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British Columbia — Debates (Hansard)

4th Session, 37th Parliament OFFICIAL REPORT OF DEBATES OF THE LEGISLATIVE ASSEMBLY (HANSARD) Wednesday, April 2, 2003 Afternoon Sitting Volume 13, Number 12 THE HONOURABLE CLAUDE RICHMOND, SPEAKER ISSN 0709-1281

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Honourable Iona Campagnolo 4TH SESSION, 37TH PARLIAMENT SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Claude Richmond EXECUTIVE COUNCIL Premier and President of the Executive Council................................................................................. .........................Hon. Gordon Campbell Minister of State for Intergovernmental Relations.............................................................................. ..................... Hon.

Greg Halsey-Brandt Deputy Premier and Minister of Education ....................................................................................... ..................................Hon. Christy Clark Minister of Advanced Education................................................................................................. ...........................................Hon. Shirley Bond Attorney General and Minister Responsible for Treaty Negotiations.............................................................. .................... Hon.

Geoff Plant Minister of Children and Family Development.................................................................................... ..............................Hon. Gordon Hogg Minister of State for Early Childhood Development.............................................................................. .................................Hon. Linda Reid Minister of Community, Aboriginal and Women's Services......................................................................... .................. Hon.

George Abbott Minister of State for Community Charter........................................................................................ .................................. Hon. Ted Nebbeling Minister of State for Women's Equality ......................................................................................... .................................... Hon. Lynn Stephens Minister of Competition, Science and Enterprise ................................................................................ ..................................Hon.

Rick Thorpe Minister of State for Deregulation ............................................................................................. ............................................ Hon. Kevin Falcon Minister of Energy and Mines................................................................................................... ....................................... Hon. Richard Neufeld Minister of Finance ............................................................................................................ ....................................................... Hon.

Gary Collins Minister of Forests ............................................................................................................ .................................................. Hon. Michael de Jong Minister of Health Planning .................................................................................................... ............................................ Hon. Sindi Hawkins Minister of Health Services.................................................................................................... ................................................ Hon.

Colin Hansen Minister of State for Mental Health ............................................................................................ ...................................Hon. Gulzar S. Cheema Minister of State for Intermediate, Long Term and Home Care ............................................................................. Hon. Katherine Whittred Minister of Human Resources.................................................................................................... ............................................Hon.

Murray Coell Minister of Management Services................................................................................................ .........................................Hon. Sandy Santori Minister of Provincial Revenue................................................................................................. ................................................Hon. Bill Barisoff Minister of Public Safety and Solicitor General ................................................................................ ..................................Hon.

Rich Coleman Minister of Skills Development and Labour...................................................................................... .............................Hon. Graham P. Bruce Minister of Sustainable Resource Management and Minister of Agriculture, Food and Fisheries ..................................Hon. Stan Hagen Minister of Transportation..................................................................................................... .................................................... Hon.

Judith Reid Minister of Water, Land and Air Protection..................................................................................... ....................................Hon. Joyce Murray LEGISLATIVE ASSEMBLY Deputy Speaker................................................................................................................. ..............................................................

John Weisbeck Leader of the Opposition ....................................................................................................... ...........................................................Joy MacPhail Deputy Chair, Committee of the Whole ........................................................................................... .............................................. Harold Long Clerk of the Legislative Assembly .............................................................................................. .........................................E.

George MacMinn Clerk Assistant ................................................................................................................ ................................................................... Robert Vaive Clerk Assistant and Law Clerk .................................................................................................. ........................................................ Ian D. Izard Clerk Assistant and Clerk of Committees........................................................................................ ............................................Craig H.

James Clerk Assistant/Committee Clerk................................................................................................ ............................................ Kate Ryan-Lloyd Sergeant-at-Arms ............................................................................................................... .........................................................A.A. Humphreys Director, Hansard Services ..................................................................................................... ........................................

Anthony Dambrauskas Legislative Librarian.......................................................................................................... ............................................................. Joan A. Barton Legislative Comptroller ........................................................................................................ .................................................................Peter Bray Published by British Columbia Hansard Services, and printed under the authority of the Speaker by the Queen's Printer, Victoria.

Rates: single issue, $2.85; per calendar year, mailed daily, $298. GST extra. Agent: Crown Publications Inc., 521 Fort St., Victoria, B.C. V8W 1E7. Telephone: (250) 386-4636. Fax: 386-0221. www.leg.bc.ca/hansard In addition to printed transcripts, Hansard Services publishes transcripts on the Internet and broadcasts Chamber debates on television.

Party Standings: Liberal 75; New Democratic 2; Independent Liberal 2. ALPHABETICAL LIST OF MEMBERS Abbott, Hon. George (L) ....................................................................... Shuswap Anderson, Val J. (L) .............................................................Vancouver-Langara Barisoff, Hon. Bill (L)............................................. Penticton–Okanagan Valley Bell, Pat (L).........................................................................Prince George North Belsey, Bill (L).................................................................................

North Coast Bennett, Bill (L) ........................................................................... East Kootenay Bhullar, Tony (Ind. L) ................................................................. Surrey-Newton Bloy, Harry (L).................................................................................. Burquitlam Bond, Hon. Shirley (L).........................................Prince George–Mount Robson Bray, Jeff (L)......................................................................Victoria–Beacon H ill Brenzinger, Elayne (L) ...............................................................

Surrey-Whalley Brice, Susan (L) ............................................................................Saanich South Bruce, Hon. Graham P. (L)................................................ Cowichan-Ladysmith Campbell, Hon. Gordon (L)............................................. Vancouver–Point Grey Cheema, Hon. Gulzar S. (L) ..........................................Surrey–Panorama Ridge Chong, Ida (L)................................................................ Oak Bay–Gordon Head Christensen, Tom (L) .............................................................

Okanagan-Vernon Chutter, Dave (L) ........................................................................... Yale-L illooet Clark, Hon. Christy (L) ..................................................Port Moody–Westwood Cobb, Walt (L) ............................................................................. Cariboo South Coell, Hon. Murray (L) ........................................ Saanich North and the Islands Coleman, Hon. Rich (L) .............................................. Fort Langley–Aldergrove Collins, Hon.

Gary (L).........................................................Vancouver-Fairview de Jong, Hon. Michael (L)....................................... Abbotsford–Mount Lehman Falcon, Hon. Kevin (L) .......................................................... Surrey-Cloverdale Hagen, Hon. Stan (L) ................................................................... Comox Valley Halsey-Brandt, Hon. Greg (L) ..................................................Richmond Centre Hamilton, Arnie (L)............................................................Esquimalt-Metchosin Hansen, Hon.

Colin (L) .....................................................Vancouver-Quilchena Harris, Roger (L)......................................................................................Skeena Hawes, Randy (L) ............................................................ Maple Ridge–Mission Hawkins, Hon. Sindi (L).......................................................... Kelowna-Mission Hayer, Dave S. (L) ................................................................... Surrey-Tynehead Hogg, Hon. Gordon (L) ........................................................

Surrey–White Rock Hunter, Mike (L) ...................................................................................Nanaimo Jarvis, Daniel (L)...................................................... North Vancouver–Seymour Johnston, Ken (L)............................................................ Vancouver-Fraserview Kerr, Brian J. (L).............................................................. Malahat–Juan de Fuca Krueger, Kevin (L).................................................

Kamloops–North Thompson Kwan, Jenny Wai Ching (NDP) ...............................Vancouver–Mount Pleasant Lee, Richard T. (L).......................................................................Burnaby North Lekstrom, Blair (L)................................................................. Peace River South Les, John (L) .......................................................................... Ch illiwack-Sumas Locke, Brenda (L) ...........................................................

Surrey–Green Timbers Long, Harold (L) ...................................................Powell River–Sunshine Coast MacKay, Dennis (L)....................................................... Bulkley Valley–Stikine McMahon, Wendy (L).............................................Columbia River–Revelstoke MacPhail, Joy (NDP) ..........................................................

Vancouver-Hastings Manhas, Karn (L) .............................................Port Coquitlam–Burke Mountain Masi, Reni (L) ...................................................................................Delta North Mayencourt, Lorne (L) ..........................................................Vancouver-Burrard Murray, Hon. Joyce (L) ........................................................... New Westminster Nebbeling, Hon. Ted (L) .......................................... West Vancouver–Garibaldi Nettleton, Paul (Ind. L)..................................................Prince George–Omineca Neufeld, Hon.

Richard (L)...................................................... Peace River North Nijjar, Rob (L)...................................................................Vancouver-Kingsway Nuraney, John (L) ...............................................................Burnaby-W illingdon Orr, Sheila (L) ...........................................................................Victoria-Hillside Penner, Barry (L)....................................................................... Ch illiwack-Kent Plant, Hon. Geoff (L) ......................................................... Richmond-Steveston Reid, Hon.

Judith (L)............................................................Nanaimo-Parksv ille Reid, Hon. Linda (L) ................................................................... Richmond East Richmond, Hon. Claude (L) ................................................................ Kamloops Roddick, Valerie (L)..........................................................................Delta South Sahota, Patty (L).....................................................................Burnaby-Edmonds Santori, Hon. Sandy (L)..............................................West Kootenay–Boundary Stephens, Hon.

Lynn (L) ........................................................................ Langley Stewart, Ken (L)...................................................... Maple Ridge–Pitt Meadows Stewart, Richard (L) ...................................................... Coquitlam-Maillardville Suffredine, Blair F. (L) ................................................................Nelson-Creston Sultan, Ralph (L)....................................................... West Vancouver–Capilano Thorpe, Hon.

Rick (L) ..........................................................Okanagan-Westside Trumper, Gillian (L)................................................................Alberni-Qualicum van Dongen, John (L).........................................................Abbotsford-Clayburn Visser, Rod (L).................................................................................North Island Weisbeck, John (L).........................................................Kelowna–Lake Country Whittred, Hon.

Katherine (L) ...................................North Vancouver–Lonsdale Wilson, John (L)........................................................................... Cariboo North Wong, Patrick (L)............................................................Vancouver-Kensington LIST OF MEMBERS BY RIDING Abbotsford-Clayburn................................................................John van Dongen Abbotsford–Mount Lehman ..............................................Hon.

Michael de Jong Alberni-Qualicum.......................................................................G illian Trumper Bulkley Valley–Stikine ..............................................................Dennis MacKay Burnaby North..............................................................................Richard T. Lee Burnaby-Edmonds............................................................................Patty Sahota Burnaby-Willingdon......................................................................

John Nuraney Burquitlam ........................................................................................ Harry Bloy Cariboo North ..................................................................................John Wilson Cariboo South .................................................................................... Walt Cobb Chilliwack-Kent ............................................................................. Barry Penner Chilliwack-Sumas .................................................................................

John Les Columbia River–Revelstoke....................................................Wendy McMahon Comox Valley .......................................................................... Hon. Stan Hagen Coquitlam-Maillardville .............................................................Richard Stewart Cowichan-Ladysmith .......................................................Hon. Graham P. Bruce Delta North.......................................................................................... Reni Masi Delta South................................................................................

