Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 10, 1997

Afternoon

Volume 5, Number 19

Part 1

[ Page 4143 ]

The House met at 2:06 p.m.

Hon. G. Clark: I have a school group that comes virtually every year, I think -- for the 11 years I've been a member of the Legislature. It's an honour for me to introduce kids from St. Joseph's School in my constituency; the principal Mr. Mike Boreham; the teachers, Ms. Irma Perreault and Mr. Fran�ois Pomerleau; and a parent, Mrs. Elaine Silva. So we have a group here of 30 grade 7 students from St. Joseph's, and I'd like all members to make them welcome.

W. Hartley: It's my pleasure to introduce four people who are very near and dear to me: my spouse Alice and our daughter Wallis; Alice's mother Mary Muir, from Paisley, Scotland; and my mother Betty Hartley, from Penticton. Please welcome them.

T. Stevenson: I'd like to introduce a constituent from Vancouver-Burrard who is over to visit for the day. Would the House please make Colin Simmons welcome.

B. Penner: It's my pleasure today to introduce Sandra Dyck, who is visiting British Columbia. She lives in Ottawa at the present time. In fact, we became friends about 26 years ago when I discovered that her family had the best sandbox on the street. Would the House please make her welcome.

G. Campbell: Today I would like not just to introduce Amanjit Pandher but to wish her a very happy birthday. She is a legislative intern who works with us. We're glad that she's been around this long, and we hope she'll be here for many years to come.

Oral Questions

B.C. TRANSIT EMPLOYEE ABSENTEEISM

G. Campbell: As the minister responsible for Transit may know, I once sat on the B.C. Transit board. Many times, as members of the board, we raised the issue of Transit's absentee policy. Unfortunately, successive ministers prohibited real action from taking place with regard to that. The Premier then hired Frank Dixon to deal with this very real problem. Unfortunately, when Mr. Dixon decided to deal with the problem, he was promptly fired by the Premier, at a cost to the taxpayers of British Columbia of $500,000.

According to the minister yesterday, things have got worse. Today, absenteeism is costing Transit users $15 million. That represents a doubling of the costs for absenteeism. My question to the minister responsible for Transit is: will the minister confirm today that it was the previous minister, the Premier, who was responsible for the doubling of absentee costs in the Transit system?

Hon. J. MacPhail: It's interesting that the following fact has been overlooked in the whole debate around the cost of absenteeism. The employees of the Transit system actually pay a great portion of the absenteeism costs themselves. The long-term disability portion of absenteeism is 100 percent funded out of the employees' own pockets, costing the several thousand employees over $3 million per year.

There is no question that the absenteeism rate has increased. There is no question that management has been attempting to deal with this over the last years. There is no question that not only this government but the previous administration and the administration before that identified a culture that contributes to high absenteeism. Frankly, now that we actually have a solution in place -- an absenteeism management plan that is very, very severe -- I think it's not only important for the management of the corporation to pay attention and enforce that, it's also important for the workers themselves, who will actually benefit by more take-home pay once the absenteeism is reduced.

G. Campbell: I read the minister's estimates briefing note prior to coming to the House, and she comments on a number of important issues. However, the point is that Mr. Corrigan and other appointments of this government have said they were going to deal with Transit absenteeism in the past. We've watched as the cost of absenteeism has doubled.

When the Premier hired Frank Dixon, he told Mr. Dixon it was time to get tough -- very similar to what we're hearing from this minister today with regard to absenteeism. Mr. Dixon made the understandable mistake of actually believing the Premier when the Premier told him to get tough. However, as soon as he started to deal with the problem, the Premier wrongfully dismissed Mr. Dixon and removed him from his job. Under the management of B.C. Transit's amateurs, absenteeism has skyrocketed; it has doubled in the last couple of years. That, again, is in the minister's briefing note.

My question to the minister today is: will the minister agree that firing Mr. Dixon was a big mistake, and that Transit has been on the wrong track ever since?

The Speaker: The Leader of the Opposition.

G. Campbell: Perhaps the minister will answer this question. Absenteeism has been a problem in Transit for some time. The minister has referred to Mr. Corrigan. Mr. Corrigan came to this House two years ago and told Members of the Legislative Assembly that -- surprise of surprises -- there's a plan to attack absenteeism and to deal with what he called the dysfunctional management-labour relationship. Since he made that announcement, absenteeism costs have doubled in the Transit system.

My question to the minister is: why should any Transit user think that this government is truly going to deal with absenteeism instead of watching its costs go up and services go down in the B.C. Transit system?

Hon. J. MacPhail: Since we're having a history lesson here today, let's be very clear about the history of this. The collective agreement that negotiated for two absenteeisms of up to five days a year was negotiated when that member opposite was on the B.C. Transit board. So let's make sure we have the history clear.

It's all very well and good to stand up in this Legislature and throw around information about whether things have doubled or not. We are dealing with the problem. We have an absenteeism management system in place. It is a serious problem. There is no question that I have admitted that this is a serious problem. We are tackling it and we're getting on with it.

B.C. TRANSIT BUS DRIVER CONTRACT

D. Symons: It's interesting listening to that answer, because indeed it's the same contract that was in place two years ago that is creating these problems -- and we've doubled . . . the same plan this government has for attacking the problem.

[ Page 4144 ]

The collective agreement between the bus drivers and B.C. Transit is silent when it comes to providing a doctor's certificate for calling in sick. In fact, it appears that drivers can call in sick virtually indefinitely without any verification of illness.

Will the minister tell us if she approves of this contract provision in light of the fact that most contracts in the private sector require some proof of illness after the first few days of absence?

Hon. J. MacPhail: Well, again, maybe he could find out from his own leader why that occurred and why that collective agreement was negotiated. Certainly he has better information on that historical perspective than I do.

But frankly, you know . . .

Interjections.

The Speaker: Order, members. Members, please. Order!

Hon. J. MacPhail: . . . if we need to use question period to do collective bargaining, we're going to have to change the rules of question period.

[2:15]

D. Symons: I should remind the hon. minister that the hon. leader of the Liberal Party hasn't been on that board since 1990. This government has been in effect since 1991, and they've done little about it. The Transit board is often dominated by appointees from the government . . .

The Speaker: Member, could we have a question.

D. Symons: . . . so the board often doesn't have control over these.

We understand that B.C. Transit has something called a "spare board," which is a roster of spare drivers who are paid to show up at morning and afternoon roll call and fill in for any drivers that call in sick. With this setup, spare-board drivers -- most of whom are high on the seniority list -- are guaranteed an annual salary of as much as $60,000 to $70,000 a year. Can the minister responsible for B.C. Transit tell us whether she agrees with Transit paying top wages to drivers, some of whom seldom get behind the wheel?

Hon. J. MacPhail: Again, hon. Speaker, we on the government side rise day after day to listen to the opposition attack working people. Really, they attack health care workers; they attack Transit workers; they attack forestry workers; they attack nurses. This is just another example of them attacking Transit workers and doing it in such a way that they actually want to change the terms of their collective agreement. Well, I can understand why Transit workers said no to the Liberal opposition in the last election.

There is an issue in transit systems across North America . . .

Interjections.

The Speaker: Please proceed.

Hon. J. MacPhail: . . . that there is a split-shift system required because of the delivery of service in peak hours. Probably because no one on the other side takes a bus, they're not aware that there are peak hours of service. That requires a sustained length of service, during which there has to be a spare board to compensate for that.

It's a very complex matter. I have already admitted that the spare-board system examined by the auditor general needs to be brought into the twenty-first century. The corporation has already started to do that and will continue to do that.

