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

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 24, 1999

Afternoon

Volume 16, Number 12

[ Page 13961 ]

The House met at 2:06 p.m.

D. Jarvis: On behalf of my friend the member for Delta South, who can't be here today, I'd like to introduce two of his constituents who are visiting Victoria: Jane Marynowski and her son, Mark. Would the House please make them welcome.

D. Symons: It is my pleasure today to introduce a young man in the gallery. It's his first time coming here to see his Grosspa and what he does when he's in Victoria. I wonder if the House would make Nicholas Symons welcome.

Hon. J. Pullinger: It's my pleasure today to introduce some visitors from Italy as well as some friends from British Columbia. A number of us had a wonderful meeting with Professor Stefano Zamagni and Professor Vera Zamagni. Professor Stefano Zamagni is the dean of the faculty of economics at the University of Bologna, Italy, and the head of the Centre for the Study of Cooperative Economics at that same university. He's world renowned for his groundbreaking work on the civil economy and on the nature and comparative advantages of cooperative economic systems. Professor Vera Zamagni is a professor of economic history.

With them is John Restakis, who is the region manager of the Canadian Cooperative Association, B.C. region, as well as Dave Mowat, who's the CEO of VanCity Regional Development Corp., and Andrea Jarvis of VanCity. With them, as well, is somebody who's not at all known to this House: a former Minister of Forests in an NDP government and a very quiet and unassuming MLA in this Legislature, Bob Williams. Welcome back. Welcome to all of you.

Hon. H. Lali: We have the pleasure of a number of guests from the taxi industry joining us here in the galleries. They are Mohan Kang, Amarjit Gill, Manoj Kumar, Brian Moore, Danny Mucci and Mr. Claus. Would the House please make these visitors welcome.

L. Reid: I have three lovely guests in the gallery today. Charan Gill and Carl Boyce are dear friends of mine from Richmond. They're joined today by a lovely woman who lives in Victoria, Jane Noble. I would ask the House to please make them welcome.

W. Hartley: Visiting us in the gallery today are Mr. Ian McManus, MP, and his wife and daughter, from New South Wales in Australia. Mr. McManus is a member of the Parliament of New South Wales. Would members please make them welcome.

Hon. P. Priddy: Joining us in the gallery today are the members of the teen tobacco team, which provides advice to the Minister of Health on the kinds of strategies that work for teens in terms of getting them either to not start smoking in the first place or to stop.

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This is the first teen tobacco team in the country. I would like to acknowledge their work this year, and I'd like to say I look forward to working with them next year. I'd like to recognize their names: Helena Chan from Vancouver, Kirpal Hoon from Williams Lake, Mary Illical from Surrey, Michael Jensen from Terrace, Alison Jones from Campbell River and Ryan Matthew from Kamloops. They've been wonderful to work with, and I'd ask the House to please make them welcome.

Hon. S. Hammell: I'm very pleased to introduce two visitors who are in the gallery today. Dr. Ellen Kornegay, director of the office of the status of women in South Africa is in Canada to gather information about building capacity within the government to support social, political and economic equality for women in that country. Accompanying Dr. Kornegay is Barbara McCann, a gender equality specialist for the Canadian International Development Agency. Given that this government supports the only freestanding ministry for women's equality in the country, I'm sure they will find the time spent with the ministry helpful. Would the House please make them welcome.

Hon. G. Wilson: In the gallery today are two key officials with the B.C. Treaty Commission. Commissioner Peter Lusztig is Canada's appointment to the B.C. Treaty Commission and has served with the commission since 1995. With him is Mr. Peter Colenbrander, who is the senior treaty process analyst for the B.C. Treaty Commission. Would the House please make them welcome.

Hon. D. Zirnhelt: Today I have the honour to introduce four guests. They've joined us to celebrate the bicentenary of the birth of B.C.'s pioneer botanist David Douglas, which is tomorrow. William Young is a former B.C. chief forester and founder and past president of the David Douglas Society for western North America; he's now secretary-treasurer of the society and a member of the Forest History Association. James MacFarlane, a forestry consultant, is vice-president of the society; he was formerly a VP and chief forester at MacMillan Bloedel.

Ralph Schmidt is also a member of the society and is a former director of research at the Ministry of Forests. Jeff Bates is a member of the society and president of the Forest History Association. Please join me in welcoming them to the House today and thanking them for their contributions to maintaining biodiversity in our valuable forests.

F. Randall: In the gallery this afternoon is Don McGill, who is the president of Teamsters Local 213 and also the president of the B.C. and Yukon Territory Building and Construction Trades Council. With him is Pete Aussem, a trustee of the Teamsters Local 213 pension plan. They are in Victoria holding a pension plan trustees' meeting. Would the House please make them welcome.

H. Giesbrecht: I'd like to introduce a young Skeena constituent to the House today: Michael Jensen, who's from Terrace. I know his parents well, and I know they're very pleased that he was one of the people chosen for the youth tobacco advisory team. Would the House please make him welcome.

Introduction of Bills

COMPANY ACT

Hon. J. MacPhail presented a message from His Honour the Lieutenant-Governor: a bill intituled Company Act.

Hon. J. MacPhail: I move that the bill be introduced and read a first time now.

[ Page 13962 ]

Motion approved.

Hon. J. MacPhail: I'm pleased to introduce the new Company Act, which will govern how companies are created, dissolved, organized and managed. The current act last underwent a major revision in 1973. The outdated act adds to the cost of doing business in British Columbia and places British Columbia companies at a competitive disadvantage. The new act represents legislative reform that will facilitate commercial activity in the province, as well as improve efficiencies for companies and the corporate registry.

Preparations for the new act have been ongoing for several years. Last year a discussion draft was released for public comment. As a result of comments received and with a view to balancing the often conflicting interests expressed, a number of provisions in the discussion draft were subsequently revised. The new act will accommodate recent developments in corporate law, streamlining a number of commercial transactions, and resolve ambiguities and problems with the existing statute. Finally, it will reduce filing requirements and allow for increases in efficiency at the corporate registry.

Hon. Speaker, I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

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Bill 85 introduced, read a first time and ordered to be placed on the orders of the day for second reading at the next sitting of the House after today.

FOOD SAFETY ACT

Hon. C. Evans presented a message from His Honour the Lieutenant-Governor: a bill intituled Food Safety Act.

Hon. C. Evans: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. C. Evans: This bill consolidates and updates the food safety regulations of existing legislation so that licensing, inspection and standard-setting are combined into just one statute which covers food at every level from the gate to the plate. As a consequence, the Meat Inspection Act and the Milk Industry Act will be repealed. British Columbia's food safety system is already among the best in the world, and this bill will maintain a strong role for government in setting food safety standards.

The legislation also affirms that the industry is responsible for ensuring that food is safe. This proposal enables government and industry to take a much more flexible approach to how food safety is regulated. There has been an increasing recognition that prescriptive standards in the current regulations are outdated, that they're onerous and that they're too inflexible. This legislation will enable government to set outcome-based standards that focus on the safety of the food and not on the specific methods to achieve it.

Outcome-based regulations will provide industry with the flexibility to meet the food safety standards using modern technology and a variety of methods. Regulations to replace and update existing regulations will be developed after ongoing consultation.

In 1993 federal and provincial agriculture and health ministers undertook to develop a more integrated approach to food standards and inspection. The blueprint for the Canadian food inspection system was created. This bill enables British Columbia to meet its commitment to set food safety standards that are equivalent to all other provinces and to federal standards. This bill would be administered by the Minister of Health, who was assigned responsibility for provincial food safety in 1998. The Ministry of Agriculture and Food will assist by continuing to administer dairy farm licensing and inspection.

Madam Speaker, I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 83 introduced, read a first time and ordered to be placed on the orders of the day for second reading at the next sitting of the House after today.

Oral Questions

MOVEMENT OF B.C. COMPANIES TO ALBERTA

R. Neufeld: Since 1991 more than 560 B.C. companies have relocated to Alberta. Over 200 companies have left B.C. for Alberta in the last two years, and now, according to the government's own documents, 1999 is shaping up to be a record year, with 78 B.C. companies leaving in the first five months alone. Will the Minister of Small Business tell us what it is about the NDP's treatment of small business that makes them want to take their head office, jump in a moving van and move to Alberta?

Hon. I. Waddell: Did the hon. member say a moving van or a movie van? If it's a movie van, a billion dollars is coming here. That's pretty good. If it's a moving van, then the hon. member might want to pause and look at what's really happening here.

Yesterday the Minister of Finance announced -- with the support of the small business community -- measures to eliminate and reduce red tape. This is what the community wants. If the hon. member would move his mind back a little bit, he would remember that the Minister of Finance and the government introduced the best small business tax break in the country in the budget. Finally, if he'd look at the tourists that are coming into this province this summer, he might take a more positive attitude and, instead of talking about going to Alberta, try to encourage people to come here -- as they are going to do.

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

Interjections.

The Speaker: Order, members.

R. Neufeld: Well, the minister just doesn't seem to get it. The statistics speak for themselves. In the first five months of this year . . .

Interjections.

[ Page 13963 ]

The Speaker: Order.

R. Neufeld: . . . 78 companies have left for Alberta. That's in comparison to only 13 in the same period one year ago. If this government is so friendly -- if all the things that the minister talks about are so friendly to small business -- can this minister explain to me again why there is a 300 percent increase in B.C. companies leaving for Alberta?

The Speaker: Minister of . . . .

Hon. I. Waddell: Hon. Speaker . . . .

The Speaker: Minister, the Chair needs to recognize the minister. The minister rises, and I say: "Small Business, Tourism and Culture minister."

Hon. I. Waddell: Sorry, hon. Speaker. In my eagerness to respond, I forgot that. I'll try and remember that.

I don't understand where the member is getting his information. Perhaps the member could tell us, because if he looks . . . .

Interjections.

The Speaker: Members, come to order, please.

Hon. I. Waddell: In the amalgamation of the phone companies -- B.C. Tel and Telus, from Alberta . . . tell us where they moved. Telus is coming to Vancouver for their head office. Ericsson Communications is coming here. The stock exchange . . . . I got a letter from Charlie Locke -- who runs the Fernie resort, the Lake Louise resort and the Fortress Mountain resort -- saying: "I'm coming to British Columbia. I approve of the policies of the government." So I just plead with the opposition to show some optimism and some faith in British Columbia. We're trying to bring in these policies. I believe they're working, and this economy is turning around.

OVERCROWDING IN PROVINCIAL JAILS

AND RELEASE OF HIGH-RISK OFFENDERS

G. Plant: The opposition has obtained an internal corrections branch report which shows that the number of prisoners in B.C.'s provincial jails will exceed the system's . . .

Interjections.

The Speaker: Members . . . .

G. Plant: . . . emergency capacity to hold them over the next two years. This comes on the heels of another example of a delay in the court system that has forced a stay of proceedings against a man convicted of indecent assault at trial. So I have a question for the Attorney General. Will he tell us how he is going to ensure that dangerous criminals are not released into our neighbourhoods and communities to relieve the overflow problem that exists in the province's prison system?

Hon. U. Dosanjh: I think the hon. member knows well that the more dangerous and more serious offenders belong in the federal prisons in the first place. We have prisoners that serve two-years-less-a-day sentences, and some of them are released on parole and otherwise . . . . Very serious offenders belong in the federal prisons.