Valerie Roddick East Kootenay .................................................................................. Bill Bennett Esquimalt-Metchosin...................................................................Arnie Hamilton Fort Langley–Aldergrove ..................................................... Hon. Rich Coleman Kamloops ....................................................................... Hon. Claude Richmond Kamloops–North Thompson ........................................................Kevin Krueger Kelowna–Lake Country...............................................................

John Weisbeck Kelowna-Mission ................................................................ Hon. Sindi Hawkins Langley ............................................................................... Hon. Lynn Stephens Malahat–Juan de Fuca .....................................................................Brian J. Kerr Maple Ridge–Mission ................................................................... Randy Hawes Maple Ridge–Pitt Meadows .............................................................Ken Stewart Nanaimo..........................................................................................

Mike Hunter Nanaimo-Parksville ...................................................................Hon. Judith Reid Nelson-Creston.......................................................................Blair F. Suffredine New Westminster ..................................................................Hon. Joyce Murray North Coast ........................................................................................Bill Belsey North Island........................................................................................Rod Visser North Vancouver–Lonsdale.......................................... Hon.

Katherine Wh ittred North Vancouver–Seymour .............................................................Daniel Jarvis Oak Bay–Gordon Head .......................................................................Ida Chong Okanagan-Vernon .................................................................... Tom Christensen Okanagan-Westside.................................................................Hon. Rick Thorpe Peace River North .............................................................Hon. Richard Neufeld Peace River South .......................................................................

Blair Lekstrom Penticton–Okanagan Valley ....................................................Hon. Bill Barisoff Port Coquitlam–Burke Mountain.................................................... Karn Manhas Port Moody–Westwood......................................................... Hon. Christy Clark Powell River–Sunshine Coast.......................................................... Harold Long Prince George North................................................................................Pat Bell Prince George–Mount Robson................................................Hon.

Shirley Bond Prince George–Omineca................................................................Paul Nettleton Richmond Centre......................................................... Hon. Greg Halsey-Brandt Richmond East .......................................................................... Hon. Linda Reid Richmond-Steveston ................................................................ Hon. Geoff Plant Saanich North and the Islands ............................................... Hon. Murray Coell Saanich South...................................................................................

Susan Brice Shuswap .............................................................................. Hon. George Abbott Skeena.............................................................................................Roger Harris Surrey-Cloverdale ................................................................. Hon. Kevin Falcon Surrey–Green Timbers .................................................................. Brenda Locke Surrey-Newton ............................................................................... Tony Bhullar Surrey–Panorama Ridge................................................. Hon.

Gulzar S. Cheema Surrey-Tynehead .......................................................................... Dave S. Hayer Surrey-Whalley ...................................................................... Elayne Brenzinger Surrey–White Rock ...............................................................Hon. Gordon Hogg Vancouver-Burrard................................................................. Lorne Mayencourt Vancouver-Fairview............................................................... Hon.

Gary Co llins Vancouver-Fraserview ...................................................................Ken Johnston Vancouver-Hastings .......................................................................Joy MacPhail Vancouver-Kensington...................................................................Patrick Wong Vancouver-Kingsway..........................................................................Rob Nijjar Vancouver-Langara....................................................................Val J.

Anderson Vancouver–Mount Pleasant............................................Jenny Wai Ching Kwan Vancouver–Point Grey ................................................... Hon. Gordon Campbell Vancouver-Quilchena............................................................ Hon. Colin Hansen Victoria–Beacon Hill.............................................................................Jeff Bray Victoria-Hillside.................................................................................. Sheila Orr West Kootenay–Boundary.................................................... Hon.

Sandy Santori West Vancouver–Capilano ..............................................................Ralph Sultan West Vancouver–Garibaldi ................................................. Hon. Ted Nebbeling Yale-Lillooet .................................................................................. Dave Chutter

CONTENTS Wednesday, April 2, 2003 Afternoon Sitting Routine Proceedings Page Introductions by Members....................................................................................................... ............................................... 5909 Statements (Standing Order 25 B).............................................................................................................................. .............. 5909 Wine industry on Vancouver Island B. Kerr Forest industry in B.C. E. Brenzinger Offshore oil and gas industry B.

Belsey Oral Questions................................................................................................................. ......................................................... 5910 Privatization of B.C. Rail J. MacPhail Hon. G. Campbell School-based education funding W. McMahon Hon. G. Hogg Addiction treatment and mental health services J. Bray Hon. G. Cheema Director of public prosecutions model in justice system T. Bhullar Hon. G. Plant Air Canada service in B.C. J. MacPhail Hon. G.

Campbell Petitions ...................................................................................................................... ............................................................... 5913 J. MacPhail Committee of the Whole House ................................................................................................... .......................................... 5913 Hospital District Amendment Act, 2003 (Bill 25) R. Hawes Hon. C.

Hansen Report and Third Reading of Bills .............................................................................................. ........................................... 5915 Hospital District Amendment Act, 2003 (Bill 25) Second Reading of Bills ........................................................................................................ ................................................... 5915 Provincial Revenue Statutes Amendment Act, 2003 (Bill 30) Hon. B.

Barisoff Committee of Supply ............................................................................................................ ................................................... 5916 Estimates: Ministry of Energy and Mines (continued) Hon. R. Neufeld D. MacKay P. Bell B. Bennett W. McMahon R. Harris J. MacPhail B. Belsey P. Nettleton

Estimates: Ministry of Water, Land and Air Protection (continued) J. MacPhail Hon. J. Murray G. Trumper R. Lee

5909 WEDNESDAY, APRIL 2, 2003 The House met at 2:04 p.m. Prayers. [1405] Introductions by Members R. Harris: I t ' s m y p l e a s u r e t o d a y t o b e a b l e t o i n - troduce to the House the members of the board of di- rectors of the Northwest Corridor Development Cor- poration. In the gallery today we have Mr. Jeff Burghardt, Mr. Tom Baldwin, Mr. Graham Dallas, Ms. Diane Hewlett, Mr. Mike Mihaly, Mr. Mike Osborn, Mr. Bud Powell, Mr. Ken Veldman, Mr. Graham Kedg- ley, Ms. Susan Clark, Mr. Mike Proctor and Ms. Chris Morey.

The Northwest Corridor Development Corporation is truly a public-private partnership that brings together businesses, business people, municipal leaders and pro- vincial leaders from both Alberta and British Columbia — with membership in Alaska — who are absolutely tremendous advocates of the entire Highway 16 corridor and a lot more than that.

They are advocates for devel- opment in the north across both provinces, and they're here today in Victoria to meet with ministers and to just basically introduce themselves to our organization and do what they can to continue to promote this province as a great place to live and do business. So I wish the House to really make them feel wel- come here today. J. Nuraney: W e h a v e i n t h e H o u s e t o d a y 2 8 s t u - dents in grades 4 and 5 from Suncrest Elementary School in Burnaby. Make no mistake. These are young people, a very bright group of people.

I had the opportunity to go to their classroom a few days ago, and the first question I was asked was: "How much money do you make?" So please do not be deceived. They are very bright. They are learning things about the governments in Canada and in British Columbia, and they are here visiting us today. They are accompanied by their teachers, Joanne Hunchak and Andrew Hunchak; the parents, Grover Wong, Terry McCue, Debbie Meehan, Sook Sihota and Janet Litke. Please, may I request the House to make them all welcome. S. Brice: I h a v e p l e a s u r e t o d a y i n i n t r o d u c i n g Robert Boyd.

Robert is a student at Reynolds Secon- dary School in my riding. He's a young Liberal, very interested in politics. He's a star on our team about to come forward in the future. I have no doubt he will one day take his seat in this Legislature as an MLA. I ask the House to make him welcome. R. Hawes: Today in the House we have Mr. Ron L o m e v i s i t i n g f r o m S e a t t l e . H e ' s h e r e t o d o w h a t w e hope all our American visitors do, and that's take ad- vantage of our lower dollar by spending an awful lot of American money here in Victoria. Would the House please make him welcome. V.

Anderson: I would like the House to join me in welcoming a group of excited students who have ven- tured over here from Vancouver to see the city and to sit in the Legislature and see how we behave. I hope we will show them a good opportunity while they're here. There are 60 grade 5 students and the adults who are accompanying them from Sir Wilfrid Laurier Elemen- tary School in Vancouver, with their teachers Ms. King and Ms. Gordon. Please, let's make them welcome. W.

McMahon: It's a pleasure today to introduce two constituents, Norma and Buzz Harmsworth — great friends from the great community of Invermere — who are here with two Rotary exchange students: Renske van Andel, an exchange student from Holland who's been sponsored by the Victoria Harbourside Rotary Club; and Pedro Arkcoverde from Brazil, who is sponsored by the Invermere Rotary Club. I ask the House to please make them welcome. Statements (Standing Order 25

B) WINE INDUSTRY ON VANCOUVER ISLAND B. Kerr: Just over ten years ago, the first commer- cial winery was opened on Vancouver Island. The win- ery is located about 50 kilometres north of Victoria in the pastoral and farming community of Glenora in the beautiful Cowichan Valley. The soil in this area is ideal for grape-growing and has been compared to the best of the Alsace and Chablis areas of France. [1410] During the next ten years, a number of other vint- ners recognized the potential of the valley and have moved into the region.

There are now nine commercial wineries in the valley cultivating a variety of wines, with more than 250 acres, with 500 acres in various levels of planning. These vintners, along with the vintners from Sat- urna, Saanich, and Saltspring, have come together to form VIVA, the Vancouver Island Vintners Associa- tion. This is an association of licensed wineries dedi- cated to producing quality wines and ciders on Van- couver Island. Recently, VIVA set up a committee to work towards creating the region as an appellation.

In doing this, they hope that more people will recognize the wines of the Island and visit the vineyards as part of a culinary and wine-tasting experience. What is really exciting is that VIVA wishes to create a wilderness wine tour. The modern tourist is looking for adventure as well as good food and wine, so the combination of wine on the Island's east coast and amazing but accessible wilderness on the west coast is sure to be a winner. This tour will take the traveller up

5910 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 the west coast of Vancouver Island through Sooke to Port Renfrew, and there the traveller will turn east to a working forest to complete their tour in the wine coun- try of the Cowichan Valley. This trip can be done in conjunction with the many events that will be sponsored by VIVA this year, but don't wait for a festival. Every weekend of the summer the win- eries will be open for tastings, lunches and picnics.

So plan to stay in B.C. this year, come to Vancouver Island, and be sure to visit the many wineries that will soon be creating a name for themselves and for the region. FOREST INDUSTRY IN B.C. E. Brenzinger: I want to take a moment to talk about forestry. I know Surrey isn't in the heartlands, and it might seem odd for an urban MLA to want to talk about forestry issues. On the map we're not shown as a forest-dependent community, and in the strictest sense that is true, but we are all forest-dependent in British Columbia. The forest sector generates more than a billion dol- l a r s i n r e v e n u e .

I t i s o n e o f t h e p r i m a r y s o u r c e s o f money that we use to pay for schools and hospitals. Forestry built the heartlands, but it has also built this province. My riding does have a forestry presence: Interfor Mackenzie Mills and Mill and Timber Products Ltd. Both operations have shown innovation in creating products that are in demand and building markets that want those products. The forest revitalization plan introduced by the Forests ministry is an exciting opportunity to build the industry.