FORT ST. JOHN AMBULANCE SERVICE

R. Neufeld: My question is to the Minister of Health. I guess it's your day today.

Last week the minister bragged about how well her new Fort St. John ambulance service was working. I wonder if she has read the recent report by RCMP constables Brown and Rusk, which explains how it took her new ambulance service almost three hours to respond to a reported heart attack that took the life of a local resident.

The ambulance service and the RCMP received the call at 2300 hours. Here's what the officers wrote in their report:

"What is of concern here is that the deceased had been lying on the floor since 2230 hours. We arrived at 0021, conducted our investigation and sat around and waited another hour and 20 minutes before the coroner arrived, before we took matters into our own hands. There was no indication how much longer we would have had to wait for the ambulance. After we had loaded the deceased, we finally got a call from the ambulance saying they were three miles away. We departed the scene and travelled over five miles before we met them, and ignored them, transporting the deceased ourselves."

How does the minister respond to this quote from the official police report, and what steps has she taken to investigate the matter?

Hon. J. MacPhail: Yes, we have investigated this incident. Certainly human error took place on that day. There was a transfer of information that needed to be done in terms of up-to-date maps. There was also a geographic orientation for new crew members that had not been properly carried out. Yes, we have investigated that.

I would also like to say that my fullest sympathies are extended to the family. The family has made it clear that they don't wish this matter to be made public, as well, so I hope the member will take that under advisement.

Since that time, all crews have up-to-date maps, and the geographic orientations for crew members have been doubled.

R. Neufeld: Well, the minister is on another issue. I'll be asking a further question about poor ambulance service. You got it out of the Alaska Highway News , but that relates to a totally different issue.

Hon. J. MacPhail: No, it doesn't.

R. Neufeld: Yes, it does -- a totally different issue.

But the minister also claimed that there have been no complaints. She said that three times before on questions about the Fort St. John ambulance service. Cpl. Brown answers that self-serving claim from the minister:

"I recently read . . . and have heard . . . how the current ambulance staff has improved service and there have been no complaints . . . . Everything is not as good as some people

[ Page 4145 ]

would like others to think . . . . If this type of service is what we can expect, we will either be back to the transporting of injured like in the good old days, or we are going to be named in a few civil suits."

Given this damning indictment of the new Fort St. John ambulance service, what actions has the minister taken to remedy the problems that she has caused?

Hon. J. MacPhail: The community of Fort St. John has known since 1974 that the B.C. Ambulance Service is legislated, under the act that was brought in in 1974, as a provincial service. The Fort St. John community has also known since 1990 -- under the previous, Social Credit government -- that there was an industrial inquiry commission that ordered all ambulance services to be transferred from fire departments to the B.C. Ambulance Service. We've been working with the community since then.

This hon. member also knows that the fire department has room for one ambulance. There are three ambulance bays required for the ambulance service there. There is also no room for the crew there. The fire department couldn't offer that to the crew. So we are working as best we can . . . .

Interjection.

Hon. J. MacPhail: Clearly the hon. member doesn't like it when the facts are presented to him.

We are working to put in place a proper ambulance depot there. It will be leased or whatever is most cost-efficient for taxpayers. But the fire department does not have the room for the ambulance service. In terms of if the hon. member is . . . .

The Speaker: Thank you, minister. I think we have indeed canvassed the question.

B.C. TRANSIT BUS DRIVER CONTRACT

R. Coleman: My question is to the minister responsible for Transit. And I must tell you that I do take transit, unlike the previous chairman of B.C. Transit, who had a nice Saab to drive around in.

The collective agreement between B.C. Transit . . .

Interjections.

The Speaker: Order, members. I do want to hear this.

R. Coleman: . . . and the bus drivers' union must be the envy of NDP-friendly unions everywhere. It allows drivers to show up for work late, sign on as a spare and get paid a full day's work even if they don't get behind the wheel. The contract also says that if a driver is called in on a scheduled day off, they receive time and a half for the first seven hours, over double time for the next three hours and triple time for everything after that.

Will the minister agree that these provisions are outrageous and must be changed?

Hon. J. MacPhail: I'll tell you that in my former life I had trouble with every collective agreement that the previous, Social Credit administration negotiated -- which is exactly what that collective agreement was. The whole industry is an industry that has to cope with the scheduling problems of a transit system that has peak hours. The collective agreement deals with those situations. Does the collective agreement need to be modernized? That's exactly what the auditor general recommended. When this collective agreement expires, I expect that those issues will be addressed by both the union and management.

The Speaker: The bell terminates question period.

Reports from Committees

F. Gingell: I have the honour to present the second report of the Select Standing Committee on Public Accounts for the first session of the thirty-sixth parliament. I move that the report be taken as read and received.

Motion approved.

F. Gingell: I ask leave of the House to suspend the rules to permit the moving of a motion to adopt the report.

Leave granted.

F. Gingell: I move that the report be adopted, and if I may, I'd like to add one other word.

In my opening remarks, I asked that the report be taken as read and received. I would like all members of the House to ignore that. I'd like all of you to take it home with you tonight and read it this evening, because you'll be tested on it tomorrow. [Laughter.]

Motion approved.

G. Campbell: I rise on a sad note. I'm sure that we are all aware of the fact that yesterday a Canadian vessel was floundering in the Pacific, and it was the American Coast Guard that went out to retrieve and save a number of Canadians. Unfortunately, in doing that, four people apparently have lost their lives. I think it would be appropriate, as these were Canadians -- British Columbia citizens -- that we send our condolences to the families of the Coast Guard members who did unfortunately perish.

The Speaker: I think that that's an excellent suggestion, and I will be happy to do that on behalf of the House.

Orders of the Day

Hon. J. MacPhail: I call Committee of Supply in Committee A, and for the benefit of the members of the Legislature, we will be debating the estimates of the Ministry of Small Business, Tourism and Culture. In this House, I call Committee of Supply to debate estimates. For the information of the Legislature, we'll be debating the estimates of the Ministry of Employment and Investment.

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

ESTIMATES: MINISTRY OF EMPLOYMENT

AND INVESTMENT

(continued)

On vote 24: minister's office, $374,000 (continued).

D. Jarvis: Prior to the lunch hour we were talking about Mining Jobs 2000, although I must admit that prior to that,

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I had been talking about the fish that were in the lakes. I'm always surprised at who watches us on TV, and when I got to my office, I had a fax. So I have to make an apology, I guess. It says: "We, the members of the Mating Bulltrout Protection Coalition, wish to protest the member's remarks during the estimates with respect to the value of this exceptional specy and, more importantly, of its offspring." So I apologize to anyone who felt that I insulted bulltrout.

[2:30]

Interjection.

D. Jarvis: It may have been written by lake water; I'm not too sure.

Nevertheless, I want to go back . . . . We had been talking about mineral tenure, but I want to go into what they call step 3, the creation of a competitive tax structure, and ask if the minister has done any studies. He did mention the corporation capital tax and everyone saying: "Cut the corporation capital tax; cut it, cut it, cut it." I tend to agree with them. In fact, I think it is impairing the investment and development of this province. Has the minister done any studies on the impact of the corporation capital tax on investment and, more specifically, on mining itself?

Hon. D. Miller: No. Nor do I think that you could, in a . . . . You can't do an isolated study on the impact of a single part of your tax regime. You have to look at the broad base of not only a tax regime but other issues that have some impact on investment. As I outlined in some of our previous discussion, we are addressing a number of issues that were brought forward from the mining sector. We have three tables. One of those is looking at taxation-type questions. As I indicated in my previous response, I have also asked the industry, in a creative way, to look at tax.

Quite frankly, the easiest solution that some people come to when looking at impediments is to say: "Well, if we didn't have this tax issue, life would be the way it ought to be." I don't subscribe to that notion absolutely. I think you have to be competitive overall, over the broad base of issues and conditions that have an impact on investment. We are doing some studies -- looking at the oil and gas sector -- in terms of competitiveness. We've got a table with the mining sector, and we've thrown out a bit of a challenge to them.

