Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JULY 2, 1997

Afternoon

Volume 6, Number 10

Part 2

[ Page 5057 ]

The House resumed at 6:34 p.m.

[G. Brewin in the chair.]

Hon. J. MacPhail: I call Committee A, and for the information of the members, we'll be debating the estimates of the Ministry of Employment and Investment. And in this House, I call Committee of Supply B. For the information of the members, in about a minute we'll be debating the estimates of the Ministry of Forests.

The House in Committee of Supply B; G. Brewin in the chair.

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 37: minister's office, $433,000 (continued).

T. Nebbeling: Earlier on this afternoon, before recess, my colleagues diverted from the questions I was asking by going back to the advertising, comparing costs and how it is broken down. But I would like to go back with the minister for awhile to the regulatory issues working group. I do that because, while I was listening to some of the answers from the minister in response to the questions from my colleagues, there was some mention about the Forest Practices Code and the need for some changes in the regulatory system.

What I'd like to ask the minister is: since February of this year, when this working group was talking, were they at all focused on the regulatory changes that will be needed to accommodate, in particular, the operation of the new land-based delivery system without some of the rules that have guided the delivery of FRBC money up to now? I can't see how, without this committee having gone over some of these regulatory issues, the change can be put into effect. So did this particular group discuss any of the issues related to the relaxation of the Forest Practices Code to accommodate the new land-based delivery system?

Hon. D. Zirnhelt: Under the new land-based delivery model, the code will still apply, as it does today. The regulatory groups didn't discuss the delivery of FRBC. In fact, it was the FRBC group that discussed the delivery, because the board of Forest Renewal had instructed work to be done, and they hired Lee Doney to oversee that work to streamline the delivery of FRBC. So the streamlining of the delivery of FRBC was separate from the streamlining of the delivery of the Forest Practices Code.

T. Nebbeling: Is the minister saying that the group that was going to look at regulatory issues in the Forest Practices Code did not get involved in the regulatory changes to the Forest Practices Code that will be needed in order to accommodate the new delivery? I'm asking this question because the new regulatory system that was approved, I believe, by the board of FRBC in January or February of this year -- or at least a move toward a new form of delivery . . . .

I would find it strange that a working group like FRBC -- delivery working group, as the group is called -- would actually work in isolation from the group that was put together to deal with regulations. So maybe I misunderstood the minister, but I got the feeling that this FRBC delivery working group was actually working in isolation and making recommendations, as opposed to FRBC.

Hon. D. Zirnhelt: I believe there was a high degree of awareness of what various groups were doing. The Ministry of Forests is responsible for the legislative changes that are in Bill 47. In the process of developing the changes in the legislation, we consulted with various groups, including FRBC and other stakeholders. It wasn't necessary for the regulatory subcommittee to discuss this, because there was already a group on the FRBC delivery. Most of the FRBC delivery model just required a change in who the contractor was and how it was going to be delivered on the ground. It didn't require regulatory change for the most part.

T. Nebbeling: Did the FRBC delivery working group meet with any of the environmental groups that also met with the regulatory issue working group?

Hon. D. Zirnhelt: I don't think so.

T. Nebbeling: Does the new land-based delivery program -- or direction system or whatever you want to label it -- include how silviculture programs will be managed in the future, as far as the approval of programs is concerned? With that, I'm going in the direction of what the minister has talked about before, and that is that the requirement of permits to get the silviculture plans approved have been considerably relaxed. Is that not requiring a change in the Forest Practices Code, as well, to accept that relaxation of paperwork applications, providing of plans?

As the minister stated the other day, there is a reduction from six plans to three plans when it comes to silviculture applications. Was this done just by the FRBC delivery group, or did a regulatory issues working group have anything to say on that, as well?

Hon. D. Zirnhelt: Yes. The regulatory issues working group dealt with a reduction in number of plans. The fact that one of those plans was a five-year silviculture plan meant that there had to be some changes. The ministry itself dealt with the changes to the legislation that was required to achieve the silviculture objectives in a different way.

T. Nebbeling: Maybe before I go on -- because I certainly have some more questions on the role of this committee -- can the minister tell me who the committee members were and what role they played, either in the bureaucracy . . . ? Or, if they were members from the stakeholders group, who were they?

[6:45]

Hon. D. Zirnhelt: I already read into the record who the members of this particular committee were. I mentioned the three officials: Allan, Pedersen and Kumi. And for industry: Sitter, Rounsville and McMullen; with backup support from Brian Gilfillan. Those were the people that were looking at the number of plans and reducing the number of plans. There were no environmental stakeholders in that particular process.

But the same ideas about reducing the number of plans came up in the process that I established in August, which went through, put a report out in December, took comments until the end of January and then looked at the regulatory changes that were necessary, the legislative changes that were necessary, and so on.

That particular change to the regulations took advantage of mailing out to various stakeholders and receiving written comments. There is, when we deal with some of the regulatory changes within the Ministries of Employment and

Invest-

[ Page 5058 ]

ment, Forests and Environment, a steering committee of assistant deputy ministers that makes recommendations to ministers and, ultimately, cabinet.

T. Nebbeling: The members that the minister named before were members of the regulatory issues working group. I was looking for the members of the FRBC delivery working group, which was headed by Lee Doney. Maybe they are the same members as in the other committee. If that is the case, maybe the minister can explain that.

Hon. D. Zirnhelt: To my knowledge, he didn't have a committee, but I'd be happy to ask him if he had a committee working with him. He was charged with the responsibility, and for any reporting out to the Forest Renewal board, he was there and gave the reports himself. But I'll find out if he had a committee working with him.

T. Nebbeling: I always have a problem when a group consists of one. In the paperwork that I have, this particular group was certainly identified as a group and not just as a consultant or as somebody who was writing a report basically single-handedly. Maybe the minister can explain to me why . . . . Or maybe -- rather than why -- it is the Forest Renewal board that was involved in creating this new land-based delivery system. I can't see that just one person on his own creates a whole new plan that is no longer based on spending targets but is more focused on getting a regional involvement into it -- which I believe will be an improvement.

This is a pretty impressive undertaking if this individual, Lee Doney, has indeed done all this work on his own. It's not something that you just do by sitting back for an hour or two and saying: "Well, I think this is the right way to go."

So I'm really surprised to hear that this individual has done this whole change in focus of how the land-based delivery system, which will manage approximately $300 million a year for the next five years -- that it is the brainchild of just one person and that no discussion has taken place on it with other opponents or other opinion-makers, so that the plan works for all and not for just the management team that will deal in the future with FRBC money.

Hon. D. Zirnhelt: Well, Mr. Doney had extensive consultations with people who have thought about this. But remember that it was the board of Forest Renewal that first analyzed how they were doing and, through strategic planning exercises, came up with the idea that we should go back to a simpler delivery model. So it was the collective wisdom and knowledge of all those people on the board, and there was a full range of stakeholders represented there. There were all the advisers to Forest Renewal and their executive, their program directors, and so on.

So there were discussions. Mr. Doney would have held discussions with the ministries -- at least the Ministries of Environment and Forests. He would have had discussions with licensees about how this might be done. The Forest Renewal staff had had discussions about umbrella contracts, for example -- umbrella agreements, multi-year agreements -- so there was a whole history that was then available to Lee Doney.

As I said, I would get information. I suspect he took advice from a number of sources and did go and consult more widely than with just the board of FRBC. But there were many discussions where he would be reporting to the board. So we had quite a range of stakeholders advising him.

Now, when he developed the new model, that work was then available for the purposes of the jobs and timber accord discussions. So government then took the new delivery model to industry and explained that this now was the way we intended to achieve the original objectives of FRBC.

T. Nebbeling: I'm still baffled that this is indeed -- if it is -- the exercise of one person who may have spoken to others but not in an official capacity, like: "Your voice is recognized as being a contributor to the new land-based delivery system."

Did the minister actually say -- and I'm going to be careful not to put words in the minister's mouth -- that staff of FRBC has been involved in advising Mr. Lee Doney and putting together this new document, this new direction? Maybe the minister can clarify that. I thought he said that.

Hon. D. Zirnhelt: Let me explain in my words what I think happened. Mr. Doney was given the responsibility to come up with a new delivery model. In the process he was to discuss it with FRBC staff, who have had some considerable experience now in administering contracts and in the design of the existing delivery model -- similarly with the Ministry of Environment and the Ministry of Forests, both of which have had experience now in the delivery of forest renewal programs. So he did have advice.

He is a special adviser to the board, so as such, he had access to all the staff of the board if he needed information. It wasn't just single-handedly producing background reports or whatever; he could have information brought to him. We're talking about a person who's been in, roughly, a deputy minister capacity in a number of organizations and agencies and, as such, has considerable experience. He worked full-time on this for the better part of six months. It's quite conceivable that he could produce a product that would be suitable to undertaking a new direction.

T. Nebbeling: So far I get the feeling that it has actually only been FRBC's staff that added, no doubt, to the wealth of knowledge that Mr. Lee Doney had on FRBC, on how in the past the funds had been distributed and on what basis. I'm not doubting the deputy minister's knowledge, but I do have a problem with the idea that . . . .

So far I've only been given the feeling -- and we may expand on this -- that FRBC's staff has been advising the deputy minister in creating a new document that basically has to undo a lot of the damage that has been done in the first three years because of the wrong type of delivery system, including the fact that you may be involved with a three- or five-year project but you've only got funding for one year guaranteed, and then the next year you have to apply for the second portion and hope that you get that money.

The other thing, of course, is that in the past I think there has been very little continuity in regard to the delivery of funds to projects. By that I mean that projects which were undertaken would be cancelled a while later. This was often done by the staff that was also involved in advising Mr. Doney. I would have expected that there would have been a much bigger role in this process. I would have expected that that would have been the members of this working group, which now is really not a working group; it's just a one-man show that entices the opinions of many people.

Nevertheless, I get the feeling that the authority to create a document is with Mr. Lee Doney. Sure, it will go to the board, and the board will have another look at it. I do not get the feeling that there have been independent opinions

[ Page 5059 ]

brought into the whole discussion of how we can make FRBC a better body to deal with the financial management of the stumpage -- the super-stumpage that was given to them with a very clear mandate.

As we said last week -- the minister, at least, said last week -- in order to implement this land-based delivery system, we will have to have some amendments to the act. I believe you made that point last week. I truly have a problem when a group that hasn't done a great job, to put it mildly . . . . The board of FRBC has been the only conduit to channel the information that Mr. Lee Doney as the consultant, the adviser, the creator of this new land-based delivery system has been able to accumulate. How did he accumulate it? Again, from the same people that work in the organization who haven't done a great job.

So I am looking for an element in the whole delivery that is not directly involved with FRBC. Has that happened?

Hon. D. Zirnhelt: The independent look at things has to work for and be contracted by somebody. The board of directors of FRBC was not happy with discontinuity; they tried to get things up and running quickly. And you know well, and I know, that it's difficult to spend this kind of money wisely, quickly. So the board of FRBC drove to get the money spent. I guess the question is: how could we administer it without creating an entirely new bureaucracy -- a huge bureaucracy?