Secondly, we have a corrections facility coming up in Port Coquitlam which is already being built, and that would deal with some of those issues. The hon. member should know, as a lawyer of some experience, that it's important that we do some restorative justice at the other end of the spectrum. We have actually attempted to keep people out of jails and out of courts. Those that are less serious, low-risk offenders are actually being diverted away from the system into the communities. So the communities are powerful; they hold the offenders accountable. They're able to deal with those issues so that the backlogs are dealt with appropriately and Corrections are not overcrowded.

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

G. Plant: I want to deal with one aspect of the province's inmate count, if you will. The Attorney General was quoted recently as having said that he is considering putting higher-risk offenders on the electronic monitoring program. But the fact is that the courts put high-risk criminals in jail to keep them out of our neighbourhoods and communities. So I want to ask the Attorney General this: will he assure us that he is not planning to bypass the will of the courts by placing higher-risk offenders in our communities under the electronic monitoring program?

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Hon. U. Dosanjh: There was a federal review of all of the electronic monitoring programs across the country. That review told us what we already knew: we're not very effectively utilizing electronic monitoring. Electronic monitoring is a form of incarceration, which happens upon reclassification by Corrections officials with those offenders that pose some significant risk but are allowed to work in the community so that they can support their families, support themselves and try to become productive members of the family.

We will make changes to that program, but this hon. members needs to know that we in British Columbia make the largest number of applications for dangerous-offender designation in the entire country, based on our population. Over a quarter of the dangerous offenders currently serving jail time across the country come from British Columbia, because we take a very serious view of these kinds of issues. So I would ask the hon. member to actually look at our record and not pander to things that don't need to be pandered to.

GOVERNMENT INTENTIONS ON PERSONAL INCOME TAX CUT

R. Kasper: Since 1996 the government has consistently reduced personal income tax, frozen Hydro rates and tuition fees, cut small business taxes to lower than those of Alberta, exempted 90 percent of B.C. businesses from the corporation capital tax and offered a tax holiday for new investment. My question to the Minister of Finance . . .

Interjections.

R. Kasper: Listen up.

[ Page 13964 ]

The Speaker: Members, members.

R. Kasper: . . . is: given these targeted measures, I, as well as other British Columbians, want to know why the minister has not seen fit to implement the $1.2 billion in personal tax cuts recommended by the B.C. Business Summit and the opposition.

Interjections.

The Speaker: Order, members. Come to order. The Chair will not recognize the minister until the House has come to order.

Hon. J. MacPhail: The whole aspect of managing the economy is serious business. Our government takes it very seriously. We don't go around making rash promises that simply can't be fulfilled. Let me just tell you . . .

Interjections.

The Speaker: Order. Members, members.

Hon. J. MacPhail: . . . the tough choices we've made. We've made some very tough choices to do targeted tax cuts and, at the same time, improve health care and improve education. And it's working. We are protecting health care and education, and our targeted tax cuts are working. What we will not do is what the opposition has asked. Here's what their $1.2 billion tax cut would do. Fully 35 percent . . . .

Interjections.

The Speaker: Members, members. Come to order. The minister is just finishing up.

Interjections.

Hon. J. MacPhail: Hon. Speaker, this . . . .

Interjections.

The Speaker: Members, minister . . . .

Hon. J. MacPhail: Sorry.

The Speaker: Thank you.

Members, come to order. Peace River North, Fort Langley-Aldergrove, come to order.

Hon. J. MacPhail: Hon. Speaker, this is the analysis that every British Columbian is doing. I gather they don't want it out, but I'll tell them what's actually going on. Their tax cut, the tax cut that they would wish . . . . Fully 50 percent of the benefit would go to 4 percent of the population. We will not do that. The 50 percent that have the lowest income would get one-thousandth of the benefit that those people would give to the top income tax people, and, hon. Speaker . . .

The Speaker: Thank you, minister. It's time to move on.

Hon. J. MacPhail: . . . we simply will not do that.

The Speaker: Minister, thank you.

Hon. J. MacPhail: We believe in a fair tax system for all British Columbians.

[1430]

The Speaker: Thank you, minister. Time to move on.

Interjections.

The Speaker: Order, members.

CONDUCT OF GOVERNMENT MEMBERS

OF PUBLIC ACCOUNTS COMMITTEE

M. de Jong: On Tuesday the Public Accounts Committee shut down its inquiry into the auditor general's report on the 1996 fudge-it budget. Just when it seemed we might learn the truth about how it was that Tom Gunton, the Premier's leading political adviser, was able to inject . . .

Interjections.

The Speaker: Members, members. Columbia River-Revelstoke, come to order.

M. de Jong: . . . hundreds of millions of mythical revenue dollars of optimism into the '96 budget, the government -- the NDP -- shut it down. They shut it down, Madam Speaker. What about the truth? Well, you can't ask the Premier, and you never get a straight answer from the Finance minister. You can't ask the NDP members, the member for Malahat-Juan de Fuca and the other members that were part of the cover-up. So the question is for . . .

Interjections.

The Speaker: Order, members.

Interjection.

The Speaker: Member for Skeena . . . .

M. de Jong: . . . the Chair of the Public Accounts Committee. How could this cover-up take place, and what is the status of Public Accounts as a result of this shameful conduct on the part of the NDP members of that committee?

The Speaker: I recognize the member for Okanagan-Penticton, who is the Chair of the committee.

R. Thorpe: As the member knows, the government has the majority of members on the committee. I can confirm to this House that the member for Saanich North and the Islands put forward a motion to call Mr. Tom Gunton as a witness to the committee. The motion was defeated by all government members voting no, thus stopping Mr. Gunton's appearance before the committee.

In addition, I can advise that the government member for Malahat-Juan de Fuca put forward a motion of closure on the committee. All government members voted yes for the closure, causing the inquiry of the auditor general's report to

[ Page 13965 ]

come to an end without hearing from Mr. Gunton, Ms. Eaton or Mr. Wouters on this very critical issue for British Columbians.

Interjections.

The Speaker: Order, members.

M. de Jong: At last, Madam Speaker -- to receive a response that is concise, to the point and that deals with the question. What a welcome departure from what we're usually forced to endure in this House.

But my supplemental . . . . I thought I heard the Chair of the Public Accounts Committee say that the NDP members of that committee weren't interested in finding out the truth. I thought I heard him say that they were interested in effecting a cover-up and that they didn't want to put questions to the one person . . .

The Speaker: Hon. member . . . .

M. de Jong: . . . that could provide the answer.

The Speaker: Hon. member . . . .

M. de Jong: That's what I thought I heard.

The Speaker: Hon. member, what's your . . . ?

M. de Jong: I wonder if that's a correct version of events.

Interjections.

The Speaker: Members will come to order. The question was asked within the time, and I will allow a small, short reply.

But I must also add a piece of information for all members -- that is, while it is permissible to address a question to the Chairman of the Public Accounts Committee, it is not permissible in the House for detailed canvassing of votes that have happened in the committee. I apologize to all for having allowed that to happen earlier.

In the current moment, I recognize the hon. member for Okanagan-Penticton.

R. Thorpe: I'd like to thank the member for that very thoughtful question. I'll take that on notice.

[1435]

Tabling Documents

Hon. G. Wilson: I have the honour today to present the 1999 report of the B.C. Treaty Commission.

Hon. I. Waddell: I rise to table two reports. The first is "Economic Impacts of the Leonardo da Vinci Exhibit for the Southern Vancouver Island Region" and the second one is "Royal B.C. Museum Visitor Study of the Leonard da Vinci Exhibit."

Reports from Committees

T. Stevenson: I have the honour to present a report from the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills. I move that the report be read and received.

Motion approved.

Law Clerk:

"June 23, 1999. Hon. Speaker, your Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills begs leave to report that the

preamble to Bill No. Pr403 intituled Poulos Investments Ltd. (Corporate Restoration) Act, 1999, has been approved and the committee recommends that the bill proceed to second reading.

"All of which is respectfully submitted. Tim Stevenson, Chair."

T. Stevenson: By leave I move that the rules be suspended and the report adopted.

Leave granted.

Motion approved.

Bill Pr403 ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Ministerial Statement

BICENTENARY OF BIRTH OF DAVID DOUGLAS

Hon. D. Zirnhelt: Today I ask you to join me in recognizing June 25 as the 200th anniversary of the birth of B.C.'s pioneer botanist, David Douglas. I'm tabling a proclamation doing just that.

David Douglas was a Scottish-born botanist and field naturalist who spent ten years exploring the west coast, including two trips to British Columbia. He identified and catalogued over 200 plant species in B.C. and the Pacific Northwest and introduced over 400 native western North American plant species to the world. Many of these plants were named after David Douglas, including the Douglas fir, which has great social, cultural and economic value to British Columbians.

Douglas was an observant and tough-minded person who travelled under primitive conditions by canoe and horseback, but mainly on foot, through icy rivers, long portages and freezing temperature to collect plants for the benefit of society. As an adventurer he ranks with his fellow countrymen, Alexander Mackenzie and Simon Fraser.

On the eve of the bicentenary of David Douglas's birth, I ask you to join me in recognizing the contribution that David Douglas has made to the social and economic fabric of British Columbia by exploring and cataloguing our forests, the contributions of British Columbians today who are working to maintain the biodiversity and sustainability of our forests, and the commitment of the Ministry of Forests, working to continue to develop and implement management practices that will sustain the social, cultural and economic environmental values of all our forest resources.

[ Page 13966 ]

The Speaker: In response to the ministerial statement, I recognize the member for Shuswap.

G. Abbott: It's a pleasure to rise and join in the recognition of the David Douglas bicentenary. Douglas truly was a remarkable figure in this province's history. He compressed into a decade the accomplishments of a lifetime. Douglas came to Canada from London, at the age of 24, on a botanical expedition for the Royal Horticultural Society. Douglas's harvest of plants and seeds established a record for species introduced by an individual into Britain. At a time when some 92,000 species of plants were known the world over, Douglas sent to Britain about 7,000 species, many of them new and native to western Canada.

Douglas explored much of British Columbia, overcoming difficult challenges. On one of his journeys, he travelled up the Fraser to Fort George Canyon. His canoe was smashed on the rocks. His journal, botanical notes and all his specimens were lost, and Douglas was swept downstream in the icy flood and almost drowned.

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The natives of the Columbia region described him as the grass man. As one author noted in a magazine: "British Columbia has been enriched by Douglas firs since the earliest days of the province. These beautiful trees, wherever they grow, are a real monument to the man of grass." A man who lived to search -- and died, perhaps, of curiosity -- Douglas has been described as a historian of science and as one of the greatest and most successful exploring botanists to whom the world is deeply indebted. His legacy is reflected in the importance of our forests -- in particular, the Douglas fir -- to British Columbia.

Orders of the Day

Hon. J. MacPhail: I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Forests.

The House in Committee of Supply B; W. Hartley in the chair.

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 34: ministry operations, $282,402,000 (continued).

G. Abbott: This afternoon the plan, as I've laid it out to the minister, is to have a few questions around stumpage and a few around the small business forest enterprise program. We'll then see what we have time for after that -- perhaps a few questions on FRBC near the end of our time here. There are a couple of miscellaneous issues that I'd like to pose to the minister, some of them further to other discussions we've had earlier in the estimates. If the minister doesn't have the appropriate staff here, he can just make a note of the questions and let me know the answers at the best time.

