1998/99 Legislative Session: 3rd Session, 36th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 10, 1999

Afternoon

Volume 15, Number 25

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The House met at 2:08 p.m.

Hon. D. Streifel: Am I the only one up? That's pretty good. Thank you.

Interjections.

Hon. D. Streifel: It never fails. I stand up, and the opposition starts to heckle and use up their own time.

Hon. Speaker, it's my pleasure today to welcome to the precincts 26 grade 6 and 7 students and five adults from Fraserview Elementary School in Mission. They're accompanied by their teacher, Ms. A. Titford. I bid the House make them welcome.

G. Plant: I notice in the gallery a constituent and a friend from Richmond, John Berkyto. I hope that members will please make him welcome.

W. Hartley: In the galleries, we have . . . . Well, there are actually three groups -- three parties from the same group, I believe -- coming from Wellington Elementary School in Woodinville, Washington. There are some 30 grade 6 students, several adults and . . . . It looks like their teachers are Ms. Jackson and Mr. Boyd. So would members please welcome them.

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Hon. H. Lali: I have two sets of introductions to make. First, in the House today is Frank Howard. Frank was a CCF-NDP MP from 1957 to 1974 and the Member of the Legislative Assembly for Skeena in the early 1950s and again during the early eighties. He's been in politics steadily since the 1950s, and he's one of the most famous MPs in his fight for aboriginal rights, which resulted in the aboriginal people getting the vote in 1963 under Mr. Diefenbaker. So would the House please make him welcome.

The second set of introductions is . . . . There are two sets of couples from my riding: Ray and Phyllis Hatch and Darwin and Susan Birg from Yale. They're here to talk to the Minister of Small Business, Tourism and Culture and myself about starting up a new venture, and also to see the functioning of the Legislature. So would the House please make my constituents welcome.

Hon. D. Lovick: I just noticed in the gallery somebody well known to you, hon. Speaker, as well as to me -- namely, Prof. Terry Morley from the University of Victoria. I'd ask my colleagues to please join me in making him welcome.

Hon. U. Dosanjh: Present in the gallery is a good friend and a constituent of mine, Edgar Orellano. Accompanying him is José Antonio Movil and spouse Lidia Movil. José is a member of the Guatemalan parliament. Would the House please make both of them welcome.

The Speaker: And now, hon. members, I would like to make an introduction from the Chair. In the gallery are two new friends of mine, Larry Beaudet and his son Asahel; Asahel is at South Park Elementary School. They were here to have lunch with me today and also to learn about parliament and the Legislature and the role of the Speaker. Would the House please make them both welcome.

Oral Questions

COST OF GOVERNMENT LOTTERY LAWSUITS

G. Campbell: Since the NDP started its massive expansion of gambling in British Columbia, literally hundreds of thousands of dollars . . .

Interjections.

The Speaker: Members, come to order.

G. Campbell: . . . have been spent by the government trying to force gambling on communities in British Columbia. According to documents obtained by the official opposition, in the last 18 months the Lottery Corporation alone has spent over $400,000 related to fighting losing court cases. My question to the minister responsible for the B.C. Lottery Corporation is: at a time when the children's advocate is saying that there is . . .

Interjections.

The Speaker: Order!

G. Campbell: . . . not enough money -- the government's not providing enough money -- to care for children at risk, how can he justify spending $400,000 defending the government's illegal actions?

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Interjections.

The Speaker: Order, members.

Hon. M. Farnworth: I suppose we could start with the million-dollar mailer that the opposition mailed out -- that was stolen. I suppose we could talk about the other transgressions of the opposition . . .

Interjections.

The Speaker: Order!

Hon. M. Farnworth: . . . and the money they've received from the gaming industry over the years. We could talk about the fact that the money made by the Lottery Corporation goes to provide health care and education in this province. We could talk about how we're trying to work with communities throughout this province to put gaming on the sound legal foundation that's required in this province. That's why we went out and got a White Paper, and that's why we're consulting with communities around the province.

The Speaker: First supplementary, Leader of the Official Opposition.

G. Campbell: The government has spent 400,000 taxpayers' dollars trying to defend its own illegal activities, hon.

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Speaker. Rather than working with communities, they've spent $390,000 trying to force slot machines on the people of Surrey and the people of Vancouver, and thousands more dollars trying to take dollars from charities to put them into general revenue, in the coffers of the government. My question again to the minister responsible is: how can you justify spending $400,000 -- taking $400,000 out of the taxpayers' pockets -- to try and defend this government's illegal activities?

Hon. M. Farnworth: It's a little rich, listening to this opposition, whose economic plan is to cut billions out of this budget -- billions that go to health care and education, billions that go to children and families, billions that go to provide social services in this province. That's their economic plan.

We are working with communities in this province to put in place a stable gaming regime that is legal -- in a context of legislation -- and a White Paper is out there and has been developed. We've been working cooperatively with communities. That's why we've had support from places like Kelowna, who think the White Paper and the recommendations and the direction that we're moving in with gaming are the right way to go. That's why the mayor of Kamloops said that the direction that we've been taking is the right way to go. The issues that they laid on the table, we've been addressing.

The Speaker: Second supplementary, Leader of the Official Opposition.

G. Campbell: Well, the B.C. Lottery Corporation at least has admitted and confessed that they've wasted $400,000 on these losing court battles. But you know, hon. Speaker, we know that the really big bucks aren't spent by the Lottery Corporation; they're spent by the Attorney General's department, trying to defend this government. Unfortunately, the Attorney General has been stonewalling the taxpayers of British Columbia and has not told them how much money was spent in fighting these six losing court battles. So my question to the Attorney General today is: will he tell the House exactly how much money his ministry spent defending this government's illegal activities?

Hon. U. Dosanjh: This is absolutely shameful conduct on the part of this opposition -- absolutely shameful. This issue was canvassed during the estimates of the Attorney General -- fully canvassed -- and full explanations were made that the Attorney General cannot release that information, because there is a solicitor-client privilege. If we want to violate all of the fundamental principles of justice that have gone on for centuries in this province and this country, then we should do that. That's absolutely shameless.

Interjections.

The Speaker: Order, members.

G. Plant: Solicitor-client privilege is an interesting concept. Here it's the Attorney General who is the client. It's the Attorney General and the government that have within their means of knowledge the amount of money spent by the Attorney General to defend these lawsuits and to prosecute these lawsuits -- and have it within their power to disclose that amount. So let's . . . .

Interjections.

The Speaker: Members, order. The recognized member has the floor.

G. Plant: This is taxpayer money. The people of British Columbia have the right to know how much the government's Ministry of Attorney General -- not the Lottery Corporation -- is spending on defending its illegal and indefensible gambling policies in the courts of British Columbia. So I give the Attorney General another chance: will he tell us how much has been spent?

Interjections.

The Speaker: Members, come to order.

Hon. U. Dosanjh: It's a novel concept that this hon. member is promoting in this House. The chief legal adviser of government simply has been turned upside down to make a client out of him; that's a novel concept. The hon. member just finished saying that the Attorney General is the client. The Attorney General is the chief legal adviser and the lawyer of the government. The Attorney General is not the client, and that's one of the fundamental principles that the hon. member fails to understand.

The hon. member and I had a thorough discussion on this issue. This was canvassed during the debate on estimates, and that's the end of the matter. There are moneys mentioned in those estimates that have gone for legal purposes. But for the Attorney General to start releasing individual information with respect to lawyers and the amounts with respect to those lawyers and with respect to particular matters would be an absolute breach of that confidentiality on which this system of justice is based.

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The Speaker: First supplementary, member for Richmond-Steveston.

Interjections.

The Speaker: Order, members.

G. Plant: This isn't about the hourly rate of some lawyer contracted by the Ministry of Attorney General. The minister stands on behalf of the government. He spends money on behalf of the government. The government defends the indefensible in the courts of British Columbia, pursuing gambling policies that are opposed by the vast majority of British Columbians. Taxpayers want to know the answer to one simple question: added all together, how much did it cost? How much have the taxpayers spent pursuing this government's indefensible gambling policies?

Interjections.

The Speaker: Order, members. The member for Richmond-Steveston and the Minister of Energy and Mines, will come to order.

Interjections.

The Speaker: The Attorney General has been recognized and has the floor.

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Interjection.

The Speaker: Minister!

Interjections.

The Speaker: Members, I'm in your hands. The Attorney General has been recognized. Until there is order in this chamber, we will not proceed.

Hon. U. Dosanjh: Hon. Speaker, the critic for the Attorney General just mentioned a certain figure; the hon. Leader of the Opposition mentioned a certain figure. They have obviously received those figures pursuant to the Freedom of Information Act. That is obviously the maximum amount of information that can be released under the law, under the freedom-of-information and privacy legislation.

In addition to that, there is what I have said, a fundamental principle on which our system of justice is based, and that's called the solicitor-client privilege. The Attorney General ministry, for however many years it has existed, has functioned, is based on that principle. That principle was canvassed during the estimates debate. All of these questions were canvassed. If the hon. members opposite want to have an estimates debate again, I'd be happy to oblige; I don't have any problems whatsoever. But let this House understand, let the people of British Columbia understand that for the sake . . .

Interjections.

The Speaker: Members . . . .

Hon. U. Dosanjh: . . . of politicizing each and every issue in this province, they are now prepared to forgo all of the fundamental principles of justice on which this system has been based.

MAMMOGRAPHY SERVICE IN FORT NELSON

R. Neufeld: A mobile mammography diagnostic unit that has been used to service Fort Nelson in northeastern B.C. has been cut by this government. Now women in Fort Nelson have been requested to travel up to ten hours for a return trip just to be screened for breast cancer. This is like asking Vancouver women to drive over to Penticton to get a mammogram.

Will the Health minister tell us why she thinks it is acceptable to have women in Fort Nelson travel a total of ten hours to access this vital service?

Hon. P. Priddy: The member has raised this issue and the specifics of it with me, and he knows that the ministry is trying to find a solution to that. He's been assured of that.

Access to mammography is extremely important. We screened the one-millionth woman in British Columbia last year. We know that women are surviving longer in British Columbia than anywhere in the country as a result of our good mammography program. That's the reason that we're providing 38,000 more mammographies -- a 20 percent increase -- this year. Ten hours is too long, and we are trying to resolve that problem for the member.

The Speaker: First supplementary, the member for Peace River North.

R. Neufeld: A mobile unit costs about $100,000. This service ended early in the year, around the same time that Mr. Gunton was spending thousands of taxpayers' dollars on his bunker. I guess it's no wonder that the women in my constituency, specifically Fort Nelson, wonder where the minister's priorities are. I have been asking this minister for over a month to get some resolution to this issue, and today I'm going to take her up on her challenge. She said in the House that it is very important to this government.

If it is important to this government, then I suggest that we get on with starting to fund that unit so that women in Fort Nelson and up the Alaska Highway can have equal access to this important service.

[1425]

TESTING OF GENETICALLY MODIFIED FOOD

J. Sawicki: My question is to the Minister of Agriculture on the subject of genetically engineered food, otherwise known as GMOs. Despite the fact that our own B.C. farmers have an international reputation for producing nutritious food of excellent quality, there is growing concern about genetically engineered food. At present, Health Canada evaluates the safety of GMOs only when the manufacturers themselves ask for it.