If all I ever hear is, "Well, cut my taxes," then I don't think we're going to get very far. If we look at the tax system in a creative way and try to determine where there may be some ways to utilize the tax system that produces defined benefits into the future, which expands our GDP and creates new jobs, then that's something I'm interested in discussing with them.

D. Jarvis: I agree that you can't go around and say that we're going to cut taxes, but I think the complaints are really pertaining more to the non-profit-related taxes. That is discouraging, and I think the minister is fully aware that it is a cause for concern for foreign investors coming into this country, or for Canadians or British Columbians to invest, knowing that as soon as they bring any assets here, this government immediately taxes them, whether they're making a profit or not. So that has to be a discouraging word. Does the minister therefore see a need for reform in non-profit-related taxation?

Hon. D. Miller: Again, I don't really want to get into a debate with respect to a tax that is described as sort of a non-profit-based tax versus other types of tax. Relative to the tax structure, as the member might well know, part of our broad issue in Canada is that ordinary working people somehow feel -- with some justification, in my view -- that while their taxes . . . . There's no ability for the kinds of deductions that flow to some sectors on the business side. High-paid workers -- and we like high-paid jobs in British Columbia -- pay . . . . In a relative sense, working people pay taxes.

If you make a lot of money and if you're an hourly paid worker, you pay a pretty hefty tax bill. If the tax base is somehow -- after all of these deductions; pages and pages . . . . If you have to take the pay at the end of that to pay taxes on the "profits . . . . " Sometimes there aren't any profits to tax, because they've been written down. The mining industry pays $7 million annually in taxes under the corporation capital tax on gross receipts of . . . .

Direct tax payments are $235 million; $7 million of that is corporation capital taxes -- in the scheme of things, hardly the deal-breaker with respect to mining investment.

There are many other issues that I consider far more important: the investment climate, the regulatory regime -- those kinds of things -- and we are engaged with the sector in trying to examine those questions.

D. Jarvis: While there is, as you say . . . . In the more important scheme of things, the industry doesn't feel that way. You know yourself that they feel they are paying an excessive amount of tax for what there is. The only reason you're going to get more taxes down the line . . . . It's going to be higher and higher, the more mines that you develop -- hopefully, anyway.

In the development of an efficient permitting system, what are you doing about reducing the amount of time it takes, for example, in the environmental assessment programs? Is the ministry looking at reducing that time factor to any degree? In what ways are they trying to improve it that would speed it up?

Hon. D. Miller: Responsibility for that does rest with my colleague the Minister of Environment, the land use coordination office and the environmental assessment process. I participate to the degree that as a minister responsible for some development -- particularly in energy and mines -- I'm a cosignatore. That's the way the system works. It could be another minister on a different type of project, but the system itself is under the purview of my colleague.

In response to earlier questions, I did say that we are always examining our processes to ensure that they are the least possible bureaucratic -- hence the announcement on the changes to the Forest Practices Code. That is also the prevailing view with respect to environmental assessment. We don't want it to be overbureaucratic; we don't want it to be overcostly; we don't want it to be something that's not timely. I think we have permitted some developments in this province in a pretty timely way.

I recall that the Huckleberry mine project, which will open this year, received permitting approval from British Columbia and had to sit and wait to get permitting approval from Canada. In fact, things got so bad that the Canadian ambassador in Japan, Mr. Campbell, wrote a letter to the current federal Minister of Natural Resources, Anne McLellan, urging her to intervene to grant a permit so that they could proceed with the development of the Huckleberry project.

So I think in that instance we compared more than favourably with the Canadian process, and we will continue to strive to be as efficient and timely as possible.

[ Page 4147 ]

D. Jarvis: I want to look at one of the aspects of that: the native land claims. Has the ministry developed any interim agreements for the mining development with the pending land claims that may be coming up?

Hon. D. Miller: No, the Nis g a'a agreement is, I would hope, close to completion. There is an agreement-in-principle in that instance. Where we entered formal negotiations there were some interim agreements, but I'm not aware of others. We do try to encourage their development which I did speak at length on this earlier this morning. We do try to encourage both capacity-building and the ability of first nations to participate. We do encourage the development of relationships between the private sector and aboriginal groups, because we can clearly see the benefits when we look at some of those that have been successful -- for example, Eskay Creek in the Tahltans.

D. Jarvis: The ministry is not developing any specific type of an interim agreement that would occur if an aboriginal claim did impact on a mining tenure or something like that. Are you leaving that up to the individual mines to sort out themselves? Or is the ministry trying to help to create some type of an agreement?

Hon. D. Miller: Through the negotiating process. In other words, if the province and the federal government are in formal treaty negotiations with a first nation, it is possible that interim measures will be produced by that negotiation. There weren't any, to my recollection, in the Nis g a'a process that primarily impacted on forestry. I'm not aware of any that currently have any impact at all on mining.

D. Jarvis: I was wondering if the minister could discuss -- I know perhaps it may all deal with B.C. Hydro -- what he has been doing to use low-cost energy resources as an advantage to stimulate development. He did mention that there was power coming from the Columbia River in the treaty coming up in 1998. But I guess the industrial community is the biggest customer of B.C. Hydro, and it costs them, I don't know . . . . I think it is up around $86,000 -- or is it $86 million? -- that Highland Valley is paying in hydro costs. You wonder.

With all the initiatives and everything that came forth a year or so ago, if this continues on, it's cutting into a lot of wealth and a lot of future taxation for people going to come in. This is not something that makes people who want to come in and do business in this province happy. Can you . . . ?

Hon. D. Miller: We certainly enjoy, and have enjoyed historically, a distinct advantage in terms of the availability of relatively low-cost power within British Columbia. And that advantage, by the way, will continue over time. Right now and in the recent past there has been a glut of energy on the market. That has resulted in the available market price being lower than Hydro's pricing. I think Hydro has responded in a positive way by offering real-time pricing, RTP, for industrials, and some have taken advantage of that.

Low-cost power -- because primarily our power in B.C. is developed through hydroelectric generation -- has been a distinct advantage for many, many years. Industries that have located in this province have enjoyed, relative to other jurisdictions, very low-cost power indeed. People shouldn't lose sight of that because there happens to be a glut of power and market pricing is much lower than it ordinarily is or used to be.

But I did say, again in response to earlier questions, that we are developing policy. We will see the return of 1,400 megawatts of power back into British Columbia. The public should be aware that some British Columbians in the Kootenays paid a heavy price back in the fifties for the development of that power. They saw their lands flooded, and people saw their homes taken away. That had a dramatic impact in that region of the province.

Now that we have that power coming back or being returned to us under the Columbia River Treaty . . . . And I might add that it's a very good deal. We've got the return of the 1,400 megawatts starting in 1998, with no cost to B.C. The obligation under the agreement we've negotiated . . . . I think it is a good agreement. It's been examined by those outside of government in the energy field. They've described it as a good agreement. We'll see that 1,400 megawatts returned to the border, with no transmission costs from the point of origin. That means that we have the opportunity to utilize that power for jobs, if you like. That's an entitlement of the people of this province.

We previously reached an agreement with the Columbia Basin Trust to transfer cash to the Columbia basin, the region that had the real personal impact of the construction of those dams and facilities in the fifties. They are currently engaged in trying to look at economic stimulation of their region, and that's proceeding well, I think. So when we're ready, we will be able to announce a significant package that will be available both for some of the existing industries and the new entrants to the B.C. marketplace. We think it's important to utilize that power to create jobs and economic benefits in our province.