[1445]

We've talked about the issue of Forest Service roads. In the estimates last evening the minister indicated that no Forest Service roads that also serve school bus routes have been closed, and it didn't appear that that was going to be a problem. The Minister of Education, in a June 17

article in the Prince George Free Press , apparently suggested that Prince George and the area school bus routes wouldn't be affected but that there may be four in Cariboo North and four in Cariboo South that could be affected. He also indicated to the Free Press that the most impacted routes are in the Kootenays, the Fraser Valley and Vancouver Island. Would it be possible to have the minister provide me with specifics with respect to this?

Hon. D. Zirnhelt: I can provide that information in due course. I'll try to get it as soon as possible, but I suspect that the answer will be the same. We haven't taken decisions. Certainly routes would have to be reviewed. I am informed that no routes will be closed down this year, and it is our objective to keep every route open. Given that context, I will see if there's any additional information.

G. Abbott: Another unrelated issue, and one that I know nothing about. I'm looking for the minister to provide some information here. Apparently the Forest Service has run a conference centre at Mesachie Lake, I believe it is, near Lake Cowichan. We've received a letter of concern about its closure, or potential closure.

Could the minister advise the history of the conference centre and what plans there are in the ministry with respect to it?

Hon. D. Zirnhelt: We're in the process of closing the Mesachie Lake conference centre. We can give you the history of it, but it is simply a budget matter. We had to trim our budget somewhere, and we thought we could live without this one.

G. Abbott: Again an unrelated issue. This involves the first nation referrals that are expected from woodlot owners.

In the Shuswap area, woodlot owners have been advised -- at least their understanding is -- that they should consult with all four of the first nations bands which exist in the Shuswap area, even if their woodlot is not adjacent to all four -- and I guess they couldn't possibly be adjacent to all four. The woodlot operators are concerned with the volume of paperwork that appears to be expected of them for reasons of consultation and would like some clarification as to whether their obligation to consult extends only to the adjacent band or extends to all of the first nations bands in the Salmon Arm forest district.

Hon. D. Zirnhelt: Well, I will look into the exact details, but I think I can give you a general answer, which is good advice to them. Because we're dealing with area-based tenures, they're long-term tenures. They want to be sure that they don't end up in some kind of a wreck, meaning that their development is held up in the courts due to inadequate consultation.

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It is advised that they consult with anyone or any first nation that may have a claim or appear to have a legitimate claim. Through time, first nations have moved over the landscape. It was not by their choosing which particular settlements they settled on over the last decades, and as a result there may be overlap or shared areas.

[ Page 13967 ]

So if there is any evidence that these are shared areas or areas that might be considered to be overlap areas, then it's wise to consult with all. If you miss one, you might end up stopping . . . . We had such a case happening in the Mid-Coast, where a judge found that there wasn't sufficient consultation with a neighbouring -- albeit not adjacent, but neighbouring -- first nation. So prudence is, I think, the order of the day here, but we will clarify the reasons for it.

I understand that it can be seen as onerous, but perhaps the results of some of the overview assessments may be able to be compiled in a way that indicates that there's negligible risk, which might relieve them of some of the responsibilities. So I will get some details on the requirements for consultation and forward them to you.

G. Abbott: A last question on this particular area. The suggestion from the ministry in the flow chart for first nations referrals that the woodlot operators are working with suggests that if a band has not responded to their letter within two weeks, they should contact the bands by phone, request meetings and ask to have a meeting with respect to the plans, etc. Again, there seems to be some concern about the obligation to do this. Further, I guess, in some cases the response that they're getting from the bands is: "That's 50 miles away from where we are.

Why would we care?" Again, though, at this point the advice of the minister would be simply to err on the side of caution, even if it means that there may be a little bit of frustration around duplication or disinterest -- that it is best to err on the side of caution rather than otherwise.

Hon. D. Zirnhelt: I think that's what a lawyer would advise, were they to consult with a legal adviser on it. But in the case where first nations have said, "Why would we care -- it's 50 miles away?" then that sounds to me like pretty good evidence that there isn't an interest that might be affected by the development. When that kind of feedback is generated, then I think the risk is much lower. But again, if they're advised to go through the steps, then I don't think the placement of a phone call or a copy of a letter is too onerous, given that it will minimize their risk, because it will be the woodlot owner whose development will be obstructed should there be a problem.

My comments were about the long term. Since these are long-term licences, they may wish to build their relationship with someone who, in the process, may be claiming rights to that Crown land in the area. So in the event that a claim was to be established in the future at any time, the owner of the long-term licence would be advised to build the relationships so as to not find themselves with neighbours with whom they haven't built up a positive relationship.

G. Abbott: I will pass along that advice from the minister to those who are concerned.

This gets us into the area of stumpage, though. It's the unique area of agricultural leases and the stumpage that is paid on those. I know that the minister has also received correspondence on this issue from, among others, Charles Butcher's Limousin ranch in Prince George. He's also written to me and is very concerned that the stumpage he pays on the wood from -- I think it says -- an agricultural lease has stayed up high.

[1455]

I'll give you an example. In August of '95 stumpage was $55.01, and the price he was receiving was $100. In October of '96 the stumpage was $60.54; the price was $108. We'll go down about another year, January of '98: $64.30 a cubic metre, stumpage; and about $80, price. The last example he gives is that stumpage is at $57.42 a cubic metre, and he's only able to secure $72 a cubic metre on the wood. So the dilemma as posed by Mr. Butcher is that stumpage is staying up while what he can secure per cubic metre on his wood is going down, in his estimation.

I guess the second part of the argument that Mr. Butcher makes is this: why should he pay for silviculture on an agricultural lease when he's taking the wood off, clearing the land and putting it into agricultural production?

Hon. D. Zirnhelt: I'm informed that there is no silviculture levy on agricultural leases.

With respect to the other comments, I see the $45 spread in '95. My own experience has been that there are times when you make good money, and you've got to log when you can do that. There are times in depressed markets when you just can't do it. The value of the resource, nevertheless, is an appraised value. They're evaluated by the same formula that all wood is evaluated. But I will admit that they are in a different market.

When companies are limited by quota, then the private market is not going to pay a sufficient amount to put them into a profit position, so there are very slim margins in the examples you give me. I'm sure there are worse examples where the market is even less than $72. We are fixed into the stumpage system. If there is something untoward about the calculation of the cost side, we can look into that and would be happy to provide the details, if we haven't already looked into those. What happens is that you get the sawlog price from someone. They don't factor into that the wood they get for 25 cents.

Quite often, when you take the wood that goes in on salvage prices, the average comes down, and it changes it quite considerably.

G. Abbott: We've had some discussion about stumpage issues -- I guess more in the context of how potentially reforming the stumpage system might be a part of future discussions in a process about reforming public policy in the forest area. The recent White Paper from the IWA offers some interesting observations with respect to stumpage and the stumpage system we have in B.C., and I want to get the minister's comments on some of those. For example, on page 43 of the document by Mr.

Smyth there is a note that none of the other provinces -- he means other than British Columbia -- covered by the softwood lumber agreement uses a target-rate system. Alberta, Ontario, Quebec do not use target-rate systems; we're the only ones that do. I guess the question there is: why are we doing it differently than others?

The other point that the paper makes is particularly in context of Alberta's stumpage system, and I'll just quote from this study briefly:

"This quick cycle adjustment gives the Alberta industry a significant advantage over B.C. companies because it sets rates on a timely basis, while the time lag from the beginning of the quarterly adjustment period to the end of the quarterly stumpage rate effective period in British Columbia can be as long as five months. Given the sharp fluctuation in lumber prices during the 1990s, such an extended period can inflict severe damage on the B.C. industry."

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[ Page 13968 ]

That's two questions, I guess: why we have the target rate system when others don't, and a comment with respect to the observation made about the quick-cycle adjustment in the Alberta stumpage system.

Hon. D. Zirnhelt: I want to make a couple of clarifications on some things I've said. When we reviewed the record, some of my staff noticed a few things where we require some clarification.

First, I want to be clear that in this discussion, stumpage and the softwood lumber agreement are inextricably bound up together, as the member himself has pointed out. We don't want to affect our position, should we choose to renegotiate that agreement or should we choose not to renegotiate.

Second, a small correction. Earlier, when I talked about stumpage and taxes . . . . Stumpage is not a tax; it's the price charged for trees. I was using the term loosely to encapsulate everything. I just want to make sure that it's an important distinction, because my staff is aware of some distant recollection -- but nevertheless to be heeded -- that there are court cases over this issue. So I wanted to be very clear for the record.

With respect to your question, why set a target rate system, a target rate system was the result of negotiations with the Americans. In 1987, when we adopted the system, it was the system that we agreed to work by so that we wouldn't be arbitrarily lowering stumpage in areas and thereby creating a cross-subsidy across the province. That's why it's different. Our system was under much more scrutiny and needed a fix. Whether today it's adequate or not is another question, but we needed a fix that was able to forestall actions by the U.S. I think it's been only partially successful in that, but at least we can defend the system when queried by the Americans.

With respect to the quick-cycle, more rapid response to market, what Mr. Smyth doesn't say there is that industry has a decided advantage over competitors when it goes the other way. When prices go up and you're still paying on the quarter of lower prices, there's a decided advantage there. You know, you never hear about the upside of the cycle; you only hear about the downside. So I agree that a more rapid response makes it more immediately market-sensitive and under the right conditions it'll give an advantage, but the other side is equally true.

There is an advantage gained when there's a lag in the rise of stumpage. I think we've gone through a period where we have benefited from that. So that's the simple explanation.

Further, though, I think I have to say that there would be . . . . Well, I'll just leave my comments at that for now.

G. Abbott: Thanks to the minister for that explanation.

Given that one of the apparent objectives of British Columbia possibly going into the next round of the softwood lumber agreement is to prove to the Americans that we have a market-sensitive stumpage system, will that particular and perhaps very important element in the big puzzle about public forest policy here in British Columbia . . . ? Will that advantage of the Alberta system, in terms of market sensitivity, therefore be an important consideration as B.C. prepares for the next round of the softwood lumber agreement?

Hon. D. Zirnhelt: In the view of the Americans they would like to see us tie the stumpage fees charged to the price of standing trees. They would like to see a competitive market for the standing trees, not any other derivative of the market.

[1505]

G. Abbott: I won't pursue that one any further.

Another one of the useful suggestions that's made by Mr. Smyth -- this one's on page 45 -- is a suggestion from him around getting the right log to the right mill without suffering an undue penalty because of the current appraisal system. The suggestion he makes is this: "Moreover, the current appraisal points policy should be changed to encourage companies to transport logs past the sawmill closest to the harvesting site to a more distant mill that can manufacture higher value products from them.

Such a policy will stimulate increased log trading between sawmills, including those of different companies." That's his suggestion with respect to changing the current appraisal points policy. Is the government giving any consideration to this particular suggestion?

Hon. D. Zirnhelt: Where we agree with Mr. Smyth is that we should try to get a higher-value log sorted out and bucked at the right place and not trucked as a sawlog and then turned into a peeler or a high-value product source. We agree with that. We're not sure that we agree with the vehicle. That'll have to be examined. See, he's given a specific vehicle, which is the point of appraisal, and so . . . . You know, we've come this way on the coast where we've made great advances. I think there are more advances to be made there, and so we tend to agree with the principle but not necessarily the mechanism.