The idea was developed that to get it up and running, we would have the Ministries of Environment, Forests and maybe Skills for the training part as agents of convenience who had some knowledge of this type of work to administer it -- that that would be a cost-effective and doable way of getting up and running. To hire all the staff and so on separately and independently would be a difficult way to get it up and running.

The board was also concerned about the fact that we needed to go to a more planning-based model, as opposed to a project-driven model where you just wait and see what projects you . . . . In some regions, we weren't getting applications; some licensees in some regions weren't applying. Today we still have a bit of a problem with getting an even spread.

Prior to the negotiation phase over the jobs and timber accord, Lee Doney met with the stakeholders of FRBC. He was taking advice from stakeholders. He reported to the chair of the board -- not to the CEO, not to the senior bureaucrat of the board, but to the chair. This was advice independent of the board, independent of the administrative staff of FRBC.

During negotiations on the jobs and timber accord with the CEOs, Lee Doney was joined by the CEOs to agree on a new delivery model. We wanted to know that it was doable, so we had to have advice from all those people who advised the CEOs. They actually went and looked at their experience in the field. We were drawing on a lot of wisdom out there in the private sector, the public sector.

Mr. Doney was not working alone; he had advice. He had people who were experienced in all fields -- private consulting, government work, private industry work -- so he had advice. If he had a problem that was not resolved or where there was no agreement, he would problem-solve until he had a solution. I think he was providing an independent assessment -- a model, the objective of which was to be able to deliver the program in the most cost-effective manner.

[7:00]

T. Nebbeling: I'm happy to hear that some of the stakeholders were consulted, that their opinion was solicited. But then the minister said: "You know the CEOs -- we talked to them, the private sector, and they know what they're doing." I wouldn't disagree with the minister at all. There is a lot of knowledge there. However, FRBC was not there just for the companies. The money was definitely in the form of a super-stumpage collected from the companies. I'd like to come back to that, because other companies than the majors have been participating in making these contributions, as well, over time.

Their voice is sorely missed in all the exercises that we have been discussing. I'm talking about the smaller operators.

To come back to the point I'm trying to make, when we talk about the stakeholders, too often we only hear the voice of the so-called CEOs of the major companies. FRBC was also supposed to serve the communities, whether it was for recreational opportunities or for finding new ways to bring new elements into a community so that people that are displaced have an opportunity to go into a new direction, be it through education or through new opportunities with a value-added project.

In the whole debate that we have heard so far, I haven't often heard the voices of these communities. Very rarely have they been enticed to speak up. When we travel through the communities and meet with the community leaders, that is often one of the really big problems that community leaders have with Forest Renewal B.C. -- that not much of that money is actually earmarked for real community redirection. By that I mean new opportunities for younger people who will not go, like their dads did, into the forest industry, but who nevertheless have to find something in that community that can keep them there.

As much as the Premier at the time promised that Forest Renewal B.C. was introduced as the tool to make sure that nobody would lose a job -- or at least if there were a job lost there would be a new opportunity created -- I don't think we very often spent much time thinking about the next generation that we want to keep in the communities where they live as well. It was not just economic sustainability that we were seeking for forest-dependent communities, but also social sustainability. That's why communities often complain that there is very little money out of the total amount that FRBC has available. It's clearly coming toward that objective.

So not hearing the minister saying -- when Lee Doney goes around and tries to entice opinions -- that communities have been involved in this whole process, as well, is disappointing. Maybe it is an oversight that the minister can clarify: were communities asked to give an opinion? I would like to hear that.

Hon. D. Zirnhelt: The communities do have a representative on the board. The mayor of Lumby is on the FRBC board. I don't recall any concern raised that Mr. Doney wasn't consulting sufficiently. Remember, the exercise was about trying to deliver the land-based programs more cost-effectively.

As you know, if you define communities -- regional district or municipality -- they don't have any expertise, particularly in land-based program administration. Nor do they offer it, to my knowledge. I can't recall one letter from a community. It's really about money -- right? If it's about money, then they would like money, and they would like to have a say in how it's spent.

[ Page 5060 ]

I guess the job of FRBC is to find an equitable distribution between the program areas. There is more that is going to be spent in the communities' envelope this year. But as we concentrate on the land-based programs, more money is going to be spent there. Don't forget that one of the intentions of Forest Renewal is to renew the forest -- the biggest concern.

There are two concerns that weren't being met adequately. One was sufficient money being invested in the land base to get more productivity so that there would be jobs down the road, jobs protected and jobs created, more fibre produced and so on. That was a weakness. We weren't getting enough of that in the ground, because there were all kinds of debates about the economics of that.

The communities program is there. It's larger than it was before, and when we were discussing what the forest worker agency would do, there was lots of discussion with communities. Anytime there's a consultation, you can't sit and study forever. We had to have a new delivery model that met the needs of the program of FRBC and met the needs of communities.

The needs of communities were to have more stable employment and to have investments in the forest base, so that part of the program was what Lee Doney was concentrating on. It was the delivery model for the land-based program. He was not charged with assessing the delivery model for the rest of the programs. The board did not ask him to do that.

The delivery of the rest of the programs, the priority areas and so on, is decided after consultations through an advisory process in the communities, which is wide-open. It's wide-open for people who live in the forests, in the small unincorporated communities and in the larger incorporated communities. They were all invited to come and tell the Forest Renewal board how they could give input into setting priorities for Forest Renewal.

T. Nebbeling: It's interesting that the minister says that we really haven't heard dissatisfaction from communities. I think you started your statement with that. I'm surprised.

I would not take the town of Lumby as an example of how communities get benefits. The mayor of Lumby is on the board -- I know that -- and I'm sure she stands up and fights for her area from time to time. However, there are another 174 forest-dependent communities that do not have their local elected leaders on the Forest Renewal board. Being on the board, being there when this stuff is dished out, will make a difference. I mean, it would be naïve to think that the mayor of Lumby is not from time to time going to say: "Now I want my community to get something.

I spend a lot of time on this board, which takes away from the time I should be spending in my community, so in return I expect something." And that's fine; I have no problem with that.

However, when the minister said that we haven't really heard from the communities about not being satisfied with what is coming their way, we in the standing committee on forests spent almost three months debating exactly that issue. In spite of some of the members opposite thinking that many of the letters received from mayors, councillors, community organizations . . . . It was perceived that it was an enticed type of letter-writing campaign. No, what these letters really reflected was the frustration in the communities that do need to rechannel the opportunities in these communities, and they were just not getting the responses that they needed to have.

I think the communities are disillusioned with what has happened in Forest Renewal B.C. They have asked the board to travel. They have asked the standing committee on forests to travel to some of these communities and have a dialogue, so people feel that it's truly a system where they are being heard, as well.

It was interesting to note that Roger Stanyer, the chairman of the board, in one of his very first interviews, which he did with Truck Logger Magazine , made it very clear that unless communities were involved in the process, unless the voices of the communities were heard and responded to in the appropriate manner, FRBC was doomed to fail. These are his words, not mine. If the minister hasn't seen that, I have a copy of the magazine that I can provide him with.

What that says to me, now that we are looking at a new way of delivering the land-based delivery system, is that FRBC has indeed failed to deal with that very specific purpose, that very specific need -- and that is hearing the voices of the communities.

That's why, when the minister was talking about the so-called stakeholders' group that had been enticed to respond, give information and look at the new direction, I was interested that communities were not named in that. That's why I bring it up. I do not think any land-based delivery program that is ignoring the social and economic well-being of many communities throughout British Columbia . . . . If that is not part of the deliberation, then it's not going to be perfect.

It was also telling that the minister said: "You know, we have to look at the new delivery system, because there are areas we don't even get applications from." The minister has to look at why an area would not apply for FRBC funding. Can it have anything to do with the paper mill -- the enormous amount of bureaucracy you have to overcome, the application system? If the minister truly looks into that, then it becomes clear quite easily that up to now a lot of people, with smaller projects in particular, were disillusioned or discouraged by the system that was in place and is in place right up till today: how to get FRBC funding for a project. I hope that will certainly change here, as well.

What I'm saying is that if the community role had been recognized earlier by FRBC, and if the voices had been heard of the communities and of community leaders and especially of the elements that would have worked to create social and educational well-being, then FRBC may not have needed this dramatic change that the minister is talking about and that will be undertaken in the near future. Hopefully, somehow we can still have this dialogue with communities.

I don't know if the minister wants to respond to that. I think it is quite serious that the mandate of Forest Renewal B.C. was clear: to have the voices heard of all parties, all stakeholders. The communities have clearly been left out of that process. Even at a time when it became so clear that they were left out of the process and when on all sides hands were raised that said, "Can you listen to us, give us an opportunity to say what we have to say in order to also have the benefits from FRBC?" the response was very negative from the FRBC board, from the standing committee.

That voice was just not being considered. Maybe the minister wants to respond to that, and then I would like to talk about the native community, as well.

Hon. D. Zirnhelt: Go back to where you started this conversation. I would caution the member about insulting some of the community leaders. The mayor of Port Alberni is very insulted by the statements you made in this House --

[ Page 5061 ]

very insulted. And now you're suggesting that the mayor of Lumby, who doesn't represent Lumby on the board . . . . I said she was the mayor of Lumby. Now you dare to suggest that perhaps she's there and will get a little something for her time. It doesn't work that way. She represents communities on the board, and everybody else on the board lives in communities. One of the major licensee representatives lives in Prince George. Another one lives outside Cranbrook in a small community. These people live in communities, so that community voice is there.

I can tell you haven't been at the Forest Renewal board. There's a community subcommittee that advises the board. Yes, you wanted a road show for the Forest Renewal committee. Forest Renewal has an input, and it isn't just the standing committee that is for community input.

Yes, we did listen to communities. Communities were concerned that money would be taken from Forest Renewal funds and put into general revenue. We said that we listened to the concerns of communities. Yes, they said that they didn't want that to happen. They didn't want it to go into general revenues; they didn't want it to be spent on schools and hospitals, etc., although some did. They wanted it to go back into the forest land base. They didn't say to put it into the communities program, into economic diversification; they said to invest it back in the forest land base.

They also said to do it in the most cost-effective way, and so we needed a new delivery model for the land-based programs.

[7:15]

There were other problems. Ministries could only do year-by-year contracts; we needed multi-year contracts to get the stability that's out there. And we're saying that the forest sector people, communities, labour groups -- just about everybody wants there to be community stability. There is no one voice of communities. When I hear communities say, "We want more of the money for economic diversification," we hear that, but we also know that we've got to have a solid investment in the land base of the forest.

That is the best opportunity to take people in the existing workforce of the forest industry and keep them working, where there's some kind of displacement. So yes, Forest Renewal was set up to listen to the voices and to have all the stakeholders there. It won't work if we don't listen to the environmental stakeholders, to the industry stakeholders and to other stakeholders out there, including communities of first nations. We have to listen to them all.