The province, as a whole, will benefit from opening up access to timber, to putting more wood into the hands of small entrepreneurs through woodlots, and communities can have a greater voice through community forests. We need to remember that in the lower mainland, the forest sector provides 120,000 di- rect and indirect jobs in metro Vancouver alone. These reforms are designed to create opportunities. T h e y a r e d e s i g n e d t o r e b u i l d a n i n d u s t r y t h a t w a s i n decline for the past decade. These changes ensure that we practise forestry in a sustainable way.

We know we have the people and the product. Now we have the tools to ensure our industry can be competitive and can thrive in the global marketplace. OFFSHORE OIL AND GAS INDUSTRY B. Belsey: The government of Canada recently an- nounced that they will start a process to review the lifting of a moratorium that currently inhibits offshore oil and gas exploration off our coast. As early as 1913 the first well was drilled in the Queen Charlotte Is- lands, Haida Gwaii.

Between 1949 and 1971, eight wells were drilled on Graham Island, and between 1965 and 1969, Shell Canada drilled and capped eight offshore subsurface exploratory wells. The federal moratorium was put in place in 1972 to prevent oil tankers from travelling through the Dixon Entrance, Hecate Strait, Queen Charlotte Sound en route from Alaska to Washington State. A little-known fact is that for 90 years the oil and gas industry has been exploring around the Queen Charlotte Islands, Haida Gwaii.

More significant is the fact that offshore and onshore exploration, seismic work and exploratory drilling were completed with very little, if any, impact to the environment — no blowouts, no oil spills, no damage to the flora and fauna. [1415] The whales, the seals, the sea lions, the salmon, the herring, the crab and the birds continue to migrate in these waters. The shellfish and seaweed on the beaches, as well as the marine life in the ocean, continue to pro- vide nourishment and income to those that harvest them. I offer one very important question.

Why do we permit oil and gas wells off the east coast, but we do not permit them on the west coast? With two new fed- eral government panels and a new UNBC panel sched- uled to travel the province to review lifting the morato- rium, I would suggest that we as a province are going to need this oil and gas just to fuel the transportation of these groups working around the province and Ottawa to study oil and gas. It is not with reckless abandonment that I and the p e o p l e i n m y r i d i n g a s k t o l i f t t h i s m o r a t o r i u m .

W e insist that any oil and gas exploration must take into consideration ownership, safety and the environmental concerns. We will look forward to participating in the process as soon as it comes to my riding. Oral Questions PRIVATIZATION OF B.C. RAIL J. MacPhail: To wiggle out of his promise not to privatize B.C. Rail, the Premier has said over and over that B.C. Rail is a drain on the taxpayer. In his February infomercial, he repeated that B.C. Rail was costing tax- payers a billion dollars in subsidies. The facts prove the Premier wrong. B.C.

Rail's stra- tegic plan predicts big profits for the public railway over the next three years. Can the Premier explain why he is breaking his promise to the people of the north and privatizing a public service that is making a profit? Hon. G. Campbell: The facts on B.C. Rail are clear. Over the last 15 years the taxpayers have subsidized B.C. Rail to the tune of $1 billion. The fact is that cus- tomers are leaving B.C. Rail. The fact is that northern communities are s aying it's ti me for us to look at B.C.

Rail not just as an economic engine but as an important transportation component of an integrated transporta- tion system for all of North America, for British Co- lumbia to get our products to marketplace and for products to come to British Columbians. B.C. Rail will be an important part of our economic future, as we said. The B.C. Rail right-of-way will be maintained in public hands so that we make sure that

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5911 we have an integrated rail service that meets the needs of northern British Columbia. Mr. Speaker: The Leader of the Opposition has a supplementary question. J. MacPhail: I guess it's hard for British Columbians to actually believe the Premier when he just spouts off what he just said, which is entirely wrong. This past fiscal year the government booked $61 million in reve- nue from the corporation. We learned from a memo obtained by the opposition that things are going so well for B.C. Rail that big bonuses are being handed out.

The memo of this past month tells management: "The 2002 net operating income for bonus purposes came in at an impressive $76.8 million." Again, to the Premier: why are bonuses being paid to B.C. Rail management for exemplary financial per- formance at a company that the Premier wants to pri- vatize because he says it's a money-loser? Who's telling the truth here? Hon. G. Campbell: The facts do speak for them- selves. B.C. Rail has been subsidized by the taxpayer of British Columbia to the tune of a billion dollars over the last three years. The facts also speak for themselves that customers have been leaving B.C.

Rail. The facts also speak for themselves that northern communities have said it's time for a change in B.C. Rail so they can be assured of long-term, integrated rail access to their communities and to their resources. It's critical to their economic future. That is the plan the government laid out for British Columbians. It is the plan we intend to execute in con- cert with people from the north, from the customers of B.C. Rail and from B.C. Rail itself. Mr. Speaker: The Leader of the Opposition has a further supplementary. J. MacPhail: Yes. It's interesting that the Premier goes back 15 years.

It may be that he's having to articulate mis- takes made by the then Social Credit government, of whom some now sit in his cabinet. But the fact of the mat- ter is that the Premier knew all of that information… Interjections. Mr. Speaker: Order, please. Order. Let us hear the question. [1420] J. MacPhail: …and the Premier still made a prom- ise to residents in the north purely for political reasons. As soon as the election was over, he started to spin a tale about B.C. Rail that isn't true. He wants to make a case for privatization. B.C.

Rail freight and passenger service has earned a profit for taxpayers every year since 1993, but in the past few months the government has been meeting with CN and CP about B.C. Rail — corporations that have given over $50,000 to the B.C. Liberals. In fact, we learned just today that CN gave this government $36,000 last year. Will he just admit that B.C. Rail does provide good value, at a profit, but that he never intended to keep his promise to the people of the north and that he's now just paying off his political friends? Hon. G. Campbell: It is the member opposite's government that had….

I quote: "They were looking at whether they wanted to sell a big-ticket item." It was the member opposite who sat in cabinet and said they were thinking of selling British Columbia Railway Co. It was the member opposite whose government said it was time to sell a symbolic asset, and B.C. Rail was one of her government's potential sales. What this govern- ment has done…. Interjections. Mr. Speaker: Order, please. Order. Interjections. Mr. Speaker: Order. Let us hear the answer as well. Hon. G. Campbell: What this government has done is exactly what we said we'd do. We have worked with northern communities.

We have listened and learned from northern communities. We have worked with B.C. Rail. We have listened to B.C. Rail. We have lis- tened to customers. We have said: "How can we assure that B.C. Rail is an important asset in the future eco- nomic development of our province?" That's what this government is going to do. We are going to undo the damage of the last government. We're going to build a new era of prosperity right across the north. Interjections. Mr. Speaker: Order, please. Order. SCHOOL-BASED EDUCATION FUNDING W. McMahon: My question is to the Minister of Children and Family Development.

Earlier this week in estimates I asked the minister whether his review of school-based programs was complete. The minister responded that he might be in a position to announce the results shortly. As parents and local school boards are concerned about whether these programs will continue, can the minister provide my constituents any assurances that school-based programs will be preserved? Hon. G. Hogg: Yes, I can. Consistent with the commitment the Premier made, school-based programs will continue. This year these programs…. Interjection.

5912 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 Hon. G. Hogg: Now hear this. Interjections. Mr. Speaker: Order, please. Hon. G. Hogg: T h i s y e a r t h e s e p r o g r a m s w i l l b e funded at over $43 million. That's more money than has ever been put in this basket of services, which are designed to support the socially and economically dis- advantaged students of this province. We will have the most effective, the most accountable and the most measurable system of service delivery.

We will have that by coordinating with many of our service partners, our community partners — with teachers, administra- tors, trustees, parents and community service provid- ers — who have come together to assist us with sup- port and to ensure that we d o have the very best sys- tem of service delivery in all of Canada. Mr. Speaker: The member for Columbia River– Revelstoke has a supplementary question. W. McMahon: That is great news. I think every- body has been worried about it over the last while.

For the past decade the Revelstoke school district has been passed over countless times for school- based funding. In fact, they have never received one penny. It is clear that when it comes to school-based funding, there has been a great inequity across the province with some school districts receiving large amounts of funding at the expense of other districts. Can the minister tell us whether the new school- based funding will address these inequities? [1425] Hon. G. Hogg: We have completed the first-ever comprehensive review and restructuring of the school- based programs.

We have used the best research avail- able, both locally and internationally, to look at what type of model can best ensure that those students with the greatest needs will be receiving the allocation. We developed a socioeconomic model that provides us with the information necessary to ensure that funding goes to those students and those schools that have the greatest needs. As a result of that, three school districts that have not received a cent in the past will be included in this model.

We'll ensure that those students and those schools who have the greatest need will receive the services they need to start providing services to the most socially and economically disadvantaged stu- dents in this province, so they can perform and reach their goals as all students should have the opportunity to do. ADDICTION TREATMENT AND MENTAL HEALTH SERVICES J. Bray: M y q u e s t i o n i s t o t he M i ni s t e r o f S t at e f o r Mental Health. I have spoken a great deal recently in this House about substance abuse and homelessness issues in Victoria's downtown.

Government has teamed up with the city of Victoria and the Vancouver Island health authority on several short-term strategies, such as funding for needle pickup and the funding for Sandy Merriman House. My community also wants leadership from the province in dealing with addictions and mental health issues in Victoria on longer-term strategies. Can the minister tell my constituents and those who serve in the downtown what he is doing to provide permanent solutions for persons living with concurrent disor- ders? Hon. G.

Cheema: When we formed the government, it was clear that we had two separate systems working independently of each other: an addictions system that operated in isolation from the health system… Interjection. Hon. G. Cheema: Mr. Speaker, it seems like the member for Vancouver-Hastings is very upset and very unhappy. …and a mental health system that operated inde- pendently of the addictions system. About 70 percent of the patients in the addictions system are also pa- tients of the mental health system.

For the first time in B.C., our government brought addictions care directly into the health care delivery system. We have also merged mental health and addictions to serve pa- tients more effectively. Our restructuring is helping health authorities revitalize their service system to provide the best evidence-based care. Victoria is a great example of the partnerships that are resulting from these very significant changes. Also, both the municipality and the health authority are working closely together to improve the system. Interjections. Hon. G. Cheema: And, Mr. Speaker…. Mr. Speaker: Thank you, Mr. Minister.

DIRECTOR OF PUBLIC PROSECUTIONS MODEL IN JUSTICE SYSTEM T. Bhullar: My question is to the Attorney Gen- eral. Has he given any thought to basing our justice system on the director of public prosecutions model? Hon. G. Plant: I thank the member for his ques- tion. The system that we have in British Columbia is pretty close, functionally, to an independent or direc- tor of public prosecutions model. Crown counsel make their decisions on a case-by-case basis in a way that's independent from government.

We have, as the member knows, the institution of special prosecutor used to ensure that in particularly important or po-

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5913 tentially challenging cases, we appoint a special prosecutor outside the prosecution service. The prosecution service is protected by statute by the Crown Counsel Act from direct day-to-day opera- tional intervention by the government. We're very close to most of the features of a DPP model. I don't ever close my mind to the idea of how you could make something work better. If the mem- ber has particular ideas in that regard, I'd be happy to hear about them. I actually think that we have a ser- vice in British Columbia that serves the public interest well.