In view of this growing public concern, will the minister commit today to urge Health Canada to become more proactive in their evaluation of GMOs in order to give all Canadians a better assurance that the food we consume is indeed safe?

Hon. C. Evans: I'm aware that this is a very important issue to the member -- and not just to this member. I think that over 1,000 people have written to me, and probably to the opposition critic, on the subject of genetically modified foods. The Women's Institute in every constituency in the province has made it a priority of theirs this year.

The hon. member will remember the rBST argument, in milk. Ours was the only province in Canada, I think, that spoke out against the federal government making this additive okay in milk, and happily, they decided not to. I have written to the federal minister, asking him to take steps to make sure that testing is done that gives all Canadians a feeling of safety and security in our food supply. Also, we will in future be introducing legislation that makes it possible for people to label foods in terms of what's not in them as well as what's in them. I hope that the hon. member gets some security from all those steps.

Ministerial Statement

CALL FOR FEDERAL BULK WATER EXPORT BAN

Hon. C. McGregor: I rise today to bring to members' attention our government's concerns with the future of British Columbia's water. Our province has some of the cleanest, purest, most abundant fresh water in the world. But it's no secret that corporate interests want that water for their own purposes. They want it for trade, for profit, and they want bulk water treated as a commercial good. We are opposed to

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that. That's why our Water Protection Act ensures that decisions about our environment and our water are made here in British Columbia by British Columbians and not by corporate interests.

Today I'm calling on the federal government to legislate a ban on all bulk water exports across Canada. We know the federal government is also concerned about this issue. They've said, as recently as February, that they would enact federal legislation. I want to applaud them for making that commitment.

The federal Environment minister, Christine Stewart, stated explicitly: "We have to have some legislation in place that specifically secures our fresh water resources." Ottawa recognizes that British Columbia has put in place the strongest and highest environmental standards in the country to protect our vital fresh water. We believe that similar standards should be in place right across the country.

Members may be aware that Ottawa has looked at options to protect Canada's fresh water. However, the option they've chosen is a voluntary federal-interprovincial accord. On the surface, that might seem as if it's an acceptable approach, but we have serious concerns. Because it is voluntary, this accord will not truly protect Canada's waters. What we need to complement B.C.'s strong legislative action is federal legislation within its jurisdiction that is equally unequivocal in protecting Canada's water resource.

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B.C. exercised its legitimate constitutional authority at the provincial level in passing our Water Protection Act. We are now asking Ottawa to exercise its recognized constitutional authority at the federal level. We are prepared to fully support the strong federal action taken to protect our water for the people of Canada and the people of British Columbia. I will be speaking to my federal counterpart to make B.C.'s concerns clear and to offer B.C.'s full cooperation and support in crafting such legislation.

We must send a message that our streams and rivers and lakes, our groundwater and our watersheds are not for sale. Our water is a priceless environmental legacy for the future -- a legacy we must not allow to be sold out to corporate interests. It must be protected here in British Columbia and across this country for the future of all Canadians.

M. Coell: I'm pleased to hear the minister clarify for us the government's position on the export of bulk water. I was concerned earlier in the year when Powerex was discussing the export of bulk water for Sumas thermal generation. But the government is no longer pursuing that . . .

Interjections.

The Speaker: Order, members.

M. Coell: . . . and the minister has clarified that for us. I'm very pleased.

On this side of the House, we have not supported the . . .

Interjections.

The Speaker: Order, members.

M. Coell: . . . export of bulk water for many, many years -- from the time when the member for Powell River-Sunshine Coast sat on this side of the House, and that's so many years ago.

The province of B.C. is the only province in Canada that does not have groundwater legislation. I look forward to the minister tabling groundwater legislation in the House later this session. Maybe she could throw in a biologists act to help out in that area as well. But I can say on this side of the House that we do not support bulk water exports, and we will support the government in their effort to convince the federal government to do the same.

NATIONAL TRANSPORTATION WEEK

Hon. H. Lali: As the Minister of Transportation and Highways, it gives me great pleasure to bring National Transportation Week to the attention of the House. Transportation Week, which began on June 6 and runs to June 12, serves to remind us of the key role transportation plays in this province. As part of its Transportation Week activities the province supported and took

part in successful Bike to Work Week programs in Vancouver, Victoria and Nanaimo. We continue to support cycling. The minister of cycles over there is applauding. We continue to support cycling as a mode of transportation, both through our provincial cycling network program and our improved highway and bridge designs.

Without question, safe, reliable and efficient transportation is important to the people of this province. In recognition of this fact, this government continues to improve our provincial transportation network. In addition to making major investments in urban transit and ferries, we have committed $490 million for highway capital improvements this year.

Interjections.

The Speaker: Members, come to order. The minister has the floor.

Interjections.

The Speaker: Members . . . .

Hon. H. Lali: We are also improving northern roads in British Columbia, building a new Kootenay Lake ferry in Nelson and expanding SkyTrain on the lower mainland to ensure the future prosperity of this province. But provincial transportation investments need federal support as well. I believe that every province should be able to negotiate federal funding for highways and other transportation infrastructure such as urban transit or border crossings.

Interjection.

Hon. H. Lali: Therefore, since last year -- and I think the member for Vancouver-Little Mountain might pay a little bit more attention, since he lives in the lower mainland -- I've been working to raise awareness of the need for the federal government to increase its transportation investments across the country.

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Transportation Week provides an excellent opportunity to reflect on the support that B.C. has gained for its national transportation strategy initiative. At a meeting of federal and provincial transportation ministers in May, I led a session on a proposed national transportation investment strategy that would include federal participation. This discussion resulted

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in a strong consensus among the provinces that it's time for the federal government to play a bigger

part in supporting transportation investment.

Efficient transportation links have helped build British Columbia, and we intend to keep B.C. strong by continuing to improve both our provincial and our national transportation network.

D. Symons: It's my pleasure to rise and respond to the ministerial statement on National Transportation Week. We on this side of the House of course agree with the government. In fact, I think nobody would disagree on the importance of transportation to the economy of our province and our country. It's interesting that this follows on the proclamation of a truckers appreciation day, because the two fit together very nicely.

But transportation of course includes not only our highways but the air, rail, ferries and, more increasingly, I suppose, we might even talk about the electronic highways, as well, as being a form of transportation in the province. We support transportation every bit as much as the government does. We might disagree with them on some of the projects that they have done, but nevertheless transportation is important, and we would support all efforts to improve the transportation of the province.

I was somewhat surprised to hear the minister mention ferries. He didn't mention fast ferries per se, but certainly there have been some, let's say, mistakes made by the government in the area of transportation. We also look for federal support for transportation. Indeed, we strongly support a national transportation strategy and a federal participation in financial investment in transportation. And I have reminded the minister a few times that there is a motion on the order paper -- Motion 41 -- that asks precisely that: that the federal government would do it.

It's just unfortunate that that motion has not come forward so the whole House here could endorse the motion that we on this side of the House have had on that order paper for some six years.

So I'm hoping, in support of National Transportation Week, that the government side will allow that motion to come forward. We will all vote for it in support of transportation.

Tabling Documents

Hon. D. Streifel: I have the honour today to present the Fisheries Renewal B.C. plan for the year 1999-2000.

The Speaker: The Chair also has the honour to present a report: the annual report of the British Columbia Legislative Library for the year 1998.

Orders of the Day

Hon. J. MacPhail: In this House, I call Committee of the Whole to debate Bill 58. In Committee A, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry for Children and Families and the Ministry of Employment and Investment.

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999

(continued)

The House in committee on Bill 58; P. Calendino in the chair.

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section 1 (continued).

Hon. D. Lovick: I thought perhaps it would be appropriate to begin our deliberations this afternoon by answering the question that we ended with. In response to the particular question the member raised this morning -- namely, day labourers working on projects covered by the HCL agreement -- I offer the following information to the member. I can advise him that the HCL collective agreement provides that HCL make pension contributions on behalf of all workers on projects, including day labourers.

This is a matter covered by the collective agreement, and all I can do for the moment at least is simply advise the member that I will advise the minister responsible -- namely, the Minister of Transportation and Highways -- of the concerns that he raised. I think that's the appropriate course of action.

With respect to this particular amendment -- the one that we were basing this discussion on -- its purpose is to avoid the need for multi-employer plans to track, virtually forever, very small amounts of money contributed on behalf of workers who worked for a very short time for an employer who contributes to a multi-employer plan. The administrative costs associated with tracking the money and the former worker can be predictably exorbitant. This amendment is an attempt to avoid that red tape and administrative overload, unless the worker will actually derive some benefit from the pension funds that have indeed been accrued. I hope that answers the member's question.

[1445]

D. Symons: I thank the minister for that answer, and I just have a few further comments -- and a question, I guess -- to make. He mentioned HCL. The problem with HCL, of course, is that the moment an employee begins working on a project that's covered by HCL, there are moneys going, from the conditions of that employment, to various union funds; the moneys, of course, go to the worker, and moneys go to a pension plan.

Indeed, if after 30 days that particular employee is still to remain on the job, he must -- and that's a real problem, I guess -- join a union, one of the building trades unions that are covered by that agreement. If he does not last 30 days, basically he goes away. He gets his salary out of that, but all those other funds sort of disappear into that bag, part of it being the union pension funds and part of it being other gifts or donations to various union organizations -- or at least disbursements of money from HCL, which basically is from the government, because they are funding it.

The issue that the minister raised relating to the difficulty of tracking small amounts of moneys for employees that are working short periods of time . . . . I can agree with the minister on that. When you have a large turnover like that, it's quite possible that many of these people sort of disappear off the map, in a sense, yet you have the problem of dealing with hundreds or maybe a thousand dollars in a pension plan -- following that for the life of that individual until he's eventually able to collect on the pension.

I did mention before that there are alternatives to having that happen which would still benefit that employee. One of them is to make this contribution going in . . . . We were told in the Ministry of Transportation and Highways . . . . We brought up what I consider to be the problem of the HCL

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agreement. The minister assured us, when we were talking about the pension portion of it, that the money was basically the employee's. Instead of a higher salary or hourly rate, the employee had taken the option of having that $3 an hour -- collectively they did this, in the agreement -- go into a pension plan, rather than having $3 more an hour without a pension plan. So that was all part of the collective agreement.

In a sense, the money earned hourly by these individuals is sort of earmarked for them, because they are the persons who would be recipients of the benefit of that money. It was part of the collective agreement that they would be recipients in that way.

Therefore, if that money is to go to the employee, we could find some way that that will happen -- rather than that for 350 days or less the money doesn't go to the employee -- either by making the money that's contributed during that period portable, so they can transfer it to some other plan if they are able to be employed in some other activity that has a plan -- or it can go into an RSP of some sort, which again would be some sort of pensionable arrangement for that employee.

The way it is now, if they don't manage to fit the criteria of this particular

section -- 350 days or more of work in each of two consecutive years -- then that money is of no value to them at all, although it has been collected on their behalf. That's my concern. Let's see that everybody who has worked on the project that's covered by a multi-employer plan will profit by those moneys that have gone into that plan on their behalf, under their name.