I would submit to you that they are all being listened to equally and that they all have access to the Forest Renewal board and to a very open community and regional advisory process. The very smallest of communities are not represented by any of those people who wrote to you -- those are the organized communities. But the timber comes out of a little valley where there are 50 people or five people, and it's not organized. Those people aren't organized into a voice. They do have a voice now, though, through the regional advisory process.

They were invited to participate in how we constructed that advisory process. So I would submit to you that FRBC has responded, and it is making an adjustment as is necessary. They're spending $625 million, and all of it is going to benefit communities in one way or another. Whether it's a university town, a small town or a large town, they'll all benefit from the expenditure of the money. I'd say it is a boon, and they are involved and their voice has been heard.

T. Nebbeling: I cannot let the statement by the minister about the mayor of Port Alberni and the mayor of Lumby go by. When we talk about estimates and money and where it is going, I find it quite sad that we see this kind of manipulation of facts being used by some members in the House to entice somebody to get extremely angry. I don't know if the minister saw the

article in the Alberni Valley Times . If he had seen it, he would have been shaking his head. If I had been the mayor of Port Alberni, I would have been fuming, because the member from Port Alberni used language you will not find in Hansard . You will not find the word used by me as a quote. It is bribery and blackmail when it comes to the mayor of Port Alberni. The whole

article by the member from Port Alberni is bribery and blackmail -- the mayor is bribable and she can be blackmailed. It's a very offensive piece of misinformation by that member.

When I spoke today to the newspaper, they did agree that these words were not mine, because I did send them Hansard . I also sent Hansard to the mayor of Port Alberni. Although I haven't spoken to her yet, because I've been here, she did say to the paper: "Well, it looks like it was political bombast more than anything else." So I think the member from Port Alberni has done this mayor a tremendous disservice by trying to put words in my mouth, something that the minister really doesn't like when I do it to him, but I don't do it to the mayor of Port Alberni.

For him to have used the words that this is how the member for West Vancouver-Garibaldi -- or from Whistler, as he says -- feels about the mayor is more than offensive.

Having said that, I am now going to continue with what I was talking about. I believe communities have been shortchanged; let's put it that way. I think we have talked about it many times, and many times the minister, through his chairman of the board of FRBC, has tried to wave it away as nonsense. Even tonight again, the community role is not so important. It was all focused on the sustainability of the forest. Well, I believe Forest Renewal B.C. is supposed to do more than the major objective: the sustainability of the forest. It has to continue or to create a sustainable work base for communities.

At the same time, the minister is also very much aware that in certain areas it is inevitable that jobs will be lost. Take the North Coast, with the removal of Clayoquot, and if we take away Kingcome or take a 24 percent AAC reduction, it's inevitable that the harvest sector is going to have jobs lost and that these people cannot go back to other areas where they can continue to harvest. When we talk about the people in Tahsis that have been laid off, these people will not go back into a mill.

When we talk to the people in Gold Bridge, 70 workers in the mill there have been given notice and told: "Next year, you're up." They will not go back into a mill. We have to create new opportunities. Not everybody will go into the forest to do what the minister said this afternoon -- that is, build trails, do pruning or spacing or some silviculture activities like tree-planting. Not everybody will be doing that. The people that cannot go back into the traditional sector they've been working in have to find an opportunity. There are kids that are living in the community.

They were supposed to be taken care of as well, be it through education or new elements of added value, but it just isn't happening.

I think it is fair to say that had the minister or the chairman of the FRBC board done in the past what the chairman of FRBC says is most critical -- that is, dialogue with the communities, so the reality of what happens in a community is right up front, people know about it . . . . If that had happened, then I don't think we would see what is happening now -- that is, total discontent with this government's policy

[ Page 5062 ]

and how it has managed Forest Renewal B.C. and how Forest Renewal B.C. was almost pilfered by this government through the transfer of $450 million from FRBC into general revenue to offset the deficit.

All these kinds of attacks on FRBC took place, and nobody was able to say: "Listen, it won't happen; it's wrong." It's only when we as the opposition were definitely involved, mobilizing thousands of people in the end to say: "This is happening to FRBC. If it's okay with you, fine; but if you think it's wrong, you better speak up." Then in September, when the announcement was made that FRBC felt they had a surplus which was not a surplus -- it's proven how it was not a surplus -- these voices suddenly roared over this province.

Even people who didn't think for a second that this government would dare to take that money just shook their head and said: "They did it. This is going straight against the well-being of the working men and women of this province." So this system has not worked. This system has not worked financially; this system has not worked creatively to find opportunities for people. It could have been avoided if FRBC had done what it was mandated to do -- that is, operate with consultation with communities.

Unfortunately, it hasn't happened, and what is even more bothersome now is that we're going in a new direction, and it is not happening again.

Can the minister answer my next question: have the aboriginal communities been asked for their opinion on the new direction, and what has been their involvement in coming to the new land-based delivery system?

Hon. D. Zirnhelt: There is a first nations representative on the board of FRBC. To my knowledge, he has been very active in participating in discussions about the delivery. But other than that, we didn't have a special consultation process with first nations. But I would remind the member that in the advisory process to FRBC, community leaders speak to the regional staff of FRBC all the time, and they speak to board members of FRBC all the time. So the communities do have a voice.

I can't let the member leave on the record that somehow the way to implement a $300 million land-based program is just by asking communities how they think it should be done. I think there needs to be some knowledge about how you run a watershed program, how you run a spacing program. My point was simply that very few communities that I'm aware of have anybody on staff that has ever run any of those kinds of programs. There may be some if they're running a community watershed or something like that. We hear from them, because they would have been partners in watershed restoration.

They have the option to partner up. Communities have had opportunities through the years as one of the stakeholders, one of the partners, to work with other partners to propose applications. The first nations also have some input. They have advisers; they have concerns.

Everybody wants more money spent in their sector and their community. There just isn't enough to go around. The people you spoke of, the smaller projects here and there . . . . There just isn't enough money to go around. There are going to be disappointed people and people who are turned down.

But the money is being spent -- for two years now. Two of the four years, we will have been at capacity or at the targeted amount or beyond it. So one, two, three, four years of running it . . . . We're up and running. FRBC is effectively getting the money out there. I'd suggest to you that any community that looks at it is pleased with the money that's coming in there. It's run, in my view, with a low administrative overhead.

It's running in response to a wide range of interests out there, not the least of which is what's needed in the forest itself. There is a wider range of interests than just "communities." There are people who live in communities. The forest industry people, the labour people, all the people advising, the local economic development groups -- all live in communities, and some of them have no connection to municipal governments. We are listening to communities. There's vast community input. Every MLA has input to the communities and can write and try to influence the direction.

But I say to you that the communities committee itself has people on it that advise the board of FRBC on how the communities program itself is spent. So there's more or less community input into different levels of program.

When it comes to the first nations input, we fully expect to listen to them. We've had discussions with both the first nations groups. I personally have briefed them on some of the new directions and heard from them. There's a wide range of opinion on what we should be doing there. Most of them expressed concern that more money go into the areas from which the timber is extracted, and that means their communities. It's totally understandable that they would see that they should get a piece of the action.

I can tell you that 25 percent of the funds, approximately 25 percent of these programs, do go to people from first nations. The details of this I would like to get into when we are discussing FRBC.

T. Nebbeling: I agree with the minister that this type of detail should come when we really have the FRBC team here. I'm happy you say that, because I was almost tempted to go into one or two projects that I know were community-driven, were basically cut off at the pass when it came to actually going into a restoration project with some workers and were given a fraction of the money that was needed to do these two projects. I'm talking about the Squamish-Lillooet area. However, I'm not going to go into that detail, because it wouldn't be right, not having the right staff here.

But what I would like to ask the minister is: in the past three years, which the minister still feels should be considered quite successful -- or if not the minister, then certainly the chairman of FRBC . . . ? What kind of monitor system is there in place to gauge the level of success of FRBC for the first three years that it has been in operation? How was it done, on an annual basis? Was there a system in place to monitor the activities of FRBC? Or was it just working in isolation and giving an annual business report and like that? How do we ensure that the money that is spent is indeed being spent in such a manner that (

a) we can document it and that (

b) at the end of the day we can say, "Hey, listen, this was a good job" -- or a bad job or whatever -- but that at least we have the power to come to a conclusion about the activities? What has happened in the past three years on that?

[7:30]

Hon. D. Zirnhelt: Well, questions on the systems of accountability that are used by FRBC we should address when the staff are here. There are reports on progress to every board meeting. There are the annual reports.

I just remind the member that one of the purposes of having it before a committee would be to ask those questions, to get into those kinds of questions. It is a Crown corporation; there is a committee. And there's a wonderful opportunity to talk about systems of accountability and monitoring. So while I'll get into some level during this debate, I think most of it that relates to the functioning of the systems that are in place

[ Page 5063 ]

today and so on could properly go through the legislative standing committee. There is a great opportunity there to get into the details of how the Crown corporation monitors itself.

But as for me, as a minister I am concerned about the higher-level issues -- that of work towards jobs for displaced forest workers, major investment in the plan or in the land-based programs. Those kinds of things are the things that we constantly query as members of the board. I, as a member of the board, receive reports on a monthly basis as to how they're progressing towards achieving their objectives.

T. Nebbeling: I'm going to walk away for now from FRBC and its new land-based delivery system, because I think we could spend two days on it and still never, ever touch what really happens with FRBC, the funding and how it has gone. So my stopping now on FRBC doesn't mean that I will not come back. I hope the minister understands that.

What I would like to do now is focus a little bit more on the jobs and timber accord, because clearly the information that I'd hoped to receive from my initial question -- that is, these so-called working groups, what their role had been not only in advising the forest sector strategy committee but also in creating new directions, and what kind of debates had happened in these groups to come to conclusions that now are going to be incorporated into the jobs and timber accord . . . . I had hoped that it would have happened.

I didn't really get much satisfaction on my questions about the regulatory issues working group, because I still do not know if some of the new regulatory rules that will apply to the jobs and timber accord were just done by this committee without consulting with other groups that would have to live with the consequences of some of these new regulatory systems. Of course, I'm talking about the FRBC delivery working group as one. Later on I'll come back to the stumpage working group; I believe there was one like that. There was also a jobs working group.

But what I would like to shift the focus towards for a moment is the jobs and timber accord itself. Much has been said in the last four or five days, and more has been said in the last 14 months, on what the jobs and timber accord is going to do and how it will indeed create new opportunities for displaced forest workers. Later on we're going to have, no doubt, a debate on who should be included in the definition of displaced forest workers and who will be excluded from it. I'm thinking in particular about certain sectors of the silviculture industry. The minister has an answer to that.

But I think we can have a good exchange on that one as well, because I don't see it as black and white, the way the minister or the Premier has presented it to the province.