It gives good value for money and ensures that we do the best we can to keep the streets of British Columbia safe. [1430] AIR CANADA SERVICE IN B.C. J. MacPhail: Yesterday the Minister of Finance and the Premier said that B.C. won't be too hard-hit by Air Canada's troubles, because WestJet is filling the breach. The Premier encouraged the federal government to do nothing. WestJet doesn't serve Kamloops or Nanaimo; nor does it serve Castlegar, Prince Rupert, Dawson Creek, Williams Lake, Terrace or Cranbrook — all communi- ties who depend on Air Canada for service.

To the Premier: how does doing nothing help those communities who will be hard hit immediately when Air Canada cuts its services to those communities, as it is speculating today? Hon. G. Campbell: In travelling the province, I can tell you that the current system that we have been undergoing since Air Canada became a sole provider of major air traffic in Canada has not met the needs of the people of British Columbia. It has not met the needs of the small communities of Brit- ish Columbia.

W h a t i s i m p o r t a n t i s t h a t w e c r e a t e a n e n v i r o n - ment where all communities in British Columbia have the o ppo rtu nit y to be pro pe rl y se rv ice d by an economic carrier like WestJet, certainly. I certainly do not want the federal government to do something that will put WestJet at disadvantage, which will put at disadvantage many, many British Columbians. [End of question period.] Petitions J.

MacPhail: I rise to present a petition signed by over 1,500 British Columbians, which says the selective training regime contemplated by the province will compromise trades training and will undermine the effectiveness of B.C.'s workforce. Orders of the Day Hon. G. Collins: I call committee stage debate of Bill 25. Committee of the Whole House HOSPITAL DISTRICT AMENDMENT ACT, 2003 The House in Committee of the Whole (Section

B) on Bill 25; J. Weisbeck in the chair. The committee met at 2:35 p.m. On

section 1,

section 8(3). R. Hawes: Minister, I wonder if you could just ex- plain. This change does transfer some capacity. Does this give increased power to the regional hospital dis- tricts, or are you looking to somehow give them more power to do more than they have been able to do be- fore? Hon. C. Hansen: What this does, in effect, is main- tain the powers that have been in practice by the re- gional hospital districts. What we've had up until now are provisions that allow the provincial government, in essence, to interfere, to oversee and to direct regional hospital districts.

Given that these hospital districts are creatures of the regional government, all of the indi- viduals who serve on regional hospital districts — as the member knows, because I think he previously served on a regional hospital district board…. All of those members are drawn from elected officials of ei- ther municipal or regional governments. In essence, these are powers the province has not used certainly in recent history. We are now just regu- larizing that so the power clearly rests 100 percent with that hospital district board and removes the ability of the province to interfere.

In doing so, we satisfy some of the conditions set out by the auditor general to en- sure that this body i s see n as an i ndepende nt body as we move to generally accepted accounting principles and the reporting requirements under those GAAP rules in 2004-05 fiscal year. R. Hawes: Has there been any consultation with hospital districts around the province about granting them this greater autonomy? Hon. C. Hansen: There is a review underway right now of the broader mandates of the regional hospital districts. That's something I announced in November, actually, at the time of the last meeting of the Union of B.C.

Municipalities annual general meeting. I think that was very well received by the regional hospital dis- tricts, because there are some broader unanswered questions. That review and that consultation are currently underway. This particular legislation is not directly connected to that. This particular legislation is fairly narrow in scope and is housekeeping in nature, in my view. There has been consultation with the UBCM. Cer- tainly, all of the regional hospital districts in the prov-

5914 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 ince were advised that we were going to be taking this particular action. It has been well received, because it does confirm their authority, and I think it clearly helps us live up to our new-era commitment that we're going to ensure that local powers are properly vested with local groups without the opportunity for provincial government interference. So, yes, there has been con- sultation around this particular piece of legislation, and the feedback we have got from the regional hospital districts has been positive.

Section 1,

section 8(3) and

section 2,

section 11 ap- proved. On

section 3,

section 20. R. Hawes: Thank you, Chair, and thank you to my colleague from Chilliwack.

Section 3 removes the requirement that the minister give approval before regional hospital districts can bor- row money or assume financial obligations. Does this in any way put taxpayers at risk because that oversight now will be gone — the oversight of the ministry? Is there any further risk to taxpayers without that oversight? Hon. G. Cheema: Can I have leave to make an in- troduction, please? Leave granted. [1440] Introductions by Members Hon. G. Cheema: I have three of my constituents visiting us today in this House. Mr. Swarn Singh Buttar is accompanied by Mr.

Gurbans Singh Sandhu, who is a retired principal from Punjab, and his wife, Mrs. Ran- jit Kaur Sandhu. Can the House please make them very welcome. Debate Continued Hon. C. Hansen: The short answer to the member's question is no, there would not be any increased tax burden put on local taxpayers. In fact, the way this has been practised up till now is that the request for the establishment of that borrowing authority has really come from local governments and has simply been rubber-stamped by the provincial government in the past year. Now we're simply removing the rubber- stamp portion of that.

There is nothing in the changes we're doing today that would result in increased bur- den on local taxpayers. R. Hawes: Just to clarify, then, there really has not been oversight by the ministry. The local governments, through the hospital districts, have made decisions, and the ministry has just simply…. It's almost mean- ingless, then — the ministry's approval of the borrow- ing of the regional districts? [H. Long in the chair.] Hon. C. Hansen: The answer is, in essence, yes. This has just been one added level of bureaucracy that really has not been necessary. It has been totally re- dundant.

Given that all the members who serve on the local hospital district board are themselves elected offi- cials, elected by their local communities, it really is a case of the provincial government having the powers to interfere with what should be local government de- cisions. Even though those powers have never been exercised in the past, that power was still there. I think the fact that we're removing it clearly puts the account- abilities where they belong, and that's clearly with local government.

I think this is good news in terms of setting the tone for relationships between the provincial government and local government, which I think is a common theme through a lot of the changes we're making vis-à- vis governance overlaps between the provincial and municipal governments. R. Hawes: I did sit for quite a number of years on a regional hospital district, and I can tell you that it did take a long time to get approval to do things quite of- ten, and it was seen to be overly bureaucratic.

I think some of us felt that there was some oversight on the part of the government, because the government of the day seemed to imply that there was. I'm taken aback a bit that there wasn't and that this is just a rubber-stamp exercise, but I guess nothing really should surprise me. I know these kind of changes, then, are going to be welcomed greatly by regional hospital districts. I know that at the local level, autonomy is greatly, greatly cher- ished. This does, it looks like to me, provide a great deal more autonomy.

It allows regional governments to get on with the job far more easily, with far less in- terference, and to continue…. After all, what they're doing here in many cases is providing 40 percent fund- ing for capital projects for the health authorities within their own district. Through the rest of the bill, is there anything in here that does anything but remove a bunch of bu- reaucracy that really is not necessary? Are there any powers that are taken from regional hospital districts in any way by this bill?

Or are all of their powers, if you will — the autonomy, I guess I would say, of regional districts — enhanced in every

section of this bill? Hon. C. Hansen: To answer the member's question, this is 100 percent giving that power back to local gov- ernments. There is nothing in this bill that is taking powers away from the regional hospital district. It is in fact giving up power that the provincial government could have exercised. We've never had reason to. We think it's unnecessary. It's just part of the red tape and bureaucracy that is there, and we're trying to streamline. [1445] This is partly a deregulation initiative. It does help u s a c h i e v e s o m e o f o u r d e r e g u l a t i o n t a r g e t s .

I t ' s i n a minimal way, but I think it's good news for local gov- ernment in that it does give power to local govern- ments, which is where it belongs.

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5915 R. Hawes: One last question to the minister, and I'm not sure whether you can answer the question, minister. Local government, when it borrows money for a term of longer than five years, is required to go to the taxpayers for assent. There are occasions when re- gional hospital districts will borrow funds — substan- tial amounts of funds. I think of the area in which I live as an example, where the regional hospital district will be putting up a considerable amount of money towards a new hospital. Those funds could be borrowed.

If they are borrowed for a period of more than five years, does the regional hospital district have to go to the taxpayers for assent with the removal of the ministry's approval require- ment, or can they just proceed? Hon. C. Hansen: I don't have a specific answer for the member, other than to say that what we're doing here today does not change the existing requirements. Those requirements are really driven, I'm assuming, under the Municipal Act but certainly fall under the authority of the municipal government legislation that would apply in that case.

There's nothing we are doing in this change that would affect that one way or the other. Sections 3 to 10 inclusive approved. Title approved. Hon. C. Hansen: I move that the committee rise and report the bill complete without amendment. Motion approved. The committee rose at 2:47 p.m. The House resumed; Mr. Speaker in the chair. Report and Third Reading of Bills Bill 25, Hospital District Amendment Act, 2003, reported complete without amendment, read a third time and passed. Hon. C. Hansen: I call second reading of Bill 30. Second Reading of Bills PROVINCIAL REVENUE STATUTES AMENDMENT ACT, 2003 Hon. B.

Barisoff: Bill 30, Provincial Revenue Stat- utes Amendment Act, 2003, proposes a number of amendments to the taxation and revenue statutes ad- ministered by the Minister of Provincial Revenue. The measures included in this bill will help to achieve our goals of fair, efficient and equitable ad- ministration of tax and revenue statutes and collection of all outstanding amounts owed to government. Amendments to the corporation capital tax ensure that authorized foreign banks and domestic banks receive equivalent tax treatment.

Amendments to the Income Tax Act align the act with parallel provisions in the federal Income Tax Act. Similar amendments are required each year to accom- modate changes in the federal legislation. One of the recommendations of the core services review was that the Mineral Tax Review Board be re- placed with a ministerial appeal process. This bill amends the Mineral Tax Act by replacing the board with a ministerial appeal process consistent with the ministe- rial appeal processes in other taxation legislation.

The Ministry of Provincial Revenue is charged with the responsibility for collection of all oil and gas revenues under the Petroleum and Natural Gas Act.

To ensure that the ministry has adequate statutory authority to carry out its revenue collection duties, this act must be amended to authorize the Ministry of Provincial Revenue to appoint a ministry employee as a royalty collector. [1450] The Hotel Room Tax Act, the Motor Fuel Tax Act, the Social Service Tax Act and the Tobacco Tax Act are amended to clarify that where the province has infor- mation that tax liability exists, but the taxpayer dis- agrees with that information, it is the taxpayer's re- sponsibility to provide evidence to refute the existence of the tax liability.

However, in the interests of fairness, these statutes are also amended to allow taxpayers to request a waiver of the six-year assessment limitation period. This will provide the taxpayer with additional time in which to gather evidence to refute the proposed as- sessment. Waiver provisions are also proposed for the Corporation Capital Tax Act and the Logging Tax Act.

In addition to a number of minor housekeeping amendments introduced in this bill, the appeal provi- sions under the Social Service Tax Act, the Hotel Room Tax Act, the Motor Fuel Tax Act and the Tobacco Tax Act are expanded to ensure that the taxpayer has the right to appeal all decisions by the administrator under these statutes and to clarify the appeal process. The Land Tax Deferment Act is amended to clarify situations for which existing tax deferment agreements may continue despite partial transfer of property own- ership.