Hon. D. Lovick: I thank the member for his comments. I would simply point out to him that I've already given him the only assurance I can give him. The matter that he addresses is, of course, covered by a particular collective agreement. I'm powerless to change that agreement here -- as he is, and as this Legislature indeed is at the moment. It certainly falls outside the purview of this bill. But I think the point the member makes bears consideration and some close scrutiny.

As I say, I've undertaken to ensure that the points he raises are indeed brought to the attention of my colleague, the Minister of Transportation and Highways, who is responsible for the HCL agreement, and I will do that.

D. Symons: I think the minister has missed the point. I'm not arguing HCL here. It's just one example of an employment arrangement that this act -- and I'm arguing the conditions and statements in

section 1(

k) of this act -- put some limitations on the availability of those moneys that go into a pension plan accruing back to the employee who earned those benefits in a pension plan.

There are people who do fall through the cracks. One of the cracks is this 350 hours of employment in each of two successive years. So I'm suggesting that we might amend this portion of it so that we can avoid those cracks that people fall through and we can see that the employee who has earned the benefits will profit by them. It's this act, not the HCL act, that I'm raising questions on right now.

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Hon. D. Lovick: I would make just two points. Number one, this act is a significant improvement over what was there. It used to be five years; this one is two years, so we're moving in that direction. The second point is -- just to remind the member; he knows it full well, because he's been through a pension experience of his own -- that not everybody who begins starting out to pay into a pension gets vested. Some people will never work enough hours. That's the nature of their careers -- right?

So I don't, as I say, think we can do much about that. We believe that this act has indeed, on the basis of the recommendations from all the trustees . . . . The groups represented at the council have said that this is, as I say, a significant improvement over what was there. Who knows, five years from now we may talk about improving it more, but I think this is as far as everybody is prepared to go at this point, and this is the product of consultation, discussion, negotiation and compromise.

D. Symons: Just one comment, because misinformation possibly came out then relating to individual pension plans, one of which I belong to. In that particular plan, if somewhere along the line before you became vested . . . you were able to withdraw your employee contributions from that plan. In this case here we don't have an employee contribution, because as I was told by the Minister of Transportation when we were discussing this very issue, that was in lieu of the employee having a higher salary.

So they were saying that in this case, then, the employee in effect allows $3 per hour of his wage -- which is a pretty high contribution, actually; you know, $3 an hour works out to about somewhere in the neighbourhood of 20 percent of the earnings of that person -- to go into a pension plan. That's a pretty rich one.

The disadvantage, of course -- it sounds good; this is a fantastic pension plan they belong to -- is that many people in these multi-employer-type jobs don't work 365 days a year for 25 years up to their pensionable age. They don't have a chance to accumulate a large pension, because they're not working full years, due to the very nature of their jobs. And that gets us down to the problem we're going to come into with

section 48 later on -- the pension they are likely to receive isn't all that great -- but that's for another day's discussion, I'm sure.

The fact that a person doesn't get vested doesn't always mean that that money disappears into a black hole, from the employee's viewpoint. Very often they are able to access it -- either to roll that money into an RSP or to actually withdraw the money and then pay income tax on it at that time. I am simply suggesting we might arrange something where we can do the former -- roll any moneys into an RSP if they don't meet the vesting requirements.

K. Krueger: I appreciate the commitments the minister made about looking into the HCL situation. I want to flesh some facts out a little, though. Earlier we discussed the consultant's report which had suggested that at least 45 percent of HCL workers would never get to vest, would never get to draw money out of the HCL pension plan. The minister indicated that he didn't believe that; his words were that the "preponderant majority" of HCL workers do vest.

So would the minister tell us . . . ? We know that the government has the numbers. Obviously the government writes the paycheques. And there's tight control of this, we assume, because there's a special hiring hall set up for it. Indeed, HCL has taken over, as I understand it, the full former offices of the Thompson-Nicola regional district in Kamloops as the expansion has gone into the interior. There's a lot of infrastructure there and a lot of employees -- surely keeping track of these things.

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So would the minister give us the accurate numbers, so we don't have to argue about terms like "percentages" or "proponderant majorities"? Or if the minister has percentages, what percentage of HCL workers will meet this definition of years of continuous plan membership? What percentage have been meeting that definition up till now, and how many workers are we talking about that didn't meet it?

[1455]

Hon. D. Lovick: I don't have the statistical evidence available, and indeed, I'm not sure that HCL does. I understand they don't keep, or they haven't got, particular statistics on the number of days and the number of hours worked. Our contact at HCL has agreed to check with their own staff statistician and see if they can assemble that material. But no, I don't have that information at the moment, much as I'm sure the member wishes I did.

K. Krueger: Seated beside the minister is the superintendent of pensions for British Columbia, and I'm sure she is concerned about that. If HCL doesn't have those records, there is something drastically wrong. Those records ought to be there. I wonder if we could have the minister's commitment that we will be provided with those numbers next week and that if we choose to come back and deal with these questions further, we will be able to.

Hon. D. Lovick: Mr. Chairman, I believe I already gave the member that assurance, and will do so again.

K. Krueger: Would the minister agree that this

section --

section 1(k) -- working in partnership with, hinging on,

section 14, which we'll get to later . . . ? Unfortunately, I have to talk about it a bit now, since it's relevant.

Section 14 repeals

section 26(2) with regard to HCL employees who have not attained 350 hours in each of the past two years. These sections, working in concert, will disentitle those HCL workers from any pension benefits, as things stand right now.

Hon. D. Lovick: The member's question is, unfortunately, confusing, insofar as

section 26 introduces a different definition which no longer obtains. The only thing we are talking about now is

section 1(k). That's the new definition. So talking about

section 26 is, frankly, irrelevant.

K. Krueger: Perhaps my question just wasn't clear. Presumably, either late today or sometime next week, we will deal with

section 14 of this act, which does repeal

section 26(2). I'm well aware of that. What I am asking the minister is: does he agree that when that happens -- when

section 14 becomes law and repeals the old

section 26(2) -- then this definition, definition (

k) under

section 1, will serve to disentitle HCL workers of any hope they had of drawing any of these pension benefits if they didn't get at least 350 hours in each of the previous two years -- that this

section will operate to ensure that they don't vest?

Hon. D. Lovick: I simply have to again make the point that we can't connect

section 26 to

section 1(k). The two aren't connected.

Section 26 referred to years of continuous employment, and the new

section refers to years of continuous plan membership, as I recall. There isn't a comparison between those two. They're separate and distinct.

K. Krueger: But there's obviously a reason for the new definition. I say that the reason is that it makes it clear that employees who don't get over those thresholds in multi-employer plans -- I'm asking specifically about HCL workers right now -- will no longer have a hope of vesting, where they did before, and will be unable to vest because of this new definition in

section 1(k). Is that true?

[1500]

Hon. D. Lovick: I'm not going to answer the specific question -- the member may want to come back at it again -- because I want to make sure I understand just what this is, and I have a hunch that we are on parallel streams at the moment.

The new definition in

section 1(k), "years of continuous plan membership," came into effect, in fact, when the rules changed in January of 1998, with the new rules for vesting. That's when that new language came to be. All that's happening in

section 1(

k) of the Pension Benefits Standards Amendment Act is that we're simply catching up to that legislation so that we will consistent with that legislation.

K. Krueger: Perhaps our streams are converging, then, because what I'm saying, that being the case, is that this

section will remove any doubt that those HCL workers who failed to get over the threshold of 350 hours in each of the past two years will vest. There was doubt before, at least in some people's minds. The minister said that there's no doubt in the superintendent's mind. But there has been doubt in other people's minds. These amendments in this act will serve to clarify that, and those employees will not vest. Is that correct?

Hon. D. Lovick: That is correct.

K. Krueger: Well, our streams did indeed converge. That's not good news for those HCL workers. I believe there are many of them. The minister has committed to giving us those numbers next week. To those members, I think, this is kind of a hopeless, fraudulent, continuing treadmill. They're seeing $3.05 an hour paid into pension funds on their behalf. They are now, through this act of the Legislature, losing any entitlement to it.

There was this dispute that we discussed earlier, between the consultant and . . . . I'm going to put his name on the record, because it's obviously well known anyway. We're referring to letters exchanged by the consultant and the superintendent. His name is Mr. Greg Hurst; he was operating as Shasta Consulting at the time. There was a sharp disagreement between them, apparently. The minister went so far, before the lunch break, as to say that the superintendent repudiated, discredited and denied the report.

Well, the superintendent could be wrong. I have respect for the superintendent, but she could be wrong. Mr. Hurst definitely feels she is wrong. I'm going to briefly explain why. In many of the plans, employees don't get vested, because they don't have enough covered hours in multi-employer plans. They could be vested if they were in a union to start with and they worked for HCL, or if they stayed union post-project -- although that isn't very likely for a lot of them. It's not likely that many HCL workers in the interior are going to get over 350 hours in two consecutive years.

Interjection.

The Chair: Member . . . .

[ Page 13512 ]

Hon. D. Lovick: Mr. Chairman, just on a point of order. We're looking at

section 1 of the bill. We're talking about

definitions. We've had a fairly lengthy discussion about the definition. What the member is now doing is raising a matter that was discussed some time ago, a consultant's report talking about whether an HCL project -- the Vancouver Island Highway project -- in effect accommodated all of the workers who thought they were buying into a pension plan at the time. I'm sorry, but that simply is not part of the definition that we're discussing here; that is old stuff. We have talked about it in Highways estimates; we talked about it in my estimates earlier.

I have undertaken to look into HCL for the members opposite, to provide them all the assurances I can. But it has nothing to do with the legislation we're now talking about. This is about history; this is about old examples and about a report from a consultant that I know is near and dear to the members of the opposition, because he has indeed provided them their advice on the bill -- fair enough. But that is not part of what we're now supposed to be discussing by the rules of this chamber on this bill.

K. Krueger: The minister has just conceded -- finally, after a lot of shuckin' and jivin' -- that our paths did converge, that this

section does serve to resolve the question once and for all, apparently, of HCL workers' entitlement. So it's only fair that I be allowed to finish up this line of questioning. I'm not going to carry on all day with it. But I have some things that have to be resolved, because there is a conflict in some of the things we've been told today.

[1505]

The consultant, Mr. Hurst, is watching the debate. He has communicated to me. I only just met this man recently. But he felt that he didn't get much attention or much interest from the government for the tremendous work that he put in and the resolution he'd come to, the recommendations he made, which really do make sense.

The consultant, Mr. Hurst, messaged me, after watching the debate this morning, and said that at the time, the superintendent refuted his report on the basis of immediate vesting in multi-employer pension plans, arguing as follows. First, under a multi-employer plan, a member could not be terminated until after two years had passed -- which was in the definition of termination of membership. Second, after two years the member would have had two years of continuous plan membership. Third, ergo everyone is vested, regardless of number of hours worked.

If those were the arguments at the time, if that was the resolution, and there having been no definition then to determine what constituted a year of continuous plan membership, then Bill 58 now introduces this definition, sets the threshold of hours worked -- which the 1997 report by Mr. Hurst fully anticipated -- and, in effect, disentitles workers to something that Mr. Hurst says, the superintendent argued, they were entitled to in 1997. Does the minister agree?

The Chair: Minister, before I recognize you, I would like to remind the member that if he wants to make the point briefly, he's allowed to do so. But I remind him not to be tedious, as tediousness will not be permitted.