Just to illustrate it, it's interesting to see that the silviculture industry for ever and ever has made it very clear that its industry consists of 18,000 people -- full-time, part-time. They have made the announcement time after time; it is documented. The Premier last week in an

article said that 12,000 silviculture workers didn't have to worry. It's interesting to see how the minister is already taking away 6,000 jobs by talking about 12,000 jobs. That truly contradicts the statement of the combined organizations that work in that field. But I'm not going to talk about that today. We're going to get to that later on.

What I would like, then, to get from the minister is an idea that once this jobs and timber accord is in operation, in action, and all the regulatory requirements have been fulfilled so that it can start paying money out to entice or to create new jobs -- I shouldn't use the word entice -- how is the government action going to be monitored? How are we in this Legislature going to have an opportunity to constantly -- or at least on a regular basis -- find out how this is happening, if it is successful?

Is there going to be a monitoring system in place that will keep a constant eye, a vigilant eye on what happens in the industry, how it is happening? Is everybody on board? Who's not on board? Is it a fair system? Is it a rotten system -- whatever? Is there a monitoring system in place that will go parallel with the introduction of the accord?

Hon. D. Zirnhelt: Well, the nearest parallel would be the job protection commissioner. He reports on specific projects and so on to ministers through the year, and then he has an annual report. So there is a reporting mechanism.

The jobs accord advocate will be created. It will be that office that has the ongoing responsibility to respond to government and to industry. It will monitor the effectiveness of the jobs and timber accord and will be an advocate for the provisions of the accord. So that person will need to have access to the information from industry and government, and there will be an annual report on progress. It will report to cabinet, and it's our intention to make the reports public.

T. Nebbeling: There's a job protection agency, you just said, and there is a jobs advocate. Or is it one and the same?

Hon. D. Zirnhelt: No, I said that this will be similar in the way it reports out. I said the nearest model would be the job protection commissioner, who reports out on how many jobs he's protected and saved through economic plans and so on -- his activities through economic mediation. It's similar. Don't try to say it's the same or anything. There are similarities there.

The accord spells out that there will be an advocate, which we will create. I said that person will report to cabinet, and the annual reports of the timber jobs advocate will be made public, much as the reports of the job protection commissioner are made public.

That side of the House has confidence in the job protection commissioner; I expect that they will have confidence in the jobs accord advocate, as well. There's a very open process. This has to work for the public of British Columbia. In order to do that, we expect there to be a reporting out on the numbers, and we expect them to work consistently from an agreed-upon baseline.

T. Nebbeling: When we talk about the job protection commissioner, I agree with the minister that Mr. Kerley has done a remarkable job. He's doing a job under intense pressure. It's a job that we should have hoped would not have been necessary in 1997. That's why, in the past, this position was only an appointment for a couple of years, and then the job would just disappear because there was no further need for it.

The problem, of course, is that throughout this province there's so much upheaval in the forest industry because of the Forest Practices Code, the protected-areas strategy, CORE. There's much upheaval because the product that goes into the mills, be it a pulp mill, be it a sawlog mill . . . . To get a product to the mill, the cost is higher than what the end product will deliver in return. That has caused many smaller operations in particular to shut down.

So the job protection commissioner is exactly what his title says. He is there to protect jobs. These are existing jobs, jobs that are under attack, jobs that could be lost unless there

[ Page 5064 ]

is going to be some assistance from the government to assist continued economic viability wherever these jobs are going to be lost.

We see it happening in the Terrace area. In spite of the jobs commissioner's very best effort to save thousands of direct jobs, it will ultimately lead to about 9,000 lost jobs in total, with indirect jobs as well. We see the job protection commissioner working every day to the fullest to see if he can save any of these operations in the Terrace, Prince Rupert, Hazelton, Stewart and Smithers areas. In spite of that, because of the cost of the product that goes into the pulp mill and the price that is received at the end for the product that is produced there, the Prince Rupert pulp mill did close down.

There were 161 people laid off, and these were direct jobs. The community of Rupert is just devastated because they know that the fallout from these 160 jobs, which ultimately will be 250 jobs, is tremendous and is felt through the whole community.

That is the job protection commissioner's role: to reduce much of the impact of what's happening in the industry. It's unfortunate that in 1997 we still have a need for that. Many of the initiatives undertaken by this government in the last six years were not only to reduce the annual allowable cut, to set aside land for other purposes -- which we support -- but to do so in such a manner that FRBC money, which was in super-stumpage and add-on stumpage, could protect these jobs that could be at risk of disappearing. Obviously it is not working. So now to hear that the jobs advocate is going to do the trick . . . .

I quite honestly don't understand it, because I didn't think the advocate was actually involved in creating sustainability for existing jobs. Last week we talked about it. You know, when a council member in Terrace asked the deputy minister why FRBC money was not coming in larger amounts to the area in order to save the whole industry and thereby save the jobs, the answer was: "Well, we're not in the business of saving jobs. We're here to create new jobs." That's going to be the role of the advocate, so I do think it is a different type of job.

I would like to have the minister explain or take us through how he believes this jobs advocate will indeed be able to create jobs effectively, especially in these places where we're losing jobs on a daily basis. I mentioned job losses earlier when I talked about Tahsis, when I talked about Gold Bridge -- small places. There is very little opportunity to replace the jobs that are gone. Not even the job protection commissioner has been able to do anything there.

I cannot see how, when we're going to monitor FRBC money, having an advocate who is solely responsible for creating new jobs and making sure that new people are hired in operations that are part of the jobs and timber accord, he or she can, under that label and in that position in the long term, do what FRBC was supposed to do -- that is, not only keep people at work but replace the jobs that are lost because of government regulations in such a manner that there is sustainability in these communities. Maybe the minister can walk us through how this advocate is going to do his job and how we can make sure that we get regular reports from the advocate.

[7:45]

Hon. D. Zirnhelt: A couple of things. The job protection commissioner works across all the sectors of the economy. When it was originally brought in, it was brought in because of cyclical problems in various industries. But then, as we know, there's structural change going on in the economy -- massive structural change. Some of the things that effect change come from without; some of them are from within. But in structural change, the nature of the industry changes. Every day, as in every industry, there are jobs that are eliminated and jobs that are created. Some businesses fail, in every economy, and others are successful.

But if you look at the evidence, the wood is being cut -- relatively stable. The number of jobs is relatively stable; there are some ups and downs. Pulp markets in the world are a problem. That's structural change. Therefore I expect that the pulp sector will be going through structural change.

You mentioned Gold River; you mentioned Tahsis. Some of these have to do with the changing nature of the marketplace out there, and markets. Of course, we expect industry will have to change. And no, the jobs advocate . . . . Nobody will keep every job exactly the same. Some jobs will go, and others will be created. On the whole, we want more jobs. We've said that very clearly.

I'd like to correct the record a bit. The member has suggested that the deputy minister was in Terrace and had said something like: "It's not my mandate to save jobs; it's my mandate to create jobs." I have no idea where that comes from; we can't figure out where that came from, because the deputy minister hasn't been in Terrace for a long time. He certainly wasn't with me.

You may have been referring to the Deputy Premier, I don't know; I don't think he was in Terrace. I'm not aware of any comment to that effect. If it's a secondhand reporting of a comment, I don't recall that it was made in my presence. So that's a little clarification around that. I just want to assure you that the deputy minister has not been to Terrace as the Deputy Minister of Forests and didn't make a statement like that.

It's everybody's job -- timber advocate, companies, government, stakeholders, everybody -- to try to maintain as many of the jobs as we can but also to create new jobs. The timber jobs advocate is a position that we agreed with industry should report both to industry -- and that will be by way of a public reporting out -- and to government. It has the responsibility to establish accounting mechanisms to monitor job creation and assess progress towards achieving the job targets.

That advocate will monitor ongoing employment and job creation in the forest sector. Where there are outcomes in jeopardy, he will undertake reviews and propose remedial measures. So I expect that he will concentrate on implementing the accord. He's there to advocate for the accord, to advocate for those lines in the accord that say that we attempt to get more jobs out of more timber going to the remanufacturers or through new investment or through other initiatives by the small business sector.

We have to work on implementation. This accord is just what is here, just what's written down. We're now working on the implementation strategy. So some of these details will be there -- the methodologies and so on, number crunching. The advocate will have to work on developing his methods of operation. We don't say: "Here's the blueprint; you run with it." I think we've said everything that's been agreed upon with industry that can be said now.

T. Nebbeling: When the minister says, "We've said everything that has been agreed on with the industry," I know that he knows . . . . I'm very skeptical because it is that same

[ Page 5065 ]

industry that did not sign the accord. If they had agreed on everything, why wouldn't they have signed? As I said before, the accord is a goodwill exercise; it is a good-faith document. But there are no signatures from any of these CEOs representing the industry, who came on board and said: "Okay, we believe this is the right way to go, this is the right thing to do, and this is workable." If they had felt that way, they would have signed it, I'm sure.

Having said that, I quickly want to come back to the serious part of the whole debate, of course, which is about the viability of the industry. Where are we going to put our money, where are we going to put our emphasis, and where are we going to find ways of reducing the number of lost jobs as much as possible?

The minister mentions the structural changes in, for example, the pulp sector. Of course there are structural changes. There are cyclical changes, there are structural changes, but we can deal with that. How we can deal with that is by getting a dose of reality incorporated into how we deal with the industry. As long as we think we can front-load costs onto the product that has to go into the mill, to the extent that what the product at the end is going to be and has to be sold on the global market -- that that product can just not compete with the suppliers from other countries . . . .

I don't care if the answer is because in other countries the wage scale is lower or they have other reasons why they can produce it cheaper. That's not the point. The point is that we have an industry that's been a very viable industry. We can specialize and produce that pulp or paper that is not created in other countries. So there is a way of dealing with that structural change.

Yes, the Indonesian product is cheaper -- we know it -- and so are some other countries. But once you know these facts, you have to get real and say: "Okay, how can we undermine that competitor?" The Indonesians said: "We're going to build a billion-dollar pulp mill. How can we undermine British Columbia?"

I would suggest that the key lies in what we have talked about before, I believe, and that is to set the upfront cost of the product -- the log, the timber -- to reflect the marketability of the product that it creates. If we are going to go into a market type of system and adjust . . . . When the prices are high you charge a high price, and when the prices come down you have a different price. That's the first step in that direction. That will make sure that our product will indeed be marketable on a global level. That will make sure that the pulp mills can continue to do their work, thereby securing the jobs.

If we do that, then we are at least going in the direction where I believe we ultimately have to go. We have to become market-driven when it comes to pulp.

I know that the answer is immediately: "With the softwood lumber deal, we cannot touch any of the cost upfront, because it's seen as a subsidy." Well, I think we have plenty of ammunition now and proof that by having these costs driven up the way they have been driven up, it is kicking Canadians out of a job. The Americans just have to accept that the stumpage has to be revisited and that the stumpage has to be brought in line with what the global market can allow the end product to cost -- that is a given.