The School Act is amended to explicitly require that municipalities apply for available grants in place of school taxes. These grants are available from the government of Canada, Crown corporations and some provincial public bodies. These amendments ensure that the province receives a school tax portion of avail- able grants. The School Act is also amended to repeal outdated references and procedures. Mr. Speaker: The question is second reading of Bill 30. Motion approved. Hon. B.

Barisoff: I move that Bill 30 be referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

5916 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 Bill 30, Provincial Revenue Statutes Amendment Act, 2003, read a second time and referred to a Com- mittee of the Whole House for consideration at the next sitting of the House after today. Hon. G. Collins: I call estimates debate for the Min- istry of Energy and Mines. Committee of Supply The House in Committee of Supply B; H. Long in the chair. The committee met at 2:52 p.m. ESTIMATES: MINISTRY OF ENERGY AND MINES (continued) On vote 20: ministry operations, $32,390,000 (con- tinued). Hon. R.

Neufeld: We left off last evening, starting on the mines portion of the ministry. We will move through the mines portion of the ministry to the energy portion of the ministry and then move to the Crowns — B.C. Hydro, Columbia Basin Trust and the B.C. Utilities Commission. I have with me Fred Hermann, the chief inspector of mines for the province; Ross Curtis on my right- hand side, the acting deputy minister for the Energy ministry; and Doug Callbeck, who's with the ministry. He's the assistant deputy minister to management ser- vices. [1455] D.

MacKay: A couple of questions having to do with mining that I'd like some clarification on. I asked a question in the House the other day having to do with the quality of water that is extracted during the coalbed methane process, and the concern around the quality of the water and what happens to the water when it is extracted if, in fact, it is toxic. I wonder if I could get an answer to what happens to that water. Hon. R. Neufeld: Yes, in the production of coalbed methane you have to remove the water.

First you drill the well, then you have to remove the water, and that allows the coalbed methane to be released from the coal-bearing seams. The process works like this. The company will — of course, after they get all their permits; they have to do all those kinds of things — drill a well to the coal seam they want to go into — usually about 3,000 feet deep, or something like that, into the earth. They will then set a surface casing, and they will cement the surface cas- ing on the outside so there's no way for anything to get up outside of the casing.

They will then perforate, which means that under high pressure they will send sand and that kind of thing down in the well to perfo- rate the coal. Then they will put a tubing inside of the casing, and they will pump the water off. Once the water is pumped off, then the gas will come up. Some of that water — the member is correct — is toxic. Some of it is potable, and some of it, with a bit of treatment, can be potable. So there's a process that we hav e t o g o t hro u g h . T he M i ni s t ry o f W at e r, L an d a nd Air Protection is responsible for it, where water is tested.

If it's tested, they then make application if they can actually…. They may be able to spread it on land for farmers, for irrigation. They may be able to put it into streams. Again, that has to be a permitted thing. If it is toxic, what has to happen is that it has to go to a disposal well. A disposal well will be one that's approved by the ministry, which is deep in the earth. Usually it's a gas well that's gone dry or an oil well that's gone dry, and it's into caverns. The water will be forced down there under pressure, all regulated by the Oil and Gas Commission. D.

MacKay: It sounds like there has to be a reser- voir in place before the drilling actually starts to release the methane gas. So there's a place to put the water as it's being extracted, prior to the gas coming up? Hon. R. Neufeld: Yes. Once they drill the well, that's how they test to see how much gas is there. They'll start pumping the water off. Depending on the water and how much is there and how long they have to pump…. Those aren't known ahead of time until you start doing the process. Really, it's when you lift the water off of it that it allows the natural gas to come up.

But once you start pumping the water off, the wa- ter immediately has to be tested to find out exactly what you can do with the water. D. MacKay: Given the fact that Bulkley Valley– Stikine has some huge coal deposits, and given the recent legislation that was introduced in the House and passed the other day declaring the owner of the re- source, I wonder: has that generated any interest in the mining sector or the petroleum sector to go out and start looking for this product in these coal fields? Hon. R. Neufeld: Yes, it has.

The ministry, through its titles branch, has sold tracts of coal land around the province — in the southeast of the province, in the Kootenays. In fact, there's a project that's been drilled there already, and they are pumping water to test it. In the northeast there has been land sold. In the Princeton area there has been land sold. On Vancouver Island there's been land sold. Basically, that's it. But there is a lot of interest in starting to develop coalbed methane. So it'll come more and more as we move forward. D.

MacKay: Given some of the native unrest that we're facing in the province in the forest industry and, I suspect, in the mining industry, I wonder if the minis- ter could tell me if we're taking any steps to ensure that the development or the exploration for minerals can

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5917 take place without this unrest that we seem to be en- countering in the forest industry and — to a small de- gree, that I'm aware of — in the mining industry. [1500] I just wonder if the minister could explain to me what steps the ministry has taken to resolve or mini- mize the impact of native unrest as people are looking for minerals and gas. Hon. R. Neufeld: Yes, there's a process that the Oil and Gas Commission takes upon itself when some company applies to drill on Crown land.

If it's on pri- vate land, there's a negotiation between the oil com- pany and the private landholder. If it's on Crown land, there's obviously a negotiation that has to take place with first nations. The proponent, after going through all the processes to get permits to drill a well, will have to pay — and someone may correct me here — $7,800 per well.

Half of that goes to first nations on the traditional territory of whoever it happens to be for capacity purposes so that the first nations can actually hire the proper people, or the people they think they need, to be able to negotiate with the oil companies and to mitigate some of the con- cerns they may have on their traditional territory. It's a process we've used in the northeast now for a number of years. I wouldn't say it's absolutely perfect, but it does work relatively well.

There is a negotiation that goes on between the Oil and Gas Commission and the first nation that would be affected, and there's also a requirement that there's a negotiation between the proponent and the first nation to come to some agree- ments around how this work is going to take place, exactly the same as it would be if it was private land. D. MacKay: I apologize to the minister. I missed part of the answer. Did I understand the minister to say that 50 percent of the cost for the permit goes to the natives? Hon. R.

Neufeld: Half of the $7,800, and we're go- ing to check that I have the number correct — yes — that goes to…. If there's some activity happening in a traditional territory of a first nation and there's going to be a well drilled, the proponent has to pay the $7,800 upfront. Half of that is to manage the Oil and Gas Commission. The other half is to negotiate with first nations and to deal with their issues on their traditional territory. D. MacKay: I'm sorry. I'm having a problem under- standing that, Mr. Chair. Again, to the minister.

The other half — is that used for the treaty negotiation process, or is it given directly to the native band? I apologize. Hon. R. Neufeld: No, the $7,800 has nothing to do with the treaty negotiations. That's totally outside of what we're talking about. This is for the first nations to be able to get the capacity — the knowledgable people needed who know what happens with coalbed meth- ane, with natural gas drilling, with oil well drilling if it happened to be oil wells or other issues that they think they should find out about before they allow any activity to take place on their land.

This is totally, completely separate from the treaty negotiations office. This is a fee that's been negotiated with the industry, which is paid upfront to be able to accommodate first nations so that they can actually work on these processes. The member maybe should understand that this originated in the northeast. We drill just under 1,000 wells a year — I don't know how many kilometres of seismic line — and I'm not exactly sure how many kilometres of pipeline, but it is significant.

To be able to get the process done so we can actually consult, be- cause we have to consult by law with first nations, they have to have some money to be able to finance that. They can't finance it unless it is paid that way. Now it's paid by the proponent into the system, so they can ac- tually hire the correct people, so they can do the nego- tiations and know what's happening. [1505] On a first nations traditional territory just north of Fort St. John, there might be 300 of those wells drilled. Understandably, it takes a few people to be able to do that work. That's what that money is meant to do. D.

MacKay: Thank you for the patience in respond- ing to that question, which has bothered me for some time. I wonder — just to go back to the mining again, because of the proximity of mineralization in the northwest part of the province — if we could talk for a moment about the Kemess mine and the Kemess North mine properties. I understand there is some exploration going on further north of Kemess mine. There has been some talk, and I believe the Ministry of Energy and Mines is the lead agency on the Kemess mine road to hook up to Highway 37.

I wonder if the minister could bring me up to speed on where we are with that proposed high- way connection. Hon. R. Neufeld: Y e s , t he M i ni s t ry o f E ne rg y a nd Mines is the lead on the Stewart-Omineca road. It's a road that, if built, would open up an awful lot more country. It would be very beneficial to Kemess, to the logging industry, and would actually open up some other areas in the member's constituency — which would be good news for his constituency, I'm sure. There have been some initial meetings. I think the member was at the one I was at quite a while ago.

The group proposing the road were asked to come back with some more costs and a little bit firmer figures than what they originally had. They have come back to the ministry with those costs just recently. We're still trying to evaluate that. Within the ministry we're working to actually bring this to fruition. We hope…. In fact, we don't hope. We have people going to the northwest to talk to the first nations, to work with them and also to do further work with the proponents on this road. There is work being done on the road. I can get some further information for the

5918 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 member and give it to him in written form if he wishes. That's basically what we know today sitting here. The Kemess North mine. Yes, there is another de- posit north of Kemess, the original site, that will add a fair amount of life to the mine. I'm not exactly sure how many years, but it's significant and will actually keep a lot more people employed up there, which would be good news for the northwest. In fact, I'm told it would extend the life of the mine by 15 years, so that's another 15 years that Kemess could be operating.

By then maybe they'll have found another deposit that's just as good, and it can continue to produce for quite a while into the future. D. MacKay: Thank you for that response. I would like to ask a couple more questions, and then I will give up the floor to other members who may have questions. Going through the service plan, I noticed the notation there to introduce flow-through shares. I just wonder if the minister could tell me if that flow-through share project has been realizing the revenue that we had an- ticipated. Is it raising funds for the mining industry? [1510] Hon. R.

Neufeld: Yes, there has been significant uptake on the flow-through shares. We anticipate that in this upcoming year there will be also. The Ministry of Finance actually would have the numbers of how much has been taken up, and we can get that for the member so he has that information. Last year, actually, exploration doubled in British Columbia, up from about $20 million to $40 million last fiscal year. The Mining Association of B.C. has said that all indications for this year are for it to double again. That will be up to $80 million.

They also tell me on a regular basis that to sustain the mining industry mov- ing forward, we need about $150 million spent yearly on exploration to sustain new mines coming on stream. So we're getting there, maybe not as fast as we'd like to, but that's not bad to double it last year and to look forward to doubling it this year. I also think, to be truthful about it, the price of minerals has actually in- creased a bit, especially gold. That's probably helped. In fact, not probably — it will have helped spur some of the expenditures on exploration.

We're now at 9 percent, I believe, of the Canadian total of exploration dollars spent — up from 4 percent a year ago. So this last fiscal year we moved from 4 per- cent to 9 percent. That's substantial. We want to get to a minimum of 15 percent of the exploration dollars spent in Canada, spent in British Columbia. P. Wong: Mr. Chair, I seek leave to make an intro- duction. Leave granted. Introductions by Members P. Wong: Joining us in the House today, we have 61 grades 5 and 6 students with their teacher Ms. Baker, along with Ms. Grossey, Ms. Irving, Ms. Janes, Ms. Atwall, Ms. Lauder and Mr.