[2:45]

D. Jarvis: Well, it's not necessarily that our industry here is getting cheap power. We're getting into the energy end of it, and I don't want to get into that right now. But let's face it, this government is selling power cheaper to the Yankees across the border than they are to our own consumers in this province. So you can't say that it's that cheap. But I was referring to something like Mount Milligan, which is going to come on stream probably next year or the year after possibly, and places like that. Is your ministry, as an advocate for mining, actually making an application for perhaps Hydro to, you know, give them a break in some way while they come on stream?

Hon. D. Miller: We currently are developing that policy, and I don't want to give too much away with respect to that. But clearly the opportunity to use that power to advance the . . . . Not to fundamentally alter the economics. In other words, if a project comes forward, it has to have good, basic economics. You would be foolish, in my view, to use power to subsidize the development of something that in the long term is not economic. That's the real trick in terms of how you apply any available power. There are many questions that have to be worked out in terms of pricing.

The member is right: we do export surplus power. We do have a hydro system. That means that at certain periods of the year there could be excess water flows into our storage reservoirs. That means that our generation facilities, our turbines, are capable of generating more power than we need inside British Columbia. What we do in that case is take what we call surplus power and we export it. I believe we generated about -- what? -- $150 million in cash back into our province by exporting that peak power.

[ Page 4148 ]

Now, it's not firm power in terms of delivery, in terms of load, but certainly Powerex, which is the export agency or arm of Hydro, has been very successful in terms of some of the marketing of surplus power -- the Intalco deal in Washington State. We recently concluded an agreement in Mexico. So we are exporting.

But it's important that the public understand that the surplus power we export comes about because we have hydro systems. If you get heavy rainfall -- a big snow melt, all those kinds of things -- you've got more water in your reservoir than you need or should have. Then, rather than just spilling it . . . . We do manage our systems for fish values, for flooding -- all of those kinds of things -- but if we can generate excess power and export that and bring that money back into B.C., then we do that.

D. Jarvis: Of course, we could create more if we got into a larger cogeneration policy and plan -- or opened it up a bit. Nevertheless, as I said, that's another subject.

I want to ask the minister . . . . We talked earlier about streamlining regulations. What has the ministry been doing with regards to streamlining the regulations for the mining industry in general?

Hon. D. Miller: I did earlier speak of the mining code, which I hope will be finalized reasonably soon. I did speak of the three tables we've got with the Mining Association dealing with a number of issues -- taxation and others. Our ongoing desire is to reduce the regulatory burden but maintain standards.

In fact, I was handed a copy of the May 1997 "Lynch Report on B.C. Politics" earlier today. I hadn't seen it prior to today, and I must say I was delighted in terms of the kind of work that our ministry is doing. The headline on page 1 is: "The Mining Industry" -- if I could say my own name; well, maybe I won't -- "[and me] Work on Jobs Projects." Throughout the

article . . . . "Let's Go -- and Go First-Class -- Ahead with Gambling." No, that's a different topic.

"Trucking Industry to be Freed from Regulations by '98." You can see the Ministry of Transportation and Highways is busily engaged.

Here's an article: "It's Time to Stop Risking Mining's Future in B.C.: Investment Minister . . . seems open to removing the barriers stalling this industry. Clarity around rules. A recognition that mining companies have a choice about where they invest . . . . " There are others: "Alberta and B.C. to Tackle Northern Transport Woes"; "Quintette, Bullmoose Deal in Northeast Coal"; "Elk Falls Power Plant Clears Hurdle: a $225 million power plant project for Elk Falls has moved a step closer to construction" -- announced the Minister of Employment and Investment.

So there's some reasonably good news out there. I'm never satisfied; it's never good enough. We've got to continue to make progress, but some of the outside reporters seem to think that there's some movement that's noteworthy.

D. Jarvis: Surely the minister knows by now that you can't believe everything you read. You even mentioned Elk Falls, and I happen to know that things aren't all rosy at Elk Falls, either, right at the moment.

When we're talking about streamlining regulations . . . . You did have some talks, I understand, with federal Natural Resources Minister McLellan. I was asking: did you ever get together to talk about harmonization? And if so, what was said? The minister is shaking his head, saying they never got together, so I assume that nothing has occurred.

Hon. D. Miller: No, we do have an agreement. I did say that earlier. The record will show that I did say we do have an agreement with the federal government on a single process. I talked about some of the difficulties still inherent there. Although I did try to arrange a meeting with the federal minister, Ms. McLellan, it never did happen. I guess she was busy, and it's a big country. Now I read in the speculation pieces that she would like a different portfolio. But I guess tomorrow will tell: I think the federal cabinet is being named tomorrow.

Just going back to the regulatory reform. I did mention the mineral exploration code; the reform of placer mining regulations to ensure that responsible placer mining can continue while ensuring that fish habitat is not jeopardized; revised road regulations pursuant to the Forest Act and the Forest Practices Code to allow off-mineral claim activities, in a fashion similar to oil and gas, to be permitted by the ministry responsible for mining. I did talk at length in a general way about providing input to the Environmental Assessment Act audit process, and reviewing the Mines Act for possible changes. So we are looking across the piece at regulation and how we can improve.

D. Jarvis: I want to ask a few questions about the mineral tenure audit. There doesn't seem to have been much done on that. I've got an FOI here, but it came back with a lot of blanks in the recommendation end of it. I was wondering if the minister could answer a few questions and talk about some major issues discussed in this audit -- namely, the system for reconciliation.

Hon. D. Miller: We may have some material, but I'm not certain we do have material with respect to that audit. My recollection -- the auditor general's audit, I presume, is what the member is talking about -- is that the branch was audited and came off fairly favourably.

D. Jarvis: No, this was the comptroller general's audit on the mineral titles branch. I want to know some of the specifics about it, because it mentions different things. I want to know about the loss of interest income.

Hon. D. Miller: As I indicated, I understand that the audit was done; the branch came off quite favourably. There were some follow-up issues. We'd be happy to provide all the reports in terms of the ministry's response back to the auditor general. But no real problem areas were identified. I think maybe there were some routine issues. Beyond that, the results of the audit were favourable to the branch.

[ Page 4149 ]

Hon. D. Miller: I've got officials watching, so if there is specific detailed information, maybe they can bring it in while we're discussing this. I apologize for not having it. I understand that the loss of interest income is really an issue of when deposits are made with the ministry. A very slight time delay sometimes occurred in the transfer to the CRF, and that's being resolved. But I must repeat that it was very minor.

Secondly, I'm also the minister responsible for freedom of information. I sometimes think that maybe just asking my officials if certain documents are available, as the first course, might be preferable. If you think you're hitting a wall, well, fair enough; that's what FOI is there for. The problem with FOI is that under certain rules, you might indeed get documents that are blanked out. My assistant deputy minister would be happy to meet with you, and if we can give you unblanked copies, he'd be happy to do that, really.

Interjection.

Hon. D. Miller: Well, I don't know. I do know that FOI is costing the citizens of this province a heck of a lot of money -- in the millions and millions and millions of dollars. I think it's important to have FOI as a protection for citizens against government. I do have some views about its utilization as a research tool for the opposition and the media, but that's not for discussion right now.

[3:00]

D. Jarvis: I want to ask some more questions on mining before we go into energy, but I've been called out for a few minutes. I wonder if it would be in order if I excused myself for a while and then came back and entered into mining. The questions I have left are pretty straightforward and jump from subject to subject. The member for Peace River North would like to discuss some aspects of energy with the minister.

R. Neufeld: I don't have a lot of questions, but they deal mainly with the energy industry in my constituency. We also have some questions on Hydro, but I guess we'll be getting to those later on.

Mining has been covered well by the Liberal critic. I just wonder what's happening with the Cassiar mine. I understand that there's still something happening in the Cassiar, where there could be some further mining of the tailings and those kinds of things. I had a question brought up to me just the other day about it. Maybe the minister could bring me up to date on what's happening.

