2002 Legislative Session: 3rd Session, 37th 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)

MONDAY, APRIL 8, 2002

Afternoon Sitting

Volume 5, Number 10

CONTENTS

Routine

Proceedings

Page

Introductions by Members

Introduction and First Reading of Bills

Community Care Facility Act (Bill 16)

Hon. K. Whittred

Sustainable Resource Management Statutes Amendment Act, 2002 (Bill 22)

Hon. S. Hagen

Transportation Statutes Amendment Act, 2002 (Bill 25)

Hon. J. Reid

Statements (Standing Order 25 B )

Sport development

S. Brice

Tynehead park

D. Hayer

Organ donations

L. Mayencourt

Oral Questions

Cost of referendum on treaty negotiations

J. MacPhail

Hon. G. Abbott

Effectiveness of referendum on treaty negotiations

J. Kwan

Hon. G. Abbott

J. MacPhail

Expansion of Vancouver convention centre

L. Mayencourt

Hon. R. Thorpe

Ban on open pens in aquaculture industry

M. Hunter

Hon. J. van Dongen

Youth traffic safety

R. Lee

Hon. R. Coleman

Second Reading of Bills

Taxation Statutes Amendment Act, 2002 (Bill 3)

Hon. G. Collins

J. MacPhail

I. Chong

Corporation Capital Tax Amendment Act, 2002 (Bill 4)

Hon. G. Collins

I. Chong

Registry Statutes Amendment Act, 2002 (Bill 20)

Hon. G. Collins

Committee of the Whole House

Deregulation Statutes Amendment Act, 2002 (Bill 8)

J. MacPhail

Hon. K. Falcon

Hon. S. Hawkins

Reporting of Bills

Deregulation Statutes Amendment Act, 2002 (Bill 8)

Third Reading of Bills

Deregulation Statutes Amendment Act, 2002 (Bill 8)

Hon. G. Collins

Committee of Supply

Estimates: Ministry of Finance

Hon. G. Collins

J. MacPhail

Estimates: Ministry of Children and Family Development

Hon. G. Hogg

S. Orr

J. Bray

J. Kwan

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Forests

Hon. M. de Jong

J. Kwan

B. Belsey

R. Hawes

P. Bell

J. MacPhail

[ Page 2559 ]

MONDAY, APRIL 8, 2002

The House

met at 2:03 p.m.

Introductions by Members

H. Bloy:

Mr. Speaker, it gives me great pleasure and honour today; it's the first day my

son has been in the House to see us while we're sitting. I'd like to introduce

my son, Jeremy Bloy, and his girlfriend, Jennifer Breakell, and my daughter

Katie is here again. If the House would please make them welcome.

Hon. G.

Abbott: Mr. Speaker, we have some distinguished guests in the gallery whom

I'll have the pleasure of meeting a little later on today. They are Mr. Hugh

Dobbie, who is an applied science technologist and president of the Association

of Applied Science Technologists and Technicians of B.C., and, with him, Mr.

John Leech, who's the executive director of the association; John Watson, a

professional engineer and president of the Association of Professional Engineers

and Geoscientists of B.C.; and John Bremner, a professional engineer and

executive director of that organization. I'd like the House to make all of our

distinguished guests welcome.

[1405]

Hamilton: It's my pleasure to introduce Wendy Hobbs, a trustee from Sooke

school district 62. Would the House please make her welcome.

Hon. K.

Falcon: I'd like to introduce a delegation of students from the Cloverdale

Learning Centre in Surrey and also the Woodroffe High School in Ottawa. The

students are participating in the YMCA's Great Canadian Migration Youth

Exchange. We've got their teacher sponsors, Odeel Washlander and Sandra Ross. I

believe they're here today. From Surrey we've got Marilyn Middleton and Terry

Tether. I would ask the House to please make them welcome.

Introduction and

First Reading of Bills

COMMUNITY CARE FACILITY ACT

Hon. K.

Whittred presented a message from His Honour the Administrator: a bill intituled

Community Care Facility Act.

Hon. K.

Whittred: I move that Bill 16, intituled Community Care Facility Act, be

read a first time now.

Motion

approved.

Hon. K.

Whittred: The Community Care Facility Act governs the licensing of community

care facilities in British Columbia. The primary purpose of the bill and its

regulations is to protect the health and safety of vulnerable and dependent

persons cared for in licensed facilities. While this government applauds the

intent of the existing act, which is substantially in the same form as

originally enacted in 1969, we feel that the act needs to be repealed and

replaced with legislation that better reflects current licensing trends and

practices.

Community

care facility services have evolved. Current practices recognize that there is a

continuum of care with varying levels of care services. This legislation is more

focused on protecting the health and safety of dependent and vulnerable persons,

in contrast to the current scheme. The new Community Care Facility Act will

create a framework that permits health authorities and communities to provide

better and more flexible community care while ensuring that consistent standards

remain in place so the health and safety of persons receiving those services is

not compromised.

Some

existing provisions in the Community Care Facility Act are obsolete or

unnecessarily restrictive, and, in general, the act needs to be modernized into

plain language for purposes of clarity and consistency in

interpretation and

application. This new legislation clarifies the roles of the provincial and

local authorities to avoid duplication and to provide greater local autonomy.

This

government wants to provide an opportunity for public consultation in health

authorities across the province this spring and summer in order to get feedback

directly from community care constituents.

I move that

the bill be placed on orders of the day for second reading at the next sitting

of the House after today.

Bill 16

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

[1410]

SUSTAINABLE RESOURCE MANAGEMENT

STATUTES AMENDMENT ACT, 2002

Hon. S.

Hagen presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Sustainable Resource Management Statutes Amendment Act, 2002.

Hon. S.

Hagen: I move that Bill 22, entitled Sustainable Resource Management

Statutes Amendment Act, 2002, be read a first time now.

Motion

approved.

Hon. S.

Hagen: I am pleased to introduce this bill today. The Sustainable Resource

Management Statutes Amendment Act, 2002, includes amendments to the

Muskwa-Kechika Management Area Act, the Water Act and consequential amendments

to the Forest Practices Code of British Columbia Act.

With

respect to the Muskwa-Kechika management area, this area is a unique wilderness

area in northeast

[ Page 2560 ]

British Columbia. It is bestowed with a globally significant abundance and

diversity of wildlife as well as outstanding natural resource development values

such as oil and gas.

This bill

makes some changes to the way government will continue to manage this

significant area. These changes balance government's commitment to the long-term

management and maintenance of the Muskwa-Kechika with government's new-era

commitment to maximizing taxpayer dollars in a fiscally responsible way.

This bill

makes changes that increase the incentive for more partners to donate funds to

the trust fund and in that way is consistent with the government's commitments

to establish funding partnerships with the private sector and foundations.

The bill

continues to ensure adequate funding for planning, research and conservation

work in the Muskwa-Kechika. Through the Muskwa-Kechika Management Area Act and

Forest Practices Code of British Columbia Act amendments, the bill reflects

changes in ministry functions and authority regarding land use planning

resulting from government reorganization and reflects government's direction to

eliminate joint signing authority for land use planning between ministries.

With

regards to the proposed Water Act amendments, this bill reflects our

government's new-era vision to create a thriving private sector economy, reduce

the cost of government by increasing efficiencies, reduce red tape and the

regulatory burden on B.C. businesses, provide for faster approvals and greater

access to Crown resources, and accommodates government reorganization. The bill

assists in achieving turnaround targets for water licensing decisions and

supports backlog reduction commitments announced by this government.

Practically

speaking, the Water Act contains some cumbersome and time-consuming procedures.

For example, the requirement for a written approval for diverting or using water

for the short term — i.e., not exceeding 12 months — can create difficulties

for certain businesses with widespread operations but very short seasonal

windows. The proposed amendments would make the notification requirements more

consistent but less prescriptive.

I move that

the bill be placed on orders of the day for second reading at the next sitting

of the House after today.

Bill 22

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

TRANSPORTATION STATUTES

AMENDMENT ACT, 2002

Hon.

J. Reid presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Transportation Statutes Amendment Act, 2002.

Hon. J.

Reid: I move that the bill be introduced and read a first time now.

Motion

approved.

Hon. J.

Reid: I am pleased to introduce Bill 25, Transportation Statutes Amendment

Act, 2002. Bill 25 includes amendments to three statutes: Ministry of

Transportation and Highways Act, Ferry Corporation Act and Greater Vancouver

Transportation Authority Act. Bill 25 also provides authority to repeal the

Ferry Act, which applies to inland ferries.

The most

significant amendments contained in this bill allow for a new

section to be

created in the Ministry of Transportation and Highways Act to provide for inland

ferry administration. This change will ensure equitable treatment of ferry

service delivery between inland and coastal communities and will ensure

sufficient revenues to protect and maintain existing services.

Two other

amendments of a housekeeping nature are contained in Bill 25. The first

amendment remedies a concern raised by the auditor general with respect to the

accounting treatment of provincially owned SkyTrain assets leased to TransLink.

The second amendment removes a requirement to affix the ministry seal to

contract documents.

[1415]

I move that

the bill be placed on orders of the day for second reading at the next sitting

of the House after today.

Bill 25

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Statements

(Standing Order 25

b) SPORT DEVELOPMENT

Brice: It is important that the 2010 Olympic bid be embraced by the whole

province of British Columbia and not be perceived as a lower mainland event. As

we prepare our bid for international acceptance, we can readily imagine the

positive results that will accrue during and following the games. We must

maximize this eight-year lead-up time to establish a provincewide vision for

sport development in B.C. to enable people to enjoy good health through sport

and recreation — a vision starting with young people participating in

community programs and a vision of B.C.-based athletes to lead Canada in

participation and podium performances. This can be facilitated by tapping into

an existing sport network.

The

PacificSport Group is the B.C. network of national and regional sports centres

committed to world-class athletic services, coaching excellence and long-term

sport development. PacificSport includes national centres in Victoria and

Vancouver and regional centres in Nanaimo, Abbotsford, Kamloops, Kelowna and

Prince George. We should involve the talent pool of the professionals and

volunteers within that PacificSport Group.

[ Page 2561 ]

Until

recently, I had the privilege of chairing the board at Victoria National

Training Centre, and I am very excited about the potential for all our B.C.

athletes. To be the best, you have to compete against the best. There are

12-year-old kids in all parts of our province, kids who will be reaching their

competing prime in 2010, kids who can get to know the power of the athlete and

the joy of achievement. PacificSport can help make their dreams come true and

contribute to an Olympic Games that leave a legacy of a healthier, more active

British Columbia.

TYNEHEAD PARK

Hayer: Thank you for the opportunity to speak today on a topic that is very

dear to my heart. As you know, Vancouver's crown jewel is much-loved Stanley

Park. There are few who ever visit who do not take advantage of a trip to

Stanley Park and its magnificent setting. Well, we have the opportunity in my

community to create an equivalent to Stanley Park, a park that will be loved by

Surrey residents as much as Stanley Park is loved by those who live in

Vancouver. I am talking about Tynehead Regional Park. It is the namesake for my

riding: Surrey-Tynehead. It occupies the heart of my constituency.

As most

people are aware, at the current rate of growth it won't be long before Surrey's

population surpasses that of Vancouver. Tynehead offers a unique opportunity to

create a park that will have a wide appeal in the heart of what will soon be

this province's largest city. Tynehead was conceived in the mid-1960s, but it

wasn't until 1992, in the western half of the park, that some development began

with natural trails and a fish hatchery. Yet while those projects are relatively

minor, almost 300,000 people visit Tynehead park each year. Just think how many

will use it when it's fully developed.