Yow, who have come over from Sir Alexander Mackenzie Elementary School in Vancouver. Would you please join me in making them all very welcome. Debate Continued D. MacKay: Looking at the service plans for the Ministry of Energy and Mines, on page 17 we talk about increasing mine and exploration and develop- ment activity and some targets that we were reaching for. I notice in the performance target for 2003-04 that we're hoping to achieve $100 million worth of capital investment. I know it's early in the year, but are we moving toward that target?

Again, is that something I should perhaps be asking from the Finance ministry, or is that something you're able to respond to? Hon. R. Neufeld: Actually, we're working towards this year's target, which just started yesterday — '03-04. Last year the $100 million that the member said…. We will get the exact number for you, but it's close to the $100 million if you look at some of the projects that moved forward last year in the mineral industry.

We were close to meeting our target, even though we were in hugely depressed markets, and that didn't help us a bit until later on in the year when the price of gold went up. D. MacKay: Again, using that as a positive indica- tor, looking at the service plan and the performance target to generate increased revenues of $27.2 million, based on the last response I got, I assume that the reve- nues are increasing as well? [1515] Hon. R. Neufeld: Yes, they are. D.

MacKay: For my own clarification, I wonder if the minister, looking at the supplement to the esti- mates, could explain to me the $2.5 million we spend on resource-revenue-sharing agreements. Where does that money go, and how is it distributed? Hon. R. Neufeld: Actually, could you repeat which STOB you were under? D. MacKay: Yes, that's under vote 21. Hon. R. Neufeld: There's a resource-revenue- sharing agreement of $2.5 million that was negotiated many years ago with the Fort Nelson Indian band — in fact, in the early seventies — for pools of gas that were drilled into under their actual reserve.

Also, I believe there's an agreement with the Blueberry first nation for the same reasons. D. MacKay: Is that an ongoing cost to government only while the oil is under there, or is it ongoing even after the reserve has been depleted?

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5919 Hon. R. Neufeld: It's revenue sharing. As long as they're producing, that will be an ongoing expense. If they quit producing and the wells are dry, then it won't be. D. MacKay: My final question to the minister, again under vote 21, has to do with dealing with the Vancou- ver Island natural gas pipeline agreement. I notice a cost of $20.850 million. Again, is that an annualized cost to government? Hon. R. Neufeld: It's annual, and it's not always the same number.

There is a complex, long agreement that was negotiated by the last government, which puts in place those numbers. I think, in fact, it's a lot less than the $20 million this year because of the price of the product and all those kinds of things. If the member wishes to review that whole contract, I can make it available to him. D. MacKay: That concludes my questions as they relate to mining, but I do have some on B.C. Hydro. P. Bell: I'd just like to start out on the revenue side for the Ministry of Energy and Mines. I see an increase in the '03-04 fiscal year from $1.44 billion to $1.77 billion.

I'm wondering if the minister has a breakout of how much of that comes through minerals versus energy. Hon. R. Neufeld: The staff is looking for that num- ber right now. If you want, go on to the next question. In the book they're inclusive, so we'll break that out for you. Minerals are probably — I'm going to make a guess here — about $50 million of that $1.7 billion. [1520] P. Bell: Great. Actually, what I'd li ke to kno w i s if there is an expected increase from '02-03 to '03-04. The next question is a pretty generic question, I think.

I'll just ask the minister to take a few moments to compare the regulatory and taxation regimes in the province as they stand today with some of the other jurisdictions in Canada that we compete with. Princi- pally, I'd be interested in hearing his thoughts on how we compare, perhaps, to Ontario and Quebec, but he should feel free to expand to any of the provinces. I'm just curious — again, more specifically as it relates to mines as opposed to energy and specifically our regu- latory regimes and taxation regimes. Hon. R. Neufeld: Our taxation regimes are very good in the province of British Columbia.

The member will remember that when we came into office, this gov- ernment committed to reducing the corporate tax to the level of our neighbours — from 16½ percent to 13½ percent. We've removed the tax on machinery and equipment for the mining industry and the oil and gas industry. In fact, in parts of the forestry industry we're increased for exemption. We also committed, prior to the election and early on in our mandate, to remove the corporate capital tax. That's been done. In fact, it's in total effect now, as we speak, this last fiscal year.

Our taxation regimes, as far as I know — in rela- tionship to Quebec, Ontario, Alberta, Saskatchewan and B.C. — are about the same. The difference, proba- bly, between…. In fact, one of the differences between us and Quebec…. I'll make this an example. I'm not so sure about Ontario anymore. Quebec highly subsidizes who they think they can pick as winners and losers. In this province we said that…. What we're going to do is keep our costs as low as we possibly can and quit hav- ing government pick winners and losers in the process.

Actually, if it's economically viable, they should be able to go out there and make a dollar. I do know Quebec highly subsidizes a lot of its in- dustry — I'll use one example, production of alumi- num, although it's not in my portfolio — and just re- cently gave a really low hydro rate guaranteed for quite a few years into the future and gave some inter- est-free loans and some grants in the hundreds of mil- lions of dollars to an aluminum corporation. It's hard for us to compete against that. In fact, we don't. We said we wouldn't do it anymore. Our regulations and our legislation are about the same.

There will obviously be differences, because we're a different geography from Ontario or Quebec or Alberta. In fact, it's compared in one report that I saw lately that Alberta has a very favourable regulation and legislation process in place for mining, but when you look at how much mineralization there is in the prov- ince of Alberta, it's almost that much in comparison to the mineralization in the province of British Columbia — again, hugely different geographies across Canada. If you look at that in its fullest form, you'll find that we have a fairly good regime.

You should also know that through the ministry, we've reviewed for a couple of years now our regula- tions and have been removing what we call the nee d- less regulation and the red tape.

I am actually speaking to one of the members of the Legislature, who is going to take it upon himself to work with a number of you — and I hope this member will be one — to take our mines regulations and legislation and actually take it as a project and say, "Look, this is what we need, and this what we don't need," so that we get some input from people who are on the ground, like yourself in your constituency, and people who are familiar with the mining industry. The member from the Kootenays would probably be interested in that.

I think that's a positive thing to look forward to — that we can actu- ally get a little bit more red tape removed. The targets in the service plan are being met. In fact, we're ahead of our targets this year. I think we've reduced across the whole ministry 15 percent of our regulations. We're actually ahead of what our target is, and we want to continue to be ahead of what our target is so that we can encourage the industry to come to British Columbia and invest their money. [1525] I have the breakout of the dollars for the member for '02-03. The total oil and gas….

Rather than the bo- nus bids and all that, I can send the member a copy of this. It's $1.357 billion. The minerals are $65 million. I

5920 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 was out $15 million. Then there's also the Columbia downstream benefits that are figured into that. That gives you a breakdown. P. Bell: As the minister will know, the Fraser Insti- tute does a report annually which ranks various juris- dictions both from a mineralization perspective and from a regulatory perspective. I thank the minister for pointing out all the significant, very significant, changes that have been made in our regulations.

I'm sure he was as disappointed as I was with the lack of movement in our rankings last year in the Fra- ser Institute report. I note that in the report it stated very clearly that despite all the significant changes that were made, it didn't appear as if industry, for whatever reason, was aware of those changes. I think the people who actually did the report noted it was unexpected by them to see little movement on our part.

I'm just wondering if the minister would take a few moments to expand on his thoughts in terms of what it's going to take to get the mining industry to recog- nize the significant changes he has made in terms of the regulatory regimes and how we are a much more friendly environment to the mining industry than gov- ernments of the last decade or so. Hon. R. Neufeld: I agree with the member. I was a bit disappointed with the Fraser Institute report. That's the report I was alluding to earlier, where we were at the bottom of the page when it came to being overregu- lated, and Alberta was at the top of the page.

When you turned the next page and looked at the mineraliza- tion, well, Alberta was at the bottom of the page and we were up at the top. Obviously, if you don't have a lot of minerals to go after, you're not going to have many regulations in place. Alberta — to be fair to Alberta — leads us in a whole bunch of areas when it comes to industry and investment. Obviously, their investment is a lot more in the oil and gas industry than it is in the mineral in- dustry, although they mine an awful lot of coal because almost all of their electricity is generated by coal.

To get the mindset changed is — I agree with the member — a difficult process. This last fall or summer I decided in the ministry that we should get our external relations branch working on how we can actually get out to at least the people in B.C. that we have made some significant changes.

We've put together a group o f p e o p l e t hat hav e b e e n g o i ng t o d i f f e re nt c o m m u ni - ties — I don't know if we've been to all of them yet; it was eight or nine communities — to explain the bene- fits of mining and the benefits to the community and the region where that mining takes place, to explain the benefits of coalbed methane, to explain the benefits of oil and gas activity — all that kind of activity on the land base that can actually work very well with all the other industries in the province like tourism or forestry or any of those.

We're trying to do that to get it out to the people who actually do the exploration, because a lot of those people aren't aware of some of the changes we've made. It's going to be, I believe, a difficult uphill battle, especially with the prices staying low for mainly cop- per, for instance. Copper is still not up there enough that we can open some of the mines that are closed now. Hopefully, those prices go up. [1530] We also have had a presence at the Cordilleran Roundup both years that I've been minister and at PDAC. I didn't get to PDAC this year, but we had peo- ple from the ministry there. We have a booth.

We try to make contact with as many people as we possibly can at both the Cordilleran Roundup and PDAC in Toronto to let them know what's happening. Actually, it's start- ing to pay off a bit. Slowly, people are starting to re- spond to the fact that there has been a significant change in the province, that the government of the province enjoys investment. They actually think if they're going to invest, they should make a profit to pay their shareholders and are starting to move back to the province.

Again, for instance — I'll use copper again — what I've said before is to get people to go out and find new copper mines now…. To develop a whole copper mine is hugely expensive, so the price has to get up a little bit, especially since the industry can't open the ones they've already closed because of low prices. We will continue to go out there and meet with the industry, with both the large industry and the smaller mining industry — the small miners — and also with the ex- ploration industry as much as we possibly can to en- courage them to develop in the province of British Co- lumbia.

They're quite welcome here. I think it's probably going to take us a number of years yet before people are actually comfortable. They want to look and see, before they invest a billion dol- lars in developing a mine. Is it real? Is it going to stay this way? Is the government going to be able to con- tinue on into the future? I know the member and I surely think that will continue. We're hopeful that over time, that brings more investment to the province. I also am, I believe, making a trip to London in the fall to talk to the investment community. Not all in- vestment comes out of Vancouver or Bay Street.

There's a tremendous amount of investment that comes out of London. In fact, when I was in the Kootenays this last week, I met with two individuals over there — small mining companies — who said they get all their financ- ing out of London. It would be very good if I went to London and started telling the financiers that things are changing in British Columbia and that we are mov- ing forward and trying to encourage mineral develop- ment in the province. P. Bell: Thank you very much. That certainly gives me reason to feel way more optimistic in terms of our future. It's extremely important for my riding.

As much as the member for Bulkley Valley–Stikine would like to think that the Kemess mine is in his riding, it actually is in my riding, and we'd like to see several more just like it. Interjection.