Hon. D. Miller: There is a company that has expressed some interest. There aren't any deals consummated. B.C. Chrysotile, I gather, has some interest in seeing if it's possible to use some of that fibre. It is long-fibre asbestos for tile-making. There's nothing consummated in terms of any agreement, though.

R. Neufeld: Further, and mostly on energy, I think I should start off by saying -- and your assistant deputy minister will have known this person very well -- that the person who was actually the first person on the ground in Energy and Mines in the Fort St. John area, Mr. Dave Johnson, unfortunately passed away a while ago, just prior to retirement.

Mr Johnson had been in the energy industry right from the ground floor, I think, with the Ministry of Energy in British Columbia, and he used to go right out north of Fort Nelson and sit on wells and deal with things in that kind of a fashion, and slowly we've changed over time. I understood that we were possibly going to do a commemoration for Mr. Johnson in Fort St. John. I wonder just where that's at.

[E. Walsh in the chair.]

Hon. D. Miller: I do appreciate the member raising this. I did pay tribute to Mr. Johnson yesterday. The member will be pleased to note that the new Charlie Lake office will be named after Mr. Johnson. He will also be pleased to see that the industry will be developing a $100,000 bursary fund specifically dedicated to training, particularly for residents of northeast British Columbia. I guess, in some ways, as a minister who has only been here for a year or so, I didn't have the opportunity -- and still have not had an opportunity -- to meet a lot of the field staff. But certainly the tributes to Mr.

Johnson have come in from all over. He certainly was well respected by his peers, in both the ministry and the industry, and I think it's a real tribute to that man as an individual.

R. Neufeld: I appreciate that, because he was a stalwart in Fort St. John. I worked with Mr. Johnson for many years in the oil and gas industry. He was a legend in his own time and actually was one of those people who worked for government that you talked about yesterday, who really put their heart and soul and energy into their job. He did a good job and was well respected in the industry and by his peers in government. So I'm glad to hear that. I think that that's really great.

Just a bit further about the Forest Practices Code and its changes in road construction, I guess it is, for the mining industry. I've talked to your parliamentary secretary briefly about the issue of looking at the Forest Practices Code as it applies to the oil and gas industry in much the same fashion as for some other things. It's not exactly the same as the mining industry, but the oil and gas industry is a bit peculiar on its own, especially when you're talking about some of the seismic work and maybe some of the early trails to get to some of the areas to explore for oil and gas.

Is there some way that we could start a working group from your ministry with the industry to try and work out some of the issues with the Forest Practices Code that they find some difficulty with?

I've had numerous individuals talk to me about some of the problems they have with the Forest Practices Code, and rather than deal with it on an ad hoc basis, I think we and British Columbia would be much better served, and so would the industry and the ministry, if we were to start a liaison with the industry in trying to collectively work out those things that will work better for industry and for government. I wonder if there is something that we can start there. Maybe the minister has already started it -- I'm not sure.

Hon. D. Miller: In our view, the problem was more acute in the mining sector, particularly on the exploration side, and we are covering that with respect to the mineral exploration code. We've not ignored the petroleum and natural gas areas, either. There have been some complaints about the development of road regulations, and under the designation the operator can recover road maintenance capital costs from other industrial users. The member is probably aware of this. So we are working with that sector and working cooperatively to develop a new petroleum road regulation to meet the unique requirements of the oil and gas industry.

As I say, it wasn't felt that the problem was as acute in the oil and gas sector as it was with different issues -- as it was with the mining sector. But the principle -- and I think the member would support this

[ Page 4150 ]

-- is that as an operating ministry responsible for energy, mines and petroleum resources, with field staff who are well versed over the years in working with the industry, who know the standards that must be met and who know how they can lay a firm hand on when it has to be laid on to achieve the kind of results that you want to achieve . . . . We think it's desirable to have that housed within our ministry -- to have the equivalency standards housed within the ministry. It's much the same, I suppose, as under the Forest Practices Code announcement. I believe I heard the minister talk about results-based as opposed to process-based, so we set the standards.

We say, using the forestry analogy to complete the argument: here are the standards, in terms of how you must do your planning, how you must do your harvesting or your roadbuilding; these are all the things that you are required to do. But instead of saying that we want to see all of this produced on paper in multi-plans, plans after plans after plans, we want to reduce the number of plans and free up some of our managers to have time to go out on the ground and say: well look, have you lived up to the standards?

That's kind of a results-based approach, by which you maintain the integrity of your standards and you get the results but at a lower cost. We like that approach, and, as I said, we're working both with the oil and gas sector and the mining sector to try to bring improvements.

R. Neufeld: I hesitate to say it, but when we debated the Forest Practices Code, if the minister were to go back to the time when we debated that, I think I talked about a results-based Forest Practices Code rather than such a punitive system that is put into place with piles of paper and reams of regulation. So I'm glad to see, a number of years after the introduction of the Forest Practices Code, that we're finally getting around to some of those commonsense things, and that the industry has been able to convince you that just because it's written on 14 different forms in 20 different offices, that doesn't always make it right. I think that's a good move.

Could the minister share with me: who in the ministry is working with whom in the industry on trying to streamline some of the things in the Forest Practices Code, so that if I have some issues that come forward to me I know who to contact on either side, in government or industry?

Hon. D. Miller: I can't give names on the industry side, but the industry association should be able to do that. The individuals in the ministry are Dave Shaw, on the resource management side; Greg MacKillop in the ministry; and Peter Davis, on oil and gas. And there's Linda Stewart from placer regulation. That will be sufficient to give you leads into more of the names, the players, on the industry side.

R. Neufeld: The other issue, I guess -- and it hasn't been an issue that I'm aware of yet in Fort St. John or in the northeast, particularly north of the Peace River -- is the issue surrounding the people that were lost in the Lands ministry. Much of the oil and gas industry, especially for pipelines, acquisitions of land and those kinds of procedures, has to go through the Ministry of Environment, Lands and Parks. To my knowledge, that's all been amalgamated into the Ministry of the Environment now, with quite a few people being laid off.

There continues to be an underlying current that at some point in time it's going to hit us that the people left there are not going to be able to keep up to the paperwork that's required and the approvals required for those kinds of projects, specifically pipelines. I wonder if the ministry is working -- and I assume they probably are -- with the Ministry of Lands. Like I say, it's not an issue to me; at least I've never been told it is. But I think that the longer we leave it and the longer the issues pile up, the tougher it's going to get.

What will happen is what usually happens: on November 1, people won't be able to get their permits to start going out to build their pipelines, and that will already be the start of the winter season.

So I'm just trying to work a little bit with the minister here to bring him the concerns that some of the people are telling me about, so that maybe we can head it off a little bit before that time. I would think that maybe the minister is working closely with the Minister of Environment to come to some kind of a resolution about how we deal with those issues.

Hon. D. Miller: In fact, there has been some positive work. I don't have specific information on one aspect of it, but at least for authorizations, the turnaround time . . . . I'll just quote from a letter from the manager of regulation, Mr. Ken Kadonaga, to my assistant deputy minister.

"The new streamlined referral process for oil and gas activities was started on October 1, 1996 and appears to have reduced the referral times. For well authorizations, the average turnaround period in October was approximately seven days, down from 15 in September, despite a substantial increase in the number of applications -- 56 in October, up from 21 in September. A similar decrease also occurred in the turnaround times for geophysical program applications."

So it's clear that the ministry is seized with the issue and is working in a positive way to try to reduce those turnaround times for authorizations. And the ministry will continue to do that.