I am happy

to say that options are now being explored to take advantage of the full 800

acres of this parkland gem. The first public consultation meeting was held in my

riding recently, and in the coming months more will take place to get input on

what those people would like to see Tynehead become. I am encouraged, and I urge

everyone with a desire to retain and protect public spaces to participate.

ORGAN DONATIONS

Mayencourt: I want to speak today about the B.C. Transplant Society. They're

in the business of saving lives through the organ donor registry, and last year

in British Columbia 83 of the people they helped by providing a donation of a

kidney got that gift of life through a living friend or relative.

[1420]

Who are

those people who donate a part of their own body so that someone else can live?

They are ordinary people who have followed their hearts and performed a heroic

task. One of those people sits among us in this chamber today — a person who

donated his kidney and in doing so saved the life of his desperately ill cousin.

He doesn't call himself a hero, but his family, friends and colleagues do. I

know that his story has inspired others to do likewise, and that's important,

because over 400 British Columbians are waiting right now for such

an act of

generosity. Over a half-million British Columbians have signed on to the new

organ donors registry. I salute each and every one of them. We need everyone in

British Columbia to register, so I urge you to call the B.C. Transplant Society

and offer someone a chance at life.

With that,

I'd just like to salute the member for Vancouver-Kingsway.

Mr.

Speaker: That concludes members' statements.

Oral Questions

COST OF REFERENDUM

ON TREATY NEGOTIATIONS

MacPhail: The treaty referendum and the government's question-writing skills

are fast becoming the laughingstock of the country. Pollster Angus Reid said

that the referendum is one of the most amateurish, one-sided attempts to gauge

the public that he's ever seen.

To the

minister responsible for Aboriginal Services, a very straightforward question:

how much does it cost taxpayers every time a ballot is returned and counted —

tax dollars that could be going to audio books, to legal aid for single moms or

to refugees?

Hon. G.

Abbott: I think, clearly, the best example of "amateurish" we had

around was actually the NDP government of British Columbia over the past decade.

That's certainly the best example of amateurish we have around.

The

second-best example is the pathetic and, I think, completely ill-advised attempt

by the NDP party and the opposition here in the Legislature to try to divide

British Columbians around the questions that have been posed in the referendum.

We have a

far greater belief in the common sense and goodwill of British Columbians. I

believe that British Columbians are embracing the opportunity to have a voice at

last in the treaty process. We salute that. We believe that British Columbians

will want to express their views with respect to this. They will want to

reinvigorate and re-excite the treaty process, which we believe will ultimately

be successful, despite the efforts of this opposition.

MacPhail: Not only did the minister not answer my question, but he's

completely out of touch with what's going on in the rest of British Columbia.

The referendum questions are so one-sided that, in fact, Jacques Parizeau would

blush about these questions.

I'll tell

you something: British Columbians know that they deserve a lot better. There are

absolutely millions being spent on this referendum in order for the government

to get the answers that they want.

[ Page 2562 ]

Now we

understand that there's a provincewide yes campaign tour going on by members of

the government, starting with the Attorney General. Can the Minister of

Aboriginal Services tell British Columbians how much government money is being

wasted to prop up the government's yes-side campaign — money that could be

spent on lowering drug costs for seniors or on audio books, just to name two?

Hon. G.

Abbott: The issue is an interesting one. What we have seen over the past

decade under the former government's leadership was a treaty process that did

not engage the people of British Columbia. As a consequence, we have seen the

expenditure of about half a billion dollars on that process without any results.

What we want to do through this referendum process is, again, to re-engage the

people of British Columbia around the principles which should guide our treaty

discussions.

The member

might remember — and occasionally I point this out to them — that we spent

about half a billion dollars on fast ferries under this former government. How

many treaty referendums could that have bought?

Mr.

Speaker: The Leader of the Opposition has a further supplementary.

MacPhail: Whenever this minister raises fast ferries, it's sort of like the

equivalent of a bad hair day. He has nowhere else to go.

At a time

when this government is cutting support for seniors, the disabled, single moms

and the blind, it insists on spending millions — millions — on a divided,

one-sided referendum.

[1425]

The

Minister of Aboriginal Services has still not answered the question about either

how much his government is spending on this referendum or how much taxpayers can

save by not sending in their ballot. Stop the rhetoric, and answer the

questions. Tell British Columbians how much money British Columbians will save

if they decide not to send in their ballot. British Columbians want the answer

to that so that they know what a good strategy is about whether to send in their

ballot marked no or to boycott.

Hon. G.

Abbott: I know that the Attorney General, the Minister Responsible for

Treaty Negotiations, actually has been entirely open about the cost of this

referendum.

You know,

this opposition was certainly expert about trying to manipulate public opinion

when it came to issues around the Nisga'a treaty. There was no limit to the

amount they were prepared to spend there. Yet here, where I think we're trying

to do something much more fundamental…

Interjection.

Mr.

Speaker: Order, please. Order, please.

Hon. G.

Abbott: …where we are trying to engage the people of British Columbia for

the first time on the principles which should guide treaty-making in British

Columbia, surely the member opposite is not suggesting that somehow democracy

should be constrained by the small cost that's associated with canvassing the

people. I think that's entirely wrong. Again, I guess it goes some measure to

explaining a government that made so many ill-advised and poor decisions over

their ten-year tenure that we have the unfortunate legacy of failure from this

government that we inherit today.

EFFECTIVENESS OF REFERENDUM

ON TREATY NEGOTIATIONS

J. Kwan:

There is more than enough confusion in the province over this government's

ill-conceived referendum. Now that the ballots have been mailed out, further

questions arise. Handwriting experts note that the error rate in authenticating

a person's signature is up to 25 percent. This means that legitimate ballots

could be rejected and forged ballots could be counted. Will the minister admit

that this process is so flawed, so meaningless, such a waste of time and so open

to error that the only sensible course of action is to cancel the referendum and

redirect those tax dollars to aboriginal services?

Hon. G.

Abbott: There certainly is a certain amount of confusion with respect to the

issues, and they rest entirely in those two seats over there. That's where the

confusion really exists. It's interesting.

Interjection.

Mr.

Speaker: Order, please.

Hon. G.

Abbott: This is the remnants of the party that governed British Columbia for

ten years. One of the pieces of legislation they passed during that period was

the Recall Act, and the measures that are used to test public opinion are

precisely those that were contained in the Recall Act. So if there's some

confusion, it rests entirely in those two seats.

Mr.

Speaker: The member for Vancouver–Mount Pleasant has a supplementary

question.

J. Kwan:

It is clear that what is driving this silly referendum process has nothing to do

with listening to people, nothing to do with democracy. The ballots are being

tossed out with other junk mail that people receive. People living in apartments

are receiving ballots addressed to those who moved out months ago, and others

are not receiving ballots at all, despite the fact that they've been on the

voters list for many years. I myself have not received a ballot. Now we see that

even if you do not….

Interjections.

[ Page 2563 ]

Mr.

Speaker: Order, please. Order. The member has the floor.

J. Kwan:

Now we see that even if you do cast a ballot, you have a 1-in-4 chance of it not

being counted. Will the minister admit that this is an amateurish, error-ridden,

inconclusive referendum that is an affront to democracy and to British

Columbians?

[1430]

Hon. G.

Abbott: It's interesting. Since the last election when, of course, the

scourge of British Columbia was thrown out and we finally got a new government

here in British Columbia, we've been hearing this Chicken Little: "The sky

is falling; the sky is falling."

MacPhail: It actually is.

Hon. G.

Abbott: Well, actually, it isn't. We have a new and brighter day in British

Columbia, and it's based on the view that British Columbians are a great people

and that if you give them an opportunity to express their views, they'll take us

up on that. That's exactly what we want to do here. Where the failure lies is in

those two seats, the remnant of the government that purportedly governed British

Columbia. We believe, Mr. Speaker, that in allowing people to give us their

advice on the principles that should guide us in the province, we can

reinvigorate the treaty process. We can see some successes, unlike the complete

lack of successes that we saw when the NDP government was in office in British

Columbia.

EXPANSION OF

VANCOUVER CONVENTION CENTRE

Mayencourt: My question is to the Minister of Competition, Science and

Enterprise. Last Friday was the deadline for the request for expressions of

interest from potential private investors in the expansion of the Vancouver

Convention and Exhibition Centre. Will the minister please tell us how many

applications were received and who they were from?

Hon. R.

Thorpe: Some more good news for British Columbia today. The request for

expressions of interest closed last Friday. We have received six proposals from

private sector investors for development of the convention centre: four from

British Columbia, one from Ontario and one from a combination of Quebec and

France, showing that international investors and domestic investors have

confidence in British Columbia and know that the province is open for business

once again.

Mr.

Speaker: The member for Vancouver-Burrard has a supplementary question.

Mayencourt: That is indeed good news, because for many years tourism

operators in my riding and across the province have been stressing the need for

the expansion of the convention centre to ensure the strength of the tourism

industry in British Columbia. Can the minister please tell us what steps are now

going to be taken in order to move to the successful completion of the

convention centre in Vancouver?

Interjections.

Hon. R.

Thorpe: It appears that the members of the opposition across the House are

against this private sector investment in British Columbia. Let me tell the

member over there one thing our government will not do, and that is waste $72

million like the NDP did before they had a plan to move forward. Our government

won't do that. We're moving forward now with a process of technical review and

evaluation. We expect that to be completed by the end of May, and we're excited

about working with the federal government, the city of Vancouver, the private

sector and the tourism industry of British Columbia and moving forward with this

project.

BAN ON OPEN PENS IN

AQUACULTURE INDUSTRY

Hunter: I have a question for the Minister of Agriculture, Food and

Fisheries, who I think knows that aquaculture is playing an increasingly

significant role in many local economies throughout coastal British Columbia.

Critics of aquaculture development keep saying that open-pen fish farms should

be banned and replaced by closed-containment or land-based facilities. Could the

Minister of Agriculture, Food and Fisheries give us his opinion on what a ban on

open-pen fish farming would do to the industry?

Hon. J.

van Dongen: If closed containment was imposed on our salmon-farming

industry, it would mean the end of the industry in British Columbia. Higher

capital costs, higher operating costs and lower capacities will result in the

industry being economically not feasible. Every other country in the world uses

open-net technology, and if our industry is prevented from doing so, then they

will simply be out of business.

Mr.

Speaker: The member for Nanaimo has a supplementary question.

[1435]

Hunter: I think many of the people I represent feel that after ten years of

being ignored, this government is finally listening to their concerns, and I

appreciate the minister's response. The last thing my constituents and I want to

see is actions that might hurt the recovery process and the development of the

aquaculture industry. Can the minister expand on his answer and tell me what the

impact of banning open-pen fish farms might have in a community like Nanaimo?

[ Page 2564 ]

Hon. J.

van Dongen: Certainly, the loss of the salmon-farming industry would have a

direct impact on many of our coastal communities. Five thousand direct and

indirect jobs, not just on farms themselves but also in the processing plants,

the manufacturing sector, the transportation sector and all of the service

industries — biologists, divers, veterinarians — would all be lost, and $375

million in direct sales. Loss of all of these jobs would have a direct impact on

all of our communities like Nanaimo, Port Alberni, Port Hardy, Tofino, etc.

YOUTH TRAFFIC SAFETY

R. Lee:

My question is to the Solicitor General. In recent weeks several young lives

have been taken in tragic accidents involving street racing on the roads of

British Columbia. Police, parents and communities are all struggling to find

ways to get the message across to young people that speed does kill. Can the

Solicitor General tell us what he believes is a possible solution to this

serious problem?

Hon. R.