The second part, of course, is the overregulation of the whole industry. We're beginning to try to look at it. We haven't got the details yet, but through the Forest Practices Code amendments I hope to see some lesser regulation. That's the second part of why our industry is in this very structural turmoil. Our regulations are such that we cannot compete any longer, because again, it drives up the cost.

I'm waiting to go into debate on the Forest Practices Code to see how much relaxation we can give the industry without violating our environmental standards. There are many different ways that we can achieve the objective of reduced regulation and still stand up as champions for our environment. That is most likely what we have to become -- champions of our environment rather than the defenders at all costs, because that has certainly created the so-called structural change that the minister talked about.

That structural change is avoidable. Once we go into that different mode of market competitiveness -- global market competitiveness -- and lesser regulations, then I have no doubt that the investment will also come back again to this province. With the investment, we can take some of these mills that today, because of their antique state, their aged equipment, can no longer compete in the markets, either because of the costs that the old equipment causes the end product to cost . . . .

With upgrades to some of these mills -- and, I think the minister will agree with me, substantial upgrades, so we need investment -- they can be made much more productive and thereby add a new component to becoming competitive in the world market and continuing to support jobs. The bottom line, regardless of what we do, is that if we cannot use FRBC money for saving the industry from the elements I just talked about -- and it doesn't mean that we just tell the company that here's $100 million or $50 million or whatever it takes . . . .

We can create partnerships with part of the FRBC money to save these jobs, as well.

I talked about this last week, so I'm not going to repeat it. But I truly hope that when we talk about the structural change of the industry, we will start incorporating some of these ways so we can make a difference in how the product produced in these mills, be it lumber, pulp or paper, can compete on the global market. That's where the key lies to our success in the forestry industry.

We will talk a lot more about this global competitiveness when we talk about added value. I'm going to talk on that later when we speak about the objectives of the value-added sector to create 5,000 jobs, but in return there is more timber going toward it -- some 700 million cubic metres, I believe. I haven't got the number here, but when we discuss it I will have the correct number.

While whatever we make with the lumber is great, if we cannot get that lumber into the global market at the right price so that people want to buy our windows, our doors or whatever we make with that lumber . . . . Other countries -- like Sweden and Finland, in particular -- produce exactly the same value-added products and produce them at a much better price. When we cannot compete with countries like Poland, we have to realize that they have a lot of Western infrastructure today to produce value-added products that we Canadians will have to compete with.

If we can't get the price of that value-added product down when we go into the global market, there won't be any buyers. In spite of more timber, if there are no buyers to buy the product because it's too expensive, where are we going? It may be a nice solution on paper. It might be a nice solution to say: "Hey, this is how we do it, and doesn't it make sense?" Of course it makes sense -- but only if we are in a global, competitive market strategy.

[ Page 5066 ]

That is not happening, unfortunately, but hopefully, we can come to that one day. I think many of the problems that have caused the jobs commissioner's role to be such an important one can hopefully be dealt with in that manner, and we will then indeed have job opportunities in mills that are financially viable, selling products that are competitive in the global market.

Having said that, coming back to not really having been able to monitor the FRBC in the past -- besides the activity on the Forests standing committee, of which I have obviously been a member for only one session -- I really believe in a system where whatever government does, we look at input. We have now created the input, with more timber and more money. We look at what that money is going to do, and then at the end of the day, we have to be able to look at the output and say: "Yes, it did make a difference toward what we tried to achieve."

Hearing from the minister that the jobs advocate will report to cabinet once a year and then we'll get a report, well, that doesn't give me much comfort. These reports are often two or three years old by the time they arrive in the Legislature, and I think this has to be a much more hands-on type of approach. The way we totally and constantly channel all the actions of the various groups that will be involved in creating the 21,000 jobs, and where it is happening and where it is not happening -- to me, that is the key.

[8:00]

It should not only be monitoring the industry, although the industry is obviously the number one partner that to a large extent will create the 21,000 jobs -- if it works. At the same time, government is a big partner in this as well, and I would like to hear from the minister how the action by government is going to be monitored. I'm asking this because, during the first three years of FRBC -- and the minister has admitted to it in the past -- the way the Crown corporation worked left a lot to be desired, be it the cost of administration or the cost of all the consultants who prepared reports.

Once the reports were prepared and all the money was spent, there was no money to actually do the projects, as we saw happening this year.

At the beginning of this year, the people on a large number of projects had done their homework. They had spent two years doing ground analysis. They had two years of consultants advising what had to be done in the restoration projects, in particular, and then this year, when the money was supposed to come to actually get people to do restoration work in the forests -- sorry, there was no money. Most projects were given a portion of what they were asking for.

I have pointed this out to the minister before, and the answer was: "Well, you know, if we give everybody what they want, we're all going to go broke." My point is that if a two-year study shows that an influx of, say, $1 million dollars has to be put into a project to restore the area that was under study to its fullest recoverable status, and if the consultants and the experts say it's going to cost a $1 million, you can't turn around and say: "We're going to give you only $500,000 or $300,000 or $200,000." I mean, that is two years of wasted work, and I have pointed that out before.

I would also like to hear from the minister, as this is a living document, how we are going to monitor the work of the government and government representatives to make sure that this

section is also done in the most expedient and most financially responsible way possible.

Hon. D. Zirnhelt: I'm really at a loss. I'm trying to connect the long dissertation about a world-competitive forest industry . . . . And we are. Some of our sawmills are the best in the industry; some of our pulp mills are the best in the world. We do have a world-competitive . . . . I didn't hear any solutions coming to the problem.

The jobs advocate reports to cabinet through the Minister of Forests. From time to time, the jobs advocate will be asked for progress on setting up his systems and will be given assistance if he needs assistance. The jobs advocate will report out on government's role in getting out the wood ahead. It would simply be a matter of the annual report reporting on the accord. Since there is something in the accord about wood ahead, then he will report out on that.

There's something there -- whatever is in there that says it -- about what government shall do and that the advocate will report on it. There's no magic. He'll report on it, and he'll report through the minister. It's like any other objective we set. There will be an annual report that indicates progress toward the aspects of the accord.

T. Nebbeling: Well, then maybe the minister can go a bit more deeply into this advocate role and the number of staff that this particular position will require, because we are looking at a $15 billion industry. That's the forest industry. The advocate will be very much involved in making sure that industry meets its obligations under the accord, but at the same time, I'm asking how the government's action is being monitored.

To illustrate why I think it is so important . . . . I was trying to hint at it earlier on, but maybe I have to go into a bit more detail. After three years of FRBC operation, after three years . . . . The FRBC was saying in the first year: "Hey, listen, we didn't spend a lot of money relative to our objective of $400 million a year for the five-year period that it is supposed to go, but we needed the first year to get our feet wet." Nobody really argued with that. It was a bit of a shame, because communities and companies were hoping that they could start tapping into FRBC money.

It was announced with so much spectacle by Premier Harcourt that the money was going to be available immediately, and it was going to go back to the forests and the environment and the communities. It was going to go back to the communities and the areas it was taken from. So the first year was a bit of a washout.

The second year there was a little bit more money. I think $250 million was committed, and $148 million was actually spent -- correct me if I'm wrong, but I think it was in that kind of area. Again, FRBC fell way behind their objective of $400 million. Had there been a real monitoring system in the second year to ask what happened, I think . . . . Not the Select Standing Committee on Forests, because from experience it is very hard to get any true information on what happens behind the scenes -- the more prodding you do, the less cooperation you get.

There should be an independent agent who would have monitored what this government Crown corporation was doing with the money, because they did take in money: $435 million in the second year, I believe. They took in the money, but they didn't pay it out. Why not? FRBC said: "Well, we're still trying to organize ourselves, and we still have to get more data." Less people felt comfortable with that approach, but we gave them another year.

Well, I don't know how much has been spent in the third year or how many cheques have really been signed, compared to the promises that were made in '96 and were supposed to be honoured before March '97. I don't know how many cheques were signed, but the fact that it took three years to get to that baseline of $400 million a year -- or close to it, as

[ Page 5067 ]

hopefully the third year was. When we are at FRBC, we will be talking about what has actually been spent before March 31, 1997.

Had we had an independent agent watching what happened, I think FRBC would have been a lot more effective in seeing its objective being achieved. The other thing, of course, that it would have done if we had an agency watching over . . . . If we can watch over government and all the other components that make up the society of British Columbia -- and the government is doing a good job at doing that -- why shouldn't we watch what happens in our own home? Had we done that, I believe the 40 percent cost, which was not directly going into the forests, would never have happened. I think it would have been a much lower level.

I know the minister is writing fiercely, because Price Waterhouse did a study on the actual cost of the Forest Renewal B.C. operation and came in with a much lesser number -- and we will discuss it during the FRBC estimates, as well. But if you look at how Price Waterhouse in their analysis came to the cost of the operation of FRBC and at how much money was spent on paper and on consultants and on more paper and on more consultants, they excluded a huge number of sectors from being considered as a cost of FRBC. I've got the study.

Unfortunately, I didn't bring any FRBC documentation files with me; otherwise, I could quote some of them now. But the list of elements that make up the cost of FRBC . . . . According to the study, the cost is less than the 40 percent which even the minister acknowledged as being there. It was wrong, it was a waste, and it had to change.

The 40 percent, of course, was acknowledged by the chairman of FRBC with a shameful face saying: "Yep, we have to do better, and we will do better in the future." Well, I believe that if FRBC, the Crown corporation, had had an agent watching over it, that kind of waste of money -- money that should have gone into the forest, into the environment, into the communities -- would have been caught much earlier, and then it would have done us all well.

I put a much stronger emphasis on monitoring the government than just focusing on the industry. I'm not saying that the industry should not be monitored as well. I think this is a very important type of undertaking that the government is taking on here. The reason for me believing in this type of monitoring is that if there is waste, and if we are not meeting our obligations or the challenges of the accord, then we had better know it quickly and early. Therefore I don't think that this so-called monitoring program by the government, which will be a report once a year to the cabinet, is going to have any value.

Before it comes to the Legislature, we may be well ahead in the second or maybe the third year. Sometimes these reports seem to disappear. I would ask the minister if there is still consideration for a broader monitoring program at this stage, so that we can have a good idea what happens on a quarterly or a yearly basis, maximum, and take action so that the second year will be better than the first year and the third year will be better than the second year.

Hon. D. Zirnhelt: On the issue around how you get an agency up and running, I would suggest that there are various ways of doing it. I don't think there's any perfect way. You have to make some adjustments. You never end up with a complete blueprint on day one. You know, you talk about FRBC; you talk about it endlessly. But when we did finally study it, we found out that its costs were well within the range of costs that industry uses, and industry's own consultant did that.

We ordered that review, because people on that side of the House were using figures like 85 percent being spent on administration, like somehow the money that was contracted . . . . They said it time and time again. The leader over there said it; people said it time and time again -- misleading the public. So we examined it. Do you know what the opposition was including? They were including in the 85 percent or the 40 percent money spent by the Ministry of Environment -- contracted by them. Somebody has to be responsible for the money.