R. Neufeld: I think we're getting two issues mixed up here. Maybe I didn't explain it well enough to the minister; I will try again. I am aware of and appreciate what the minister just read out about the referral times as they are concerned with well authorities and geophysical permits and those kinds of things. Yes, there has been a tremendous improvement in that from the Ministry of Environment. It was terrible; it was hindering the industry quite badly. But the Ministry of Environment did get their house in order, and those go through, on most cases, very quickly now, other than in the very sensitive areas -- which is understandable and everybody knows that.

[3:15]

What I'm talking about is the Ministry of Lands, which also dealt with referrals. On the well authorities and what not, it wasn't such a big issue, but when it comes to the pipeline rights-of-way, all those kinds of things that the Ministry of Lands has to deal with -- those issues alone, getting away from the drilling and the seismic end of it . . . . That's the

part I'm talking about. I'm not trying to say that it's a problem now, but I have some underlying concerns from people, both within the ministry and within industry, that there could be some problems if somehow we don't address how we deal with some of those issues. So, two separate items.

I thank the minister, and I thank the Minister of Environment of the day; they did a good job getting the well authorities through. This is a different issue. Maybe the minister would like to comment on that.

Hon. D. Miller: I don't have specifics on that issue. I really want to thank the member. I think the ministry is aware of that and brings the same attitude to that question as they've

[ Page 4151 ]

brought to other issues. So maybe if there's something of substance, then I could report directly to the member subsequent to these estimates, and I thank him for raising the issue.

R. Neufeld: Thank you. I appreciate that. I'll stay in touch with your assistant deputy minister, who's with you right now, on those issues. But it's good to make you aware of some of the things that could take place and result in something that none of us want: a slowdown of the industry and, of course, for government, a little bit less loot in taxes and those kinds of things. That's part of it.

Talking about taxes, the minister earlier spoke about the TLC -- I guess it's tender loving care committee. It's actually quite well-named; I would think that probably you had some hand in that. In any event, it was about mining and some form of taxes or something, or fees or whatever, and gathering money that could be reinvested back into the industry, if I understood the minister correctly. That might be a pretty rough thumbnail sketch of it, and the minister can certainly enlighten me on what it means. I wonder if those same kinds of talks would be going on with the energy industry.

I relate it to some of the issues they have to deal with, specifically in Fort Nelson. We're still travelling over the same old road, the same Desan road that was there, in no better shape, in fact worse shape, than it was six years ago, and we haven't made any headway on that. I'm wondering if there's some way that some of those things can be broached with the industry to find out if there isn't a way that we can start expending some money on some infrastructure, specifically as it relates to the oil and gas industry.

Hon. D. Miller: I did refer earlier, in some part of these estimates, to the kind of work we're doing -- a competitiveness study on the oil and gas side, looking at reforming the regulatory regime, the pricing system -- and that work continues. We are engaged in some work with respect to the Sierra-Yoyo-Desan Road; that's ongoing. I would have liked that to have proceeded at a quicker pace. It hasn't, so we may be in a position to make some broader public statements in the near future. I'll leave it at that.

R. Neufeld: It's interesting. I have some gentlemen in my office from both Calgary and Fort St. John who want to talk to me about some oil and gas issues, so I'm going to have to leave for awhile. But I certainly want to come back and ask some more questions of the minister.

Just before I go, one question I'd like to ask is: does the ministry have the official numbers for the amount of investment that the oil and gas industry makes in British Columbia? That would be northeast B.C. only. Do you have those hard figures?

Hon. D. Miller: Off the top, I was going to say about $1.5 billion, but the numbers in 1996 look about $1.7 billion. There are additional proposals with respect to pipeline construction that are in the region of $2 billion.

This is a big sector in B.C., a very important sector of our economy and one that we value. There are 14,500 direct jobs and 23,000 associated jobs on the indirect side -- a very good industry. There's been renewed activity on the sales side. If you accept the conventional wisdom with respect to the alliance proposal and others, that has the potential to provide even better opportunities on the price side, thereby attracting even more investment, so we see nothing but growth in this sector.

R. Neufeld: I'm happy for that clarification. The June 5 release from the ministry quoted $1.2 billion. On April 3, during a speech you made, you quoted $1.7 billion, and I've been told $2.4 billion. The numbers are all over the place, and that's why I wanted confirmation of how much it was. I know it's very important to the industry, and it's very important in my constituency and to people who work there. With that, I'll turn it over to the Liberal critic for Mines.

Hon. D. Miller: Probably the reason for the discrepancy in numbers is that I happen to be very conservative in my forecasting.

D. Jarvis: Is the minister beginning to think he's being tossed around a bit, going back and forth here?

Hon. D. Miller: Yes.

D. Jarvis: Sorry for the interruption. I had two appointments today that I had set up some time ago, and therefore the situation.

I just want to go back to the implementation of the mineral exploration code. Could the minister discuss with us what the current status of that is? We understand that it's been held up for some reason. Has a draft been put forward to cabinet yet? What is the status of the mineral development office, as well?

Hon. D. Miller: I think the development of the code is going well. Some months ago, there was or appeared to be a bit of a bottleneck somewhere, but after some discussion with the industry, I proposed to them a practical way of moving forward. Rather than huge bureaucracies on either side, I suggested that some people with field experience, both on the ministry side and the industry side, get out there and take that document -- which had been through 14 or 15 drafts -- out on the ground and say: "Okay, how does it work?

Let's follow it through." As a result of that, we sped up the process, and I believe we have agreement. There are some technical issues, administrative issues, but to all intents and purposes, in my view, we are there.

I do look forward, once the issues are finalized, to making an announcement. I think it's good news for the industry, and I'll try to get as much public attention and notice on that announcement as we can.

D. Jarvis: So it is in cabinet now; it's been presented to cabinet; it's getting ready to be approved, and we can look forward to seeing it on the streets any day now.

Hon. D. Miller: There's regulatory issues that need to be completed, but I just want to say that for all intents and purposes, we've announced our intentions. We are moving forward. I think it's moving reasonably well, and when we're in a position to make an announcement, we'll do that. Because of the way our system works, I can't advise the member explicitly whether something is sitting in front of cabinet, but I'm reasonably pleased with the way it's moving forward.

D. Jarvis: Yes. I wanted to ask the minister about something to do with placer explorations up in the Cariboo area. I understand that the ministry usually gives the Cariboo Mining Association -- I believe it's the association; maybe it's just the exploration or the people that are doing the exploring up there -- a certain amount of money out of the total amount

[ Page 4152 ]

given to all the mining industry in B.C. I've heard that the moneys given out for exploration have been given strictly to the hard-rock end of it, and nothing at all went to the placer end of it.

Hon. D. Miller: I did speak earlier about the prospectors assistance program. We did maintain the budget in this fiscal year, even though we were subject to some pretty deep cuts -- about $500,000. I said earlier that we also tried to be more focused in terms of the application of those prospector grants.

Just to advise the member of some of the specifics, the total budget was $496,000; 47 grants totalling more than $380,000 have been awarded to prospectors; the largest portion, $116,000, was in the northwest region of the province, with the Kootenays and south central areas getting a smaller share of $78,000 and $58,000 respectively. Seventy-seven placer activities were excluded from eligibility for grants because most placer prospecting programs, regardless of how they are described in the application, turn out to be primarily mining operations or testing programs rather than prospecting.

Placer mining, or even successful testing programs, generate some immediate cash flow. In other words, the people doing the work have some opportunity for a revenue stream -- unlike pure prospecting. Really, the impact of new bedrock mines creates more jobs and economic spinoffs than new or expanded placer operations. Given the limits on the budget side, it's incumbent on government to be as efficient as possible, to put that money where it will produce the best results, and that's what we've tried to do.