Just backing up a bit to your previous question, the government offered industry a quick response on the cycling up and down of stumpage in '94, and it was rejected. It was on the menu of items to be prioritized in the go-round in '97, when we were talking about the action plan, and it was given very low priority and dropped at that time. But it was offered up as one of the ways in which we could modify the system. So it has been rejected by industry. Perhaps the next time around we can do it.

But, as I say, all of the recommendations and all of the issues around the market, the softwood lumber agreement and the stumpage system . . . . All of the things that we need to do some redesign around have to be taken together. We can't just pick some elements. For every action he implies, there is a reaction somewhere else.

G. Abbott: I agree with that. It is a large and involved system -- therefore the importance of the public policy review that we will be seeing, I gather, in due course here in British Columbia.

I have one final point on the stumpage system here in B.C., from the Smyth report. I'm certain that this is one that the minister has had lots of discussion with staff about, and he's probably very well versed on it. I'll quote Mr. Smyth: "Because of the rapid development of higher value lumber products at the coast during the late 1980s and 1990s, there is a high probability that its stumpage target rate has also been grossly overstated by errors in the 1986 Statistics Canada index market basket." This is a suggestion that I've heard from Mr.

Smyth on several occasions now, and he's embodied the suggestion in his paper. As I say, I'm sure the minister has walked through this a number of times with staff, and I'd be delighted to hear what the response to that is.

[ Page 13969 ]

J. van Dongen: I ask leave to make an introduction.

Leave granted.

J. van Dongen: It's my pleasure today to introduce to the Legislature 50 grade 6 students from Yarrow Community School. They are accompanied by their teacher Mrs. Klassen and a number of parents. I ask the House to please make them feel welcome.

[1510]

Hon. D. Zirnhelt: This matter was looked at in detail by senior staff in the industry and the Ministry of Forests. We looked at it in detail and found that it really was fairly minor in the scheme of things. Mr. Smyth doesn't agree with our analysis, but we provided that to him. I'm sure we'll be having discussions with him again, because it's always possible that the Ministry of Forests and the industry could be wrong and that Mr. Smyth could be right.

G. Abbott: You never know.

I think we are due for an adjustment in stumpage effective July 1. Is it possible for the minister to provide me with some indication today of what we're likely to be looking at -- first on the coast and then in the interior -- with respect to a stumpage increase or decrease, any changes in the mean-value index or the target rate and that kind of thing? I appreciate that it's not July 1 yet, but if the minister has some information with respect to what we can expect to occur on July 1, I'd welcome it.

Hon. D. Zirnhelt: Well, as you know, we do some advance work in order to do it and to be prepared to make a determination. It hasn't been done yet, because the mean-value index has not been finally determined. I can give you an idea of what might be happening, and I want you to be sure that on July 1 the rates will be effective, as you know, for three months. The increase will happen July 1. Although the adjustment, as I say, hasn't been done, the average rates are expected to go up due to stronger lumber prices. As usual, some specific cutting permits will have larger or smaller increases.

The rates are going up primarily because lumber prices have increased -- I guess, solely because lumber has increased.

On the coast, the target rate -- that is, the average rate -- increases approximately $2.05 per cubic metre. The base rate -- that is, the average sawlog rate -- increases $2.40 a cubic metre. Pulp logs remain at 25 cents a cubic metre. Japanese lumber, in Canadian dollars, is currently at $900 per thousand board feet, which is an increase of $170, or 23 percent, since June of last year. This increase is about $38 a cubic metre. So the price of lumber has gone up $38 a cubic metre.

In the interior, the interior target rate -- that is, the average rate -- increases $2.79 per cubic metre. The base rate -- again, the average sawlog rate -- increases $4.35 per cubic metre. Pulp logs remain at 25 cents a metre.

The U.S. lumber price on which this is based, in Canadian dollars, is currently $550 per thousand board feet, an increase of $150, or 36 percent, since June of last year. This increase is about $38 a cubic metre.

G. Abbott: I thank the minister for that detail. I appreciate that it's of a preliminary nature. But it gives us some idea of the magnitude of the problem, the magnitude of the stumpage increases that are likely to come.

Has the mean value index on the coast come out of the negative area which it's been in for some time -- mean value index being the average value index of all cutting permits? Has that improved on the coast as a result of a strengthening Japanese lumber market and, hopefully, other elements?

Hon. D. Zirnhelt: No, we simply haven't run the numbers yet. We don't know.

[1515]

G. Abbott: Could the minister advise at this point in time what the value is of the stumpage that is currently outstanding with the Ministry of Forests' revenue branch?

Hon. D. Zirnhelt: As of May 31, 1999, the overdue accounts receivable was $62 million. This is the total amount that's owed and overdue, interest being charged on the overdue amounts and the actions being taken to collect the money, including establishing liens on assets, garnishees or whatever, to receive those. The overdue amount is normal and expected. For comparative purposes, the overdue amount at the end of May '98 was $120 million. So less than half is considered overdue. The auditor general states in his 96-97 report that, in general, government has built strong controls into the forest credit management system and that the ministry has an effective collection procedure.

G. Abbott: The minister said, when describing the $62 million, that it was owed and overdue. Does that mean that a portion of the $62 million is simply owing, as opposed to beyond . . . ? I don't know whether it's 90 days or 120 days or 30 days when the ministry considers an account overdue. Can we get a distinction between owed and overdue? Is the $62 million all overdue?

Hon. D. Zirnhelt: Okay. Owed and overdue are the same thing -- $62 million is overdue, and overdue is billed for over 28 days.

G. Abbott: Does that include the amount as part of the restructuring agreement at Skeena Cellulose that has been on the books for some time? The minister doesn't need to identify the companies, but I'm curious as to what the distribution is of the overdue amount.

Hon. D. Zirnhelt: There are about 60 accounts that account for 90 percent of the overdue, and about ten accounts -- some relatively large ones -- account for 50 percent. One of them is Skeena Cellulose under the economic plan, and that overdue amount is approximately $20 million.

G. Abbott: I want to move on, then, to the small business forest enterprise program. Let's begin by a review of what was termed, when it was announced, the small business 2000 project, the aim of which was to repackage the accumulated undercut from the previous small business forest enterprise program.

Could we get an update on that in terms of its volume of sales in relation to the objective, the success with which the ministry has been able to repackage and sell the accumulated undercut, and the success in terms of getting the product to remanners?

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[ Page 13970 ]

Hon. D. Zirnhelt: Yes. As of the date of the jobs and timber accord -- two years ago -- there were 2.1 million cubic metres. We had a three- or four-year plan to sell it; it's looking like a three-year plan. Last year we sold 0.9, so that's 900,000plus cubic metres. This year we intend to sell . . . . I have to correct myself. Two years ago we sold 0.6; last year we sold 0.9; this year we'll sell 0.6. If I'm correct, that adds up to 2.1.

G. Abbott: There may be excellent reasons for this, but it certainly would appear that the stated aim of the small business 2000 project of getting that undercut out to market over time has not come to fruition, unless the 0.6, 0.9 and 0.6 are supplemental to other small business sales. But I assume that's not the case. I assume that small business sales have been limited for some reason, and perhaps those can be outlined to me.

Hon. D. Zirnhelt: No, it is truly incremental, on top of the regular program. For example, last year we sold 11.44 million cubic metres, and that's 93 percent of target. And on top of that we sold the undercut, which is just about 915,000. So it is incremental.

G. Abbott: Thank you for that clarification. When we discussed this last year, I recall the minister saying that there certainly wasn't going to be any attempt to put eight million to ten million cubic metres of accumulated undercut on the market in any one year, because clearly that would pose some difficulties in terms of markets and process and everything else. So the numbers here reflect, probably over the period of a decade, the gradual drawing down of that undercut to this point.

[1525]

Again, one of the stated goals of the small business 2000 project was to get more sales to remanners. I assume that objective has been fulfilled. Are there still problems with respect to that -- adjustments that need to be made? Or is the system working as we intended?

Hon. D. Zirnhelt: We made the commitment to deliver more wood, and we delivered it. The timber supply for the independent manufacturers segment of the small business program increased by almost 70 percent, to 4.4 million cubic metres.

I'll tell you how it's basically broken down. The bid proposal apportionment increased from 2.6 million to 3.6 million, so there's a million there. Then we accompanied it by TFL wood and put that into bid proposals. That was another 900, so that gives us the 4.4 million.

G. Abbott: The paper by Mr. Smyth from the IWA makes some comment about this and portrays the success of the program in less than glowing terms. I'll quote it:

"Unfortunately, for a variety of reasons the small business forest enterprise program has not been successful in its goal to create value-added jobs in the B.C. lumber industry. The 1,500 small businesses that make up the value-added sector are struggling to break even, and there has been no net increase in new jobs created. Value-added employment has remained steady for the past five years at approximately 13,000, or 13 percent of the total B.C. forest industry workforce."

Does the minister agree with his outline of the impact of the program on the value-added sector?

Hon. D. Zirnhelt: I have some figures. I'm not exactly sure of the time frame, but I can confirm that for you. It has been announced by the value-added industry association on the occasion of the opening at Forintek a couple of weeks ago.

I think Mr. Smyth is wrong. I think that the data now shows that there's been an increase of 3,000 jobs over the last several years in the value-added industry. There's been a steady growth of approximately 4 percent in the employment there. Those jobs have been created, and I don't think the program has been a failure. The industry associations are pleased and are using the wood.

Now, it hasn't all been brought on stream. As you know, it's been awarded over three years, and some of these sales go as long as ten years. It's going to take some time; some of the plants are still being built. So we disagree with him. There has been an investment of $51 million in capital investment since June 19, 1997 -- two years ago. We know that there have been 1,382 jobs created out of this program itself.

There are other value-added industries that are benefiting from wood fibre transfer and other things, so the small business program accounts for 1,382 new jobs and protects -- by the way, the wood coming in protects jobs -- another 3,500 existing positions. These are the sums of the jobs that have been created and the investment from individual sales. We go back and check to make sure that people are creating the jobs that they undertook to create when they bid on the wood.

[1530]

G. Abbott: Could the minister advise what the annual revenues were in the most recent year for the small business forest enterprise program? Did revenues meet projections or estimates?

Hon. D. Zirnhelt: The original estimate was $289 million, but it was revised on the heels of the stumpage adjustments and the market downturn to $202 million. And we ended the year at $210 million.

G. Abbott: And could the minister give a similar brief accounting of expenses for the program?

Hon. D. Zirnhelt: The expenditure forecast for the program for '98-99 was $142,590,000, and the actual expenditures came in at $142,070,000 -- so some $520,000 under.

G. Abbott: That's probably as close as we're ever going to get to balancing a budget in anything.

Hon. D. Zirnhelt: A profit.

G. Abbott: Yeah, on the right side too. That's great.

Just one last question on the small business program. The forest action plan brought in the new way of calculating the sales value of small business sales. I think her name's Faye Street. She's from somewhere in the Kootenays. I know she writes to the minister, and she writes to me with concerns about the new method of calculating the sales.

As I recall, the former method was for the officials to look at the value of the sale, then go to, I think, two-thirds or three-quarters of that value as an upset figure. Then the expectation was that there would be bonus bids on top of that.

As I understand the system now, again officials calculate the estimated market value of it. The upset price is 100 percent

[ Page 13971 ]

of estimated value. Then there are bonus bids on top. Is that a crude but perhaps accurate way of stating how it's done now? If it's not, perhaps we can get a correction on how it's done.