Hon. D. Lovick: I will try to ensure that I abide by the same rules.

Briefly, even under the new rules and the Hurst report's assumptions, most people who worked for HCL on the Vancouver Island Highway project would be vested. That's point one.

Secondly, as I have said -- ad nauseam, it seems to me -- we are investigating the real statistics. We will report back to the member on that.

K. Krueger: We're about to move along. There's a tie-in to the most important

section of this bill,

section 48, which we'll be discussing later. We need to resolve some issues around that at this time. Those issues are . . . . For the HCL employees whose entitlements have failed to vest up until now and those who will fail to vest under the terms of this amendment, the opposition would like to know where the money goes.

Hon. D. Lovick: At the moment, it certainly goes into the union pension plan.

K. Krueger: When the minister says that it goes into the pension plan, some of it flows through to the building trades union pension plans. Is that correct?

Hon. D. Lovick: I think that's all of it, I believe.

K. Krueger: The building trades union pension plans have been managed with varying degrees of expertise. The labourers' pension plan in 1997, I'm told, had an unfunded liability of just under $37 million; the bricklayers, just under $1 million; the carpentry workers, $2.25 million; the electricians, almost $10 million; the operating engineers, $43 million; the pile drivers, $1 million; and the sheet metal workers, almost $9 million.

What we've just deduced, then, is that this money which HCL workers have been disentitled to through subsection 1(

k) is flowing through to all of the building trades union funds. The minister just told us that all of the money is flowing through to them. A whole bunch of them are in serious deficit situations. The workers for whom the money was paid into the funds are never going to get it in a number of instances -- I say many. The minister will get us the real numbers next week, he says.

[1510]

What we have, then, is a tax base -- taxpayers' money -- flowing in to pay off union deficits in building trades union funds. Is that true?

Hon. D. Lovick: I don't think one can say that at all. All multi-employer plans currently meet funding tests in the public Pension Benefits Standards Act. Two-thirds of those plans have surpluses. The rest, except for the one plan, the labourers' plan, are still adequately funded. The assets-to-liabilities ratio is in the range of 86 percent to 99 percent. The plans, by the rules, have 15 years to pay off any funding deficiencies. The labourers' plan has significantly improved, and is now meeting the test. I think that probably covers most of it.

Indeed, it's harmful, I think, to suggest that the union pension plans are in trouble, as has been suggested earlier. And it's also worth noting that multi-employer pension plans are funded more conservatively than are single-employer pen-

[ Page 13513 ]

sion plans; 6 percent of multi-employer plans have a solvency ratio of less than 90 percent, while 15 percent of single-employer plans are less than 90 percent funded. According to the actuarial valuations on file, there are no plans that are not currently meeting the solvency and funding rules in the Pension Benefits Standards Act.

K. Krueger: The numbers I quoted were from, I believe, 1997. It's no wonder the building trades unions funds are improving, with the pipe flowing HCL money into building trades unions pension funds. And just for the record, I make the point that taxpayers working for $7.15 an hour are seeing $3.05 per hour of taxpayers' money, for every hour HCL workers put in, flowing into these funds. All of it, the minister said a couple of answers back -- all of it.

So there they are out there working at minimum-wage jobs, seeing people with $30-an-hour jobs having an additional $3.05 per hour flow into these funds that certainly were in trouble. I submit that a number of them still are in trouble. In our technical briefing, the superintendent of pensions conceded that there are three of them that are still considered to be in trouble.

The labourers' plan was bankrupt, was put into trusteeship, as I understand it, and the pensioners have had their benefits cut in half. The worst performance I've got on this table is for the operating engineers, which, curiously enough, is one that the member for Burnaby-Edmonds is pensioned off from. And he made the famous rocking chair comment in the media recently -- that pensioners should stay in their rocking chairs rather than go back to work somewhere. Or at least that's how he's quoted. Perhaps he'll get on the record during this debate and say what he meant.

These building trades unions have a very high contribution rate and very low pay-out to their members. Of course, we're going to have to deal with that mainly in

section 48, but it's nowhere near the $20,000 to $30,000 a year that I heard the minister personally say in the media.

Another interesting point is the bankruptcy of the Ford Theatre, owned by Livent, which I gather was funded by union pension funds. I'm told that the large debt on the theatre is owed to mortgage fund No. 1 and that the major shareholders in that entity are -- guess what -- the Carpenters Union pension fund and the Electrical Workers pension plan. If that's true, these deficits are probably mushrooming. Can the minister confirm whether that's true?

Hon. D. Lovick: I don't know whether that is true or not, nor does the superintendent. She says we'll have to look into it.

K. Krueger: Could we have the minister's commitment that he and the superintendent will find out and report back to this House next week? This information is obviously germane to the bill that's before the House.

Hon. D. Lovick: I don't believe it is germane, frankly, but I will undertake to review this record and discover all that and indeed respond to all the points the member makes. I will get as much information as I can, working with the superintendent.

[1515]

K. Krueger: I look forward to that information. I thank the minister for the commitment.

We're about to move on. It's true, I believe, that this government is exploring every way it can to help the building trades unions resolve their unfunded liability problems. Is that true?

Hon. D. Lovick: The government is doing no such thing. The superintendent of pensions meets regularly with the trustees of pension plans to ensure that they are in compliance. Indeed, the problems that have been referred to, of multi-employer pension plans here in British Columbia, are quite commonplace across the country. That's one of the impacts of a significant decline in interest rates, let alone what's happened in the real estate market. So every pension administrator across the country is working with pension plan trustees in order to make sure that they are indeed in compliance, so they can handle the vagaries of the marketplace.

K. Krueger: But this government in particular has a very friendly relationship with the building trades unions.

Section 1(k) . . . . We've worked through the process and determined that indeed it resolves the question of the HCL workers vesting. Obviously, from the subsequent answers, it resolves it in a very satisfactory way for the building trades unions. It supports, flows right through -- all of it, the minister said -- to the building trades unions.

I believe that

section 48 is another attempt by this government to shore up its friends in the building trades unions. The clawback of benefits that I mentioned moments ago is another way. I believe that this bill, and this government by other means, are setting out to relax the solvency requirements, also to assist the building trades unions' pension funds. Is that correct?

Hon. D. Lovick: That is simply not true. Indeed, there is a national committee at the moment looking at the problem of interest rates across the country and finding out what they need to do to ensure that plans are in compliance. To insinuate -- as the member opposite, alas, seems to be doing -- that this is some kind of sweetheart deal and that the pension authorities are working hand in glove to protect their friends or something is, quite frankly, ludicrous -- let alone offensive.

K. Krueger: Well, for the record, as I wrap up my remarks on

section 1(k), that's certainly the way it looks to me. It looks like the NDP government has once again delivered on its longstanding drive to prop up the building trades unions in all their difficulties. They've got into them themselves with their jurisdictional disputes, with their management of pension funds and with their real estate speculation. They're in trouble. This government is bending over backwards -- clearly, from the answers today -- and just as we've always believed, are funneling or slushing, to use the common terms, HCL funds over into building trades unions' unfunded liabilities.

[1520]

The Chair: Member, would you take your seat, please?

K. Krueger: Yes, I will.

The Chair: I think your line of questioning is not relevant to this particular

section of the bill. I would advise you to stick to the bill as it's in the books.

[ Page 13514 ]

Section 1 of Bill 58 approved on the following division:

YEAS -- 53

Evans

Zirnhelt

McGregor

Kwan

G. Wilson

Hammell

Boone

Streifel

Pullinger

Lali

Orcherton

Stevenson

Walsh

Randall

Gillespie

Robertson

Cashore

Conroy

Giesbrecht

Doyle

Kasper

Bowbrick

Sawicki

Smallwood

Hartley

Waddell

Farnworth

Ramsey

Lovick

Sihota

MacPhail

Dosanjh

G. Clark

Miller

Petter

Priddy

Whittred

C. Clark

Campbell

Farrell-Collins

de Jong

Coell

Chong

Jarvis

Anderson

Weisbeck

Nebbeling

Hawkins

Symons

McKinnon

Janssen

Goodacre

Hansen

[1525]

NAYS -- 8

Coleman

Krueger

Symons

van Dongen

Barisoff

Dalton

J. Reid

J. Wilson

Section 2 approved.

section 3.

K. Krueger: My colleague from Okanagan-Penticton earlier began to deal with the issue of consultation and the notional business lens that this government has discussed. My questions on

section 3 are not many, but they do bear on the issue of consultation. So I would like to deal with some of those questions now. The minister's nodding, and I appreciate that. I don't want to have a running battle as to where we deal with it.

I got a message, again, from someone watching the debate before lunch, quoting the minister's answers to the member for Okanagan-Penticton, when the minister said that there was indeed extensive consultation on this bill and that the Pension Benefits Standards Advisory Council is a representative body representing expertise in the industry. As well, the profession of actuaries in the province were certainly directly involved in this. An actuary is named here. He mentions that he has participated on the committee of actuaries who provided advice to the superintendent of pensions and that he had never seen Bill 58 until very late last week when he accessed it himself via the Internet.

This whole issue of whether the Pension Benefits Standards Advisory Council, as constituted and appointed by this same government, is actually representative of the pension industry stakeholders across the province, including the pensioners themselves, is a question that we have to resolve. I don't think it is, frankly. They may be some of the best people in the world. They may be eminently well qualified, but I don't think -- and I said why in my second reading remarks -- that they are representative of a cross-section.

[1530]

It's an issue we have to deal with, and I have a couple of questions in that regard. Who, outside of the ministry and the Pension Benefits Standards Advisory Council, has the minister consulted in formulating Bill 58?

[W. Hartley in the chair.]

Hon. D. Lovick: Do I understand that this question is coming from this morning, rather than attempting to connect it to

section 3 of the bill? Is that the case?

Interjection.

Hon. D. Lovick: I'm going to ask the member to explain what this is coming under. I'm prepared to answer the questions, but I want to know where they fit.

K. Krueger:

Section 3 deals with the responsibilities of administrators and other persons. The minister has said that extensive consultations took place. That's the

part I quoted from this morning, although he didn't wish to deal with those questions any longer in the

definitions section,

section 1. The minister has referred to these extensive consultations. The people of British Columbia deserve to know more detail. Who was consulted outside the ministry itself and the Pension Benefits Standards Advisory Council? If the minister would like to give us a list, it would accelerate the process.

Hon. D. Lovick: I want to first make the point that the

section we are now dealing with is completely consistent with comparable legislation across the country. Indeed, with the common law there is no surprise here; there is nothing new or different here.

Re the specifics in terms of consultation, as I have said before on various occasions, all the amendments here were developed by the council, which by definition tends to represent the industry. In the pension plan community, most of the amendments have indeed been well discussed by the superintendent.

For example, the superintendent has discussed the amendments in talks and papers presented to the following bodies: the British Columbia Bar Association pension section; the conferences on pension trustees' responsibilities held by the Pacific Business and Law Institute; the British Columbia trades council annual meeting; the Lexium conference on pensions; the Vancouver Actuaries Club; and the Actuarial Advisory Committee.

The Actuarial Advisory Committee was addressed on the very general principles of the bill rather than the language of the bill itself, which is perhaps what the member was referring to earlier when he talked about a particular actuary who had not seen the bill until quite recently. So I hope that explains that.