You don't just write a cheque out the door and expect somehow that the money will be well spent. There have to be financial controls. There's the auditor general; there's the comptroller general; there's the Financial Administration Act; there are people in all of these agencies with the function of comptroller. All of these are there for the agencies.

You can tell us that there is a better way to get FRBC up and running, and that's fine. I'd like to hear some specifics. There never were any -- none whatsoever, other than to say: "Give the money to communities." The communities didn't have studies on watershed restoration. For you to say that you study watersheds for two years or whatever . . . . We would be damned if we went into a watershed and destroyed the watershed, as happened in Oregon. Some of that work that was done to restore watersheds was countereffective. We have to do proper studies. You might spend $200,000, and they might identify $1 million.

It doesn't mean that it has to be spent next year or the year after or over three years. This is a long-term project. We can spend billions restoring watersheds. So this is going to take some time.

You talk about the money that was promised. They went through a process where they said: "Your project meets the criteria. It's approved in principle, subject to financing, subject to budget." Then the next year, other community areas, other watersheds had proposals. This was all sifted through, and then a strategy, an investment plan was created. I would submit to you that over the three years FRBC has got up and running quite effectively. It won't do for the future for long-term contracting, because we use ministries.

[8:15]

We should get into FRBC when we have the officials here. But I can't take this blatant assertion that there are better ways of doing it -- if you had a monitor looking over their backs. Well, who's going to monitor the monitors? Your notion of government that somehow you have an independent monitor over everything gets to be ridiculous at some point. We've said that for the jobs and timber accord, we'll put an advocate in place. We think that is the appropriate mechanism to report out publicly. We have a different mechanism for different kinds of needs.

For the jobs and timber accord, we believe it's the advocate. For FRBC, we believe that the board of directors of the Crown corporation is the way to do it. We also believe that its business plan could be discussed by a legislative committee. That's another form of accountability.

In this case, the jobs and timber accord will report on a daily basis to cabinet through the Minister of Forests. I will be making reports on an as-needed basis. But there will be an annual report that will be published, and we can chart the progress that way. And we'll talk about jobs during the estimates. There are other ways of carrying on discussions and asking for accountability. I'm sure that in each community people will be watching what jobs are created and which jobs are lost as industry goes through changes and as elements of the accord get played out.

T. Nebbeling: I was almost tempted to give the minister the real solution to how that Crown corporation can operate a lot better, but he would consider that opportunism, because I

[ Page 5068 ]

would consider calling an election to see if there is another government that is willing to take that challenge. If we would be that government, I believe we would do a hell of a better job.

Having said that, the minister really begins to make some kind of fun of what is actually part of the jobs and timber accord when he talks about monitoring: who is going to monitor; how are we going to monitor; should we monitor a Crown corporation? Then the minister goes on by saying that the monitor should be monitored. That's an interesting thought that the minister has there. I say this because if we look at the Forest Practices Code and why the Forest Practices Code has not been able to do what it was supposed to do, which was to create a viable forest, a sustainable forest, with a sustainable environment and with guidelines that are workable, operational . . . .

One of the problems with the Forest Practices Code is that once one had checked something, then somebody else had to check what was checked by the first person. When the second checker didn't agree with what the first person said, he or she would send everything back, and new elements would be brought into the proposal. They would be answered. The first checker, the first monitor, would then send it back again to the second monitor, who would then go over it. This game went forward and backward. As a consequence of that, they would see the Forest Practices Code causing licence applications to take up to 18 months, when before it was four, five or six months maximum.

The minister has obviously worked with this whole monitor system before when he said that the monitor should be monitored. That's ludicrous, of course. If you have an independent agency that monitors a Crown corporation's actions and makes recommendations -- not to be negative but to be positive -- to improve the operation, then maybe the auditor general's role in the end is to make sure what the various monitors of these agencies, these Crown corporations, have recommended. I don't think you can belittle the way monitoring systems are going to be needed to make sure that the effectiveness of the programs is guaranteed.

I take this seriously. Like I say, the minister may not take lightly the fact that I bitterly complain about the effectiveness of Forest Renewal B.C. and about the waste of money in Forest Renewal B.C. That was acknowledged by the minister; that was acknowledged by the chairman. Again the minister is shaking his head no. I have the paper clippings. He was in Williams Lake and was asked: "What is this 40 percent?" He said that it was a shame and it should never have happened and we have to do better. I was at a meeting at the truck loggers convention in Vancouver, where this issue was raised.

The chairman of FRBC was there, red-faced, saying: "We have to do better and we can do better." I know we can do better and I know the intent is to get better.

What I'm saying is: if we really had a good monitoring system, what happened with this Crown corporation with that incredible budget -- $400 million collected each year for five years is $2 billion . . . . If that monitoring system had been in place, it would not have taken three years to get to the realization that a lot of money was wasted that should have gone into the ground.

Having said that, I would now like to go back to the jobs advocate and ask the minister -- as I did before, but I didn't get an answer: how many people will it take to run this agency? As I said earlier on as well, this jobs advocate will be monitoring an industry of well over $15 billion. I don't think this can be a one-man show. This is not a job where the advocate jumps into the fray if there is a concern about jobs being lost. This is upfront thinking with upfront approval systems to make sure that when timber is going to a major or to a minor, certain conditions are being met.

It's another form of bureaucracy, unfortunately. We're going to have more paper shuffled because of this. But it is important to know how big this agency is going to be. How many people will it employ? What is the budget for this agency? I would expect that there is a budget.

Hon. D. Zirnhelt: We're working on an implementation plan for the jobs and timber accord which will involve the advocate. It will be minimal. It will be as small as we can get away with to do the job. If it were a huge monitor, I'm sure we'd be criticized. If it's too small, we'll be criticized. So we're going to try to get it just right. It won't be huge.

I'm not going to give you any numbers, because you'll say, "You said this," and I don't want to get into that ridiculous game. So we're working on the implementation. Don't try to press me for details that don't exist.

T. Nebbeling: Thank you very much for that little warning: "Don't try to press me for details that don't exist."

Fourteen months after the Premier woke up in the middle of the night and said: "By God, I've got it! I'm going to create 21,000 jobs . . . . " The minister acknowledged a number of times that this was an idea that the minister had in March of 1996. "Nothing is organized; it's just an idea. I'm going to create 21,000 jobs." This is going to go into history, because the Premier also declared that the idea he had was the very best and most important thing he'd ever done in his life. Waking up in the middle of the night: "I'm going to create 21,000 jobs." Well, that was 14 months ago.

The whole success of this jobs accord depends, to a large extent, on enforcement by this advocate. This is a scary thought, by the way, because of the consequences of having to report what you're doing in your company well in advance. I can see some very negative things happening, and we will be talking about that when it comes to companies having to report to the jobs advocate if they have to lay people off.

As it has been described to me, at least, that is one of the elements that is guaranteed under the jobs advocate's job description: if you want to lay off people, you have to go to the jobs advocate and get approval from the jobs advocate. It's a scary thought; however, it's there. The government has decided . . . .

Hon. D. Zirnhelt: It's called monitoring.

T. Nebbeling: Well, there are two things: there's monitoring and there is controlling free enterprise. There is that control element. I think monitoring as an agency objective is good, because we want to know, for a change, that the money that is spent on these programs is spent properly and does have the result that the objectives set out to achieve. However, that's not the point.

This jobs advocate is going to demand a look at the size of the job. He will look at the mandate of the job: create 21,000 jobs, monitor the jobs, and at the same time, if anybody wants to get out of the deal, do everything to make sure that it is the only way to deal with the situation. At the same time, that same job will demand some good analyses of corporate viability. It's only in that way that the jobs advocate can judge if laying off some staff is justified under the information presented to him. So this is not a little job; this is a huge, huge bureaucracy. I really am surprised to hear, after all that time --

[ Page 5069 ]

14 months of planning all these different agencies, work groups, committees, referrals, opinions, solicitation -- that the minister can still not say what the jobs advocate will mean as far as the size and the cost of running this agency. This is not going to be another job protection commissioner who can travel throughout the province from one hot spot to another trying to save and secure some viability in desperate situations. And like I said, Doug Kerley has done a tremendous job; we really compliment him.

But this is a different type of job. This job is going to demand a lot of upfront work, and it cannot be done by just one or two people with the impact that this jobs and timber accord will have on all companies, small or big. So once again, has there been any talk in the ministry, in any of these work groups, to find a level of need that that jobs advocate will create as far as jobs and as far as the cost of this agency is concerned?

Hon. D. Zirnhelt: Yeah, the jobs and timber accord was a huge undertaking, and as we trimmed our budgets the ongoing operation of government was really taxed to spare senior leadership in the ministry to come up with this. But we did it, and we had to do it with industry, and that is a significant accomplishment. So for the member to just blithely say: "I'm surprised we don't have a blueprint . . . . " Well, we would be criticized for not consulting here, there and everywhere if we had a blueprint and this was somehow all laid out -- that there is no room for flexibility or anything.

So the way these things happen, you develop your strategic overview and your plan first. That's what this is. Then we work on the implementation, and we will work as quickly as we can. This is not a one-year project. It has taken a year and a bit to get this far.

You used words around "approval" of layoffs. Let me read to you what the accord says on page 11:

"Layoff Procedure: It is recognized that companies may on occasion have to permanently reduce their workforce."

"[Government recognizes] that companies may on occasion have to permanently reduce their workforce. In situations where a company intends to permanently lay off more than 25 workers, it will give notice to the jobs accord advocate of potential layoff four months in advance of any intended action. The company involved agrees to meet with the [jobs advocate] and explore consideration of alternatives to the proposed measure, human resource planning, employee counselling and retraining, notice of termination, severance pay, entitlement to pension and other benefits, including early retirement benefits."

That's what it says about layoffs, and I think that's very constructive.

T. Nebbeling: For a jobs advocate job description that hasn't got a blueprint, that's quite a bit of knowledge from the minister about what he believes the job entails when it comes to job layoffs.

Can the minister then tell me, now that we are entering into an area where the minister does have some knowledge . . . . If a mill has to close down for, say, two months and will have to lay off people for that period of time -- 400, 500, 600 people -- does the jobs advocate get involved there?

[8:30]

Hon. D. Zirnhelt: I was referring to permanent layoffs, not temporary layoffs. So we would expect that an industry wanting to lay off for a couple of months might have in place an umbrella funding agreement where they might put some of their workers to work on forest renewal type of work while they're not involved in the plant operation.

T. Nebbeling: That's a nice idea -- that there might be an opportunity for some of these workers to enter some other opportunities such as the land base management projects.

But nevertheless, my question was: if a mill has to shut down . . . ? West Fraser in Terrace shut down last year for a month, and then they extended it, the reason being that they were losing money and that it just wasn't happening. Would West Fraser have had to go to the jobs advocate in advance, saying: "Hey, listen. This is our reality. This is our situation. We have to lay off 500 millworkers for a couple of months"? Or can they just do that?