D. Jarvis: Another concern in the Cariboo area, or where the placer mining is, is the aspect of riparian zones. Evidently the riparian zones are essentially like those in logging: you have to be so many metres away from the sides of the rivers, etc. But in the placer areas up there, they're required to be ten metres -- ten to 30 metres, and more sometimes -- from the edge of the body of water. So I'm not too sure how the gold ever got down there, but it has something to do with the melting of the ice floes years ago -- it flowed down. But most gold in the river is in the centre of the damn stream.

So if you're restricted from going into that area because of that riparian zone, what justification do you have, basically . . . ? You'll be closing down the mining in that area if you can't go into the middle of a stream.

Hon. D. Miller: I'm sure the member realizes that in most activities on a land base, there can be competing interests, and when it comes to riparian zones, clearly the issue of the potential impact on fish is one that ought to be considered. There's not a person in British Columbia, I would think, who would want to take any different position.

The member talked about the ten-metre rule. That's correct, substantially, but the approach we're taking is to try to develop tailored regulations by stream. It may not make sense to have ten metres in some areas. In some areas it might be a greater distance. It's preferable, rather than having a single rule that fits every situation, to develop regulations that fit unique circumstances that may exist in each situation.

[3:30]

We are working with the Ministry of Environment and others -- the Department of Fisheries and Oceans, first nations are also involved, and environmental groups -- through a committee to look at a regulatory administrative review of placer mining to ensure the responsible operation of the industry. Implementation, hopefully prior to the 1998 field season, of a new placer mining reg under the Mines Act is proposed.

So it's an area that you have to do this kind of work in, particularly when it comes to riparian zones, as they can conceivably have direct impact on fish, and there has to be a reasonable regulatory regime to accommodate that.

D. Jarvis: So this riparian zone, pertaining to placer mining, is only where the placer gold is concentrated in the middle of the stream, creek, river or whatever it may be. Does it only apply to bodies of water that are spawning waters?

Hon. D. Miller: Well, I'm not an expert in the field, but I would think that there would also be consideration for some potential downstream impacts.

D. Jarvis: The way I look at it, then, it effectively stops placer mining, right? If your riparian zone does come into effect -- and that doesn't allow you to go into the middle of the stream, where the predominance of the placer gold is usually concentrated rather than on the edges -- and those rules apply, then placer gold mining essentially dies, does it not?

Hon. D. Miller: No, I don't think that is true. Again, I'm not an expert in placer mining. I wish my former colleague Mr. Barlee were here; he could probably talk at length about it. A few people, through their body language, are registering opinions to the contrary.

But no, not at all. I've really just tried to make the point that placer mining . . . . What we are talking about is $40 million annually in benefits, and that is fine. But surely the member doesn't disagree that there ought to be rules so that if there is an impact on fish, we can consider that. Placer deposits can be found . . . . They aren't necessarily in the middle of the stream. They could be more than ten metres from a stream. The member knows that in the geology we have in British Columbia, there are lots of places that used to be streams and aren't anymore. That's the nature of our geography.

So I think the notion of getting the industry and others together -- environmental, community, first nations -- to develop a reasonable regime, in terms of how we ought to be able to continue to have placer mining and still protect primary fish values, is a good one. That process is underway now.

D. Jarvis: If you're going to do a study on placer mining and how the riparian zone affects fish and all the rest of it, I assume that it's only natural that you could make adjustments if it's a fish-bearing stream. But what if it's not a fish-bearing stream? Are you going to change the rules? Do the same rules apply?

Hon. D. Miller: Again, I did try to respond. If there are no potential impacts on fish, then presumably one ought to be able to look at that. I don't want to be quoted as writing the regulations and the rules standing here in this House, but presumably there may be no impact in having any kind of buffer zone at all. If you look at the water issues in relation to forestry, it's clear that there's a classification of streams according to fish-bearing or non-fish-bearing and the impact on streams downstream. All of those are considered in developing the rules of practice.

One reason is the potential negative impact on fish. I would hope the member might want to say that they're an

[ Page 4153 ]

important resource value to maintain. I listened to your comments about bulltrout earlier -- and fair enough; I'm not going to get into that, necessarily . . . . But let me try to make this point of view. I've always tried to make this, because where I come from -- the north coast, the community of Prince Rupert and surrounding communities -- fishing is a mainstay of the economy. The harvesting and the processing of fish, and all of the ancillary benefits that flow, are a mainstay of the economy. It keeps people employed. It contributes millions and millions to our economy.

Protecting that basic resource -- what we call conservation -- both in terms of protecting habitat and its harvesting regime, is fundamental. One only has to look at the east coast of this country and see what happened to the cod fishery to realize that if you don't manage a natural resource in a good way, you'll run out of it. The result of running out is that you've got massive unemployment, no resource and general despair. So there always is a balance, hon. member, between these kinds of issues. Surely the protection of fish and fish habitat is fundamental.

If the member rejects the biological or environmental rationale for that, surely he ought to embrace the economic rationale for protecting a very valuable resource -- a resource that is arguably worth . . . . If one wanted to get into a contest between fisheries values and placer mining values in this province, placer mining has $40-odd million in some discrete regions of the province versus the combined value of the fishing sector -- commercial, sport, etc. -- which is in excess of $1 billion. Leaving aside any environmental questions, strictly from an economic analysis, one would presumably want to protect the greater value.

We're trying to promulgate and develop a regulatory regime with the stakeholders that makes sense, that allows placer mining to continue in this province as it has historically but also ensures that we're going to protect those primary values for an equally important, or arguably even more important, economic resource.

D. Jarvis: I appreciate the minister's balance-of-conservation lesson. I'm quite aware of the values that are out there, and most everyone in this room is. There's no question. My family has had four generations born on this coast. I know what fishing is all about. We sincerely believe in it, and I believe in it.

But when you're talking about economic values and weighing one against the other, you're trying to insinuate that because I was referring to one little lake that had nine bull-trout in it . . . . I mean, if you want to compare economic values, then I would weigh that lake with nine bulltrout in it versus a copper mine and a gold mine that pay millions of dollars of taxes and keep hundreds of people employed for years and years.

What I'm trying to tell you is that I appreciate that placer mining isn't the greatest money producer in this country, but it does provide people with jobs. It provides work. They all pay taxes, probably.

Interjection.

D. Jarvis: I know, and you're agreeing with me thoroughly. But what I'm trying to say -- and I'm trying to get some kind of commitment out of you -- is that if this riparian zone applies to all streams and rivers in an area where placer mining is done, then that itself is not fair. And it's not equitable, either, because it should only have applied to areas that have fish.

We ostensibly want to save our fish resource. The minister says that he's aware of that and he feels that way, too. But is his ministry going to be doing anything about it? That's the key to the whole thing. It's all very well for you to say that you believe in it, but will your ministry be prepared to do something to protect those placer miners who are mining in non-fishbearing streams.

Hon. D. Miller: I did respond in a previous answer by saying that if fisheries values are presumably not of concern in a particular stream, then we have . . . . We have a ten-metre buffer now. I said that we're developing regulations that are more tailored to specific streams. It may be that there's no buffer required. I did acknowledge that. I just suggested that when you start any particular process, I guess there has to be a commitment to certain things that govern the process.

Really, we do have my ministry working in cooperation with the Ministry of Forests, the Ministry of Environment, Lands and Parks, and DFO, all consulting with the placer mining industry, first nations and environmental groups on a regulatory regime that presumably would make sense.

Now, I'm not a technician; I'm not a placer miner; I'm not technically familiar with all of the issues that might exist. One would hope, given the extensive consultation with people involved there, that we'll come up with the right regime, which will be, we hope, implemented prior to the '98 field season.

We also want to look at appropriate training issues. That could be important. In other words, how you do a certain activity, regardless of ten metres or five metres or whatever, and how you conduct it can in some ways ameliorate or mitigate it.

You know, these tend to be fairly complex. I apologize if I was castigating the member in the least with respect to the views he expressed earlier about a certain species of trout.