K. Krueger: Could the minister explain why the government didn't follow the exposure bill-White Paper format that I'm told is common practice Canada-wide when pension benefits legislation is amended in this country?

Hon. D. Lovick: It's for the reasons that I think I gave a moment ago -- namely, that we didn't believe there were any surprises here. We were following the lead of other jurisdictions across the country as well as the common law. Therefore there was nothing radical or revolutionary or anything of that sort.

[ Page 13515 ]

K. Krueger: How can we say that, when

section 48 is the first of its kind? We're not at

section 48 yet, but I don't want to hark back to these consultation questions constantly throughout this debate. I want to resolve these consultation issues.

We have a provision in this bill that's unknown in Canada, as I understand it. It's a provision that the senior civil servant sitting next to the minister went to court over or was armed with. She went to court armed with the provisions that made this illegal. Now it's going to happen if this amendment act proceeds.

So this is not some housekeeping bill. This is not some bland thing that nobody would be interested in. In fact, there's been really sharp reaction from around the province. It seems to be growing with the bad news of what's contained in this bill. It's not a housekeeping bill. Is the minister saying, then, that he didn't realize that people wouldn't agree with him -- that this is just a housekeeping matter -- and that's why he didn't think it was necessary or appropriate or he wouldn't bother doing an exposure bill or a White Paper?

[1535]

Hon. D. Lovick: The only part of the bill that the member refers to in terms of being controversial or in any way potentially problematic is one very small

section of about less than ten lines out of a bill of 75 sections. It's a rather large bill, and this is one very small part. I would remind the member, too, that the particular

section he refers to -- that he seems to think was a surprise -- is indeed probably the part of the bill that has had the most exposure. It's the part of the bill that was embedded in Bill 44 from two years ago, which became -- as we all know -- a cause célèbre everywhere.

It's worth noting, however, that when Bill 44 was tabled, there were no comments received by the minister or by the superintendent of pensions on the matter of pensions. Nobody thought it was a big issue at the time. All of which is simply by way of saying that that's why I made the point in second reading the other day, or the other evening -- whenever it was -- that quite frankly I had clearly misjudged the House. I had no idea that people would be so exercised and concerned about what I think is, frankly, a relatively straightforward and simple matter.

I think the reason that there is indeed the kind of interest the member talks about is because some hysteria has been whipped up, largely by statements that are made that are simply not true.

For example, we had all kinds of people who were scared -- understandably -- and worried sick about their pensions, because they were told that 1,000 pension plans would be affected in this province. They were also deliberately told in this chamber by the member -- who issued a press release after the fact -- saying, moreover, that people would never be allowed to work. They couldn't work. Once they were collecting their pension, they couldn't go into business for themselves. They'd never be able to work.

The same people on the opposite side also whipped up hysteria by talking about the fact that the superintendent of pensions had argued against the measure that was brought forward to the House -- again, absolutely not true. So if the member wants to wonder why people are concerned -- including his friend, Phil Hochstein, who is now publishing paid advertisements to try and keep the campaign against this thing going -- I would suggest that the reason is in large measure to be found by him if he were to look in the mirror.

The Chair: Members, on

section 3, please.

K. Krueger: Hon. Chair, I take that as your forewarning that you're not going to necessarily allow me to respond to the minister. I hope you'll allow me to a little bit, because he got all his points made.

The fact is that when you open a door that's never been opened before, then people have every right to assume and expect that it may well be opened wider. I don't believe there's a single pension in this province that is safe from the ideology that led to

section 48 of this bill. Time will tell. Certainly I think this government tried to sneak this bill through the Legislature and was astonished that people realized what they were up to. I don't think the people of British Columbia have any trust whatsoever that all of their pensions aren't under threat from the kind of activity . . .

The Chair: Member, on

section 3.

K. Krueger: . . . that we're dealing with here.

We'll go back to this question of consultation, because it is normal practice in this country -- with governments that aren't trying to sneak something through or hide what's going on in their pension legislation -- to put it out to the experts. There might not be very many of them, but they're highly qualified and specialized people. They focus on these things night and day. The minister knows that a single word in pension legislation can end up having a dramatic effect in people's lives years down the road, and they don't even know what's being done to them.

It's very, very serious when a country or a province deals with pension legislation. There is a format that's accepted as standard practice. The minister is talking about standard practice. I'm told that the standard practice is that an exposure bill is written, and a White Paper is put out. It's the government's draft of what the legislation is going to look like. It's put out for a reasonable length of time, perhaps six months. It's not one civil servant sent around to talk to clubs and so on, catch-as-catch-can -- so maybe people are there and maybe they aren't; maybe they're listening; maybe they aren't.

You don't get the same sort of attention -- on a bill, on a White Paper, an exposure bill -- over lunch as you do when you sit down at your desk and apply your expertise in a time of concentration. I find that these people are tremendously focused. I've talked to a number of them -- and interestingly enough, not the same people that the minister seems to think have generated a concern. I can tell the minister that there's wide concern.

I think the minister saw a letter that went throughout the province yesterday from one of the associations -- very concerned, the ACPM -- about what this government is up to with this bill and the fact that they never had any opportunity to have any input to it.

[1540]

The minister has continually relied on what he says was the advice of the Pension Benefits Standards Advisory Council. Will the minister table in this Legislature the minutes of any meetings of the Pension Benefits Standards Advisory Council in which the amendments contained in Bill 58 were discussed?

Hon. D. Lovick: I'm happy to do that. But I have to say at the same time that I'm not happy carrying on with this discus-

[ Page 13516 ]

sion, simply because I think we ought to be looking at what the bill is -- that is,

section 3. We're wildly off what the bill is about at this point.

K. Krueger: Hon. Chair, I know that those were intended to be instructions to the Chair, and I'm sure that you won't accept them. We had an agreement that we would talk about what sort of consultation went into the drafting of this act.

I thank the minister, though, for his commitment that he will give those minutes to us. Perhaps we could have them over the weekend so that we could read them before we get back into debate next week.

I ask the minister whether the matters discussed by the Pension Benefit Standards Advisory Council with regard to this act were discussed by the entire council or by a subcommittee? Who, exactly, on the PBSAC participated in formulating the amendments that are contained in Bill 58? What are their technical qualifications?

Hon. D. Lovick: Every council member participated; every

section of the bill was debated by all the members of the council.

K. Krueger: I'm advised that some members of the Pension Benefits Standards Advisory Council put up a fight over

section 48. The minister has said that there was consensus. Sometimes consensus is achieved by various means. Will the minister confirm whether there were parts of this bill that had disagreements amongst the Pension Benefits Standards Advisory Council?

Hon. D. Lovick: Every single

section was by consensus. There were no fights at all.

K. Krueger: The Association of Canadian . . . .

Interjections.

K. Krueger: The minister says I can go ahead now. He's done heckling.

. . . Pension Management yesterday wrote a letter to the minister. It says:

"Re: Pension Benefits Standards Amendment Act, 1999.

"The Association of Canadian Pension Management (ACPM) is the national voice of the pension plan sponsor community. Members of the ACPM come from all across Canada, including B.C., and represent more than 500 pension plans, which have aggregate assets in excess of $225 billion. In addition, members are drawn from Canada's major actuarial consulting firms, financial institutions, law firms and investment counsellors that provide advice to the pension industry. ACPM's mission is to advocate the growth and health of the retirement system in Canada.

"It has come to our attention that Bill 58 has just received second reading in the B.C. Legislature this week. We are very concerned about the lack of consultation in this important piece of legislation and the impact it will have on pension plans registered in B.C.

"We would appreciate an opportunity to have a full briefing on this legislation and its implications before it is finally passed."

Hon. Chair, I don't know if the minister has had a chance to see that correspondence. It was only written yesterday, and I know he's a busy man. But faced with that request from this association, which is responsible for $225 billion in investment and includes the very types of experts that the minister felt had been consulted, wouldn't it make sense to stand down this legislation and complete a real consultation process, one where there aren't these doubts, especially considering the fact that we're dealing with issues which are of such profound importance to people's lives, future and security?

There is consternation throughout this province, and whoever the minister thinks is responsible for it, I submit that the legislation is responsible for it. It would not be there without this bill being before the House.

[1545]

Considering this letter . . . . If the minister hasn't seen it, I'll gladly send over this copy. The minister's deputy, sitting beside him, had assured me due diligence was done on this bill over a period of three years. The minister has referred to the fact that Bill 44, which was yanked in the summer of 1997, included the very same wording as some of this bill. I submit that the reason the public haven't been engaged in a dialogue about those pension provisions of Bill 44 is that they all believed it was gone -- it was hoisted, it was dead, and it wasn't coming back.

The minister referred to some of the really troublesome sections of this bill a few moments ago as just very brief, just very minor, compared to the bulk of the legislation.

Well, a little bit of poison will kill you just as dead as a lot of poison. People are very concerned that this bill is going to kill their futures, that it's going to put them in jeopardy, and that it's going to turn their worlds upside down. I feel really bad for a lot of them. They tell me -- and the experts tell me -- that there hasn't been due consultation on this bill.

So if the minister has a copy of this letter now, great. If he doesn't, we could recess for a moment while he reads my copy, and I'd like him to respond to the Association of Canadian Pension Management, to the actuaries I've spoken with that are very concerned and to everyone around this province who feels as though this was a sneak attack -- an attack on pensioners, an attack on pensions in this province, a sneak attack. It's upset people; it's caused tremendous concern and upset throughout the province.

Interjection.

K. Krueger: Obviously I would like the minister to withdraw the bill and certainly to give an account of himself and of why these people were not consulted. I didn't write these letters, hon. Chair -- through you to the minister, who keeps making out that somehow I'm making these things up. I'm sure anyone who wants to can phone the director for advocacy and government relations within the ACPM and the director of pension and benefits policy of CIBC. Her name is Gretchen Van Riesen; her phone number is 416-964-1260, and she will welcome your call.

That's the sort of thing that needs to be done. These bills are simply not brought down in the legislatures of Canada without having been subjected to the proper scrutiny of the experts who specialize in these things. So will the minister commit to do that?

Hon. D. Lovick: The experts have indeed scrutinized this. The member is quite wrong when he says it is standard practice to have a White Paper. It has been done on a couple of occasions, but that does not make it standard practice. Indeed, some of those White Papers were talking about precisely the

[ Page 13517 ]

measures that are now introduced in this particular measure, because we are attempting to harmonize with what's happening across the country in other jurisdictions.

It's worth noting that the organization he refers to -- the letter from which he quotes -- is famous and remarkable for essentially one thing: namely, that it believes in a policy of complete harmonization and believes that all pension plans everywhere across this country ought to be the same. Indeed, it has drafted model laws and by-laws for pensions. And when it doesn't get those, it's convinced that something is wrong.

What we are saying is that we are indeed in harmony with and consistent with measures that essentially define pension plans across this country. We think we've gone a long way in that direction -- certainly sufficient. I have no intention of standing down this legislation. It seems to me that we have consulted with the appropriate people and with the experts. It might also interest the member to know that this particular association may have written its letter because it was written to by the consultant that he's already quoted two or three times, who I believe was working for the Liberal opposition on this bill.