Hon. D. Zirnhelt: A calculation is made from other sales in the area and known information. We calculate what a probable selling rate would be. It's discounted 30 percent, and then that becomes the upset. So the upset is discounted 30 percent, and then the bonus bids are made on top of that.

G. Abbott: That is in comparison to the previous method of calculating it, which was, I thought, to go to two-thirds or three-quarters of the estimated value. Was it not? Again, perhaps we can get a brief description of the previous method of calculating this.

[1535]

Hon. D. Zirnhelt: Before, we used a comparative value pricing system. So, as you know, you look at the estimated price, then reduce the costs -- take the costs away -- and come up with the upset stumpage. That's how it was done, and that was the comparative value pricing system. We no longer use that. It's the market-based system now. We added levies to the comparative value price to reflect silviculture and road costs.

G. Abbott: One question on the certification issue, I guess we had a bit of a discussion around this issue last year. We've moved on, by the way. There won't be any more small business forest enterprise program questions, at least from me. I don't know if the staff want to come and go; that's fine.

We had a good discussion of the various models of certification last year in estimates. Some parts of industry are pursuing the Forest Stewardship Council. Other companies continue to pursue CSA or ISO certification. Is there anything new to report with respect to the certification issue and the ministry's role with respect to it?

R. Thorpe: I ask leave to make an introduction.

Motion approved.

R. Thorpe: I am very pleased today to have 45 grades 6 and 7 students from West Bench Elementary School. They're accompanied today by many of their teachers and their parents. I would ask this House to give them a very loud welcome as they're visiting Victoria.

Hon. D. Zirnhelt: About a year and a half ago I called industry and said that I saw a problem looming and that they'd better work together, because we needed to have a strategy to deal with certification. Industry formed a committee. We were there in a supportive role; we remain in a supportive role. Because it affects their markets, it has to be led by industry. We're quite prepared to provide information and support. We will do everything from hosting visiting teams that come to check out forest practices . . . . We support them in non-tariff barriers -- any issues there -- and general market access and standards.

We are not adopting any one system. It is, after all, the choice of the company that wants to market to choose the system. We provide technical information with respect to the standards. So as the Canadian Council of Forest Ministers, when we meet, we look at criteria and indicators and provide this information and some research, as we can afford it, to be able to support industry's efforts.

G. Abbott: Hopefully, we'll be seeing some progress in that area. It is an important issue to the forest industry's future in British Columbia to work through those certification processes. I know it has been very frustrating for companies faced with the sometimes bewildering choices that are before them. I'm pleased that government is playing that role in attempting to expedite the certification process for companies in British Columbia.

I also have a couple of questions on expropriation and compensation issues. The most prominent issue in recent weeks, of course, has been the agreement between Macmillan Bloedel and the Ministry of Forests, or the government of British Columbia, around the valuation of M&B's claim for compensation due to the expropriation of land and cutting rights earlier this decade.

[1540]

The government has entered into a process, and one of my colleagues has some questions on that. I don't, but my question to the minister is this. I understand that there are at least one or two other compensation claims outstanding. I think that TimberWest is one. Perhaps there are others as well, but the minister can advise me on that. Can he advise me, as well, whether the model that is embodied in the MacMillan Bloedel compensation claim will be used in the resolution of other claims of this nature in the years ahead?

Hon. D. Zirnhelt: The M&B settlement agreement only provides a model in the sense that it's a process of how to evaluate the value of the rights -- not whether we settle in land or cash. It's only a model in terms of how we do the evaluation.

There are a number of other claims we're discussing with Atco, Slocan, West Fraser, Interfor and some of the companies affected by the Nisga'a treaty.

G. Abbott: So there is one claim ongoing in the Kootenay area with the four licensees that the minister mentioned. Is that claim unrelated to any treaty issue? Is that independent of the treaty process? Second, is there an issue with TimberWest, respecting their claim?

Hon. D. Zirnhelt: The TimberWest negotiations are not about major parks. It's about a voluntary acquisition for goal 2 areas -- the small parks that have been created. So it's not an expropriation compensation; it's a voluntary agreement. We mentioned the Nisga'a licensees. That's the only one that is ongoing, because that's the only place we have a treaty.

G. Abbott: The first part of my question was whether the Kootenay claim involving the four licensees -- I believe it was -- that the minister mentioned . . . . That one is unrelated to any treaty. Is it a matter of cutting rights or land for the creation of parks as well?

Hon. D. Zirnhelt: There are only two claims that we're dealing with in the Kootenays. They are Atco and Slocan, and they're for parks only.

J. Reid: There has been great concern and great interest on Vancouver Island about the compensation package that is

[ Page 13972 ]

under discussion for MacMillan Bloedel. I understand that the public meetings have been very well attended and that the presentations have been made with great feeling and sincerity. I know that the hearings aren't complete. My question is about the process that is being undertaken at this time. I'd like to know, on behalf of the people who are making presentations: what can we expect to come out of the hearing process?

Hon. D. Zirnhelt: The outcome of the process will be a report written by David Perry, who is conducting the consultations.

[1545]

J. Reid: Will all of the alternative suggestions that are being made at the hearings be part of that report?

Hon. D. Zirnhelt: Well, the Perry commission, if you will, is not going to present all the written submissions. He's taking oral submissions from people, and he has a transcript of the oral submissions.

J. Reid: I suppose my question, then, is: with the opportunity that people have had for creative problem-solving here and for looking at the situation, will the forthcoming report compile any of those suggestions and be presented in such a way that those of us who can't attend these hearings will get a good sense of any alternative suggestions that were made by the public?

Hon. D. Zirnhelt: Yes, the terms of reference that David Perry has are to report back on what he's heard. I have to assume that he will report those things that he hears.

J. Reid: Once the report has then come forward out of the public hearings, what would be the next stage in this process?

Hon. D. Zirnhelt: The report would form a part of the submission to cabinet for decisions. His report is an important part of the recommendations that would go forward to government, and then there would be some kind of an agreement-in-principle with the company on what the final deal would be.

J. Reid: Will there be any other opportunity for public input once that report goes forward? Will there be any other opportunities for the public to see the proposed final agreement and to have any input on that before a decision has been made?

Hon. D. Zirnhelt: There will be a complete report out on what the decision is. The opportunity for the public to comment . . . . Look, what we've put out here is a settlement agreement. It's been on the web site. It's been published. People have the information about the land management that would go on if some of these lands were to become company lands. So we've put the information out, and the comments should be based on the settlement agreement. People now have the opportunity to comment on the settlement agreement, and that input will be taken and be part of the considerations that government uses when it makes its decision.

J. Reid: Would the minister have a suggested time line that we are looking at for that decision to be made?

Hon. D. Zirnhelt: Yes, we expect a report in mid-July from Perry. And then the final decision, according to the settlement agreement, has to be made by the end of October.

J. Reid: I would request clarification from the minister as to a consideration in this potential compensation package, and that is with the Crown land that is . . . . Again, it's proposed; it's potentially a part of this package. Is harvesting taking place on this Crown land at this time?

[1550]

Hon. D. Zirnhelt: There is harvesting taking place on some of it. It's all in the timber supply area. All of this land does contribute to the cut, and we know that there is land that is in the operating areas of the small business program. None of these areas are candidates for parklands, so they're part of the working forest and as such are subject to cutting plans.

J. Reid: Would the minister be able to inform me how many companies might be involved in this small business program and could be influenced by this decision?

Hon. D. Zirnhelt: If this settlement agreement goes through, MacMillan Bloedel will maintain its commitment to the small business program.

J. Reid: Considering the importance of the small business program to local mills, local trucking, local business, that's very good news; there was considerable concern about that. And so the costs to Macmillan Bloedel, then, I would anticipate -- and this wasn't really made clear . . . . For the small businesses to continue operating, for Macmillan Bloedel to agree to their presence in this program, is there then . . . ? I guess the concern of these businesses is, even though the suggestion is that they'll be allowed to stay operating, will that be ongoing? Is there any direction there given to Macmillan Bloedel so that these companies have any long-term assurance?

Hon. D. Zirnhelt: The agreement and commitment from MacMillan Bloedel is up to ten years.

G. Abbott: We've had a good discussion, in the debate earlier on the forest resources

chapter of the Nisga'a agreement, about the process for determining compensation in that case, and I don't think we need to go into it now.

I just have a couple of questions on the future of Forest Renewal B.C., to wrap up these estimates. I can ask questions of a technical nature at the Select Standing Committee on Forests discussions, which are still ongoing, about the previous year's business plan for FRBC. But I want to ask a couple of questions. The government, presumably in concert with FRBC, made a decision to expend the reserves of FRBC over the next two business-plan years. Is the decision to expend those reserves reflective of anticipated changes in the mandate or delivery of Forest Renewal B.C. by this government two years hence?

Hon. D. Zirnhelt: No. The decision to use reserves was consistent with the long-term intention, which was that when there was less revenue, the reserves would be drawn down. There is no change in mandate for Forest Renewal. There is a refocusing of its priorities, but the mandate hasn't changed. It

[ Page 13973 ]

is to be expected that during the discussion of the long-term forest action plan, we will get a debate about the future of Forest Renewal.

G. Abbott: I didn't catch the last sentence of that explanation. Part of the forest action plan would be a debate around the future of Forest Renewal. Did I catch that right?

[1555]

Hon. D. Zirnhelt: I said, as we review forest policy changes, Forest Renewal will have to be part of those discussions. What is the future of Forest Renewal and the investment in silviculture, communities and so on? We can't look at forest policy without looking at the needs of communities, including first nations, and the need for environmental restoration, enhanced silviculture and basic silviculture. All of those things are part of forest policy in British Columbia.

G. Abbott: In Doug Smyth's report, he makes some reference to issues about the provision of silviculture in this province. He suggests on page 35, for example: "The B.C. Ministry of Forests must encourage the industry to practise intensive silviculture by setting up a trust fund account system, which should be financed out of current stumpage payments." He goes on to say: "Chapter 9, which deals with the Alberta forest resource improvement program, will deal with that proposal in greater detail." Actually, he looks on that system with some favour in

chapter 9.

Has the Ministry of Forests had an opportunity to evaluate the Alberta forest resource improvement program, which I understand is a dedicated or trust fund which licensees can draw on for silviculture purposes? Has the ministry evaluated that program and reviewed its application to British Columbia?

Hon. D. Zirnhelt: Well, we've had a look at it. We're well aware of it. It has some shortcomings. It's only there for those things that the industry feels it should do. Forest Renewal is all about having a broader say over what the revenues of the forest should be spent on. So it has a much more restrictive mandate.

Mr. Smyth suggests a trust fund that has on its board somebody from labour and a public interest person. We have a stakeholder board that governs the Forest Renewal funds, and it has a much broader representation from labour, communities, first nations and conservation groups. The notion of Forest Renewal is much broader than what is envisioned by Mr. Smyth -- or the Alberta people, for that matter. So it's quite a different concept. As I say, the mandate's much broader.

G. Abbott: In terms of this minister's and this government's expectations for the future of Forest Renewal in B.C., is it the expectation or the hope of this government that we will see, in the next five years of program delivery by FRBC, a far more streamlined delivery of that than we have seen in the first five years? Is that part of the program that this minister would like to see achieved?