Coleman: Having once again returned to my home community on Friday to find

the lives of two young people whose family I know had been snuffed out by a

serious car accident, and also knowing the other parties involved in the

accident, I think we all can tell that the effect of the way young people handle

motor vehicles at times is tragic, as is any accident or any loss to anyone. I

don't think there's enough time in question period to actually give you the

answer, hon. member, but we have to change behaviour. We need to do more

education. We need to involve parents.

We've taken

steps to have administrative suspensions on the side of the road. We as

government are also looking at possibilities of seizing vehicles and other

options that we can do on the enforcement side.

This is a

huge community tragedy. This is the fourth time in five years that I've lost

young people in my community, most of whom I've known. We have to get a handle

on this by working with parents, educators and ourselves as legislators to find

a long-term solution. Everyone is involved in this issue, and everyone must work

together to find the long-term solutions.

[End

of question period.]

Orders of the Day

Hon. G.

Collins: In Committee A, I call Committee of Supply. For the information of

members we'll be debating the estimates of the Ministry of Forests.

In this

House, I call second reading of Bill 3.

Second Reading of Bills

TAXATION STATUTES

AMENDMENT ACT, 2002

Hon. G.

Collins: I move that Bill 3, Taxation Statutes Amendment Act, 2002, be now

read a second time.

Bill 3

amends several taxation statutes to meet the tax policy and revenue objectives

laid out in the budget speech and the government's three-year budget and fiscal

plan. In

summary, the changes continue the process of building a competitive tax

environment in British Columbia. They introduce new revenue measures to fund

compensation increases for skilled health care workers and professionals,

improve the administration and fairness of the tax system, and streamline the

legislation.

[1440]

To further

enhance competitiveness and reduce compliance costs for eligible manufacturers

and businesses in the resource sectors, the provincial sales tax exemption for

parts for exempt production machinery and equipment is expanded to include all

parts for such equipment. This measure will significantly simplify compliance

for both suppliers and purchasers and will allow the maximum economic benefit

from the overall exemption for machinery and equipment to be realized.

Competitiveness

is also enhanced through an increase in the amount of taxable income to which

the small business corporate tax rate may be applied, or the small business

threshold, from $200,000 to $300,000. This government has made a commitment to

strive to keep our corporate income tax rates competitive.

This

increase in the small business threshold, in combination with the reduction in

the general corporate income tax rate in January, will help ensure that our

overall corporate taxes are in line with those in Alberta and Ontario. The

increased small business threshold, as well, brings B.C. into line with the

other western provinces. This change will encourage small businesses to invest

in British Columbia, resulting in economic growth and job creation.

encourage tourism in the province, an exemption from the provincial sales tax is

provided for boats and travel trailers brought into the province by

non-residents for recreational use. This exemption will be of particular benefit

to local businesses that store and service boats and travel trailers for

non-residents who return to the province for their vacations year after year and

will ensure the tax does not discourage these non-residents from continuing to

vacation in British Columbia and supporting these businesses.

To support

interest in land acquisition for natural gas production, the Petroleum and

Natural Gas Act is amended so the eligibility period for acquisitions of land

subject to the base 9 royalty rate may be extended retroactively from December

31, 2002, to December 31, 2003. The government intends to introduce a regulation

to extend the base 9 royalty rate to lands acquired before December 31, 2003.

Additional

compensation costs for recruiting and retaining high-demand doctors, nurses and

other health care professionals have resulted in the government increasing

health care spending by almost $700 million this year. To ensure these

additional costs are dealt with in a deficit-neutral manner, the government made

the difficult decision to raise additional revenues.

[ Page 2565 ]

Bill 3

includes two measures designed to help offset these additional costs. The

general sales tax rate is increased from 7 percent to 7.5 percent to raise $250

million. Bill 3 also increases the refundable tax credit by 50 percent to $75

per adult. This balancing measure will protect about 700,000 low-income families

from the additional tax payable as a result of the one-half of 1 percent rate

increase.

The tax

rate on tobacco is increased by $8 per carton to $30, and the tax rate on

fine-cut tobacco is increased by a similar amount. These increases are expected

to raise $150 million annually and, in the long run, should help to reduce

health costs by encouraging current smokers to quit and, hopefully, by

discouraging young British Columbians from starting in the first place.

The

remaining measures in Bill 3 are designed to improve the fairness and the

administration of the tax system. The government recognizes that persons with

disabilities and their caregivers have needs that can limit their ability to pay

taxes. For this reason, the government is amending the Income Tax Act to

increase the credits for mental or physical impairment, the infirm dependent

credit and credit for in-home care of a relative. These credits will increase

the assistance available through the tax system by about $100 to $370 annually.

Furthermore, the enhanced tax assistance will increase over time because these

new higher credit amounts are now indexed to provincial inflation.

The Social

Service Tax Act is amended to meet a new-era commitment to eliminate the sales

tax on purchases by parent advisory councils. The amendments will provide a

refund of tax paid on goods purchased for schools with PAC-raised funds. The

refund is provided to both PACs and school boards to accommodate PACs that

purchase goods directly and those that make purchases through their school

boards.

[1445]

The Income

Tax Act is amended to change the provincial alternative minimum tax rate and the

rate at which minimum tax is credited. The new rates will be set at the ratio of

B.C.'s first tax rate to the federal first tax rate. With federal and provincial

tax rate changes in recent years, this will mean the tax adjustment rates for

alternative minimum tax will be 37.8 percent for this year.

addition, the calculation of the B.C. overseas employment tax credit is changed.

The new calculation will provide a credit amount that provides a percentage

reduction in B.C. tax equal to the percentage reduction in federal tax as a

result of the federal credit.

As well,

amendments to the Home Owner Grant Act confirm the requirement that applicants

of the homeowner grant for persons with disabilities must incur substantial

costs for physical assistance or structural modifications in the home to qualify

for the grant. The intent of the grant is to provide financial relief to persons

who, due to loss of mobility, are required to make costly home modifications or

to pay for physical assistance to allow them to live independently in their

homes.

The

amendments validate the use of the supplementary form introduced in 1997 for the

years 1997 to 2001 inclusive. They also confirm the requirement that applicants

incur substantial costs for structural modifications or physical assistance in

the home. As well, effective for this year, 2002, regulatory changes will be

introduced to replace those current forms with a new, simplified form. The

homeowner, rather than a physician, will verify that costs are incurred for

physical assistance or structural modifications to the home. A regulation will

also be introduced to ensure that the existing recipients of the grant do not

have to reconfirm their eligibility.

The School

Act is amended to allow the province to set different tax rates in different

parts of a school district for one property class. This will give the province

the flexibility to deal with situations where there are wide disparities in

average residential values within a school district. This will benefit

residential taxpayers in Tofino this year, where high property values are not

currently offset by lower tax rates under the existing school tax rate formula.

The

Hospital District Act and the Assessment Authority Act are amended to add a

reference to a school tax exemption. This will ensure consistency of exemptions

throughout all taxing authorities which use the hospital base and will confirm

existing practice.

The annual

multi-jurisdictional vehicle tax, which is an annual tax in lieu of the

provincial sales tax, was introduced in 1996 with the support and input of the

provincial trucking industry. This bill amends the Social Service Tax Act to

harmonize the eligibility requirements for payment of this tax with ICBC's

international registration plan licensing requirements. Both of these

initiatives provide one-stop shopping for eligible businesses that operate

vehicles in more than one jurisdiction, thereby eliminating the need to make

individual licence and tax payment arrangements with every jurisdiction in which

they operate. This will extend the benefit of the annual tax to businesses that

are eligible for a pro-rate licence but use pickup trucks and other lightweight

service vehicles to carry on their businesses.

The Social

Service Tax Act is also amended retroactive to March 31, 1998, to provide an

exemption for chemicals purchased by pulp mills to produce ammonium bisulphate

for use as a catalyst or direct agent in the production process. This amendment

parallels an exemption that was introduced for kraft mills in the 1998 budget.

Another

amendment clarifies the application of sales tax to royalty payments and licence

fees to correct a legislative error made in 1998. This amendment confirms that

tax is payable on such payments regardless of when the item was purchased.

Finally,

Bill 3 includes two measures to provide additional revenue to TransLink to

assist in meeting its obligations for transit and transportation infrastructure

in the lower mainland. On behalf of TransLink, the gasoline and diesel fuel tax

rate collected in the greater Vancouver transportation region is increased by 2

cents

[ Page 2566 ]

per litre. This fuel tax adjustment was proposed by TransLink during its

recent round of public consultations. The $42 million generated will help to put

TransLink on a more sound financial footing.

addition, in keeping with the public and binding cost-sharing agreement between

the previous government and TransLink, an amendment is made to provide TransLink

with the authority to increase its tax rate on parking in the greater Vancouver

transportation service area up to a maximum of 21 percent.

In this

budget the government has chosen a path of sound fiscal management — a path

that leads to a stronger and prosperous economy and greater opportunities for

all British Columbians.

Mr.

Speaker, I move second reading of Bill 3.

[1450]

MacPhail: On both Bills 3 and 4, our questions will come at the committee

stage, where we'll be examining all of the change in great detail.

Chong: I take this opportunity to speak to Bill 3, the Taxation Statutes

Amendment Act, 2002. I do want to express the very good news and the support I

have for this piece of legislation, which allows for the budget measures and

taxation measures introduced in Budget 2002 to come to fruition.

I have gone

through the bill and as in previous years in opposition, when I would go through

taxation bills, I pick out those things which I think are important and

relevant, and point out those that have not been of great benefit to my

constituency. In the past, when in opposition, there were many things that were

not satisfactory to my constituency. In this particular bill there are so many

more things and so much good news that I do want to speak to that.

the last decade B.C. has experienced a decline in economic growth and

investment. We have seen our real per-capita GDP decline as other provinces

grow. We've seen economies in the competing jurisdictions such as Alberta and

Ontario continue to grow, and we've seen their take-home — taxpayers'

disposable dollars — grow. Here in British Columbia we continue to lag behind.

We continue to see that people were getting further and further behind and that

a government refused to listen.

When we

were elected last May, thankfully, the people said that they were ready for

change, and they wanted change. They wanted change that would affect all

citizens from various taxpaying groups. They wanted to see that

low-income earners would also be considered. I'm pleased to see that our

Minister of Finance has brought in the piece of legislation which does just

that.

I just want

to touch upon some of these sections in this bill that the Minister of Finance

has already alluded to. First of all, which I find particularly comforting, is

section 6 of this piece of legislation, amending the Income Tax Act by

increasing the infirm, dependent and in-home-care relative tax credits. That is

very important.

So often as

a professional accountant in my prior career, I would have people come into my

office and explain the financial challenges they had in dealing with disabled

dependents at home. They were spending so much more and were limited to the

amount of tax credits they were able to claim. It just didn't seem fair, nor did

it seem to make any sense. These people were saving taxpayers' dollars by taking

care of them in their homes as opposed to being a burden on a health care system

that was continually having more demands on it than it was able to keep up with.

Section 6 will do much to help those families as they deal with the inflationary

pressures, the financial pressures that they are particularly affected by.

Another

piece of this legislation,

section 7: increasing the credits for the mental or

physical impairments. That is also important. Again, when I used to prepare tax

returns for a number of my clients, they wondered why it took so long for

government to acknowledge the benefits they would be providing. The cost that

they had to outlay was so much greater that: "Why couldn't government come

in and make a change on an annual basis or at least review it?" It was

about time this province took a look at that.