K. Krueger: Well, one of the points that I made in second reading -- which the minister couldn't respond to as precisely as he can at the committee stage, I suppose -- was with regard to the makeup of the Pension Benefits Standards Advisory Council, which, as I understand it, includes five union representatives and four employer representatives, but only one of them is a non-government employer.

So now you have five union representatives, three government representatives thoroughly familiar with unions, and five representatives of advisory and service providers -- of which three are lawyers, one is an actuary and one is a trust company employee. In reality the pension industry participants include a lot of actuaries and a lot of pension consultants -- much more than the number of lawyers and trust company executives. Certainly the pension industry includes the insurance companies that fund approximately 90 percent, as I understand it, of the defined contribution plans.

[1550]

I submit that the Pension Benefits Standards Advisory Council is pretty lopsided. It's heavily union-influenced through its direct union reps, through its representatives of government pension funds and possibly through the representatives of advisory and service providers who derive part of their income each year, presumably, from advising union pension funds. All things considered, it's doubtful, it seems to me, that there's even one or two people on the Pension Benefits . . . .

Interjections.

The Chair: Order, members.

Member, before you continue, I want to again stress that we are on

section 3. These questions that you're asking probably would have been suitable for

section 1, but I find it difficult to see how they apply to

section 3. Perhaps the member could try to direct his questions where they apply.

K. Krueger: I'll take that advice; I'll do it later. We tried to do it in

section 1; the minister didn't think it was appropriate there. So I will raise these issues later. The minister said that the

definitions

section was not the area where he wanted to deal with the issue of consultation, the business lens and so on. He was speaking with the member for Okanagan-Penticton at the time. He appears to have forgotten that.

Let's have a look at the specifics of

section 3 and, in particular, subsection . . . .

Interjections.

K. Krueger: The minister is saying that what is being said off-mike is irrelevant, because once again, he's saying crude, insulting and hurtful things, as he did when he told the pensioners of this province that they were greedy if they went back to work when they were on pension benefits.

Interjections.

The Chair: Members, please. Take your seat, please, member.

Members, first of all, if you have concerns about anything that occurs in these chambers and you are at your seat, you can get up on a point of order and make the proper submission to the Chair. Secondly, there is some use of language going on, on both sides -- most recently by the minister -- that is not parliamentary. I would ask all members to please use parliamentary language, or I will be asking you to withdraw those comments.

K. Krueger: I'll try again. Referring, then, to

section 3 of the legislation, specifically to subsection (b),

section 3 of Bill 58 expands upon the standards of conduct that must be applied to the administration of pension plans, as I understand it. The addition of subsection (8) to

section 8 of the act clearly imposes a very high standard upon agents and employees of the plan administrator who participates in the administration of a pension plan. This standard may be very difficult for some of the current participants in the pension industry to meet, particularly those participating in the distribution of the defined contribution pension services of insurance companies and other financial institutions.

Proactive education and dissemination of information to the pension industry and plan sponsors will be critical in order to ensure overall compliance with this provision. This, again, appears to be an instance where an exposure draft or White Paper would have been a productive process. Certainly we'll be asking the minister to make sure that the draft regulations pursuant to this act are put out as an exposure bill or a White Paper, so people will have a chance to deal with those. We are profoundly concerned about them; so are people across this province.

[1555]

I spoke with an actuary who said that he has a considerable problem with this section. An example of how it might place him in a questionable situation, where people might later accuse him of having been in a conflict-of-interest position, is if he were retained by an employer seeking savings -- perhaps seeking to strip surplus out of a pension fund, which is, of course, an issue that comes up in this bill . . . . If he's in that situation but the legislation holds him to have a fiduciary responsibility to the potential pensioners -- to their beneficiaries and to the pensioners themselves -- of the plan, this

[ Page 13518 ]

actuary feels that he can't serve two masters. He will be in a situation where the legislation is essentially demanding that he do that. He wants to act in the capacity for which he is retained -- as an adviser to the people who retained him. Does the minister think that there is any cause for concern as I have outlined to him?

Hon. D. Lovick: In 3(b), the provision sets out the accountability of administrators when they employ an agent, such as a paid pension plan staff member. This accountability is not currently enunciated in the Pension Benefits Standards Act; that's what we do here. The provision is intended to help protect members.

What it also does is essentially make what we do here consonant with the common law. The common law indeed requires this kind of competence, this kind of obligation and these standards, even though many people who are presently charged with pension plan administration may not be aware of that. What the amendments will do, then, is simply make the fiduciary obligations clearer to all involved.

K. Krueger: But on the specific point of whether agents and administrators are placed somewhat in a conflict-of-interest situation because they've been retained by a party -- for example, the example I just gave, an employer that is seeking savings and that wants to strip out surplus . . . . But they feel that the new legislation -- the amendments -- is placing upon them fiduciary duty to the beneficiaries as well.

So there's a potential conflict, and they are tremendously concerned about it. They say they have a considerable problem with this

section of the legislation. Can the minister give them his assurance that they will not be in conflict in such circumstances -- and why not?

Hon. D. Lovick: We're confident that there indeed isn't a conflict there. It's important to note, I think, that the agent carries out responsibilities, but under the responsibility of the administrator. It's the administrator who has the fiduciary obligation. The obligation carries with it, then, some awareness of what the agent is doing and whether the agent is indeed qualified or is indeed carrying out the duties in a way that doesn't put him or her into a conflict-of-interest situation.

K. Krueger: So if the agent, as retained by the administrator, then, finds herself or himself in a situation where they feel they're acting for the employer but giving advice which the beneficiaries of the plan may later argue was negative to their interests, is the administrator in a conflict situation and the agent free and clear of it? Are they both in a conflict-of-interest situation? Or is neither in a conflict-of-interest situation?

Hon. D. Lovick: The answer I'm given is that case law would probably say both of those people in those positions have an obligation to the members of the plan.

K. Krueger: Can the minister agree that . . . ? Without meaning to flog this issue to death, this seems to be a classic example, from this piece of legislation, of why an exposure bill or a White Paper would help resolve these problems.

It is frightening for people, knowing that they're putting their practices, their professions, their integrity, their reputations, their whole lives on the line -- people may accuse them of having been in a conflict situation -- that they never got a chance to point out these concerns to the minister and the superintendent of pensions and the people who make these decisions, in advance of suddenly seeing this legislation on the Internet and hearing that several MLAs are upset with each other in the faraway Legislature in Victoria.

[1600]

Hon. D. Lovick: I'm advised that the wording we see enunciated here is precisely that which is used in federal legislation as well as in the province of Ontario. It has been in place for some years and has obviously never caused any problems. Also, I want to simply give the member the assurance that we believe that those high standards are absolutely requisite, and we have no intention of retreating from or backing off those standards.

K. Krueger: I was about to move on to

section 4, but I guess we have to take a vote first.

Section 3 approved.

section 4.

K. Krueger: In subsection (

a) of

section 4,

section 9 of the present act is being amended of course. Once again, the word "adequate" and the word "generally" before "accepted actuarial principles" are being struck out. Without meaning to be repetitious, I expressed concerns earlier. I want to register those same concerns now. The minister has had some time to reflect on the concerns and his answers.

It does seem to me that in a bill that says that it sets out to protect the interests of pensioners, it doesn't protect them at all to take out the word "adequate." I have a much better feeling about "generally accepted actuarial principles" than I have with the term "accepted actuarial principles." Of course, the question naturally flows: accepted by whom? "Generally accepted" is a lot larger onus, it seems to me, than just "accepted." So I wonder if the minister, having had some time to reflect on that, could comment further, please.

Hon. D. Lovick: I would give substantially the same answer as I did earlier. This

section brings the wording into line with the current terminology used by the Institute of Actuaries. The actuaries' body is a professional organization subject to a code of conduct and very high standards of performance. This again makes us consistent with other jurisdictions, and everybody knows precisely what that means. These are the accepted practices and standards of the Institute, and I gather that's the lingua franca for the industry across the country.

K. Krueger: I'll move on to subsection (

b) of

section 4. These proposed amendments to

section 9 of the Pension Benefits Standards Act require that the plan prepare audited financial statements if the assets exceed a prescribed amount or if the superintendent requires such. This may, depending upon the level to be set in the regulations, impose an additional financial obligation on small pension plans on which audits are not now conducted. This may be a good thing. What I'm concerned about is that nobody outside the ministry, presumably, has seen the draft regulations. I certainly haven't. There may be a significant expense for small pension plans and a new and large financial obligation.

Could the minister offer us some reassurance on what he thinks is coming down the pipe in that regard?

[ Page 13519 ]

Hon. D. Lovick: I can, and I'm pleased to do so. My understanding is that the council's recommendation is that plans with assets of over $5 million will be the trigger point.

K. Krueger: This seems to be a

section where, once again, a business lens approach, as contemplated and advertised by other ministers in this cabinet, would have been very helpful. When we asked the minister's senior people, in our technical briefing, whether the business lens approach had been applied, they agreed that it hadn't but said that they felt that three years of due diligence had been done. Wouldn't it capture these concerns and deal with them nicely if the business lens approach was applied to this section, and throughout this legislation, to remove the types of concerns being expressed to me as outlined in the previous question?

[1605]

Hon. D. Lovick: The primary reason it wasn't, of course, is simply because the business lens hadn't been prepared at the time this was put together. As I said before -- and I hope I can give the member some comfort -- a huge part of the driving force for these amendments is to try and streamline and make things work more effectively and to ensure consistency between ourselves and other jurisdictions. In effect, it seems to me, the amendments and the work of the council have already captured the intention of the business lens.

I think it would be a little bit strange -- I can't think of any other word that seems appropriate at the moment -- to say: "Well, you've done all that. We believe we've got consistency. We believe it works well with other jurisdictions, but now, for the sake of the fact that we have a new idea, we're going to make you go back to square one and start over again and go through the business lens." I don't mean to trivialize the importance of a business lens; I think it's an important concept. But it seems to me we have captured the objectives already in this particular

section and indeed with all of these amendments.

Section 4 approved.

section 5.

K. Krueger:

Section 5 sets out to actually repeal

section 10(4)(d), (

e) and (f). It sets out to repeal those. I thought it might be a good idea to read into the record, for the many people who are concerned about what's happening here to pension legislation, what exactly is being repealed. These subsections -- (d), (

e) and (f) -- read as follows . . . .

Perhaps I should go back to the

preamble of subsection (4) in the Pension Benefits Standards Act, which says: "Within 10 working days after receipt of a written request and without charge, the administrator must permit a person entitled to a benefit, or the spouse or a designated beneficiary or agent of the person entitled to a benefit, to examine the following . . . . " It lists (a), (

b) and (c), which aren't being repealed.

Now, we'll just read (d), (

e) and (f), which are being repealed by this amendment. These are the things that the administrator was required to provide to people if they asked for them because they, in some way, are going to be a beneficiary of the subject's pension plan. The first one, (d), was: " . . . any agreement relating to the investment of the pension fund of the plan." The next one, (e), was: " . . . the most recent return filed under

section 9(3)(a)." The third one, (f), was: " . . . the most recent cost certificate filed under

section 9(3)(b)."