[J. Doyle in the chair.]

Hon. D. Zirnhelt: I may have only implied no. I'm sorry; I should have said no right at the start. I was trying to be helpful and suggest . . . . The advocate would get involved if they were permanent layoffs. Therefore, not when it's temporary layoffs.

T. Nebbeling: That's an interesting situation, because I believe that right now there are some areas in the northwest where mills have not opened. Not in the Golden area, but near Golden, there are one or two mills still closed down; they've been closed down now for four or five months. How would these millworkers be given an opportunity to get into alternative types of work during that period if there is no prior notification that indeed the mill will shut down for a period of time?

Sometimes it is a month, but then sometimes it gets extended and extended and extended, and the bottom line is that the millworker hasn't got an income and is just suffering from the same consequences of the shutdown that he is suffering from today or yesterday.

So if the jobs advocate is only there to dictate to industry how many jobs they have to produce at a certain time for whatever reason, then I fear that much of the hardship that is caused in the forest industry today and in the last couple of years since the implementation of all the plans introduced by this government . . . . People are constantly kicked out of the forest for a period of time. This jobs advocate is obviously not going to do anything for these workers. That's the one I'm really hoping will be dealt with as an issue: what do we do with these forest workers who are not really out of a job?

They have a job; the only thing is they can't access it for a period of time. How are we getting these people to tap into the opportunities?

On the north coast it may be easy because there are strong IWA representatives, but when you go into the northwest there are a lot of loggers, especially, who are not unionized. How would they tap into this? There must be an agency somewhere that they can go to and say: "Now I need three months of land base management work. What is available for me?"

Hon. D. Zirnhelt: If it's a temporary displacement, then they wouldn't be displaced forest workers. So, employment insurance is there as part of the safety net. As I say, there may be an umbrella agreement that the company has with FRBC or the forest worker agency. If we were needing people and there weren't displaced forest workers by the definition of

dis-

[ Page 5070 ]

placed forest workers, then perhaps that person would qualify for other employment. I don't think we can simply expect the advocate to guarantee that every mill will operate all year round, every year, because there is the market and there are temporary shutdowns for market . . . . This isn't designed to be the answer to all of those woes. The accord is designed, really, to try to create more jobs generally in the sector.

T. Nebbeling: It's 8:30; I have one and a half hours. I think it will just get me to where I want to be, because now I'm really concerned with this whole jobs and timber accord, hearing what the minister just said. If we go back to what FRBC was created for, the announcement made by the government at the time, it was to deal with people who for whatever reason were going to be kicked out of the forest, temporary or full-time, because of the Forest Practices Code and because of other codes.

The minister is shaking his head. He's says no, that's not true. It was the initiatives that have been taken by this government over the last five or six years that all had an impact on how and when people could go into the forest. Each and every one of these initiatives had impact on denying people access to certain forest areas, be it the protected-areas strategy, the Forest Practices Code, the CORE system, the Clayoquot Sound special management designation or AAC reduction as set out by the chief forester.

All these government initiatives kept people out of the forest, sometimes for a permanent period -- these are the people you're talking about, Mr. Minister -- and sometimes for shorter periods of time.

When I travel through the communities -- and it doesn't matter if it is up north or in the interior or northwest communities that depend on the forest industry -- the biggest hardship is created before they get the final chop for this permanent layoff. The biggest hardship that many of these community members experience is based on the fact that where they used to be able to work eight to 10 months in the forest, they are now, if they're lucky, getting four or five months, which means their disposable income has to be earned in that short period of time.

So when we talk about a jobs and timber accord, that is not in any way, shape or form taking responsibility for what is really a problem in the forest industry. That is that the people who have a job don't have a real job any longer. The majority don't have a real job any longer. These people are just being excluded from this, all because the money that is available has to go to create these 21,000 new jobs -- competing for the little time that people have today in the forest industry when they have a job. To eliminate that particular group of people is . . . .

I won't call it criminal -- that's not the right description -- but it is truly showing that this jobs and timber accord really is not for people who work in the forest industry, for communities that depend on the forest industry. It is purely an accord that is created to save the Premier from some egg on his face, because the Premier should have really focused on how we can get these people that have a job but no longer a full-time job, not even according to the definition in here . . . .

These people are not going to have the benefit of getting protection under this jobs and timber accord by having the jobs advocate also making sure that they, one way or another, get into the system of getting alternative work produced for them. That is to me the biggest joke of what I've heard so far in these estimates.

You know, when we go through this jobs and timber accord -- and we haven't touched much yet -- I constantly will keep in mind that this jobs and timber accord is really not created for forest workers. This is not created for the forest workers that are in the forest today. This is purely created to honour the commitment that has been made by the Premier. The people that need the protection there, the existing forest workers, are not getting it.

A guy who gets five months this year and maybe next year gets four months, that's the person who should be able to qualify for some of that land management work that is going to be done. That's the forest worker who should be able to get an extra two or three months, so he can get back again to a job that is indeed providing him and his family with an income that sustains them for the rest of the year. Just to hear the minister say these are not the people that this jobs and timber accord is all about is a crying shame, because these are the people who need that help.

These are the people that are expecting to get something out of this. These are the people who initially were the target groups that FRBC was supposed to be created for. These were the people, the workers, that worked in the forest for companies that created that extra surcharge to make sure there would be work for these forest workers. They're standing on the side, the minister tells us tonight. I think once that becomes really part of the whole debate . . . .

Is this jobs and timber accord truly an accord for the forest workers? I say no, it leaves them out in the dark. They're not going to get that extra time -- we just heard that -- unless they go after it, I suppose, on their own initiative. But there is nothing in this accord that says people who used to work eight months now only work four or five months because of the restrictions that the Forest Practices Code applies to them.

I give you an example. In the interior during certain periods of the year, if it rains for two hours, all the work gets shut down -- forest workers out. Why? The Forest Practices Code dictates it, because the land gets too impressed or too soft for humans to walk around and for equipment to be on the land. That's a consequence of the Forest Practices Code. That keeps people out of making a living.

So these people not having the advantage of this new jobs and timber accord -- this $2 billion investment by the government into the industry -- is a shameful thing. It's an appalling thing. I think it is the one thing that will haunt this minister or this government for a long, long time, because the people who make that money for FRBC funds are the ones who were expecting to get something back from it. So I am really surprised and quite shocked that the minister just blatantly says that is not what it is created for. It is just for new jobs and new jobs alone, and these are the jobs.

Hon. D. Zirnhelt: Can I ask the member to occasionally break so that I can respond? I have talked about this. You do twist what I say. Your question, if you check Hansard , was: "What happens if a mill shuts down for a month or two?" I said the jobs and timber accord was not created to deal with that situation. That's been going on and will go on. Maybe some of these agreements could help, depending on the agreements the industry has.

But let me remind you what Forest Renewal was created for: to get reinvestment back in the forest land base so there's more productivity; to restore the damage of the past; to get more productivity in the future -- we admit it would be 40-50 years. But that will keep these communities going and make sure that there are jobs there for the children of the people who are working there now.

You talk about people being out of work four and five months, etc. You know, the wood is coming out. I gave you the

[ Page 5071 ]

figures; it showed you them before and after the code. In between, a bunch of land use plans came in. The same amount of wood has been coming out. We intend to get more out. The accord is about getting more wood out, as well. Government is committed to that.

That will help those people who can't work because it's too wet. But if you dare suggest that by destroying soil when it's too wet by working on it, somehow you're taking jobs away from people by not allowing them to work under those conditions, then I say to you: look at the other side of it. We're maintaining soil productivity. We're maintaining the productivity. We're maintaining the access to the woods when they go under the right conditions. If you talk to loggers and ask them, "Should you work on the wet soils?" they'll tell you no.

If they're not allowed to go in, and the evidence is that we're being too gentle, we can actually go in more when it's wet. We'll make those adjustments. Nobody has brought any criticism like that to me.

But go back to your original question. Your question was: what happens when a mill is down for a month or two? I said the normal processes are there for people there. We're talking about displaced forest workers.

I would just encourage you to maybe shorten your monologues a little bit. Focus on a question. I'll try to give you a direct answer. But don't think you can try and twist everything I say so that somehow you're on record as taking what I've said and making it into something that it was never intended to be, because I don't think that's what we should be doing here. I think it will work better. I'm unhappy for you to filibuster my estimates. You can talk all the time. But if you want answers, then give me a chance to answer. I'd be happy to do that.

[8:45]

T. Nebbeling: First of all, I'd like to remind the minister -- and we're still talking in the context of what the jobs advocate will do and at what cost, because we still haven't come to the budget . . . . But let me remind the minister that it was the Premier who stood in the Clayoquot Sound area on his little knoll, declaring to the forest workers that because of all these initiatives, including what was happening in the Clayoquot with the CORE process, with the Clayoquot scientific panel, they did not have to worry because not one job would be lost.

Not one job would be lost because FRBC was going to be there for them. That was the statement made by the Premier then, and I still hold to the point that that is the statement that should be the guiding light for what this government is doing with FRBC money -- making sure that not a job will be lost. So stop focusing on creating jobs when there are people crying and losing their jobs on a daily basis.

Then I went on by saying it is the implementation of government initiatives such as the protected-areas strategy and the Forest Practices Code that is in part responsible for forest workers being unable to do their full-time work any longer. And the minister shook his head and said: "That's not true." I gave an illustration of how the Forest Practices Code keeps people from coming into the forests or keeps them out of the forests. As an example, I gave the situation of when it rains for two hours. Nobody is talking about whether it is right or wrong.

I'm just saying it is the Forest Practices Code that was introduced by this government that created the rule that people were out of the forest after a certain amount of rain had fallen on the forest land. It was an illustration.

So what we now see happening is that the little time that is available for the forest worker to go into the woods . . . . Now the forest worker will have to compete with that new army of so-called forest workers who are displaced forest workers in other areas. These forest workers are going to have to compete with hirees under the jobs and timber accord because it is mandated. So the five months of work that is now available to the workforce they will have to somehow share with these newcomers that this jobs and timber accord is going to mandate companies to hire.

Instead of 50 people being kicked out of the forest, there may be 70 people kicked out of the forest when it rains too hard. It is just a matter of how many people can find viable jobs in certain areas where the forest industry is critical.

When I use the Forest Practices Code as a reason -- that it has killed jobs, that it has killed opportunities for people to get a year-round occupation, an eight-months-a-year occupation or a seven-months-a-year occupation -- the minister shouldn't say: "How dare you make that an example!" The truth is, that's what's happening in the forest. You don't have to go to the interior, you can go up to the north coast -- same thing. There's AAC reductions and other elements that have kept people out of the forest. The people who are working in the forest do not get their eight to ten months any longer.