Section 12,

which the Minister of Finance spoke of, regarding the increase of the maximum

personal income tax sales tax credit from $50 to $75. It's a long time since

that has been reviewed. That is to deal with our low-income families. I realize

the one area of the legislation that some of us were not particularly fond of

seeing was the increase in the sales tax, going from 7 percent to 7.5 percent,

but we did acknowledge that was necessary to deal with the other cost pressures

our province was faced with.

[1455]

The fact

that the Minister of Finance took into consideration that increase in sales tax

and increased the sales tax credit for those low-income families is of great

comfort as well. A $25 increase — what that means is that a family would have

to spend an additional $5,000 or over $5,000 before they would see the benefit

of this sales tax credit. That would be on items that would have sales tax

applied to it. For low-income families, I can't see requiring them to spend an

additional $5,000 a year, which is about $400 more a month. I do believe that

these low-income families will benefit from that.

As well,

section 16, which deals with the income threshold for small businesses, is again

another good-news story. We watched other provinces become more aggressive and

more competitive in their tax regime to ensure that their small businesses

thrive. As we all said before in this House and we continue to say, small

businesses fuel our economy. We have to make sure that small businesses have a

way of thriving and will stay in our provinces.

I saw

provinces such as Alberta and Ontario moving in this direction. Even Manitoba

has been considering this. The previous administration, the NDP, refused to put

in a plan or to even hint this was a way that they would move forward and be

competitive. I'm so pleased to see that we have increased this threshold.

[ Page 2567 ]

For those small businesses, which will now become profitable because our

economy will start to grow, they need to know they can reinvest those tax

dollars back into their businesses. Their profitable dollars can be pumped back

into their businesses as opposed to the provincial coffers.

Of the last

few sections I want to talk about in this legislation,

section 33 is one area

that I'm particularly pleased about. It exempts boats and travel trailers from

being brought into this province for long-term use by non-residents from the tax

that would have otherwise been imposed under

section 16 of the Social Service

Tax Act. People may recall that when we were in opposition, myself, the member

for Saanich North and the Islands, who is now the Minister of Human Resources,

and the member from Shuswap, who is now the Minister of Community, Aboriginal

and Women's Services, got up and spoke against this tax that the NDP wanted to

bring in, which dealt with a tax on tourism.

Those of us

who had marine businesses in our ridings were being threatened with huge losses.

These were small businesses again. It's been some time. These businesses have

been waiting patiently, recognizing that a government which understood the value

of tourism and small businesses would do something about it. Again, we have now

taken care of that problem, and the Minister of Finance has rightfully corrected

an error the NDP had put forward.

Lastly,

sections 34 and 36, which I think are important pieces of legislation, again

show our government's commitment to volunteers, in particular to parent advisory

councils who raise money and use that money to purchase goods or services

directly benefiting our school children. The fact that they were having to raise

dollars that would be spent on these goods and services and then have to pay an

additional provincial sales tax didn't make any sense at all if that money had

been paid for directly by the school boards. An indirect tax in that way didn't

make sense. The fact that we were able to correct that error, as well, is good

news.

In closing,

I just want to say that this piece of legislation, more so than any other

taxation statute act I've seen in the last five years that I've been in this

chamber, has so much more good news than any other piece that it would be hard

not to support it. I know that myself and all my colleagues support Bill 3

wholeheartedly.

Mr.

Speaker: On second reading of Bill 3, the Minister of Finance closes debate.

Hon. G.

Collins: I want to just add a few comments to what I said earlier, in

closing the debate, and to reflect perhaps a bit on some of the comments of my

colleague, who worked with us in opposition on a number of these issues as

policy items. I want to thank her for input today as well.

[1500]

particular, there are a number of the issues contained in this piece of

legislation that were raised with me — certainly by staff who are aware of all

of them from time to time and certainly by members of government caucus — with

relation to how they affect their constituency. The multi-jurisdictional vehicle

issue is one instance. Both members from the Peace River raised that issue with

me a number of times, and I was pleased to be able to make the changes that are

contained in this legislation in an effort to correct what I think was an

unfortunate, and to rebalance that legislation and make sure that those using

smaller vehicles are extended the same benefit that accrued to larger vehicles.

As well,

the issue the member for Oak Bay–Gordon Head mentions with regard to the taxes

applied to non-residents bringing their boats and trailers into British Columbia

for use here was an issue that I know members of this House heard a great deal

about when the previous administration first introduced this tax. We pushed hard

in opposition at that time to have the legislation not proclaimed until such

time as a review could be done of it, and that was the case. I undertook a bit

of a review afterwards, and I heard from many members of caucus — particularly

those from the Okanagan, the Shuswap, the coastal areas of the province and

other areas as well. I heard from a wide number of MLAs that this was an issue

that they and the small, tourism-based businesses in their community were very

concerned about. I think we've managed to balance that legislation quite

appropriately here.

As well,

there were two other issues that I wanted to speak on. The first is the tax for

parent advisory councils. That is something that we heard a great deal about

prior to the election from individual communities, school districts and parent

advisory councils. It was a commitment the Premier made to parent advisory

councils that we would remove the requirement in legislation for them to pay the

PST, the sales tax, on purchases they made. Many of these parent advisory

councils go out, with the assistance of students and others, and raise funds for

services, goods and programs within the school district. We felt it was

important to encourage that, rather than discourage that. It was a commitment we

made during the election campaign in our New Era document. For those

parents who put countless hours in as part of their parent advisory councils in

an effort to improve the education of not only their children but the other

children in the school, it's a gesture by the government of British Columbia to

say thank you, that we appreciate the work that they do, and to make sure that

we aren't obstructing that work but rather are encouraging it. I'm pleased to be

able to do that, as well, in this legislation.

The last

item I want to address is the issue of the two areas in the legislation where

government is actually increasing taxes, which is something that we said at the

time of the budget we do not do with any sense of pleasure. In fact, it's the

last thing we ever wanted to do, but given the over $700 million in pressures in

trying to recruit and retain health care professionals and doctors in this

province, there were very few options available to government. This is the

option that I chose. That is a half percentage point increase in the PST and

[ Page 2568 ]

a fairly dramatic increase of $8 a carton in tobacco taxes.

I note that

since we introduced this budget, other provinces, particularly across western

Canada, have introduced their budgets and have in fact increased their tax rates

higher. In some provinces they've gone to $32 a carton, a fairly dramatic

increase. They've done that in Alberta and Saskatchewan. I believe Manitoba

either has just introduced or is about to introduce a budget. We'll see what

they do. I don't know what they might do, but given the pattern there's that

possibility.

I think the

fact that there is a cohesive track across the country, or at least the western

part of the country, on tobacco taxes will help to mitigate some of the risk in

enforcement in smuggling that could be there otherwise. Certainly since

September 11, the issue of this product being moved back and forth across the

U.S. border is somewhat restricted as well.

We hope

we'll be able to manage that appropriately. We believe we can. We believe it's

reasonable. I also hope that it encourages many people to decide that it's an

expensive habit that perhaps they should work hard to stop. I know that's not

easy. My younger brother, who was a smoker for some time, quit recently —

prior to the tax increase, I might add. He has certainly been working hard to

stay off the cigarettes. I know it's an extremely difficult thing for people

when they try to do that, but I hope this encourages them. I hope that it

encourages young people not to take up the habit because of the cost.

[1505]

On the PST.

It's a tax that nobody likes, but it is a consumption tax. The more people

consume, the more they pay. As well, we tried to provide an increased tax credit

at the low end to make sure that people who are at the low-income levels will

have those pressures offset. Certainly, government will continue to review that

tax in the future and year after year as we review taxation. It's certainly near

the top of my goals to be able to correct. With that, Mr. Speaker, I thank the

member for her comments, and I move second reading.

Motion

approved.

Hon. G.

Collins: I move that this be referred to a Committee of the Whole House for

consideration at the next sitting of the House after today.

[The bells were ordered to be rung.]

Motion

approved on the following division:

YEAS

— 60

Falcon

Coell

Hogg

Reid

Halsey-Brandt

Hawkins

Whittred

Cheema

Hansen

Reid

Bruce

van Dongen

Nettleton

Roddick

Wilson

Masi

Lee

Thorpe

Hagen

Collins

Nebbeling

Stephens

Abbott

Coleman

Chong

Jarvis

Anderson

Orr

Harris

Nuraney

Belsey

Bell

Chutter

Mayencourt

Johnston

Bennett

R. Stewart

Hayer

Christensen

Krueger

McMahon

Bray

Les

Locke

Nijjar

Bhullar

Wong

Bloy

Suffredine

MacKay

K. Stewart

Visser

Lekstrom

Brice

Hamilton

Sahota

Hawes

Kerr

Manhas

Hunter

NAYS

— 2

MacPhail

Kwan

[1510]

Bill 3,

Taxation Statutes Amendment Act, 2002, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the House

after today.

Hon. G.

Collins: I call second reading of Bill 4.

CORPORATION CAPITAL TAX

AMENDMENT ACT, 2002

Hon. G.

Collins: I move that Bill 4, Corporation Capital Tax Amendment Act, 2002,

now be read a second time.

In July

2001 we announced the phase-out of the corporation capital tax on corporations

that are not banks, trust companies or credit unions. On September 1, 2002, the

second stage of that process will take effect, eliminating the tax on general

corporations for taxation years that start on or after that date.

Bill 4

streamlines the Corporation Capital Tax Act by removing all remaining provisions

relating to corporations that are not banks, trust companies or credit unions

for taxation years beginning after August 31, 2002.

[1515]

The

amendments simplify the legislation by eliminating onerous calculations relating

to partnership interests because financial institutions have limited ability

under the federal and provincial legislation to participate in partnerships.

We are also

simplifying the legislation by extending to banks and trust companies the

investment allowance previously allowed only to credit unions. The investment

allowance currently allowed to credit unions removes an element of double

taxation that can occur

[ Page 2569 ]

when a credit union owns shares of another financial

institution that is itself taxable in British Columbia.

With the

elimination of the tax on general corporations, it seems logical that

corporations that remain subject to the tax be treated consistently. Restricting

the allowance to shares in other financial institutions that are taxable in

British Columbia addresses the issues of consistency under the act and double

taxation within the province. The amendments contained in Bill 4 will shorten

and simplify the legislation considerably, in line with this government's

commitment to reducing legislation.

I now move

second reading of Bill 4.

Mr.

Speaker: For further debate on second reading of Bill 4, the member for Oak

Bay–Gordon Head.

Chong: Once again I'm pleased to rise to speak on second reading of Bill 4,

Corporation Capital Tax Amendment Act, 2002.

I don't

have a lot of comments to make, except to say again that I wholeheartedly

support this bill. When it was first introduced last year that there would be

changes to the corporation capital tax, I can tell you that those I know in the

investment community were very pleased that we were finally acting on a promise

that had actually been made by a previous government, by a previous Premier. In

fact, I think it was Mike Harcourt who said back in 1994 or '95 that it was his

goal to remove it, but he never did. His government never acted on that, nor did

anyone ever move that forward with an initiative.

While I was

in opposition, as chair of our opposition caucus committee on economy, I met

with many people throughout the province. I recall on many occasions meeting

with various groups, investors waiting to bring their dollars into this

province, who said there was one tax they just could not understand, which made

British Columbia that much more uncompetitive with other jurisdictions in Canada

if not in other parts of the world. That was our corporation capital tax. They

could not wait to hear that it was finally being dealt with by this new

government.

addition, I remember meeting with a group of Asian investors. At one point this

province thrived on the investment that the Asian community, our Southeast Asia

partners, brought to British Columbia, particularly to the lower mainland. From

various parts of the southeast Asian community, when I met with a group, each

and every one of them, one after another — about a dozen of them — asked me

what this tax was all about. When I said it was not a tax on profit, that in

fact a company would be taxed on this investment if it was not profitable, it

just made no sense.