Agreement relating to the investment of the pension fund of the plan is a pretty significant document to people who are concerned about things like unfunded liabilities developing in pension plans, pension plans that go bankrupt, pension trustees that occasionally go to jail and funds that aren't always there for people when they've depended all their lives on the prospect of retiring on those funds. So it's a shocking thing for people to see that the government is amending its own pension legislation and taking these things away -- in particular this access to the agreement relating to the investment -- how people's pension funds are being handled. That's pretty significant.

We wonder how this could possibly be good. How could this possibly meet the minister's statements in first reading and second reading? Indeed, today I think that he means for this legislation to accrue to the benefit of pensioners. He means for it to protect the interests of pensioners. We don't believe that it does, and we've said so. The minister's been a little irate from time to time about that. We believe that this act is an attack on pensioners, and here's one example. Why in the world would we want to cut off pensioners' access to those agreements that tell them how their pension fund is being invested? Why would we limit that access? Who are the NDP protecting with this measure?

[1610]

Hon. D. Lovick: I am going to give the member the benefit of the doubt in this instance and say that I think he truly believes what he's saying and that there is some concern that perhaps pension members are not getting as much information as they should and perhaps indeed these amendments make that happen. So I want, then, to take his question and his concern very, very seriously indeed.

I want to start by giving him this assurance: this amendment is indeed intended to provide greater disclosure to members. I don't think he heard me, so I am going to say it again: this is intended to provide greater disclosure to members -- not less, but greater. Let me explain that.

This

section increases member access to actuarial valuation reports, to annual information returns and investment policies prepared by the plan. It replaces the previous wording, which provided access to "investment agreements." That was part of the problem -- namely, plans have many documents that could be and were captured by that particular phrase, none of which, however -- those documents -- is necessarily of much use to the members.

The old wording was seldom used and, indeed, I gather, could prove to be potentially very, very costly for plans, if it were utilized, and also, frankly, of very little benefit to members. The member will appreciate this: it was, in most instances, unnecessary red tape. It meant producing materials that, quite frankly, were not of any use to the members who got the materials given to them.

The intention here is to provide information that is more useful. Access to the statement of investment policies and procedures will be more useful, will be more informative. This information, together with the financial statements available to members, does provide a complete picture of how the assets are being invested. The member might like to note that in the legislation it says "the 3 most recent returns filed with the superintendent" and also "the 2 most recent actuarial valuation reports filed with the superintendent." The latter of those refers to the complete document,

whereas in the past

[ Page 13520 ]

what was given was, rather, a one-page

summary. So this is intended to, and indeed complies with the desire to, provide detailed, accessible and complete information. It's an improvement, frankly, on what was there before.

Finally, to give the member some comfort, I hope, the superintendent can also request any document on behalf of the member, if the member has a concern and makes that concern known to the superintendent. I hope I have allayed the member's fears.

B. Penner: I can't speak for the member for Kamloops-North Thompson, but my fears are not quite allayed yet. I want to pursue this matter a bit further.

When I read the description of what the

section is intended to do . . . . That description next to

section 5 starts by saying that the amendment will limit access to agreements related to the investment of pension funds and then goes on to say " . . . and improves disclosure requirements to plan members." I can imagine a scenario where you can technically say that you're improving disclosure while still limiting or terminating certain types of information that had previously been flowing to plan members.

I wonder if the minister can share with us what type of legal

interpretations or advice his ministry has received in putting together this provision in

section 5. If in fact the minister is aware of that information, is he prepared to share it with all members of the House so that we can have the same level of comfort that he purports to have with respect to

section 5?

Hon. D. Lovick: The old legislation, I'm advised, didn't have the kind of requirement that we are now talking about. What we have provided here -- namely, (d) "the statement of investment policies and procedures," (e) "the 3 most recent returns filed," and (f) "the 2 most recent actuarial valuation reports" -- is, I understand, the standard practice across the country now in terms of pension plans. So we are again being consistent with others, and that is perceived to be more helpful, more useful information.

[1615]

B. Penner: In terms of drafting for greater certainty, would it not make more sense to consider wording it so that plan members are entitled to access investment agreements as well, and then have the following provisions: "the statement of investment policies and procedures respecting the plan," "the 3 most recent returns filed with the superintendent" and "the actuarial valuation reports filed with the superintendent"?

In my mind, the various things that I've just mentioned are not necessarily synonymous. I think you can have an investment agreement that is not caught by the usual definition of investment policies. It's not clear in my mind that investment policies are necessarily the same thing as actual investment agreements that are effectively a contract between the pension fund and whoever is investing those moneys on behalf of the plan members. I'm not sure if those two things are synonymous. If the minister is sure that they're synonymous, is he relying on legal advice or a legal

interpretation to support that view?

Hon. D. Lovick: The plans are reviewed to ensure that they are indeed compliant in legal terms. More to the point, though, is what I referred to earlier about investment agreements. The problem is that investment agreements cover a range of different things, some of which are, quite frankly, of no help whatsoever to plan members. They don't provide useful information.

What's important to note is that the statement of investment policies and procedures will give -- has an obligation to give -- everything that would be contained in an investment agreement in any event. So it isn't a case that by not using that term, you're suddenly taking away people's opportunity to see things that would otherwise be helpful to them. That is still covered off in what we have in its place, but it also protects us against having an obligation to provide material that nobody wants or needs or can make use of.

The agreements have to be consistent with policy. That's my point of reference to that last bit, when I said that access to the statement of investment policies and procedures -- whatever investment agreements may be in place -- must be consistent with and conform to the statement of policy. So there can be no surprise, then, that we suddenly discover there's an investment agreement that doesn't seem in any way consonant with or compatible with the investment policy that the plan is supposed to be governed by.

B. Penner: A point of clarification. When you refer to policies, you're referring to the pension plan's policies -- not the government's policies with respect to pensions, but the individual pension plan's policies -- in terms of what? How they handle the money? How they're going to invest it? Or do you mean to use "policy" in the sense of the individual pension plan policy held by an employee?

Hon. D. Lovick: There is indeed, I think, the danger of a semantic difference here. When we're talking about policies, we're not talking about something like an insurance policy. We're talking, rather, about the rules governing the operation of a plan.

To the member's question: the policies that must be abided by -- God, that's an awkward phrase, but in any event . . . . The policies that must be conformed to or acted in conformity with are both government and the plan policies, whatever they have to say on the particular plan.

B. Penner: Thank you for that clarification. Prior to my previous question, the minister was saying that any investment agreement would necessarily have to be consistent with a pension plan's policies. Now, because of his explanation, it's policy as it relates to how the pension funds are to be managed. Is that correct?

Hon. D. Lovick: I'm delighted to say this: the member is quite correct.

[1620]

[ Page 13521 ]

B. Penner: We'll see how much longer he says that, hon. Chair. Then I would assert that the minister is distinguishing between an investment agreement and a pension plan policy governing a pension plan. He's using those two terms separately to relate two different things. Again, it's my concern that when it comes time to interpret this legislation, a court may, by applying the rules of statutory

interpretation, read significance into the fact that the Legislature has chosen, if we pass this section, to remove an express reference to investment agreements in place of investment policies. And a court may read into that some significance that the minister -- or even I -- doesn't anticipate. That's a hazard I would like to prevent and preclude, if possible. So that's why I'm pursuing this matter -- in the event that there is some confusion in the courts on this issue.

Hon. D. Lovick: I am advised, Mr. Chairman, that this matter is not problematic. Indeed, it has been vetted and discussed -- and other jurisdictions, as well, examined.

B. Penner: I don't have too many more questions on this, but just want to state again that I do have some concern that "investment agreement" sounds like a very specific document. Again, I'm not well-versed in the issues of pensions or pension policies, but in my mind it seems to conjure up an investment agreement as something akin to an RSP plan that you may put your money into. I know that there's a difference between pensions and RSPs, but that's my only familiarity with investing in, for example, equities or in the stock market.

You put your money into a particular form of equity fund, and you're given a copy of an investment agreement between you and whatever agency you're dealing with that's handling the money for you. I want to make it very clear -- and put it on the record, in case it ever comes time to seek clarification in the courts on this matter -- that the minister contemplates that "investment policies" will include investment agreements, so that pension plan holders will be entitled to get a copy of the actual investment agreements governing the investment of their pension plan funds.

Hon. D. Lovick: When we talk about a statement of investment policies and procedures, what we're talking about broadly is what governs the contract with the fund managers, the managers of pension funds -- their contracts, what they must do and must not do. All of those contracts, I understand, are available to the superintendent, who has responsibility to ensure that they conform with the letter of the law and the regulation.

B. Penner: And individual plan members are entitled to access those agreements through the person sitting to your left, hon. minister?

Hon. D. Lovick: I want you to know that you just scared the ADM terribly, because it's really the person on my right. But yes indeed, you can.

R. Coleman: I have a couple of questions relative to

section 5 as it applies to some correspondence I've received from the British Columbia Provincial Council of Carpenters. As we know,

section 5 deals with access to some agreements and investment funds and improves disclosure requirements to plan members -- there's going to be a statement of investments and policies.

[1625]

I want to read to the minister a couple of excerpts from this letter and ask him how this will apply to this particular union. In their

preamble, they are telling me that they're writing about events "that will soon become newsworthy in British Columbia." I don't believe that they are referring to Bill 58 as the newsworthy item. The letter is intended to provide background information as well as to make a request for assistance to an MLA.

They say: "First of all, we will outline who we are and will provide some history that should cause concern for over 600,000 B.C. citizens who are members of trade unions." The letter goes into a bit of history about the chartering of the Carpenters Union in 1943, the relationship that it has with the international union, how the international has taken control of the business of the union, and the frustration that they have.

They outline two frustrations, which I found interesting. One is that they're saying that some of these changes mean the carving up of the administration of the Carpenters Union in British Columbia, the appointment by the international portion of the union of all officers and representatives, including the directors of the trust and pension plans, and the removal of the right of the members to vote on many matters, including the right to hold elections. The concern here is obvious. The union, including our retired members, is very concerned about the parent union taking control of the Carpenters Union in British Columbia and of the pension plan.

My question to the minister is: it's obvious that there is some sort of autocratic process going on here that is affecting this particular union. They're saying that this is going on, and as it goes onward, it could affect 600,000 B.C. citizens who are members of trade unions. Obviously the control of a pension plan moving south of the border, totally out of the control of the union in British Columbia, is of grave concern -- obviously to those union members and to the people who want to collect their pension in the future.

I'm just wondering if the minister could respond and give me some insight as to how

section 5 of this act is going to help the carpenters or what is going to be done to deal with this issue of the carpenters. They simply feel that this is a non-partisan issue that doesn't belong to being tied to political beliefs or affiliation. The issue simply is the right of citizens who are members of a trade union to have their democratic right to vote protected and the protection of their pension rights. It's obviously a grave concern to this union, because this is the president of the British Columbia Provincial Council of Carpenters that has written me. I wonder if the minister could respond.

Hon. D. Lovick: The short answer to the member's question is that I don't think that

section 5 speaks to the issue that he refers to. However, I do believe that other parts of the act do. Just the other night, as a matter of fact, I met with Len Embry, president -- if that's the person who wrote the letter, he is president of the B.C. Provincial Council of Carpenters -- and with another of the senior executives. I've been familiar with this issue for a while. There was a recent issue of the carpenters' paper, called On The Level , which was featuring their battles with international. This has been going on for well over a year, by the way.