If the minister is not aware of it, then I regret to say that his officials should inform him of that, because that is happening. I'm just appalled to hear that these workers, with the little time that they are getting, are not going to get the protection of the jobs advocate, that these workers are not able to say: "The moment I'm kicked out of the forest and only get four or five months in my traditional work area, then automatically other opportunities kick in." That's what I would have thought the jobs advocate would have done, but it isn't happening according to the minister. If it is, please tell me, because I'd feel a lot better.

I don't think I'm off the wall when I say that I'm really appalled and quite shocked to hear that the people who have a job today -- albeit a meagre job -- are not part of the consideration for the jobs and timber accord. That's just the way I feel and that's the way I feel I have to express it. And I'm not filibustering here. I'm just getting very emotional when I hear the minister making statements as he just did. I'm going to continue to stand up for forest workers and forest-dependent communities to make sure that they do get their fair share of this money.

Because that was for them: Forest Renewal B.C. was to create new job opportunities for the existing forest workers so they didn't have to walk the streets of Ucluelet, Port Alberni or other forest-dependent communities. So much for that.

I think my colleague from Kelowna could take over for awhile.

J. Weisbeck: Just to change the direction somewhat here, there have been some media releases in the last short while. I guess the first one I've got here is from March 30. This particular

article states: "60 Days in Jail for Taking Scrap Wood." This particular gentleman was charged for taking half a pickup-load of cedar blocks. The second

article I have here is from the Hope Standard ; again, it talks about some theft of cedar logs. Unfortunately, three old-growth cedar trees were taken during the winter. The RCMP forest crimes unit reports that illegal operations in the Hope area have removed, at a conservative estimate, $90,000 worth of cedar this past winter. Similarly, along the Coquihalla Highway and some of the roads coming off the Coquihalla there's been considerable loss of cedar. I guess I'm wondering how serious this problem really is.

As well, I'm reading a memorandum here from the RCMP which talks about how serious they think it is, because

[ Page 5072 ]

they've gone to the point where back in 1995 -- this is dated January 27, 1995 -- they changed their name from the log theft unit to the forest crimes investigations unit. They felt that "log theft unit" was misleading. They felt that the unit was now involved mainly in complex, large-scale frauds, thefts and timber rights issues throughout the province. So as I said, I'm really wondering . . . . I'll ask the minister, after one little statement here, just how serious this problem really is.

In another memorandum dated November 2, 1995, the evaluation branch talks about a conservative estimate of 4.3 percent or $80 million worth of revenue being lost through unauthorized or mismarking of timber, fraud and outright theft. During the course of the work done by their 20 revenue inspectors, they often uncover incidents, both criminal and quasi-criminal, resulting in the need for them to consult FCIU members.

My question to the minister is: how serious is this problem? Is this value of $80 million in fact a realistic number?

Hon. D. Zirnhelt: We don't exactly know the extent of the problem. You know, we could spend a lot of time and energy trying to get the last degree. We know it was significant. The auditor general looked into our enforcement mechanisms and recommended in particular that we deal with off-hours enforcement. The auditor general had a long series of recommendations, and we're acting on virtually every one of them. There are some that may take some time to act on, but we're trying to find ways of coping with this issue.

As I say, the auditor general looked into it. I don't recall that he was able to put a figure on it, and he's a pretty good authority. There are 11 recommendations and work is going on now to address most of them, as I've said. The revenue controls have been improved. The auditor recognized that in his report this year -- recognized that the ministry has take positive steps to improve their revenue controls.

There are some inherent risks that he recognizes, which you can't totally eliminate. Let me tell you what some of those are. As you know, the Crown forest is very large -- most of the province. We can't have people everywhere, all of the time. There are 150,000 kilometres of forestry roads that are open to the public, so they can't patrol every road to prevent theft; nor is it reasonable to close a lot of these roads.

The forest industry itself is very large; it operates continuously sometimes on a three-shift basis. We check with industry regularly and without notice. By following the recommendations of the auditor general's report, we think we can crack down on a lot of the theft of timber. But as you correctly point out, there are people who are repeat offenders, and we are attempting to work through the RCMP to ensure that we get the evidence necessary to prosecute those people.

J. Weisbeck: It is my understanding that FRITs, the forest revenue investigation teams, are basically made up of foresters with really not a lot of experience in investigation. If this is as serious a problem as it appears to be, I'd like to know why we only have four RCMP officers throughout this whole province to handle the investigations.

Hon. D. Zirnhelt: I think perhaps the easiest answer is that the RCMP are pulled and pushed different ways and they deal with crimes to people. The theft unit is a specialized unit that will go in where there are trouble spots and advise the RCMP and the ministry -- as far as I understand -- on how we can carry out investigations in a better way.

You could always have more people doing everything, I think. I go back to the fact that the auditor general has had a look at this issue and has made some suggestions. One of the responses we have made is to be able to use DNA testing. We're trying to make that operational right now. There are some ideas out there. It has been piloted. So we're taking steps to make the work of those officers more effective.

J. Weisbeck: It is my understanding that these four officers are really overloaded, and that they're really picking and choosing the cases they're investigating. Really, it's basically only the very, very large cases that they are investigating. So I still don't feel right about the answer in the sense that you have a huge problem here, and we've got four people that are capable of investigating these crimes. I'm wondering whether there has been a suggestion from the ministry that they probably should have a bit more help out there.

Hon. D. Zirnhelt: It isn't just four RCMP. In every region we have forest revenue inspection teams, and there are training programs for them. So there is a lot of help out there in trying to get on top of the problem.

J. Weisbeck: I guess my argument was that I'm being told that these people aren't qualified to do investigations. They are basically foresters. I understand that the process is that all reports come in from the various forest districts, they're sent to Victoria and Victoria makes the determination of which ones are going to be investigated. So some investigations never get referred. My question would be: how many investigations are actually sent in and how many are actually investigated?

Hon. D. Zirnhelt: We'll try to get those details for you. We don't happen to have them with the officials we have here. That's one of the reasons why we encourage your critic to tell us what areas of questioning . . . . We line up the people. We have to take some of these on notice, because no one person has all of the information at their fingertips.

All I was saying was that the auditor general looked at our revenue system, including inspections and so on, and made a number of recommendations. He is pleased with the progress. If you had policemen out there that didn't know anything about the forest, you'd have a problem, too. So you have foresters out there that might not be cops. It's a combination of skills that's required.

As you know, there are laws of evidence and so on. The collection of the information can be very costly and extensive. We can spend as much money trying to collect the money . . . . I think it's a question of whether we have the right balance. I can say that better minds than mine . . . . The auditor general has said he is pleased with the progress that we've made. He made a number of other recommendations, and we are tightening up by following his recommendations.

J. Weisbeck: You made a comment that you spend more money than you would collect. I guess that I have a difficulty with that. When you consider that if it actually is $50 million of revenue that is lost to this province, and consider stumpage fees of $25 per cubic meter, that's a ton of money. We're talking millions and millions of dollars. I still don't feel comfortable that the ministry is appreciating the seriousness of this.

I understand, again, that the investigations come to Victoria. Who makes the decisions on what gets investigated?

[9:00]

Hon. D. Zirnhelt: My understanding is that the reports come in on enforcement to the region and at the regional level,

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not the Victoria level. They decide with regional Crown counsel which ones they can pursue. It's at that level, not the Victoria level.

J. Weisbeck: What sort of qualifications do these individuals have to make that decision, from a legal point of view?

Hon. D. Zirnhelt: Crown counsel have legal training. Most of them have been called to the bar, so they have legal training.

B. Penner: I rise at this stage of the estimates debates to ask the Minister of Forests -- if he feel it's an appropriate time and if he has the appropriate staff with him -- a number of questions related to the softwood lumber quota issue, in particular as it relates to a matter in my constituency in Chilliwack.

A number of weeks ago -- I believe it was about two weeks ago -- I did have an opportunity to speak to the minister directly about a local issue affecting a company known as Fraser Pacific Forest Products, which established itself last year in Chilliwack and has run into trouble exporting to the United States because of a shortage of available quota.

I recognize that British Columbia did do pretty well compared to most provinces in Canada in terms of its share of the quota allocated across Canada. I believe -- the minister can correct me if I'm wrong -- that British Columbia received about 59 percent of the available quota in Canada, or at least for provinces west of Quebec. However, one of the areas that seems to be a hardship is for those companies that are just getting started, not the major players like MacMillan Bloedel or International Forest Products that have an established track record of exports to the United States.

The companies that are innovative, that are small and just trying to get started are having difficulty. There seems to have been very little in the way of quota reserved for them, the newcomers. This poses obvious problems to them.

In certain sectors of the industry we read in the newspapers that the mills are able to pay the penalty if they ship in excess of the quota. I believe the penalty is $50 per thousand cubic feet up to a certain level, and then $100 per thousand cubic feet after that.

I'm told the company in Chilliwack was started last year with a promise from the federal government that they would be given sufficient quota to operate their mill at an economical rate that is at a level that would pay for their overhead, pay the employees' wages and still make a decent return on the investment. The investment in the case of this company in Chilliwack is about $3 million.

I wrote to the minister a couple of weeks ago with some of these details. Just for the record, I'm taking this opportunity to ask generally what, if anything, the province is able to do vis-�-vis the federal government in terms of trying to extract or free up a bit more quota for the newcomers, the new producers on the market. I know that it's been about a year now since the quota agreement has been in place. It's my understanding that there's some refinement taking place, that there's a bit of an overhaul and some fine-tuning going on.

I wonder if the minister could just bring us up to date generally on what's happening there, what role the province has and what, if anything, he could do for individual producers trying to extract a bit more quota from the federal government.

Hon. D. Zirnhelt: I'd be happy to supply the member with a written report, which we did supply on Thursday or Friday, I think it was. In any event, it was during the debates.

I have to acknowledge up front that new entrants have a particular problem if they expect to ship to the United States, because there's no question that the United States intended to limit exports. I can't speak for the federal government, but they did have a holdback of about 2 percent for new entrants. Whether that's big enough or not, you could argue, but they would be curtailing existing operations. Like the previous debate we had here, I think the idea of grandparenting existing operations was to a large extent to make sure that those with already licensed wood and so on had a market for their product. They grandparented the existing operations.

Having said that, if there is a new entrant, they can apply. A committee in British Columbia, which does send on advice to the federal government, meets once a month, or the industry can apply directly to Ottawa. Some of them are accepted, and some of they aren't. There is quota being turned in. There is no easy answer for new entrants. It will be a struggle for them to find a piece of the U.S. market unless they can pay the $50 or $100 per thousand board feet, which is the penalty they have to pay once we're over our quota.

As you correctly pointed out, British Columbia did get a significant portion, and we feel reasonably pleased that we got our share. We would always like more, and we will be doing everything we can as a government to make sure that the federal government does not create more opportunities for other regions of the country. Having said that, we have to recognize that the reason they made the holdback of 2 percent was in large part for the new entrants, we think, because there was an expansion of industry as some second growth was coming on in provinces like Ontario.