Here in

Victoria, as well, while I was in opposition I met with small businesses —

small in the sense that they hired maybe 50 employees, but they had a

substantial amount invested in capital in their plant, their land and their

equipment. Meeting with one of these, I recall, back in 1997, he indicated to me

he had lost money in that taxation year. He could not contribute towards taxes

on profits, because there were none, and he himself had to not take a salary

that year. For him to then have to pay out a corporation capital tax of about

$30,000 made no sense and provided no benefit.

That's the

real kicker, I think. When corporations are asked to bring their dollars into

this province to invest, to create jobs and to help our economy to move forward

and when they have difficulty at times and are struggling and not able to show a

profit, to then be taxed for no other reason than having brought their

investment to our province made absolutely no sense.

I think

this move we are making is a good move. It's supportable. I know all my

colleagues and I see this as an initiative that's going to spur our economy to

get investment coming back to British Columbia, investment that for so long has

avoided this province. With that, Mr. Speaker, I thank you very much for my

time.

Mr.

Speaker: Further debate on Bill 4? The question is second reading of Bill 4.

Motion

approved.

Hon. G.

Collins: I move that the bill be referred to a Committee of the Whole House

for consideration at the next meeting of the House after today.

Bill 4,

Corporation Capital Tax Amendment Act, 2002, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of the

House after today.

Hon. G.

Collins: I call second reading of Bill 20.

REGISTRY STATUTES

AMENDMENT ACT, 2002

[1520]

Hon. G.

Collins: I move that Bill 20 now be read a second time.

This bill

proposes a number of amendments to the Company Act, the Manufactured Home Act,

the Partnership Act and the Personal Property Security Act. These statutes

provide a mechanism for registering and accessing information that facilitates

and supports commerce in the province, including information pertaining to

businesses, to the ownership and location of manufactured homes and to security

interests against personal property.

For the

most part these amendments provide regulation-making power that will enable the

registries to implement electronic service delivery, moving the registries from

a paper-based registration system to an electronic one. The amendments will

facilitate the option of on-line filing of high-volume forms and documents. For

example, over 270,000 B.C. companies are now able to file their annual reports

with the corporate registry electronically. In addition, these amendments enable

the registries to implement mandatory electronic filing at some future date. As

a result, the costs and inefficiencies associated with the paper-based fil-

[ Page 2570 ]

ing system will continue to be reduced for both businesses and government.

Another

amendment in this bill is the removal of the signature requirement for

registering a general partnership or a sole proprietorship. The current

requirement that each partner file a signed declaration creates a significant

impediment to the electronic filing of documents with the corporate register.

The amendments lessen the burden of filing information with the registrar by

providing a more streamlined process for the registration of partnerships and

sole proprietorships.

The

amendments also authorize the registrar to convert paper documents filed with

any of the registries to digital form. This will serve at least two important

functions. First of all, converting paper documents will ensure sufficient

storage capacity for information filed with the registries. Secondly, digitized

information will provide increased access for all users of the registries'

information services. British Columbia is the most connected province in Canada

with six out of ten British Columbians having access to the Internet.

These

amendments are another step towards bringing e-government to the people of

British Columbia by providing on-line access to core government services 24

hours a day, seven days a week. Mr. Speaker, I now move second reading.

Motion

approved.

Hon. G.

Collins: I move that the bill be referred to a Committee of the Whole House

for consideration at the next sitting of the House after today.

Bill 20,

Registry Statutes Amendment Act, 2002, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the House

after today.

Hon. G.

Collins: I call committee stage of Bill 8.

Committee of the Whole House

DEREGULATION STATUTES

AMENDMENT ACT, 2002

The House

in Committee of the Whole (Section

B) on Bill 8; T. Christensen in the chair.

The

committee met at 3:24 p.m.

On

section

MacPhail: Mr. Chair, I have a question that's of a general nature but can

only be asked in committee. Could the minister please tell me what feedback he

has had on this legislation? He can tell me whether there's been any feedback on

any of it and what sections.

[1525]

Hon. K.

Falcon: Actually, very little or no feedback. I think there was a letter to

the editor on one of them, but that was about it.

Sections 1

to 26 inclusive approved.

section

Hon. S.

Hawkins: I move the amendment to

section 27 standing in my name in the

orders of the day.

[SECTION 27, in the proposed

section 12 (2) by

deleting "readily accessible to the public" and substituting

"accessible to qualified applicants".]

On the

amendment.

MacPhail: Could the minister explain its intent, please?

Hon. S.

Hawkins: This amendment addresses concerns. The member was asking before.

The Minister of State for Deregulation asked me to deal with it. This concerns

the information and privacy commissioner's concerns regarding potential impacts

of the amendments on the Name Act. Bill 8 amends the Name Act to require that

the director of vital statistics publish the date of birth and place of

residence of individuals who have changed their names. Name information is

published to assist law enforcement agencies and creditors to identify persons

who have changed their names.

The

publication of birthdate and residence information will enable more accurate

information, but the privacy commissioner had expressed concerns that the

publication of information in this form that read "readily accessible to

the public" might facilitate identity theft and may create risks for women

who had changed their names for safety reasons. In consultation with him, this

amendment then addresses those privacy concerns by limiting the disclosure of

name-change information to qualified applicants. The ministry staff did consult

with the privacy commissioner on this change. He supports the proposed

amendment.

The Vital

Statistics Agency will establish a secure subscriber-only website and grant

access only to qualified applicants. The definition of who is a qualified

applicant will be established by policy by the director of vital statistics

after consulting with the privacy commissioner.

MacPhail: Does this amendment take care of all the information and privacy

commissioner's concerns?

Hon. S.

Hawkins: That was my understanding. He is happy with this now. Who is a

qualified applicant, then — the definition of that term — will be

established by the director and the privacy commissioner.

Amendment

approved.

Section 27

as amended approved.

Sections 28

to 43 inclusive approved.

section

[ Page 2571 ]

Hon. K.

Falcon: I move the amendment to

section 44 standing in my name on the order

paper.

[SECTION 44, by deleting the proposed

section 44 and

substituting the following:Commencement

(1) Sections

1, 14, 16 to 19, 33 to 35 and 37 are deemed to have come into force on March

31, 2002 and are retroactive to the extent necessary to give them effect on

and after that date.

(2) Sections

22 and 23 are deemed to have come into force on April 1, 2002 and are

retroactive to the extent necessary to give them effect on and after that

date.

(3) Sections

25 to 28 come into force by regulation of the Lieutenant Governor in

Council.]

On the

amendment.

MacPhail: Could the minister please explain the reason for this? There are

some aspects of retroactivity here that are added, I believe. What's the intent

of that?

[1530]

Hon. K.

Falcon: Perhaps the easiest thing for me to do would just be to go over the

whole thing for the member. The amendment replaces the proposed commencement

section to ensure that the elimination of the licensing requirements for the

livestock artificial insemination is effective by March 31, the end of the

current licensing year. To ensure that the repeals coincide with the end and the

beginning of the fiscal year, this

section will make the repeals of the Special

Enterprise Zone and Tax Relief Act and the Trade and Convention Centre Act

effective March 31 and the repeals of the outdated Ministry of Industry and

Small Business Development Act and the Ministry of International Trade, Science

and Investment Act effective April 1, 2002. The

section provides for the Name

Act amendments to come into force by regulation, and this provides time for the

director of Vital Statistics to prepare policy respecting forms and electronic

filing. The remainder of Bill 8 will come into force upon royal assent.

Amendment

approved.

Section 44

as amended approved.

Title

approved.

Hon. K.

Falcon: I move that the committee rise and report the bill complete with

amendments.

Motion

approved.

The

committee rose at 3:31 p.m.

The House

resumed; Mr. Speaker in the chair.

Reporting of Bills

Bill 8,

Deregulation Statutes Amendment Act, 2002, reported complete with amendments.

Third Reading of Bills

Mr.

Speaker: When shall the bill be considered as read?

Hon. G.

Collins: With leave now, Mr. Speaker.

Leave

granted.

Bill 8,

Deregulation Statutes Amendment Act, 2002, read a third time and passed.

Hon. G.

Collins: I call Committee of Supply.

Committee of Supply

The House

in Committee of Supply B; T. Christensen in the chair.

The

committee met at 3:32 p.m.

ESTIMATES: MINISTRY OF FINANCE

On vote 26:

ministry operations, $27,216,000.

Hon. G.

Collins: It's my pleasure to introduce the estimates for the Ministry of

Finance for the fiscal year 2002-03. Before I begin to outline the ministry's

plans for the coming year, I'd like to talk a bit about the fiscal year that has

just ended. I think it's important to reflect on the past as a check against

future plans and directions. A lot of the work and the changes we achieved

during the 2001-02 fiscal year are the seeds from which the ministry's

three-year strategic plan will grow.

Since June

of last year, dedicated professionals across government and in Crown agencies

have helped to prepare major government announcements, including June's personal

income tax announcement that sees British Columbians in all tax brackets receive

a 25 percent cut in their provincial personal income taxes; July's economic

fiscal update; the workforce adjustment strategy; our government's first full

budget, which included a three-year government strategic plan; and three-year

service plans for ministries and Crown corporations.

Unprecedented

disclosure and transparency were a hallmark of each of these announcements, in

keeping with our commitment to make sure British Columbians are fully informed

in a timely manner. I thank all those involved in these major milestones,

especially those in the Ministry of Finance, for their hard work, their

dedication, their long hours and their professionalism.

The work

they're involved in goes far beyond numbers, spreadsheets, charts and graphs.

The Ministry of Finance has been and will continue to be at the forefront of our

government's effort to chart the course that will result in a better economic

and fiscal climate in British Columbia, one where our future is definitely

brighter than our past.

Many of the

integral parts of the government's plans have been mapped out in the Ministry of

Fi-

[ Page 2572 ]

nance's three-year service plan. Back in November at an open cabinet meeting,

I was given permission to oversee four strategic shifts in the Ministry of

Finance's business. First, to move from advising and treating all ministries and

Crown corporations the same to focusing on those ministries and Crowns where

major financial risks exist.

[1535]

Second, to

move from a command-and-control approach to one where ministries, Crowns and

agencies are more accountable through their service plans and performance

measures. This means the ministry will focus as much on outputs and outcomes as

on inputs such as dollars and FTEs.

Third, to

expand our planning from a one-year horizon to a multi-year framework.

Fourth, to

expand our current focus on ministries, Crown corporations and agencies to begin

to include schools, health agencies and some post-secondary institutions,

thereby making our books more comprehensive and inclusive.

Achieving

these shifts in the way we do business will include both challenges and

opportunities. Some come from within the ministry and government, while others

are external and beyond any single government's control. Challenges that all

economies face right now include uncertainty in worldwide economic growth and

commodity markets that create risks for government revenues and expenditures.

While we face challenges, many opportunities exist as well. For example, new

technology provides opportunities for greater productivity.

In order to

achieve the shifts I've just outlined, the ministry is reorganizing to

concentrate on four core business activities. The first involves providing

advice to support government's financial and economic objectives. The ministry

already does this in a variety of ways. Ministry of Finance staff provide advice

and support to the Minister of Finance, to cabinet, to Treasury Board and to

government caucus committees on financial, social and economic policy issues.

They also provide support to ministries and agencies on policy development and

budget planning, and they give strategic advice and support for public sector

labour relations.