Indeed, my deputy in labour relations, Mr. Don Cott, met with the carpenters well over a year ago to see about working something out. It was Mr. Cott's suggestion that a mediator

[ Page 13522 ]

would probably be advisable to try and sort out their differences. Accordingly, the carpenters engaged the services of Mr. Stan Lanyon, formerly chair of the Labour Relations Board. Mr. Lanyon reported out recently, essentially throwing up his hands, I think, and saying: "I don't know what we do." The basic policy . . . . I'm going to stretch the bounds of debate just a moment, Mr. Chairman, to give the member's question its due.

Interjection.

Hon. D. Lovick: Yeah. Well, as I say, I'm not even sure it fits in this section, but it's a fair question. Obviously you're concerned about it, and so am I. So if members want, I'm prepared to elaborate a little bit.

The matter of what the Carpenters Union -- the international union headquartered in Washington, D.C., I believe -- is attempting to do has been of concern to the Canadian locals for some time, most notably the B.C. section. It's about what the Americans refer to as rationalizing. They want to try and have a different structure of control. They want to get rid of smaller locals and make it, rather, into larger bodies "responsible for," etc., etc. They're absolutely resolved to do that.

The debate and the discussion that was going on in British Columbia, I gather, ended essentially by the American delegation from the international saying: "Well, we're going to do it anyway, and we have the power to do it." That ended the discussion. So it's problematic, no question.

[1630]

The issue, however -- up until about a month ago, when I first became aware of it -- was focused, then, on pensions. Latterly, it has not been on pensions. It's rather more about governance than anything else. Having said that, I have to acknowledge that, indirectly, it could have an impact on pensions. Obviously, if you set up a new system of governance and elect new pension trustees, that will have an impact on pensions. However, the assurance that I have given Mr.

Embry -- and I believe the superintendent has perhaps been involved in this, too -- is that our reading of our legislation -- the existing as well as the current in terms of pension benefits, and our pension legislation in this province -- is such that they could not effectively take those assets and move them out of the province, out of the country.

We think that the carpenters are indeed protected against that. Their protection against what appears to be, frankly, a somewhat authoritarian and predatory practice on the part of the international is not so clear. That gets us into the realm of the law and who has jurisdiction, etc. Most union constitutions that are affiliated with an international body effectively divest their power and give it to the national or international president. Accordingly, then, the carpenters in British Columbia have been looking for comfort in some kind of legislative change.

I don't know whether the member's familiar with that, but they have indeed proposed some ideas. Whether that would be acceptable to other unions who might be in the same predicament at some point is, again, still to be determined.

But I can tell the member this: obviously I am concerned about the integrity of that particular union and its ability to carry out what it does in this province. I understand that there's one other jurisdiction in Canada that is making cause with the British Columbia Council of Carpenters, and that's Ontario. There are some nine locals in Ontario that are presently fighting in front of the Labour Relations Board to try and prevent the international from doing what it wants to do. Beyond that, the international has had pretty good success at getting its way, quite frankly, in other jurisdictions across the country.

So that's background for the member. As I say, I don't think

section 5 is germane. Moreover I don't think the matter of the integrity of the pension is in question, as nearly as I can make out from my reading of the material so far.

R. Coleman: I guess the integrity of the pension, in this case, will depend on who's got control of the strings of the pension from the management perspective. If the management is in the United States, because of the devolution of this power, I'm not so sure . . . . Maybe the minister can tell me, but I'm not so sure what restrictions we have on how those moneys are invested. I'm not even sure that a pension plan is restricted like an RSP as to the amount that can be foreign- invested, similar to an RSP. If it isn't, then obviously . . . .

You know, the minister snapped his fingers and said it can't move that quickly, but it can move, if the decisions on investment are done over a period of months or years, into other investments.

I guess my big concern here -- and reading this section, obviously, with investment policies and procedures respecting plans . . . . You know, what are the investment policies and procedures respecting plans? I mean, there might be better investments offshore than there are here for those pension plans. The question is the transparency and who has control and whether those investments are being made on behalf of the individuals that are in the plan in British Columbia or whether those investments can actually get swallowed up somewhere else, and they wake up one morning and find out they don't have enough money to pay the pensions at the level they thought they would.

We've had that happen. There's some concern in some of the other building trades about that transparency and bad investments that have been made in some pension plans. I'm wondering if the minister would be aware of how the investment policies and procedures respecting plans today are working for these groups, relative to their transparency back to their members.

I get a lot of calls from union members -- as I'm sure everybody else does -- that tell me they have great concerns about their pension, because they keep hearing rumours that it's not doing well; they keep hearing rumours that it's been cut back. I'm wondering if the minister has any sense of how the status and value and integrity of these plans in the unions are going to be affected by this legislation.

[1635]

Hon. D. Lovick: We dealt with some of these matters awhile ago, under another part of the act. I can give the member this comfort: by our laws, you can't transfer those assets out of this jurisdiction; you can't give them offshore or something like that. There are very definite restrictions in terms of what happens to those pension funds -- all right? The superintendent has quite considerable power in that regard.

Regarding the other question, I'll just give a very brief response to the other question about the relative health of pension plans. The member is quite right that part of the

[ Page 13523 ]

predicament was that the rumour mill was abounding for a while. Indeed, it was in 1994, I think, when the primary concern was labour unions, and people were concerned.

Let me just briefly say what I said earlier to the member's colleague -- namely, that there has been a national committee struck to examine the difficulty that pension plans across the country are having, largely because of the falling value of the dollar. What happened has happened in terms of real estate market fluctuations and interest rates, primarily; actually, that's the major thing. What has occurred accordingly, then, is that those pan-Canadian bodies have been meeting to put together plans to make sure that all pension plans across the country are indeed compliant and that they are all in good health.

I understand that we have no plan at the moment in B.C. that is in any way threatened. I suspect that there will still be rumours abounding, but my information is that all of them are now well on the road to being absolutely in compliance. I think there's only one that still has some distance to go. But the superintendent assures me she's confident that, in relatively short order, everybody will be in a comfortable and perfectly appropriate fiscally responsible position.

R. Coleman: Since the minister mentioned them, maybe he can just sort of give me a brief outline to reassure me of what those restrictions are on investment of those funds, which will protect them from moving from a jurisdiction if an international body gains control of the board and the pension fund.

Hon. D. Lovick: I understand that there's a whole list of restrictions -- I would be more than happy to provide that to the member -- governing, among other things, what percentage of the portfolio could be, for example, in real estate. I think the figure is 25 percent, though I understand that no pension plan even begins to approach 25 percent. But that is nevertheless the guiding feature. There are similar restrictions on how much can be invested offshore -- I think that's 20 percent -- and a number of other things, as well, to protect, if you like, against any kind of wild fluctuations.

R. Coleman: I would very much like that information if you could provide it. I'm sure I could probably look it up too. But if you have it in a capsulized form, it would make it easier for me, and I would appreciate that.

I have only one more question, then, on this section, and that is: has part of the calculation relative to this piece of legislation and the clawback of pensions in any way been brought in actuarially to stabilize these pension funds? Is this clawback, which takes place if somebody goes to work in another trade, to stabilize the pension funds? Is that one of the underlying reasons, I guess, relative to the stability of these plans -- that we need to do this because the plans are expecting not enough participants to take care of the actuarial pay-outs to the people that are in the plan today? Is there a financial reason attached to that portion of this bill relative to the pension plans?

Hon. D. Lovick: The answer is no.

[1640]

K. Krueger: Not long ago an actuary in Vancouver had prepared a draft report that said nine of the 17 building trades union pension plans, with 75 percent of the membership, were identified as having unfunded-liability risks. The minister's given us some good news this afternoon about the improved status of those funds.

If they've improved, obviously that's a good thing for the pensioners who are depending on them -- although if the improvement is because of the tap flowing from the HCL fund, then obviously, from my comments earlier about the tax base supporting union pension fund deficits and those taxpayers often working for a quarter of the wage that HCL workers work for, that's not comforting at all.

In any event, the minister's earlier answers to the member for Chilliwack's questions with regard to not providing access to investment documents as a result of this amendment included the statement that it was questionable whether some of that material was of benefit to those pension plan members. I think the minister said it was bulky and onerous and not necessarily of value. I think, and I want to put it on the record, that that's up to the members to decide and that we don't want to be paternalistic with people.

They're very interested in the future of their pension funds, and I don't think it's a good idea to delete the provision for members being able to readily access the details of investment agreements. There have been sad histories of people going to jail in this province over the way they didn't manage pension funds properly. Pension plan members have every right to be concerned and every reason, and they ought to have full access. I know the minister said that upon application to the superintendent they can get access.

It sounds to me as though that might be a slower process and also add a lot of work for the superintendent, and I'm not sure why we'd want to create a bottleneck that does add work for her.

There have been situations where union pension funds invested in real estate and real estate development, and they've been very costly -- those investments, those decisions -- to the interests of the pension plan members. So we don't like to see any restriction on investment detail disclosure to the affected members of the pension plans. I believe that we'll vote against this

section specifically because of that, but I wonder if the minister would care to offer any further explanatory comment.

Hon. D. Lovick: I'm listening to the member's comment saying that they propose to vote against this

section of the agreement despite the fact that I have spelled out -- in fairly clear detail, I thought -- why this is an improvement in terms of what pension plan members get. The intention is entirely to make the information more useful, more accessible, more available to members of a pension plan. I'm again, as I say, just a little bit surprised to discover that members think that somehow, despite my explanation of what the intention is and why we're doing this, it isn't indeed an improvement and that the material that, as I said, in the past has proven to be of no value, is somehow of value.

Does the member want to suggest some kind of amendment? Does he think that we should leave in the reference to the statement that investment agreements still should appear to be stated in the legislation? Is that the preference? Because if so, if he wants to offer that, perhaps we could entertain that.

K. Krueger: Yes, if the minister is agreeable. I haven't written out an amendment, but if the minister is agreeable to not deleting subsection (4)(d) -- that is, not to repeal that

section -- then the official opposition would be willing to vote for this section.

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[1645]

Hon. D. Lovick: What I'm going to do is to suggest that certainly, that's absolutely acceptable to me. What we will do is rejig or jig that amendment in such a way that it works for all of us. Why don't we, then, for the moment, simply stand down

section 5, and we'll carry on with

section 6. We will table an amendment, probably on Monday if that's satisfactory, and we'll deal with it then.

K. Krueger: That's excellent. I was about to, in my enthusiasm, then suggest that we move on to

section 7, but I'll sit down so that we can have a vote on

section 6 first.

The Chair: I understand that, by agreement, we are standing down

section

Section 6 approved.

section 7.

K. Krueger: Our concerns with regard to

section 7 arise out of clause (

c) and sub-subsection (4). This is the

section that provides for the superintendent to sever an amendment from a plan. Now, I can understand where this may be necessary in some circumstances, but there are issues around this particular wording that we think could be very problematic. Perhaps the minister could just give us the benefit of an explanation of the

section before I get into that.

Hon. D. Lovick: The intention of this particular

section is, again, simply to reduce red tape. The provision will allow the superintendent to reject a portion of a plan amendment and permit the administrator to continue to administer non-offending portions. This cha