Hon. D. Zirnhelt: Actually, significant streamlining has taken place. We've had a 40 percent reduction in the administrative costs, and we've had multi-year agreements in place now for . . . . That is the streamlining. There may be some consideration for existing regional structures to deal with the worker and community programs, so there may be some elements of further streamlining that may be achieved. Our objective is to streamline as much as possible, but I would say, substantially, that the biggest part of the streamlining has taken place.

G. Abbott: Has the ministry or FRBC completed its comparison of the relative cost, productivity, and so on of the delivery of silviculture programs -- a comparison between the coast region, particularly, and the interior?

Hon. D. Zirnhelt: No, it has not. We hope to have that work completed by the end of July.

G. Abbott: This is a matter that we discussed in last year's estimates. There was some hope of having that comparison, I think, last year. It's been a long time coming, and it is something that I would very much like to see. It's going to be difficult, for example, to approve, in good faith, last year's FRBC business plan when we still haven't seen those particular figures. I will look forward to receiving those as soon as possible, because I think they form an important element in decision-making for this organization. Does the minister wish to respond?

[1600]

Hon. D. Zirnhelt: The facts can be produced for '97-98 -- up to that year. But if you want to look at the costs since the introduction of NFO, that requires some months. The year only ended two months ago, so in one more month, we'll have a compilation. We couldn't provide the information last year, except for the pre-NFO era. For the post-NFO era, a very detailed report will be available at the end of July, and that's three months after the fiscal year-end.

G. Abbott: I'm not sure whether I got the comparison for '97-98. Is that something that's been provided to the select standing committee at this point? Actually, a nod would do -- if I can get an answer to that.

Hon. D. Zirnhelt: It hasn't, but we now have it, and it can be provided to you forthwith.

G. Abbott: Thank you, that would be appreciated.

That concludes my questions.

R. Thorpe: I ask leave to make an introduction.

Leave granted.

R. Thorpe: It's a real pleasure for me to have 44 students attending here today from Uplands Elementary School, together with Mr. Johnson, Ms. Long, other teachers and many parents. I would ask that this House please give these students, teachers and parents a very warm welcome to Victoria.

G. Abbott: I want to make a couple of closing comments here. I want to thank the minister and the minister's staff for answering the questions that I and my colleagues have posed to the minister and his staff over the past few days.

I do want to emphasize once again to the minister, as my parting advice here, that this minister has a unique oppor-

[ Page 13974 ]

tunity in terms of the future review of forest policy in British Columbia. We are at a unique juncture, I think, in our history in terms of new ideas and possibilities for putting those new ideas into place. I will again commend to the minister the notion of an independent and unbiased non-partisan professional process which, hopefully, can result in improvements to the forest policy framework in British Columbia. With that comment, I thank the minister for answering those questions.

Hon. D. Zirnhelt: I'd like to make a couple of comments to wrap up. Since much of what we do is answer questions, we haven't had a chance to pull some themes out. But I've sort of reviewed the questions.

I'd like to comment first on how much of our debate really has focused on what we call the old forest economy. At this time, we're focusing on that in this debate. It's a bit unfortunate. Nevertheless, we're doing it at a time when government has acknowledged the forest industry's high costs, when government has worked diligently and hard with industry to reduce costs, when job losses appear to have bottomed out, when positive market forces have enabled industry to return to profitability, when the psychology of the industry is turning positive and when we are seeing the end of the B.C. discount.

I would have thought the debate questions might have focused less on where we have been and more on the fundamental structural, long-term issues. But we will get to that. Some of those issues constrain us in moving towards a new forest economy.

We get lots of questions about interprovincial stumpage comparisons that don't mean much, and I've got on the record why they don't mean much. But now what's really important is that we understand that across-the-board stumpage reductions have not been requested by industry and are not in the cards, because we're in arbitration under the softwood lumber agreement. But if any of the members opposite know how we might do this without another arbitration, then I'm always open and pleased to hear suggestions along those lines.

[1605]

We were questioned about the cost of the identified wildlife strategy -- which is about an average of 3 cents a cubic metre -- when the industry, through increased market prices and cost reductions is better off by about $45 a cubic metre than it was a few years ago.

A second theme that we heard was a lack of overall detail about positive suggestions; that's gone on for a while. I replied with a suggestion about the results-based code, saying that instead of just saying it, we are open to suggestions at any time for how we might move in this direction. So the invitation's there to get specific on what a results-based code might look like. We're going to push forward. We recognize the code as an important part of forest policy in British Columbia. We recognize the huge economic, social and environmental benefits that the code has brought to us. Did it cost too much?

We said yes. Have we reduced the cost of the code? The answer is yes again. Is the government moving towards a performance-based code? Yes -- Bill 82, and we'll have a chance to debate that. We look forward to hearing the opposition's view of what a performance-based code might look like.

The final, third theme had to do with a reluctance on the part of the opposition to recognize that the government had a well-planned-out strategy that dealt with issues of forest communities and workers, with increased costs, with market access and with falloff in the Asian markets. In February '97 we formulated that strategy, and for over two years we've worked on it in conjunction with the industry.

So the strategy had three elements. The jobs and timber accord -- it's clear from the debate that opposition disagrees with that approach of setting forth some objectives. But this government has given its commitment to workers in communities. The second element was to address stumpage, and we worked on that carefully with industry. The stumpage benefits have been on a permanent basis -- $200 million a year for three years. The third element was to reduce code costs, which we've done.

While people continue to be critical of the accord, what they fail to acknowledge is that it was part of an overall strategy. The framework provided by the strategy created the discipline that joint government-industry work could be based on so that when markets turned around, we were better positioned for an overall lower-cost base. Our efforts didn't stop there. We developed the short-term forest action plan, the elements of which the opposition is familiar with.

We had questions and answers on many of these, including the market-based pricing system for the small business program so that we could increase sales. We implemented changes to improve the industry's cost position, and we introduced a mill closure review process that will protect workers and stabilize communities.

But we have to turn to the long term. As we have alluded to here, we want to look at the values that the public has for the forest out there. The expectations they have will be around excellence in forest management and around access to tenure for communities and first nations by moving up the value chain away from 2-by-4s -- in other words, moving away from a volume-based to a value-based forest economy -- and by fostering competitive and profitable sectors. Of course, we have to deal with market access, tenure issues, timber pricing and performance-based regulation, which are all part of the long term-forest policy review. With that, I'd like to wrap up my part of the estimates.

G. Abbott: I kind of anticipated that we would have a nice peaceful and graceful exit from the Forests estimates, but I can't, in good faith, allow the minister -- after I made a gracious departure from the estimates -- to come back and take some whacks at the opposition for not asking the questions that he thought should be asked in the estimates. I think we probably should expect to keep the estimates going for the rest of the afternoon, because the minister will obviously want to respond to what I have to say here.

[1610]

I was completely -- and hon. Chair, you remember this clearly . . . . I was very much interested in the future of forest policy in British Columbia. I tried to get from the minister a clear understanding of what this government had in mind in terms of reform of the forest policy framework, but for some reason, at that time, that was future policy, and he really couldn't tell us very much about what the government had in mind or what they were going to do. So after working at that for some time, we had to move on.

If this government is not going to talk about the future, we've got to talk about the past. I'm afraid that's part of the deal here. As Forests critic, I have never -- nor do I know of

[ Page 13975 ]

any of my colleagues who have -- been critical, as the minister suggests, of some of the changes that are contained in the forest action plan. I have always said that they are modest changes in the right direction. I've also said that in order to ensure that we have a forest industry that can survive and thrive in this province, we need far more substantial changes in the tax and regulatory framework in British Columbia than have been embraced by this government to date. Far more substantial changes are needed.

We talked about the softwood lumber agreement and the critical importance of that. Again, I don't think the minister wanted to spend the time on that particular future element that we would have liked.

We did talk about the jobs and timber accord.

An Hon. Member: What jobs and timber accord?

G. Abbott: What jobs and timber accord? This is clearly something that the government would like to forget, and I don't blame them, because the jobs and timber accord has been a complete failure. The jobs and timber accord is based on the completely fatuous notion that a government can sit down and, in an accord or an edict, say that they are going to create more forest jobs in British Columbia. Of course in the case of the jobs and timber accord, they said back in '96 and again in '97 that they were going to create 21,000 direct new forest jobs in British Columbia and close to that number in indirect jobs.

They said they were going to create roughly 41,000 jobs. What we've seen over the history of the accord -- and it's now three years and running -- is that just about as many jobs have been lost in the B.C. forest sector as the government anticipated they were going to create. It has been a complete and unmitigated disaster. I'm afraid that it's been a disaster because it was based on completely faulty premises.

[P. Calendino in the chair.]

This government never will create jobs by wishing the jobs to be created. Jobs will only be created in British Columbia because the investment community sees an opportunity to invest and to see a return on that investment, and consequently jobs are created. Without a return on investment, we won't see jobs created. The problem with this government is its reckless policy of continually adding regulatory and tax burdens on the B.C. forest industry over the past several years.

By continually adding to the burden that faces the B.C. forest industry, what we have seen are cumulative losses to the B.C. forest industry of something like $1.7 billion over the past three years. In the industry, the expectation is for perhaps a 10 percent return on capital investment. For three years running now . . . . We have seen substantial losses year after year after year in the B.C. forest industry, and there is nothing in the jobs and timber accord that is going to change that.

[1615]

Interjections.

G. Abbott: I see that we are reaching some consensus that perhaps the Forests minister and I have adequately ventilated some of these issues. I just want to be sure that we leave on the right note. I wouldn't want anyone watching to think that we agreed with the assessment that was provided by the Forests minister at the end of these estimates. I think that important issues have been canvassed here and that we have made some constructive suggestions towards improving the forest policy framework in British Columbia. We need to bring our costs and our regulatory structure into line so that we can be competitive and so that our B.C. forest industry can be number one again.

Vote 34 approved.

Vote 35: fire suppression, $77,845,000 -- approved.

Vote 52: Forest Practices Board, $5,220,000 -- approved.

Hon. J. MacPhail: I move that the committee rise, report resolutions and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

Committee of Supply B, having reported resolutions, was granted leave to sit again.

Hon. J. MacPhail: I call second reading of Bill 81.

REGULATORY IMPACT STATEMENT ACT

(second reading)

Hon. J. MacPhail: I move that the bill be now read a second time.

Bill 81 is a key component of the new approach to the way regulation in this province is developed and delivered. The guiding principle of this approach, and hence of Bill 81, is that regulatory policy decisions should be fully informed and transparent. Regulation of economic activity is necessary for achieving a wide range of important social, economic and environmental objectives; and good regulation has wide public support. However, we must also be sure that regulation is necessary, that it is effective and fair, that it does not impose unnecessary costs on the private sector and that government accounts publicly for how it regulates.

Bill 81 reflects our commitment to these principles. It requires that government establish policies and procedures to promote informed and accountable decision-making through the preparation, use and publication of regulatory impact statements, or RISs. The RIS is intended to publicly demonstrate that regulatory policy decisions are taken in the context of good public policy analysis. This will be a powerful incentive to ensure comprehensive, high-quality analysis.

As set out in the policy that I tabled at first reading, RIS requirements include defining the objective and the consideration and documentation of alternative ways of achieving the objective, analysis of the implications and impacts of different options and of the approach to consultation. The RISs for significant decisions must be published when the decision is announced. They will be placed on our streamlining web site or linked to that web site by the originating ministry, in addition to being made available in more conventional ways.