In order to

measure our performance in these areas, we have set out a number of goals and

objectives. Balancing the budget by 2004-05 is just one of them. To that end,

we've implemented a three-year planning framework for all ministries. Each

ministry and Crown corporation's service plan was made public on budget day,

February 19. These plans contain measurable ways of evaluating performance that

both ministers and ministry staff are accountable for. They will be updated

every year. Our progress here will be easily measured: did we or did we not

achieve our budget targets? Needless to say, we have no intention of missing

them.

A second

goal is to encourage public-private partnerships and alternative service

delivery for the provision of public facilities. By doing this, we'll get the

best value for every dollar we put into public infrastructure and public

services. This will increase accountability and performance. To reach this goal,

we're developing a new capital management framework and restructuring the

capital division. Last year there were 50 FTEs in the capital division. In

2002-03 we will have ten. Accordingly, the division's budget will decrease from

$4.5 million to $1.8 million by 2004-05.

The

streamline team will provide advice to the public sector regarding

public-private partnership opportunities for public facilities as well as

establish best practices in capital asset management across the entire public

sector. We'll measure our progress by the number of P3s and alternative service

delivery projects that have been initiated and that have financing in place.

Our third

goal in this area involves creating a competitive tax and business environment

that encourages economic growth. Over the next three years we'll be implementing

strategies to continuously improve B.C.'s ability to attract investment and

innovation. On July 30 of last year we announced a business tax cut package.

These cuts returned $221 million back into the economy last fiscal year and will

inject $628 million back into the economy this fiscal year.

The tax

changes announced in the budget to help fund salaries in the health sector will

have some impact on business, but the overall tax reductions will still be about

$450 million in this fiscal year. These business tax cuts complement the 25

percent cut in provincial personal income tax that we made on our first day in

office. Today British Columbians in the lowest two brackets have the lowest

income tax rate anywhere in Canada. This comprehensive tax rate overhaul is just

one way we're making B.C. an attractive place to live and to do business.

Our

government has also taken a hard look at the number of policies and regulations

that impede economic growth. Over the next three years all government

ministries, Crown corporations and agencies will reduce the number of

regulations the government puts forward by one-third.

[1540]

How will we

mark our progress in establishing a competitive and business environment? We'll

do this by measuring our province's ranking of our personal income tax rate for

the bottom two tax brackets, and we'll monitor how B.C. ranks against other

provinces as far as taxes that affect our competitiveness. In the Ministry of

Finance we'll reduce the number of regulations from today's 68,000 to

approximately 45,000 by 2004-05.

Our fourth

goal in supporting government's financial and economic development objectives is

to effectively manage public sector compensation.

The second

core business activity we'll concentrate on is providing effective financial

management and regulation. Key in this area is the removal of barriers to

business investment and economic development by streamlining regulation and

introducing a new company act. While taking steps to make our province more

investment-friendly is important, it's only one

[ Page 2573 ]

part of the equation. Managing our accumulated debt effectively is equally

important in providing effective financial management and regulation. By taking

advantage of opportunities in domestic and international capital markets, we're

minimizing the costs and risks associated with government's debt.

A team of

dedicated professionals manages this debt to make sure we get the absolute best

interest rate possible on the money we need to borrow, thereby minimizing the

interest rate risk for British Columbians who are paying for these expenses.

Another way

we'll manage our debt is by providing comprehensive support for credit rating

analysis and expanding investor-relations activity. Our progress in managing our

debt will be measured in a number of ways including the credit rating we're

given by credit rating agencies. Another measure of success is our

taxpayer-supported debt-to-GDP ratio. We'll measure our progress here by our

debt service costs. Currently, we rank third behind Alberta and Manitoba. Over

the next three years we plan to maintain or better that position.

providing effective financial management and regulation, we'll also become more

efficient through technological advancements. I mentioned earlier that we're

making changes to the Company Act. One of those changes involves electronic

registration. With changes to the act, all corporate and personal property

registrations will be performed electronically within three years. All

management policy manuals will also be revised and consolidated electronically.

We'll move away from a multitude of paper-based processes. Progress in this area

will be charted by the percentage of personal property and corporate

registrations that are filed electronically.

Another way

we'll provide effective financial management and regulation is by moving towards

a risk-based approach to managing government's resources. This shift towards

risk-based management will mean that we'll direct our time and energy toward

areas that present the greatest opportunities and/or risks for government.

It will

also mean that we'll expand government's self-insurance program to Crown

corporations, public sector hospitals and educational institutions. Over the

past 15 years we estimate that we've saved approximately $350 million in

taxpayers' dollars through self-insurance. This year we expect to save $25

million; the year after, approximately $30 million; and by 2004-05,

approximately $35 million annually.

This

risk-based approach will also mean the expansion of the enterprise-wide risk

management program to all government agencies that will help us manage our risks

more effectively and minimize our exposure to major claims in the future.

Lastly, it will mean focusing internal audit resources on areas of greatest risk

and opportunity. These opportunities could include the expanded use of debit and

credit cards in paying for government services, as well as the automated

distribution of welfare payments.

The third

core business activity we'll focus on over the next three years is providing

comprehensive, timely and transparent financial reporting. We have a number of

goals in this area. Top of the list is to fully comply with generally accepted

accounting principles, known as GAAP, and to meet statutory reporting and

budgetary requirements. We've already started the massive process of moving

towards GAAP and plan to have it completed by 2004-05. As well, we'll further

improve our statutory reporting and budgeting requirements by tabling the public

accounts this year on July 11, more than one month ahead of the required date of

August 31. We will continue to provide quarterly reports, budgets and estimates

according to the legislated schedule, following the highest standards of

disclosure and transparency anywhere in Canada.

The fourth

core business activity we will focus on is providing effective executive and

administrative support services. Our primary goal in fulfilling this activity is

to provide effective leadership and planning. Under the Ministry of Finance's

leadership, all ministries and Crown corporations tabled three-year service

plans this February 19, and these plans will be updated annually.

[1545]

My ministry

will review its progress in meeting targets outlined in its service plan every

three months to ensure that we stay on track. We will continue to publish an

annual service plan report that outlines our progress in meeting those goals. We

will also provide efficient financial and administrative services within the

ministry and to our clients and our stakeholders.

Finally,

before I conclude, I'd like to take a moment to talk about one of the larger

corporations that reports to the Ministry of Finance. Almost 30 years ago, in

1973, the Insurance Corporation of British Columbia was established to provide

universal auto insurance to British Columbia motorists. Building on the election

of our government, ICBC, with its new board of directors, management team and a

leaner structure, will be focusing on two major areas: offering choice in the

insurance field and becoming financially sustainable. I'll have more to say

about these subjects in the months ahead.

I want to

conclude by complimenting the Ministry of Finance staff again on the effort they

have put into developing the Ministry of Finance service plan. This kind of work

is just one of the many examples of excellence in the public sector. Taking

British Columbia from its current status as a have-not province to its rightful

place as a national economic powerhouse will take vision. It takes leadership;

it takes a solid, long-term economic and fiscal plan. I'm proud of the

foundation that the Ministry of Finance has built in all these areas, and I look

forward to the pivotal role the ministry will continue to play in realizing

government's new era of hope and prosperity in British Columbia.

Thank you,

Mr. Chairman, and I'm pleased to take questions.

MacPhail: For the minister's staff, this is how I'll be asking questions.

First of all, changes to the ministry in terms of structure and staff; second,

the closing of the '01-02 books. We've seen some expenditures recently as a

result of that closing of books. On that basis,

[ Page 2574 ]

I'll be examining the revenue, both '01-02 and '02-03 — that's table 1.3

— and examining expenditures by ministry, '01-02 versus '02-03. That's table

1.6.

Next, I

want to talk about the budget transparency — I think it is now — and

ministerial accountability act.

Interjection.

MacPhail: Are there two different acts? Okay.

Then, just

a few questions on GAAP. Then I want to talk about tables A9 and A10. I'm

referring to the tables in the budget and fiscal plan — A9 and A10, which are

assumptions and sensitivities on revenue and expenditures.

Next, I

want to talk about capital changes and then Public Sector Employers Council and

then ICBC, so we should be finished by tonight.

I see this

as an opportunity to seek information. There are many other areas where I have

more strongly held views than books. I don't have anything that interests me as

much as these books, but I don't have strongly held views on them other than

their accuracy. The thrust of my estimates will be their accuracy, looking

backward, now, and looking forward. That will be the nature of my examination of

the Ministry of Finance estimates.

I don't

plan on doing a lot of yelling, which will make this the first — no, maybe

second — set of estimates where I don't plan on doing much yelling, but

answers based on numbers will help.

My first

question is on the changes to the ministry that have occurred both structurally

and personnel-wise.

Hon. G.

Collins: I'm not sure if there's a specific area or a specific position or

structure that the member is looking for an answer for, but if she does or if

she wants to work through them, I'm glad to do that as well.

Interjection.

[1550]

Hon. G.

Collins: Okay. Give me a moment, then, and I'll summarize them. I'll try and

run through it. There haven't been huge changes, but I'm glad to itemize those

ones that I think are perhaps the most pertinent. If the member has other

questions, then I'd be glad to answer those.

As I

mentioned in my opening comments, there has been a fairly significant change in

the capital division. There were about 50 FTEs there previously. That division

has shrunk down to ten people that will remain in what is sort of known as the

capital division. That reduction has taken place in a number of ways. Some

people who were in the capital division, who previously had as their file a

particular ministry and a capital program within that ministry, may well have

been moved into that ministry. They have left the capital division in Finance

and actually are now held within and work directly for the ministry they were

previously dealing with.

As well,

there may be some of those people that were in the capital division, analyzing

and doing what is normally done there as projects progress, which have been

brought back into TBS, Treasury Board staff. Those are the changes that have

happened there.

As well,

across the ministry there was the expenditure side and the revenue side. We've

put that together in what we call now a performance budget office to link those

a little more closely. You'll certainly notice — probably on the outside you

won't notice a change — that we hope to be able to get better integration

within the ministry and better use of staff talents in that way.

MacPhail: What's the overall FTE reduction in the Ministry of Finance as a

result of the changes?

Hon. G.

Collins: The reduction is from approximately 600, down 159 to a total of 441

over three years, I might add.

MacPhail: I have that as the figures from page 11 of the service plan.

Anyway, that's what the numbers are on the estimates still. Okay.

All right,

I'd like to turn to tables 1.1, 1.3 and 1.6. The reason why I say 1.1 is that

it's the

summary table — so just whatever changes may occur there.

[1555]

I sincerely

hope our economy is on the turnaround. I do not ascribe to the point of view of

people being naysayers and doom-and-gloom predictors about the economy. I think

that when that happened in the past, it was terribly unhelpful both

internationally and outside the borders of our province in Canada as well. I

don't plan on doing that at all, but I do want to know, if I can, through the

examination of this, where the strengths and weaknesses are in our economy and

our government's role in smoothing out the valleys and strengthening the peaks

in the economy.

The way I

feel most comfortable doing that — to start, anyway — is through the

examination of revenue and expenditure, and the reasons why government has

chosen to collect and expend. What's the logic behind their collections and

expenditures based on where our economy is going?

I'll leave

table 1.1 until the end. If we can look at, first of all, the expenditure by

ministry, if we may. One of the things that I need help with is these most

recent expenditures, end-of-year expenditures, that have occurred and how the

books have been closed off, ministry by ministry, so that we would know what

money is left over. If I could have an accounting of that by ministry and

whether anything else in the plan has been revised. I'm looking at table 1.6.

Sorry, I'm doing these in reverse — 1.6, 1.3, 1.1. The column in table 1.6,

revised forecast '01-02 — I assume it's in now, by ministry.

Hon. G.