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5921 P. Bell: With that…. He's trying to funnel it away, but I'm okay. As long as that road opens up more terri- tory, I'm fine with it going ahead. Just to finish off with a final question, Mr. Chair. The Muskwa-Kechika area has significant distribution and concentrations of minerals, as I understand it, and I know that the minister has recently worked closely with the Minister of Sustainable Resource Management to open up a large area. If memory serves me correctly, it's on the order of 55,000 hectares.

I wonder if the min- ister would just expand a bit on the definition of that area, what he hopes to accomplish by having opened that area up and how quickly we might see some forms of exploration taking place in the Muskwa-Kechika. Hon. R. Neufeld: Yes, the 55,000 hectares were spread across the province of British Columbia, not just in the Muskwa-Kechika, although some of it was there. I think some of it may have even been in the member's riding. They were areas that had been held by OICs for quite a number of years from land planning processes that had taken place and that were kind of in limbo.

With the Minister of Sustainable Resource Manage- ment and my ministry, we were able to open that up, actually, to mining, to natural resource extraction. The Muskwa-Kechika actually is a bit different than some of the other protected areas. In most of it — not all of it, but in a good part of it — industrial activity is allowed. I put a caveat on that: in some areas there are pretty stringent rules they have to abide by to actually get into certain areas. It is rich in mineralization, and it is rich in oil and gas.

On the east side of the slopes, the Ministry of Sustainable Resource Management and my ministry are actively working on doing the planning t h a t g o e s f o r w a r d w i t h s o m e o f t h e b a s e p r o f i t a n d those areas that there is high interest in for oil and gas development. [1535] Those plans are moving forward. They were plans in the Sustainable Resource Management service plans. We'll move those forward, probably not quite as quickly as we wanted to. That's not going to slow the industry down, but the industry has told us where t h e y ' r e i n t e r e s t e d i n g o i n g .

W h a t w e w a n t t o d o i s a better job of managing those areas where they want to g o i n t o s o t h a t w e c a n h a v e s o m e m a i n c o r r i d o r s f o r roads instead of roading a lot of it. Let's look at where they want to go, because they have a pretty good idea where the oil and gas is and where those main corridors could be built, so that everyone can use the same kind of access. I think that's good work on the part of Sustainable Resource Management to work towards those ends. Hopefully, we'll continue to de- velop as we move forward. B. Bennett: I represent, as Mr.

Chair just said, the East Kootenay. We have five coalmines in the East Kootenay, so I would like to ask just a couple of ques- tions of the minister about the coalmining sector. In reference to the mission statement of the minis- try, it refers specifically to fostering a competitive in- vestment climate. We all know that the mining indus- try is not an easy industry. It's subject to international market price fluctuations and all kinds of other chal- lenges. The coal industry in particular, I think, is a chal- lenging industry to be in.

I just wonder if the minister could relate for me what the ministry has done to foster a competitive investment climate for the coal industry. Hon. R. Neufeld: Certainly. The coal industry is, as the member pointed out, very important in the prov- ince. It generates over $1.5 billion to the GDP every year of coal mined mostly the out of the southeast, not so much out of the northeast. That will probably end in the next year or the upcoming year. We want to keep the coal industry active and operat- ing in the province.

To that end, we responded to the coal industry when we were elected and reduced taxation for not just the coal industry but the mining industry, which includes coal, and reduced the tax on machinery and equipment, reduced the corporate tax and reduced — in fact, eliminated — the corporate capital tax to bring our taxes in line with other jurisdictions around us. As the member said, the coal industry in his con- stituency provides a lot of well-paying jobs. We want to see those jobs continue and, in fact, increase into the future as the world around us continues to need more and more energy.

It doesn't matter whether it's in coal, whether it's in natural gas or whether it's coalbed meth- ane or oil. Those fossil fuels that some folks think we don't need anymore, we'll be needing for a long, long time into the future. I see a bright future for the coal industry in the province, and we want to work closely with those that are in the industry so that it can continue to expand. B. Bennett: I'd like to thank the minister for that answer, and I'd like to follow up with another question about the coal industry. The minister mentioned that the industry has high- paying jobs, and it does indeed.

There are about 2,300 people right now working in the Elk Valley coal indus- try in my riding. The average salary, with benefits, is $79,000 a year. These are terrific family-sustaining jobs that we need more of in British Columbia. One of the issues that I hear an awful lot about in the Elk Valley, when I'm there on a regular basis, is the coal-fired power project that Fording Coal put forward.

For at least ten years they've been essentially wrestling with the former provincial governments to find out what the rules were around air emissions and what the provincial energy policy was with respect to using coal to generate electricity. I just wonder, for the benefit of my constituents in the Elk Valley — who are very, very keen to know where the government stands on this issue — if the minister could enlighten us as to the prospects of that kind of project. [1540] Hon. R. Neufeld: Yes, we have, in the energy plan that was put out last fall — last November — that the

5922 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 government announced…. Part of that energy plan has been to develop emission standards for the burning of coal for the generation of electricity. I'm happy to say that through negotiations with my ministry and Water, Land and Air Protection, we were able to come for- ward with some very competitive standards for the province that actually compare very closely to our neighbours east of us, Alberta, who burn an awful lot of coal and have a lot of experience in it. The other thing is that the technology around burn- ing coal is changing constantly.

The member, I'm sure, is aware of that also. As we move forward, clean coal technology will become more and more part of the generation of electricity and the burning of coal for that purpose. In fact, I'm told it won't be that long into the future until coal can be burnt economically and with as low emissions as natural gas has today, which is good news for the coal industry. It's a number of years away, I'm told, but those things are happening as we speak. We look forward to actually having Teck Cominco or whoever put forward a proposal for a coal-fired plant in the Elk Valley.

As I understand — in fact, I've got letters from the communities there — they support it. They want to be careful about the environment, and so do we as a government. The member also agrees with that. We're going to be very careful with the envi- ronment and what we do. But we also have a fair amount of coal in the Elk Valley that can't be shipped and is just being stored on site, which would be perfect for generation of electricity.

With our new energy plan also — the access to transmission for those companies to be able to sell their power — if they wanted to sell it to Hydro and if Hy- dro was going to buy it in one of their calls for energy, they could do that. Or they could actually export it, if they wish. That separation hasn't totally happened yet, but it will happen as we move forward in the next legislative session. I think that looks pretty bright for the Elk Val- ley and the Kootenays, with the development of coal. B. Bennett: I thank the minister for that answer.

For the benefit of my constituents in the Elk Valley and the East Kootenay and also for those British Co- lumbians who live in areas that have coal, and I under- stand that there are many, many areas in the province that have this natural resource…. Of course we're not using it, as the minister stated, to generate electricity, unlike our neighbours in Alberta who generate, I think, about 60 or 65 percent or so of their electricity with coal or maybe more than that. The Americans do the same thing.

I'm just wondering, for all of those folks who are looking for good jobs and economic development, whether the minister could confirm that this govern- ment has done everything it can, from a regulatory point of view, to remove the regulatory obstacles to going forward with this kind of project.

Of course, the companies who would take the projects forward have to deal with the realities of the marketplace and whether there is a demand for electricity and all those kinds of practical considerations, but I'd just like the minister to confirm that in terms of what government can do to allow these kinds of projects to go forward, we've done everything we can possibly do. Hon. R. Neufeld: Yes, we have.

In fact, I'm com- fortable that we've done everything we could possibly do to put into place regulations that actually respect the environment around us and still allow for industry to be competitive out there and build their coal-fired plants. To be honest, I haven't had one letter since we re- leased those standards — actually, we released them in January of this year — saying those are not good stan- dards. In fact, I've had letters saying: "That's great.

We're happy now that at least we know what the stan- dards are, and we can move forward from there." [1545] As far as the coal industry in your part of the world right now, with the amalgamation of the companies, there's probably a little bit more high-level stuff going on in how they're figuring on integrating those compa- nies. Hopefully, in the very near future we'll see some proposals come forward from the industry. There's a couple of other small things that we did for the industry, and those are the things that always get forgotten.

They just came to mind as I was sitting here listening to your last question. Prior to us coming into government, coalmines couldn't use aggregate on their coal lands to develop their roads. It's hard to be- lieve that that was actually in legislation — that they couldn't do that. We changed that, so they can actually use that gravel to develop their own haul roads. We also looked seriously at the impediments with the higher-level plans and how they affected expansion of the coal industry, and we decided we would deal with that also.

So we've done a number of little things like that — not little, but things for the coal industry to make it more economical for them to be able to provide those well-paying jobs the member just spoke about. B. Bennett: I just have one final question/comment. The Ministry of Energy and Mines recently held meet- ings in Sparwood and Fernie to gather public opinion on issues such as coal-fired power generation and coal- bed methane development and mining in general. I understand that those open houses were very success- ful; there was a good turnout. I actually don't really have a question for the minis- ter.

I would like to just thank the minister for, first of all, holding those meetings — and I know he's held those meetings in other places in the province — be- cause it allowed my constituents to come out and learn about coalbed methane development and how it can be done in an environmentally sensitive way. It also al- lowed them to express their keen desire to have a coal- fired power project go forward. Given the minister's answers here in the House today, I'm going to be telling my constituents that now the ball is in the court of the companies with respect to the coal-fired power plant. So thank you very much.

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5923 W. McMahon: I h a v e b e e n t o l d b y t h e m i n i n g i n - dustry that they are pleased with the inspection service that is currently managed by your ministry. I'm told the process has worked extremely well in making the mining industry the safest heavy industry in the prov- ince. I'm also hearing some concern that the service might be transferred to WCB. I would ask for your comments in this regard. Hon. R. Neufeld: Yes, the health and safety stan- dards we have in the Ministry of Energy and Mines are very well run.

It's actually, I believe, partly funded by industry through a tax on payroll tax. They have input into the process, both labour and industry. We do have the safest mine activity, I believe, across Canada. Do we not? Interjection. Hon. R. Neufeld: We're tied with Ontario right now, so we're proud of that. We're proud of the indus- try and the people who work in the industry and work h a r d t o m a k e s u r e i t ' s a s a f e w o r k p l a c e . W i t h t h o s e health and safety standards, we know we can move forward and actually get ahead of Ontario not just in that but in a lot of other things.

The WCB — I almost forgot. There is no intention for us to move all those regulations into the Workers Compensation Board as we speak. R. Harris: First of all, I appreciate the answers to a lot of the questions I was going to ask. You've already answered them for some of the other members, specifi- cally in the area of what we're doing to get investment back into this province. But I want to focus on one specific area: the Bowser basin.

That's certainly a part of the province that holds a lot of opportunity for quite a number of communities and appears to be significantly rich in high mineraliza- tion, gas and oil opportunities as well as — once we get access — some forest opportunities. Can the minister maybe tell me what we're doing specifically in terms of marketing that region of the province and how you're going about that? [1550] Hon. R. Neufeld: Yes, we have had some activity in the Bowser basin and at what we call the interior basins, also just in the Cariboo.

We've had some tar- geted geoscience ongoing and have it ongoing now in the Bowser basin. In the Bowser basin, as we speak, there are companies that are interested in the interior basins' potential — Devon, a large oil and gas company, and another one — so there is interest in those basins. I've also had an opportunity — or the ministry p e o p l e d i d ; I wa s n't ab l e t o b e t he re — with some in- vestors from China, of all places, that came to British Columbia to talk about the energy industry.