The RIS specifically requires that the implications and costs for business be examined and considered, but the analysis and consultation are not restricted to business implications and cannot be so restricted. The RIS is intended to help get

[ Page 13976 ]

regulation and its enforcement right by ensuring that decision-makers have information about the implications. We understand that regulatory policy decisions will always have implications for business, because they are about regulating economic activity. However, these decisions also have many other significant implications. Government needs information about all implications in order to make good decisions.

In other jurisdictions in Canada, governments have introduced similar programs for regulations made under their equivalent of our Regulations Act, but these programs do not apply to legislation or to administrative policy. We believe that that kind of approach misses significant regulatory policy decisions and would fall short of our goals to improve the regulatory system, to cut tape and to streamline government.

[1620]

Bill 81 ensures that all significant regulatory decisions will be subject to the new requirements. Regulatory policy decisions include regulations, legislation and administrative policy. Regulatory authorities include authorities that have power to make such decisions that is conferred by or under a provincial statute. That includes the WCB, ICBC and any other entity except for local government. In addition, Bill 81 provides authority to require by law that an RIS be prepared for regulations before they can be effective. This is consistent with Alberta and with some Australian states.

At the same time, the government must be able to govern. The RIS policy is a tool for good decision-making. No one would want it to be used as a weapon to limit the jurisdiction of the province or of any other regulatory authority. For these reasons, a privative clause has been included to ensure that this policy cannot be used in the courts to fetter a legitimate use of decision-making authority.

The policy is intended to operate through accountability rather than through the courts. By being transparent, government is inviting the public to hold it accountable. We fully expect that the opposition, the press, the media and the public at large will be effective in ensuring that we live up to the commitment we are making with this legislation.

Bill 81 provides for the appointment of a Business Task Force on Regulatory Impact. That task force will advise on the act and its policies and procedures, as well as any on other regulatory policy matter.

A very critical role will be to provide advice on which regulatory issues require the publication of an RIS. It would dilute the impact of this initiative and needlessly slow down government decision-making if every minor regulatory policy change needed to be accompanied by a published regulatory impact statement. So the Business Task Force on Regulatory Impact will review annual regulatory plans prepared by ministries and other authorities and provide us with independent advice about which initiatives should be subject to the public RIS requirements.

In addition, they will continue the work that was started by the current Business Task Force in promoting regulatory reform, reducing the cost of doing business and cutting red tape. Bill 81 responds to strong recommendations from the Business Task Force, and it is without precedent. It is also a recommendation from the business summit, which our government is following through on today. I would like to give credit to the Business Task Force members for their contribution and efforts toward improving the regulatory climate in this province.

R. Thorpe: Only in British Columbia and only by the NDP . . . . Legislation has to be brought in to do what's right and, as my colleague said earlier, to do what's smart. Progressive, successful and growing economies across Canada do not need legislation, as the minister pointed out. Alberta doesn't have legislation in this area; they just do it because it's the right thing to do, it's the smart thing to do. They're doing it, and their economy is growing.

[1625]

Of course, the challenge here is: is this government serious? Or is this just another announceable photo op? As we know, this government continues to reannounce and recycle announcements all of the time. It's sort of like the old government, in the way it operates, whether it be tax cuts or supposed tax cuts.

Now we have the RIS. It sort of reminds me of Wendy's. People now are asking: "Where is the beef?" People are tired of these things being announced and announced -- and being only photo ops. This government has been incompetent in drawing up and working with regulations. It's been incompetent in consulting with others.

When this government first announced on March 26 what it then called the business lens . . . . I quote from that government announcement of March 26: " . . . the government will begin immediately to act in the spirit and intent of the new approach" -- great words. But what really happened since that point in time? As of June 24, 36 bills have been introduced in this House. I challenge this government to table the regulatory impact studies it has done. This minister said that they were going to live with the intent and the spirit, from March 26. That just has not happened to date.

In the minister's very own Bill 80, which we'll be dealing with a little bit later -- the Liquor Statutes Amendment Act, 1999 -- there's no business lens, no regulatory impact studies. This government has to start to walk the talk. It's about credibility.

Of course, as we know, this government has no credibility with British Columbians today. A small business operator by the name of Barb Mowatt was quoted in the papers today on this. I'll quote, and I'm just going to have to change one of the words, because I think, hon. Speaker, that you would be a little bit concerned. So I'll just paraphrase here, but the intent is . . . . "I'll be the first one to call it a . . . " -- change the word to "mistake" -- "if it is." She went on to say: "I'm making sure there are no loopholes."

That is, everything is done in every ministry and every Crown corporation; that's what this government has alluded to British Columbians that it's going to do. British Columbians have had enough, and they're going to be watching. Of course, many of the task force members tried -- albeit unsuccessfully, but they did try -- to get a moratorium put on new regulations, pending the review of existing regulations. But the government's answer was a flat no.

The question is: who's going to champion this new approach within government? Is it going to be mandatory within each ministry? I don't have confidence that there's a person on that side of the House who is going to champion this and make sure that it's done in each and every ministry and Crown corporation in the province of British Columbia. Sooner or later they have to start walking the talk, or they'll just keep walking. I challenge the minister to table the implementation and the workplan with respect to the regulatory impact studies for the entire government, as well as the per-

[ Page 13977 ]

formance benchmarks and measurements, so that people can actually see what this government has said it's going to do and what it actually does. That's important.

Bill 81 is very diluted. In fact, it's been watered down from the minister's original statement and comments to British Columbians. This bill leaves huge loopholes for this government to do -- as the Forests minister has become famous for -- whatever it wants, whenever it wants. People will be watching, and I give these words of caution to the minister: be careful how many times you announce this bill and these regulations and how many special Kodak moments you take throughout British Columbia, because you're going to remind British Columbians that you cannot walk the talk.

[1630]

British Columbians want results now. They do not want to hear the NDP's favourite song, "Tomorrow." The minister has been challenged by those who create jobs and investment in British Columbia: the small, medium and large businesses and the many other groups and communities throughout British Columbia. Your government is going to be held accountable for this bill and for this regulatory impact statement. I personally, and on behalf of and along with other members of the opposition, will be watching at every stage to tell British Columbians what's really happening with respect to this bill.

The Speaker: Seeing no further speakers, I recognize the minister to close.

Hon. J. MacPhail: Interesting remarks from the opposition. Of course, what the opposition failed to note is that this was a request from the business summit, another one of the recommendations that our government has met, along with many others, to reduce taxes and cut red tape. Certainly our government has moved much further than any other government in ensuring that an independent group of business people will oversee this and have that legislative authority.

This bill is innovative and without precedent. It will move our government forward a long way in ensuring that we cut the cost of doing business but maintain a high standard of regulations in this province. With that, I move second reading of Bill 81.

Motion approved.

Bill 81, Regulatory Impact Statement Act, 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. J. MacPhail: I call second reading of Bill 71.

FINANCE AND CORPORATE RELATIONS

STATUTES AMENDMENT ACT, 1999

(second reading)

Hon. J. MacPhail: The Finance and Corporate Relations Statutes Amendment Act, 1999, amends several statutes in order to increase government efficiency and streamline regulatory burden. The amendments have been made through the suggestions of and in consultation with business, regulatory agencies and ministry staff. All of the amendments have been reviewed by the Business Task Force.

The act includes amendments to various taxation statutes. The consumption tax statutes are amended to authorize a seller who has paid a penalty to the province for failure to collect tax on a sale to sue the purchaser to recover the tax due. A housekeeping amendment is being made to the appeal provisions of the consumption tax statutes, to allow the minister to make changes to the interest charges or change the nature of an assessment under appeal.

To provide certainty for business, amendments are made to the Motor Fuel Tax Act to clarify the equipment and purposes eligible for using coloured fuel. Additionally, the Motor Fuel Tax Act and the Social Service Tax Act are amended to provide explicit authority for exempting fuel brought into the province in the supply tank of a ship, plane or non-commercial motor vehicle.

The Land Title Act and the Taxation (Rural Area) Act are amended to clarify Crown ownership and simplify administration of forfeited properties and to modernize the processes for making rural property tax payments and applications for some rural property tax relief benefits.

The bill also makes a number of streamlining changes to the Financial Institutions Act to assist financial services industry compliance, reduce enforcement problems and contribute to the administrative efficiency of the superintendent of financial institutions and the Insurance Council of British Columbia.

Those changes include the transfer of statutory disclosure requirements and exemptions to regulations under the act, in order to enable consolidation with other disclosure requirements and exemptions which have currently prescribed in the marketing of financial product regulation and in the insurance licensing exemption regulation. There's removal of the automatic stay of superintendent's orders where an appeal is filed with the Commercial Appeals Commission. Then there are several minor changes clarifying the role and responsibilities of the Insurance Council.

Overall, these changes provide policy flexibility to deal with the rapidly changing needs of the financial marketplace without compromising the integrity of the public protection safeguards against misconduct or unlicensed activity.

Two minor amendments are made to the Mutual Fire Insurance Companies Act and the Pacific Coast Fishermen's Mutual Marine Insurance Company Act, 1945; they will eliminate outdated restrictions imposed upon mutual fire insurers and the Pacific Coast Fishermen's Mutual Marine Insurance Company respectively. The provisions to be repealed, which predate the passage of the Financial Institutions Act, are unnecessary, given that the Financial Institutions Act provides the necessary level of regulation.

[1635]

The Partnership Act is amended to permit electronic filing of various declarations required under the Partnership Act from a one-stop business registration terminal, and to accommodate the use of electronic signatures.

Bill 71 also includes amendments to the Purchasing Commission Act. That will give the commission the powers to acquire services on behalf of ministries and government institutions. These will enable the commission staff to enter into direct negotiations with bidders for public sector service contracts and to sign final contracts on behalf of client ministries and government institutions. Those amendments will streamline the process for bidders on government services, as they will provide consistency throughout the solicitation,

[ Page 13978 ]

negotiation and contracting process. The amendments will also enable commission staff to act on behalf of multiple client ministries or government institutions in a single acquisition.

The bill amends the Real Estate Act to clarify the authority for allowing interest on money held by a real estate agent to be paid to tenants of rental property, as required under the Residential Tenancy Act. That will enable more practical administration of real estate agents' trust accounts and institute improved protection for tenants of rental property.

Finally, the Society Act is amended to allow the registrar to approve electronic and other forms of voting as may be determined to be appropriate in the future. A further housekeeping amendment is made to the act to remove an unnecessary requirement for the registrar to issue a society a changed certificate of incorporation if the society changes its purpose. An amendment is also made to allow societies to amend their bylaws to permit directors to participate in directors' meetings by telephone or other communications medium if all directors present at the meeting in person or electronically can communicate with each other.

The amendments contained in this bill will enhance government efficiency and streamline the regulatory frameworks of various sectors in a number of important ways. More efficient government procedures and streamlined but effective regulation will ultimately contribute to a better environment for investment and economic development in the province.

G. Farrell-Collins: I believe that Bill 71 is primarily a housekeeping bill, and I believe that the minister's comments accurately reflect the content of the bill. We'll discuss them further in committee stage.

Hon. J. MacPhail: I move second reading.

Motion approved.

Bill 71, Finance and Corporate Relations Statutes Amendment Act, 1999, 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. J. MacPhail: I call second reading of Bill 76.