Collins: Certainly, the final numbers are not in yet. It's April 8 now. As

the member knows, it

[ Page 2575 ]

takes some time for the final reconciliation to come together. We believe we

have a pretty good idea of where the numbers are finally going to fall. There's

still some time as these numbers sort themselves out and as we close the books.

Obviously, the final numbers will be included in the public accounts when we get

there.

MacPhail: The minister must know about the Attorney General and education.

Maybe we could start with those two, because the minister announced expenditures

in those areas as a result of savings that were found internally. Perhaps we can

at least start with the two that he's gone public on.

Hon. G.

Collins: Certainly in education. The member will recall that we made a

commitment during the election campaign not to reduce the spending, to protect

the budget for the Ministry of Education. We also did that for advanced

education. I could perhaps deal with both of those first.

education, K-12, as a result of savings in the ministry, there were savings, I

believe, of about $43 million, where it looked as though the core ministry was

going to be under budget. We analyzed that. Education is one where it's a little

easier to do, given that the majority of the amount is either spent or not when

you send the grants to school districts at the beginning of the year. There's

some left, but relative to the size of the budget most of it is out the door,

and you can nail it down pretty clearly.

As we got

towards the end of the year, it was clear that there was going to be

underspending in that ministry. This government made a commitment not to reduce

the budgets, so we felt it was important to put that money back out into the

school districts. We set one condition on it, and that was where school

districts had, in the past, borrowed externally — i.e., from a bank or a

credit union or something — for some aspect of their operations, the first

thing that money should be used for would be to pay down that debt. That could

be done immediately, within that fiscal year.

Any

leftover funds that may or may not be available to a school district —

depending on what their deficits were or their debts that they borrowed

externally were — they could use as they saw fit for the betterment of the

education system. That is what took place there. We anticipate that the Ministry

of Education will come in virtually precisely on budget this year, given those

changes or those expenditures that I just spoke about.

[1600]

The

Ministry of Advanced Education had some underexpenditures as well. Ministers

right across the board have worked extremely hard this year to try and make sure

they came in on or under budget. We've been putting a great deal of effort into

that. Certainly, Treasury Board staff and I, early on in the mandate, identified

a number of ministries that had historically overspent their budgets. We focused

more of our energy on those ministries. We set up monthly meetings, and in fact

every two weeks staff would meet, and monthly the ministers would meet to go

over the plan that ministry had to manage its budget and to come in on or under

budget. We put a great deal effort into focusing our resources. Some ministries

have done very well; others have struggled and will continue to struggle, I

expect, for some time, given the types of services that they provide.

Advanced

Education is another example where expenditures are fairly easy to track because

they're given as grants to the universities and colleges, etc. There was an

underspending in that ministry which we were able to identify fairly well. I

believe the figure was $23 million, but I'll confirm that. I think it's $23

million.

The

government made a commitment in the election campaign to a series of

leading-edge endowments whereby we would fund an endowment which is held arm's

length from government. There would be a normal selection process based on peer

review for research and development in a variety of areas, from environmental to

science to health care to resource…. I mean, really across the spectrum.

Government has committed to fund those during our term in office. There was

underspending in the ministry this year, and as a result we used those funds to

help start to fund those endowments perhaps slightly ahead of where we had

hoped. So that's positive as well, and that's in keeping with our commitment to

protect the funding for that ministry.

I think

that deals with the two Educations. I don't know if the member has any questions

on those.

MacPhail: We should assume, then, that the books will close out at $1.892

billion for Advanced Education in '01-02 and for Education, even with this

expenditure, at $4.842 billion, '01-02?

Hon. G.

Collins: That's correct. In fact, that's how those figures were determined.

Those ministries were coming in under budget in the core ministries, and we put

that money back into service delivery or, in the case of Advanced Ed, the

endowment funds.

MacPhail: Under what circumstances would a board of education have

debt-servicing costs that they could use to pay down first? How does that arise?

Hon. G.

Collins: School districts have the ability to go out and borrow money on

their own for certain things. In fact, over past years school districts have

incurred debt — not huge amounts, but some — by borrowing from private

institutions — credit unions, I assume, and that sort of thing. I'm sure that

the member opposite, as a former Minister of Finance and Minister of Education,

would have been around when some of that borrowing took place.

Government

is moving towards GAAP, as I mentioned in my opening comments. At some point

it's likely that the school districts will come under the entity that we know as

generally accepted accounting principles. It's important, I think, to recognize

that there are debts outstanding with those school districts. The intent of this

grant was to try and pay those off

[ Page 2576 ]

where possible and, if there was money left over in a district, to use that

for educational services.

MacPhail: Maybe we should discuss this when we discuss capital changes. What

boards of education, what school boards would have debt-servicing costs that

they incurred themselves that weren't funded through the vote? And could the

minister introduce his staff, please?

Hon. G.

Collins: I'd be pleased to. I'm sorry. I'd started my opening comments

before they arrived. I'd be glad to do that. On my left is Paul Taylor, the

Deputy Minister of Finance. He didn't look nearly this good two weeks ago when

he left on vacation, but he just came back much rested and ready to go. Dave

Woodward, who's the acting deputy secretary for Treasury Board, is to his left.

As well, there is Nick Paul, who manages all the other interesting stuff that we

do — producing documents, economic issues, etc.

MacPhail: What school boards have debt-servicing costs that aren't covered

by the vote?

[1605]

Hon. G.

Collins: I can perhaps give the member an idea. I don't know, and I'm just

checking to see, what extent I can get into the detail of it. There are, looking

at the number, probably a dozen or more school districts. Those numbers are from

June 30 of 2001, or these districts that I have. Unless I'm told not to, I think

I can give you the districts, anyway. These are from their financial statements:

Quesnel, Surrey, Delta, Burnaby, Maple Ridge–Pitt Meadows, North Vancouver,

West Vancouver, Sunshine Coast, Prince Rupert, Peace River South, Sooke,

Alberni, Fraser-Cascade, Cowichan Valley, Vancouver Island West, Stikine and the

Nisga'a school district. The total is about $31 million.

MacPhail: So $31 million of the $44 million will pay off those debts. Is

that right?

Hon. G.

Collins: It was actually a per-capita grant, so some school districts would

have been able to pay off all. Some school districts would have been able to pay

off most. Some school districts didn't have any debt, so they wouldn't have to

pay off any.

MacPhail: What operating line would this debt servicing come under on a

school board budget?

Hon. G.

Collins: I don't know. She'd have to ask a school board. I don't know that.

Those are their books. They're held separate from ours. That's part of the

process of bringing them back into the entity under GAAP, which I expect will

create no end of challenges for government.

MacPhail: Well, the reason why I'm trying to find this out is because the

Education minister's estimates closed, and then the money was released, so I

couldn't ask any questions there. I'm just wondering what, if any, impact the

$44 million will have on protecting against cuts to programs. That's where I'm

going on this question. If it were a debt-servicing line…. It would be folly

for the minister to assume that I know the answers to these questions. I've had

several portfolios, and there's still stuff that I don't know about. That's why

I'm asking these questions. I'm trying to figure out what that money contributed

to in terms of preventing school closures, teacher layoffs, etc.

Hon. G.

Collins: My understanding is that school districts often have an operating

line outside. Some of them, I expect, in the past and perhaps now…. I don't

know; the member will excuse me if I don't have all the answers to her questions

either. Certainly, some of these may have been very short interim financing for

capital projects until such time as government dispensed payments for them. Some

may have used them to finance deficits. I'm looking at some of the school

districts and believe that's probably the case — past deficits.

It's

difficult for me to give the member an exact calculation of each school district

— what they may have used that for. The reason for it is that the numbers I

have for the member, which I said added up to about $31 million, may have

changed, because that was June 30, 2001. We don't have all of that information.

We know that those school districts have in the past had outside debts. They're

relatively small in the scheme of things, but they're there. I'm not able to

know the exact numbers.

We've asked

the school districts, when they make these decisions to pay off these debts, to

tell us what they've used the money for or how much they've paid off, so we have

a sense of that. It really is somewhat outside of my ability as Ministry of

Finance and to a certain extent the Minister of Education. We can request this

information from school districts, but it's difficult to force them to provide

it — not that they would necessarily fight us on that. It's just that we don't

control this type of provision that they may have.

[1610]

I expect

that where there were outside debts, that would have been the first line of

expenditure they would have used these one-time grants for. The only condition

we applied to these grants was that in the fiscal year that just expired, they

take that grant and use a portion of it to either fully or partially extinguish

that debt. I don't have the details on that, nor am I likely to have the details

back from the school districts for some time. I'd be glad to provide it when it

comes.

MacPhail: I'm just curious, too, because school boards aren't supposed to

run deficits. The minister quite clearly said debt servicing, so I assume it

wasn't for the deficits.

The next

example is the Attorney General. What's the underspending there?

Hon. G.

Collins: First of all, on education, if I can. The debts they would have

incurred are accumulated

[ Page 2577 ]

deficits perhaps or other capital they may have done…. Again, these numbers

are from June 30 of last year, which was about 24 days after the new government

was sworn in. I can only assume that those pre-existed, and I would be glad to

get the member more information on that. I don't know all the details of how

they were accumulated in the past, but I'd be glad to find out for her, because

I know I'm curious myself.

Second of

all, in the Attorney General's ministry there were a number of expenditures. I

spoke earlier about some of those ministries that have found it more challenging

to hit their budget targets. I would say that historically, Attorney General has

been one. Health care has certainly been another.

Part of the

reason in the Attorney General's ministry, I think, although it doesn't excuse

it in its entirety, is that they have a number of statutory requirements that

are driven by the law. They are expenditures we can try and budget for, but when

the charge comes, there's not much we can do about it.

Expenditures

for people or settling lawsuits tend to come out of the Attorney General's

ministry. Those debts can result out of court actions that are taken up by

people outside government in response to an action government may or may not

have taken in a ministry, and that results in a lawsuit. Sometimes government

settles those lawsuits. Sometimes they go to court, a decision is made, and

government is required to pay.

One of the

things we're trying to do in the Ministry of Attorney General is see how we can

allocate the risk to ministries, so they take perhaps a little more thought in

the process as they set policy and make administrative decisions to avoid

lawsuits in the future. That's another issue, which we can certainly talk about

if the member would like.

In the

Attorney General's ministry there were a number of areas over the last year

where there were requirements to access contingencies. They were generally small

amounts, but there were several of them. As we reached the end of the year, in

areas that had been allocated to contingencies and had approval of access to

contingencies, because we'd continued to work their plan with them on almost a

weekly basis, there was in some cases the ability to reduce the pressures that

were in the budget.

In this

case, there was about $7.6 million that had been allocated and approved through

contingencies, which was in the Attorney General's budget. We then came in

slightly under what was expected, to the tune of about $7.8 million. It was felt

that there had been — again, in a similar case to the school districts —

deficits that had been run up at the Legal Services Society over the last number

of years.

From

government's point of view, there wasn't attention paid to their budgets. There

was a budget given to them at the beginning of the year, and almost year after

year the costs were over what was budgeted. No action was taken, and as a result

there was an accumulated debt there from previous deficits. The money that was

provided was to pay off the debt — not in whole, I think, but certainly in

part. I think the majority of it was paid off.

That, of

course, will provide the Legal Services Society in the future more capacity

within their budget for program delivery, because they won't have to put as much

of their budget toward servicing that debt.

MacPhail: Am I correct in saying that it's not Attorney General that will

come in under budget by $7.8 million, and therefore it's contingencies? Is the

money that was charged against contingencies for some other project being used

for the legal aid?

[1615]

Hon. G.