They pointed out some of the basins to them, and they were quite astounded and, in fact, drew a circle with their fingers around the Bowser basin and asked: "How much for that one?" They had obviously come with a little bit of money they want to invest in Canada. There is significant interest in those basins. I've also met with numerous oil and gas companies in relation- ship to the basins, and they have all expressed interest.

They're new basins that haven't been drilled to any extent, and so the targeted geoscience work we want to do — and we'll have some m ore moving forward this year — will help us to market those basins to the right people so that they'll come in and invest. Part of the problem in doing it is because it is new, because there is no infrastructure. When I say infra- structure, I'm talking more in relationship to the oil and gas industry as to the pipelines and the plants and all those kinds of things that would be needed.

That's readily available in Alberta obviously, all over the province and in northeastern B.C., so we have to look at ways we can actually encourage the industry. One of the other ways we can encourage the indus- try is by reducing the royalty rate in general in a cer- tain area. It's not a subsidy, but it's an incentive for industry to come in and do their work. We haven't done that, but we're actively thinking about doing it so that we can get some interest into those areas. The up- front costs to them to actually get something happen- ing commercially would involve a fair amount of in- vestment.

We're trying hard to make those things happen. I know that in the member's region, it would be great if we could have some drilling and some mining take place in those basins. J. MacPhail: I'll continue on with coalbed methane, and I have questions, of course, on offshore oil and gas, which I understand we have not got to yet. I'll finish my series of questions on GSX as well, and I have a few questions on Columbia Trust.

Now, on coalbed meth- ane, the minister has introduced legislation, and I will be having a substantial number of questions at the leg- islative level in terms of how his legislation is going to work, but the whole issue around coalbed methane development is what I want to explore now. I understand the Minister of Energy and Mines will appear at a public meeting tomorrow, Thursday, April 3, in Hudson's Hope. Certainly, there's been a news release released by the concerned citizens of Hudson's Hope, which reads that there is….

Let me just read from it: "'There is the perception that the meetings so far have been an attempt to put the government and industry spin on coalbed methane development rather than an attempt to seriously consider citizen and landowner concerns,' say the concerned citizens of Hudson's Hope. The current thrust of the citizens' and landowners' efforts is to push for a moratorium on any drilling until full, detailed environmental and social impact studies can be carried out." [1555] They continue: "So far, despite continuous questioning and requests, the Ministry of Energy and Mines and the OGC" — Oil

5924 B RITISH COLUMBIA DEBATES W EDNESDAY, APRIL 2, 2003 and Gas Commission that would be — "have not been able to provide such an example. The citizens and landowners, while not opposed to all development, are demanding that a plan to do it right be in place before startup.

They assert that a moratorium is necessary to allow the time for study and planning." They then continue on to say, referring to the minister: "His recent open cabinet meeting presentation upset many residents, because it included nothing about environmental and social concerns that surround coalbed methane development wherever it has been done. According to Mr. Metzger" — and Mr. Metzger is a member of the Hudson's Hope concerned citizens — "'it was an orchestrated political performance designed to support the government fast-track position.

He will be called on to account for the serious omissions and discrepancies.'" Anyway, the minister is going to attend that meet- ing tomorrow in Hudson's Hope. We will get the up- date on…. I'm not to going to ask the minister to repeat what answers he's giving there, but that's the citizens' concern. Just to carry on, there's an open letter from Larry Peterson, who's a resident of the Peace River valley, dated March 18. It's to the Minister of Energy.

It says: "Dear Sir: "In recent weeks many of your constituents have become increasingly aware of the potential for a massive coalbed methane drilling program sponsored and encouraged by yourself as Minister of Energy and the corresponding bureaucracy that promotes it as a very clean energy source for the people of B.C. if it is done right, as you like to say." I'm not going to read the whole letter. It's actually a very good letter.

He goes on then to say: "From the extensive research done by some very concerned and dedicated people, it has become abundantly clear that this type of drilling program can endanger and have serious long-term consequences to the entire Peace River drainage system and the precious aquifers, rivers and streams which are the lifeblood of the entire region." He then goes on to say…. This is Larry Peterson of Peace River valley.

"We have sadly learned from first-hand experiences of farmers and ranchers and other residents of the Powder River basin in Wyoming and in Colorado, who have for more than the past ten years had to deal with the tremendous impact that coalbed methane drilling has had upon their aquifers, rivers, lakes and streams. Their lifestyle has been forever altered, the social fabric torn — the short-term gain derived by the state government for long-term pain when the coalbed methane development was rushed in to provide funds to overcome the state government deficit." Mr.

Peterson goes on to say — sound familiar? — it was not done right: "There, as here, a few test holes were proposed here and there, and soon tens of thousands of closely spaced wells were developed. When it was not done right, they experienced the consequences. Once-pristine rivers and streams now bubble with methane gas, salt water and heavy metal-laden runoff that kills cattle, wildlife and fish. Vegetation dies and refuses to grow again. People's water wells dry up or become contaminated to the point that they can light up their kitchen tap with a match.

Once valuable ranch and recreation land decreases in value and in some cases is not even sellable." I've got one other letter to read into the record and then a series of questions based on this. This letter is dated March 20 from Mrs. Terry Webster, who also copied me on the letter: "Dear Mr. Neufeld: "My husband and I are landowners in Hudson's Hope. Although our subsurface rights have not yet been sold, we have been informed, thanks to our own research and phone calls, that the rights are likely to be auctioned off in April or May of this year.

"To say that we are displeased would be the understatement of the decade. We have spent most of our adult lives building this ranch, and just as we are preparing to quit our jobs and farm on a full-time basis, coalbed methane arrives and threatens to endanger our buffalo ranching operation and our lifestyles in general. [1600] "The Oil and Gas Commission continues to assure us that all drilling operation will proceed in a safe fashion, but I am not reassured by their statements.

The March 17 issue of the Vancouver Sun criticized oil and gas drilling firms as follows" — and she quotes from the Vancouver Sun article.

"'The oil and gas compliance review report says 38 to 44 percent of drilling companies active in B.C.'s north failed to comply with sewage disposal and water protection regulations according to audits in January 2002.'" Her letter then goes on: "Further, at the workshops offered by the Oil and Gas Commission on Saturday, March 8, I listened to the presentation from the Water, Land and Air Protection representative responsible for the draft guidelines for disposal of surface water for coalbed methane. At first, I was greatly relieved to see stringent guidelines.

Then I heard that these guidelines are minimums and any company that wishes to exceed them, up to ten times the listed amount, simply contacts the Oil and Gas Commission. Of course, the Oil and Gas Commission won't have the staff to deal with these issues, as seen by the

article referred to above. "Why is water protection given over to the Oil and Gas Commission rather than to Water, Land and Air Protection, where it belongs? The answer, of course, is to streamline the process for foreign and national oil companies. Who stands to lose from this? The landowners, obviously." Mrs. Terry Webster then goes on to say: "Water disposal is just one issue. The extended flaring periods offered under the experimental scheme are also of great concern to us as my husband has suffered from asthma all his life.

When you add that to 'wells at any density,' I can see that air quality could become intolerable for us in our home. "Next, we add the constant disruption caused by the crews that will be drilling. I have looked at the Alabama slides on the Internet that show typical well sites, and I cannot imagine our ranch being converted from its present pastoral beauty to that type of industry mess." Those are just some of the examples. Just before I start my questions, will the minister be attending the Hudson's Hope meeting tomorrow? Hon. R. Neufeld: Yes, I will be. In fact, I will be going up to Fort St.

John later tonight, so she knows

WEDNESDAY, APRIL 2, 2003 B RITISH COLUMBIA DEBATES 5925 my whole itinerary. I will speak about the energy plan t h a t w e h a v e i n t h e p r o v i n c e a t t h e D a w s o n C r e e k Chamber of Commerce. I'll be meeting with a number of first nations over some other issues. I will have some meetings with the public, some private meetings with some of the people from Hudson's Hope and also a public meeting. Before I sit down, as far as public meetings go, I should maybe put on the record the number of public meetings we've had in Hudson's Hope.

In fact, June of last year was the first one — talking to the folks at Hudson's Hope about the development of petroleum and natural gas in their area, which is inclusive of coal- bed methane. We've had two public meetings in March that were attended by my ministry, Water, Land and Air Protection and Sustainable Resource Management to bring forward and actually try to answer the peo- ple's questions from Hudson's Hope. I can tell you that I can understand why some of those people would be concerned after listening to the environmental law society go through the province trying to instil some fear into people.

There have been mistakes made in the U.S.A in development of coalbed methane. I don't defend that at all. That's the United States of America. We've had our people to those basins to review what went wrong; why it went wrong. In fact, at the ministry level we want to do it right also.

We want to make sure there isn't the impact on people — regard- less of whether they live in Hudson's Hope or on Van- couver Island, where there's been a well drilled; or in the East Kootenays, where there have been about 16 wells drilled; or in the Tumbler Ridge area, where there have been about 11 or 12 wells drilled for coalbed methane. We don't want to see unnecessary impact on any of those people or landowners. We've had those meetings to bring forward the ministry's viewpoint and to listen to the individuals who are concerned about coalbed methane develop- ment.

I'm going there to talk to them a little bit more about it and also about the benefits of coalbed methane and the benefits that could happen in the community o f H u d s o n ' s H o p e i f w e , i n f a c t , m o v e f o r w a r d w i t h this proposal. [1605] J. MacPhail: I have a series of questions that arise out of the government's move forward on coalbed methane production. Just to put it in context for the people who are listening, in order to get the methane out of the coalbeds, what is done is that water pressure is applied.

Basically, the methane is pushed out along with the water, so there are water quality issues and water quantity issues. Well, there's water production produced. I'm fine for the minister's staff to correct.… I'm trying to put it in lay terms here. Feel free to stand up and correct it. There's water production that arises out of coalbed methane production, which has some concerns around that. What water quality issues and problems may arise with the produced water? I think the term "produced water" is the technical term that arises out of the water that results from coalbed methane production. Hon. R.

Neufeld: The member is basically correct in the way she described it. The difference is that water is pumped out to release the coalbed methane from the coal seams. There is a lot of water that has to be pumped before the coalbed methane will come to surface, and so there are obviously some issues around disposal of wa- ter. [J. Weisbeck in the chair.] Depending on where you're at, depending on the geology, some of that water can actually be potable.

In fact, in some of the terrible basins in the U.S., some of the communities are pretty happy, because they didn't have a source of water prior to the drilling for coalbed meth- ane, and now they have potable water. Some of the wa- ter needs very little treatment, and it can be released to the environment either by spraying it on farmland for irrigation purposes or by releasing it into streams — those kind of things — if it's potable water. All of that has to be done under the regulation of the Oil and Gas Commission. You don't just pump the water and put it wherever you want.

There are those who infer that that's what happens,

Document details

Collection	British Columbia — Debates (Hansard)
Citation	H0402pm 12
Type	hansard
Volume / chapter	H0402pm 12
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	d5ec85f7d247891c5c4abf841ba091849055e99a

Source file is stored in the law ingest library (pdf).