HEALTH STATUTES AMENDMENT ACT, 1999

(second reading)

Hon. P. Priddy: I am pleased to have the opportunity to speak to second reading of Bill 76, the Health Statutes Amendment Act, 1999. This bill makes amendments to a number of health statutes, as well as some consequential amendments to other statutes -- first, the Mental Health Amendment Act, 1998, then the

Interpretation Act and the Patients Property Act. Last year the Mental Health Amendment Act, 1998, made a number of important changes to mental health legislation in support of the government's mental health plan. Bill 76 makes several minor corrections to last year's amending act, to the

Interpretation Act and to the Patients Property Act which will allow us to proceed with bringing all of last year's amendments into force at the earliest opportunity.

[1640]

During debate on the Mental Health Amendment Act, 1998, a floor amendment was proposed by the opposition and accepted by the government which removed the phrase "mentally disordered person" wherever it appears in the Mental Health Act and replaced it with the phrase "person with a mental disorder." It was later realized that this floor amendment created a requirement for minor consequential amendments to both the

Interpretation Act and the Mental Health Amendment Act,

Section 29 of the

Interpretation Act currently states that the phrases "mentally disordered person," "mentally incompetent person," "mentally ill person," "mentally retarded person" or "insane person," wherever they appear in another act, all mean "mentally disordered person" as defined in

section 1 of the Mental Health Act.

The phrase "mentally disordered person" appears in 25 other acts. If the amendments to the Mental Health Act are brought into force as enacted, then removal of the phrase "mentally disordered person" will result in the introduction of a large degree of legal uncertainty in the other acts and the loss of consistency across provincial statutes. Therefore

section 29 of the

Interpretation Act is being amended to ensure that "mentally disordered person" in all other statues means "person with a mental disorder," as defined in the Mental Health Act.

This bill also strengthens the protection of public health through a minor amendment to

section 11 of the Health Act.

Section 11 has authorized -- for many, many years, actually -- a medical health officer who's appointed under the act to order a person with a reportable communicable disease to comply with certain conditions, if the medical health officer believes that the person is likely to expose others to the disease wilfully, carelessly or because of inability to recognize the risk involved. If such an order is contravened, the medical health officer may, with the prior approval of the provincial health officer, charge the person by what is called laying an information. This results in the matter being brought before the courts.

Section 11 currently provides that only a medical health officer may lay an information. This

section is being amended to allow assistant and deputy medical health officers, in addition to what is current -- the medical health officers -- the power to lay an information. This power will not be available to any person except a properly appointed medical health officer or deputy or assistant medical health officer.

This amendment addresses the occasional situation where it comes to light that a person with an infectious disease is not complying with an order. If the medical health officer is unavailable to lay an information for some reason, the health of the person and the public may be put at risk unnecessarily because of the delay in enforcing the order. Authorizing assistant and deputy medical health officers to lay charges will help to ensure that urgent public health concerns are addressed as quickly and efficiently as possible, while minimizing the potential for infringement of any individual liberty rights.

Bill 76 also continues this government's work on modernizing the regulation of health professions, by providing for the repeal of the Naturopaths Act and the Psychologists Act. This is being done at the request of the governing bodies of those professions. In the future, both professions will be regulated under the Health Professions Act, which is the umbrella statute that provides a consistent and comprehensive legislative framework for health professions to be self-regulating.

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The act embodies the core principles of professional regulation that the government considers desirable or essential for a profession to be effectively regulated in the public interest. Naturopathy and psychology will join the 11 professions currently designated under the Health Professions Act. As well, several minor consequential amendments to other statutes accompany the repeal of these two acts, as well as some transitional provisions necessary to facilitate the move to regulation of both professions under the Health Professions Act.

Lastly, I think there is a piece in this about repealing obsolete legislation. As part of our continuing commitment to reduce red tape and streamline government operations, this bill repeals several very obsolete pieces of health legislation. A requirement in the Community Care Facility Act, dating back to 1974, which requires certain specific fire safety measures in smaller licensed facilities is being eliminated.

Fire safety standards and regulations under the act have developed to the point where the broad statutory requirement in the act is, in most cases, redundant and adds an unnecessary expense to facility construction when adequate alternative safety measures exist. The regulations under the act will continue to ensure that adequate fire safety protection measures are required in all licensed facilities.

Parallel requirements in the Health Act and the Hospital Act, both originating prior to 1948, that all regulations made by the Lieutenant-Governor-in-Council under each act must be laid before or presented to the Legislative Assembly are removed. These are unnecessary requirements, because all regulations must now be filed with the registrar of regulations and published under the Regulations Act before they come into force. This ensures that wide public notice of regulations, which is the intent behind the requirement to present them to this House, is accomplished.

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Section 41 of the Health Act provides that a municipal council may, subject to the approval of the Lieutenant-Governor-in-Council, appoint public health inspectors to enforce the act within the municipality. This power is now exercised by regional health boards and community health councils, instead of municipal councils, by virtue of a regulation under the Health Authorities Act. The amendment in this bill simply removes the requirement for the Lieutenant-Governor-in-Council's approval of public health inspector appointments.

The Hospital (Auxiliary) Act also originates prior to 1948 -- which means it originates prior to many people in this Legislature, or at least some significant number -- and is being repealed as obsolete. It provides for the establishment and administration of provincial auxiliary hospitals to provide care and treatment for persons who do not require acute care hospitalization but cannot be cared for properly at home. There are no facilities established under this act, and none are contemplated. Necessary services of this type are now provided under the authority of the Continuing Care Act and the Community Care Facility Act.

I am pleased to be able to present these amendments to the House. I move second reading of the bill.

C. Hansen: Certainly we don't have any difficulty with the provisions that are put forward in this piece of legislation. The Mental Health Act . . . . I think the amendments put forward by the opposition last year improved the bill -- certainly in the minds of those who have to deal with it on an ongoing basis. I find it very unfortunate, of course, that it has held up proclamation of that particular amendment last year. I hope, once this Bill 76 is passed and dealt with by this chamber, that we'll be able to get on with proclaiming those changes with full haste.

With regard to the changes to the Naturopaths Act and the Psychologists Act, certainly I concur with the minister that it is far more effective for government to be administering those professions under the Health Professions Act. I applaud the work that's been done by the naturopathic physicians and the psychologists in British Columbia to move towards a more modern system for self-regulation. I support that.

With regard to the Community Care Facility Act, the amendment that's being put forward is very minor. The only thing I wish is that we would be able to see a much more substantial overhaul of the Community Care Facility Act. It's certainly one piece of legislation that I think would serve the public much better if it were written and designed in a format that was more results-oriented, rather than prescriptive-based, as it is today. But we have no difficulty with the minor amendment that the minister is proposing. We'll certainly have more comments and questions when we get into committee stage on this.

Hon. P. Priddy: I thank the member for his comments. I move second reading of the Health Statutes Amendment Act, 1999.

Motion approved.

Bill 76, Health Statutes Amendment Act, 1999, 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. P. Ramsey: I call second reading of Bill 72, the Water Amendment Act, 1999.

WATER AMENDMENT ACT, 1999

(second reading)

Hon. C. McGregor: This bill implements two key changes with respect to the management of freshwater resources in the province. The first change enables an expedited process for issuing low-volume water licences for domestic and small agricultural purposes. The second change establishes a requirement for water licence holders to submit reports on their use of water when requested to do so. These changes reflect the government's efforts to ensure a balanced policy which permits streamlined efforts while protecting the natural environment.

Water and streams throughout the province are the property of the province. Persons who wish to divert and use this water for domestic, agricultural, industrial or other purposes can apply to the government for a water licence. Provided that the person complies with the terms of the licence and makes beneficial use of the water, their water rights continue indefinitely. Currently, about 42,000 water licences have been issued in British Columbia, for purposes such as power generation and irrigation. Almost half of these water licences are issued for domestic purposes, and yet these water users represent only a fraction of 1 percent of the total volume of water

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licensed in the province. Rather than directing so much effort towards small, limited water users, we need to focus more of our attention on the major users of water and their much greater potential environmental impact.

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The existing Water Act does not fully recognize that different processes for adjudicating different types of water licence applications are appropriate. Present requirements generally involve a thorough and detailed technical analysis of the proposed use, regardless of the size or the significance of the allocation. As a result, this process is time-consuming and not sufficiently flexible to account for the relative significance or lesser significance of the licence application. While an extremely thorough process is appropriate for complex applications with significant allocation issues, it is overly time-consuming for straightforward, low-risk applications.

It is not uncommon for applicants to have to wait considerable time for a licence or an amendment to their existing licence. This backlog is inconvenient for applicants and burdensome to staff, but more importantly, it impedes proper resource management and may frustrate timely economic development. Although quick licensing will be a more streamlined process, it will nonetheless include checks and balances that protect the environment and safeguard the rights of others.

To implement the process, water management officials will evaluate the streams in their area and consult with interested parties to determine where quick licensing should apply. This will allow the ministry to fully account for local circumstances when determining where quick licensing is appropriate. Quick licensing will only apply to streams where water is abundant and to low-volume licences for domestic and agricultural purposes.

In addition to the careful determination of where and when quick licensing will apply, there are several other constraints to ensure that the process is used responsibly. For example, the addition of a new landowner's permission requirement by the regulation will ensure that landowners directly affected by a quick licence have no objection to the construction of the works. A provision that establishes quick licensing will not apply on sensitive streams, designated under the Fish Protection Act.

If there are any concerns regarding an application or if the application does not contain all of the required information, there is a provision which redirects an application to the standard adjudication process.

The other amendments contained in this bill require all water licence holders to advise government whether they are using water in a manner specified within the licence.

Improved water use monitoring information will provide necessary data for licensing decisions and assist in meeting the expectations of the Fish Protection Act and the Forest Practices Code, both of which demand better knowledge of water use activities.

Hon. Speaker, I've summarized all of the provisions of this bill, and I now move second reading.

M. Coell: I'm pleased to hear the minister's detailed explanation of the changes, and I also thank her for her staff's briefing which was provided to members of the opposition. Indeed, these are minor amendments to the act, and in some respects it's unfortunate it can't be done through regulation rather than a change to the act, because I suspect it could have been done some years ago and been a benefit to people who use the services of the Water Act.

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I do have a number of questions for the minister during the committee stage of the bill. I guess the only comment I would have is that indeed I hope that we can -- and I may ask the minister for an amendment -- tie down the time frame for when a person applies for a licence and is issued one. I'll share that with the minister tomorrow or next time we sit.

Indeed, the backlog has been extensive. It's my hope, and the hope of the opposition, that this amendment will ease that backlog and allow people to apply for and receive licences in a timely fashion that will allow them to get on with their lives and their businesses.

Hon. C. McGregor: I appreciate the member's comments. I'm sure we'll have an opportunity to debate the specific provisions of the bill when we do committee stage.

I move second reading.

Motion approved.

Bill 72, Water Amendment Act, 1999, 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. P. Ramsey: I call second reading on Bill 86.

PARK AMENDMENT ACT, 1999

(second reading)

Hon. C. McGregor: I move that the bill now be read a second time.

Throughout this bill our province is once again demonstrating its international leadership in the establishment of protected areas. We in British Columbia have every right to take pride in what this bill will achieve. Parks forever preserve a representation of B.C.'s unique ecosystems by protecting an exceptional div