Collins: If the member turns to this year's budget and fiscal plan — the

report — on page 108, table 3.3, you can see what the allocations were to

contingencies at the time this budget was introduced on February 19. It was

about five weeks from then until the end of the fiscal year, and we continued to

try to manage those pressures down to the point where there was not as large a

requirement.

We felt

that it was important, given the work that the ministry had done to manage their

costs, not to just claw that all back but to try and reward that behaviour.

We'll try to do that more as time goes by. As a result, there was some money

available. We put it to legal aid, to the Legal Services Society, to allow them

to pay off their debt, which is something we'd all have to pay off eventually

anyway. It then gives them more room in their budget to provide service.

MacPhail: So, in effect, that announcement about the $8 million of money

coming out of contingencies was made on February 19.

Hon. G.

Collins: In fact, the announcement around the money in contingencies

allocated to the Attorney General's ministry was in the budget on February 19.

Since then, as we've managed those and other pressures within the ministry,

trying to keep those costs under control, they came in under the amount

allocated to them. Rather than claw that money back, in order to try to reward

some of the more fiscally responsible behaviour that's happening and that's

building there, we tried to leave some of that funding with them to use for

other purposes. In this case they used it to pay down a debt which had been

incurred over time at the Legal Services Society, thereby allowing them to

provide a greater portion of their budget in the future to services as opposed

to debt services.

MacPhail: What is the underspending on the Attorney General's budget, then?

Hon. G.

Collins: As the member will recall from the number of open cabinet meetings

where I presented fiscal updates to the public, one of the ministries that was

continuously having challenges to get its budget on track was the Attorney

General's ministry. If you look at the contingencies on page 108 and add

[ Page 2578 ]

them up, you come to the number that is how much the Attorney General's

ministry is over the budget allocated to it on July 30. Had we not expended the

$7.8 million at the end of the fiscal year, that number would have been $7.8

million lower.

If I can be

clear, then, if you take the $8 million, the $5 million, the $8 million and the

$16 million, that's $37 million. That's what was allocated. After this was

allocated, as we were managing it on a biweekly basis, the actual expenditure

looked like it was going to come in under budget to the tune of roughly $7.8

million. Rather than claw that back, government chose to leave that money with

the ministry to encourage the work they had done. The $7.8 million was allowed

to be allocated to pay off accumulated deficits which now formed a debt held in

the Legal Services Society. That's why they received that grant.

The amount

that the Attorney General's ministry will be over is still $37 million,

approximately.

MacPhail: The reason why this has piqued my curiosity is because when the

announcement was made about the money being found, people said that there was

nothing new in that, that it was announced in February. I didn't know what they

were talking about. These were lawyers who were curious as to the reason why the

announcement was made last Thursday. They said it had been announced in February

as part of the budget. The minister has quite helpfully showed me what they were

referring to.

I just

wonder why the announcement of the same money was made a second time on

Thursday.

[1620]

Hon. G.

Collins: Perhaps I can clarify a little bit. I think we're getting into

subtleties, but I'm glad to try and walk the member through them. As she knows,

Treasury Board will notionally allocate spending pressures to contingencies.

They approve access to contingencies. In fact, legal aid services was disclosed

roughly, I guess you could say, in the budget on February 19, on page 108. The

announcement that that grant was being given and was going to pay down the debt

was made just prior to the end of the fiscal year. Government often makes

decisions at one time and announces them later and discloses them when they're

required to or when they choose to. That's what happened.

MacPhail: Well, forgive me for being suspicious, because when I called up

people to ask them whether their concerns around the provision of legal aid were

at all alleviated by the $8 million announced last week in the first of the new

fiscal year by the Attorney General, they said: "No, no. We were well aware

of that money being allocated in the budget of February." Indeed, the

Attorney General had discussed that money with them previously. They had

actually assumed it was new money beyond the $8 million that was incorporated in

the allocation of the contingencies and then found out it was exactly the same

money.

Back to

table 1.6, then. We have explanations for a couple of the ministries. Can the

minister tell me, if he's been doing biweekly management of it, what the state

of the other ministries are?

Hon. G.

Collins: I'm glad to answer that to the best of my knowledge at this point

in time. I just want to make it clear to the member that these numbers may well

change over the next little while as the books are finalized and final decisions

are made, etc. But beyond Attorney General and perhaps the Solicitor General, I

think — there may have been some pressure there — and of course the Ministry

of Health, which we're all well aware of as a result of the supplemental

estimates, there should not be many others. There may be a slight overrun in the

Ministry of Energy and Mines as a result of a statutory appropriation, but other

than that I believe just about every ministry is scheduled at this point to come

in on or under budget. Again, that will be disclosed when we get to the public

accounts. At this point, that is my best estimation of where we're at.

MacPhail: The reason why I'm heading in this direction, Mr. Chair, is not

just out of curiosity. There are cuts happening in other areas of government.

The minister has already chosen to prevent those cuts from happening in a couple

of areas, and therefore I'm curious to know whether the underbudget spending.…

If the total expenditure does come under budget, does it go to pay down deficit,

does it go to pay down debt, or are programs going to be restored?

I would

also ask the minister to go through table 3.3, the contingency allocation, as he

started to do with the Attorney General, and tell me what, if any, of those

contingencies have been expended or are planning to be expended.

Hon. G.

Collins: I want to be clear on this, because I don't want to leave a false

impression with anyone. Government's goal is to manage its finances and, where

under-expenditures occur because of good management, to underspend. There are a

few cases where there may be exceptions. The case of health care and education

are two examples — K-to-12, post-secondary and health services. The reason for

those ones is our commitment during the election campaign, and repeatedly since,

not to cut the budgets for health care and education but rather to protect those

budgets. We're doing that.

[1625]

Where there

are savings, government will try and run those ministries as efficiently as

possible. If we can save money, if we can do things more efficiently, if there

is money left over at the end of the year, then we want that money to go back

into the provision of services in whatever way it can be done. That is a

commitment we've made, and we're going to continue to follow through on that.

I think

I've explained the example I gave from the Attorney General. Certainly, the

member can look through it. It is not the intent of government to change

[ Page 2579 ]

the service plans, to throttle back the plans that government has. Ministries

are expected to continue to implement their service plans. In fact, ministers

have personally signed off on those service plans and the fact that they'll hit

those targets. Government is continuing to do that, with the exceptions I've

outlined.

MacPhail: Well, there was one other announcement of money being spent, and

that was about a million dollars from the Ministry of Community, Aboriginal and

Women's Services. What category does that fall under?

Hon. G.

Collins: Many of the underexpenditures that will be happening this year are

not large, but they will be happening in some ministries. One of the things

we've encouraged ministries to do, where possible, is absorb in their

underspending the costs of the restructuring.

For

example, and I think I mentioned this the other day in the supplemental

estimate, if a ministry came under budget by $2 million or half a million

dollars or something and had adjustments — restructuring costs, leases,

severances, etc.; part of what we've been working on — then they were expected

to absorb those within their budget prior to accessing the contingency or the

additional vote which we put through the other day. I expect ministries to do

that.

In the

Ministry of Community, Aboriginal and Women's Services I believe there was about

a million dollars which they put out in the form of one-time grants to deal with

the restructuring, and that was the intent there.

MacPhail: Oh, so the money was to pay for severance. Is that what the

minister means — for severance? To organizations funded by the….

I thought

it was the Minister of State for Women's Equality that made the announcement, so

I'm just curious. I don't think it went beyond the women's programs, so was it

there for severance?

Hon. G.

Collins: I expect that there will be restructuring costs across government

and in other groups, etc. To the best of my knowledge, although I'm not the

minister, my understanding is that those were unconditional grants that were

given to the women's centres, and they'll do with them as they choose. I'm

expecting, though, that may well end up being used for restructuring costs.

MacPhail: Could the minister then go through table 3.3 with me, as he has on

the Attorney General, and explain what funds are being expended out of

contingency or not?

Hon. G.

Collins: These contingencies are allocated as they were on February 19. I

expect there may be some changes in or out, depending on the pressures and the

spending of the various ministries between February 19, now and when we finally

close the books and issue the public accounts. At this point I'd like to stick

with what's there, although, as I've said all along, the numbers will move

between then and now, and now and when the public accounts are finally issued.

MacPhail: Again, these are pressures from contingencies for '01-02. I'm just

curious as to Elections B.C., the aboriginal treaty referendum. For instance,

that's a pressure. Well, that can't be because there's not been a cent expended

until this….

I'm curious

as to the situation such as some severance and benefit costs and shared services

under management services. I'm curious as to what it means under health

services: health services, urban specialists and facilities compensation and

nurses' settlement.

In those

estimates, we discussed all of those as part of the operating budget of '02-03.

Those are a few that come out as being curious.

[1630]

Hon. G.

Collins: First of all, with Elections B.C., the treaty referendum.

Government made a decision the day it was elected. Well, prior to the election

it made the decision as a party to do it when it was elected, if it was elected.

When it was elected, government started to implement its decision to hold this

referendum, and I believe the commitment was to do so within our first year in

office. A certain amount of work in preparation, I believe, getting the ballots

ready, etc., was done prior to the end of the fiscal year, so some of those

costs which were incurred in last year's fiscal year will be charged there.

That's a notional allocation. Again, I said those numbers may change slightly

between now and when the books are finally closed. Some of it will be in this

fiscal year, because the counting of the ballots and other processes will be

taking place in the current fiscal year. That's the reason for what the member

sees there. That sort of straddles both fiscal years.

With regard

to the nurses' settlement, for example, there are some portions that are

retroactive and some portions that will happen this year. The biggest chunk will

be next year. That's an example of a pressure.

MacPhail: I'm sure the minister is well aware that this is a huge

contingency fund from '01-02. We're dealing with…. This is perhaps the most

focused year ever in B.C. history where some things have been underestimated,

certain things have been overestimated, and the consequences have been fairly

severe in terms of cuts anticipated.

I'm trying

to get a handle on it — if somehow this contingency is going to disappear and

therefore we'll have an extra $300 million that we can add to the bottom line. I

know that the week before last the minister suggested that the reason why he

couldn't take the government restructuring costs of $95 million, as is listed

there, was because of the pressures of, I think he said, Tech B.C. So clearly he

must have an accounting of what's in and out, because we've already discussed

things that couldn't be covered off here because of

[ Page 2580 ]

other pressures. I'm trying to get a handle on the bottom line.

Hon. G.

Collins: If the member looks at the budget her government introduced in

March of last year, a little over a year ago — on page 61 — the contingency

vote at that time was $220 million. If I recall correctly, previous governments,

when I was in opposition, for a long time didn't have contingencies. If they

did, they were very small. I seem to remember the first year it was $75 million

or something around $100 million. Those contingency numbers have gone up since

then.

preparation for the budget that was presented in July — and I'm going by

memory here, so I stand to be corrected if I'm wrong — it was clear at that

point that there were other issues that we were trying to grapple with. We had

already, in the short time in office, experienced — I would say that I

experienced — a number of surprises. Those surprises continued right up until

July 30, and unfortunately they continued well after July 30. Some of them were

due to outside economic issues. Many of them were due to changes or decisions

that the previous government had made, which gradually came to my attention. The

fallout of those came to my attention over time.

If I recall

correctly, at the time of the July 30 budget I increased the contingency budget

to $360 million — I stand to be corrected if that's wrong, but I'm pretty sure

that was what the process was — because of the uncertainty, because of these

little surprises that were popping up. For this year the contingency budget is

$210 million. It is not the intent of government…. That is on page 40 of the

budget that was introduced on February 19.

What we're

trying to do is have a bu