D. Jarvis: I guess I have to apologize to the minister myself, seeing that we're all apologizing. I probably wasn't listening carefully enough when he got into his conservation-and-balance speech that he was making to me. I tended to forget, I guess, or I didn't listen to what he was saying on the other aspect.

I want to ask the minister if he could tell me about records. There's a general feeling out there that mining is not good for British Columbia. This is the spin that's been put on it for some time now. It especially seems to be that mining impairs the environment and causes all this great damage throughout British Columbia.

Now, I know records started to be kept back in the 1960s as far as reclamation and all the rest of it goes. I wonder if his office has any records as to, for example, how many hectares were disturbed by mining in this province and how many have been reclaimed through the reclamation process. What hasn't therefore been reclaimed, and where are we in terms of that situation?

Hon. D. Miller: I will read a few statistics here. I don't know if the member had the opportunity to witness, on the television news last year, the reclamation of the former Utah Mine on northern Vancouver Island, near Port Hardy, where a large open-pit mine fairly close to the ocean was reclaimed. In fact, they blew a hole in it and allowed the sea water to fill it in. I believe it stands as a pretty good testament to our ability to reclaim former mines.

The industry must place reclamation securities as conditions of all permits. They were first required back in 1969.

[ Page 4154 ]

We do hold some money in security for mining activity. In other words, there's money there to assist in that reclamation process.

There have been some recommendations made in a security policy committee discussion paper on reclamation risk management for discussion by the industry, government and the public. Under the direction of an advisory council, those have been reviewed. A final report is expected -- we don't have that yet? -- sometime soon. And we'll consider the recommendations of that security policy committee and develop an issue paper.

[3:45]

I'm just generally saying that my own view is that it's possible. There are lots of good examples of good reclamation. I don't know if we have the kind of statistical information the member is asking for. I will ask the ministry to look for it, and if we do have it, I would be prepared to pass that on. I did talk about the security that we hold. So we'll see if we have any more information. Really, I think you're looking for more of a historical perspective on reclamation activity, and anything that we discover or find in that regard, I'll forward to you.

D. Jarvis: Yes, in a sense I was looking for some type of history of mining reclamation to prove that it hasn't caused that much of a detriment to our environment.

But when you talk about Island Copper, I kind of think that we're in directly opposite fields on that one. I felt that it wasn't necessary for Island Copper to be flooded again, because all you're seeing now is a great big hole full of water, where it could have been used for added value. There were plans for it to hold waste from, let's say, Vancouver and the lower mainland and Victoria. It would have been put in there -- and it was supposedly environmentally sound to do it -- and it would have looked after that waste for 150 years.

But the previous Attorney General and the previous Environment minister -- probably this gentleman across from me; I don't know -- turned that down. It was probably the largest mine below sea level in the world, I think. So as a result of that, instead of using it to the best use or for added value, they just punched a hole in the side of the bank and filled it full of sea water again. So there wasn't much value in that. It has been reclaimed, but in a different way.

What I'm referring to is the reclamation they're doing to mines that they have been doing for probably the last 20 years. The fact is that you have places, like up in the Highland Valley, where they're actually fishing in their ponds up there. Fish are growing and they've got . . . . Most of the mines in the province have animals feeding off the waste dumps that they've reclaimed and all the rest of it. I was trying to find out some actual figures to sort of support my theory that mining isn't that bad. Even you could help by telling everyone that mining isn't that bad, seeing that you are the minister looking after mining.

But you were talking about the advisory council. It met in April of 1996. It's well over a year since then. I understand the advisory council has not met since April of '96 -- over a year now. So the report's conclusions remain uncertain at this time. The minister obviously does not know anything about it, or his department doesn't know anything about the advisory council. It's still out there in limbo. You haven't heard back from . . . ?

Hon. D. Miller: I think it's a case of a rose by any other name. I have met with the industry, the same players, on actually quite a number of occasions since I took the portfolio. I did advise the member that I've made a bit of a proposal to the industry in terms of formalizing a structure. But sometimes you know -- and I can understand this -- people say: "Well, is this more process?" So they're kind of considering that. They haven't got back to me.

The important thing is that we're actually doing something. We're making progress. There's a better, more positive atmosphere about mining, I think, in British Columbia. We'll continue to work on that. I actually don't like sitting in meetings too much myself. What's that old saying: process is for cheese? Really, I think you've got to identify the issue; you get some people working on it. Let's try to move ahead and make some progress.

S. Hawkins: I ask leave to make an introduction.

Leave granted.

S. Hawkins: In the gallery today I have a surprise visitor, a very, very dear friend of mine from law school. Visiting Victoria are Rob and Cheryl Beck. Would the House please join me in making them welcome.

D. Jarvis: I'm sort of jumping around on different things. So I just want to ask another thing about mining in regards to . . . . I got a letter in regards to Workers Compensation. I'm wondering if the ministry has looked into it at all or made any appeal, seeing that they've now become an advocate of mining. This one letter showed, then . . . . I want to read it into the record. It says: "The record shows there was an increase of less than 1 percent in the number of [WCB] claims filed from 1988 to 1995." That's a 1 percent increase of claims.

"During the same period, however, WCB staff increased 58 percent, from 1,611 employees to 2,550. To pay for this staff increase, the employers' bill to fund the system rose 123 percent" -- from 1988 . . . to $985 million in 1996.

Now, the coalmining industry has seen an even more dramatic increase. I appreciate we're not in WCB, but I'm leading up to the question. The coalmining industry has had a more dramatic increase, they said, from $2.80 per $100 of employee wages in '93 to $5.05 in '97 -- an increase of 80 percent in four years. For the same period in metal mining, rates increased from $2.75 per $100 in employee wages in 1988 to $6.45 in '97 -- an increase of another 135 percent. On an average annual wage of $54,000, the annual WCB payment for a coalmine worker has risen from $1,512 in '88 to $2,700 in '97.

What I'm trying to say is that it's tough for these companies to make a living out there when things keep going up and everything keeps going up and up and up. Has the ministry given any consideration, or has it made any appeal on their behalf, to try and lower or do something about those rates going up when their claims are not going up? The cost of operating is going up 135 percent in some cases -- 80 percent to 135 percent -- and the number of claims is going up by only 1 percent. So the balance is out of whack here. Can the minister respond to that, please? Or would he?

Hon. D. Miller: Actually, maybe the question should be: "should he?" And the answer is no. I did deal extensively with WCB issues when I was the Minister of Labour and responsible for WCB. I might add that I was very pleased . . . . In fact, I'm a very big fan of Mr. Parker, the present CEO of the Workers Compensation Board. It appears there has been a

[ Page 4155 ]

very positive performance on the economic side in terms of unfunded liability and those kinds of questions. But any questions about that system, really, Madam Chair, should be properly addressed to the minister responsible.

D. Jarvis: I appreciate that most of that should be dealt with by the Minister of Labour, and the Workers Compensation . . . . But the minister has said that he has now become an advocate for mining in this province, so I was wondering if his ministry would consider making some kind of application to the Minister of Labour and asking him if he would give consideration to perhaps lessening the taxation that is being put upon the mining industry.

Hon. D. Miller: No. I'm responsible as well for other sectors of our economy. It would be foolish of me in the extreme to put myself in a position where I as the Minister of Employment and Investment was making submissions to another minister about issues that are determined partly through formula. The member knows full well how assessment rates are derived at WCB. He knows that it's related to frequency and cost. He also should be aware, if he has followed this, that there are sectors of our economy -- if you look at their accident experience and the premiums they pay -- that are not paying their fair share of the costs.

There is and has been a policy at WCB to have a cap on increases -- in other words, to avoid the completely dramatic increases; I think it was about 20 percent. They exceeded that two years ago to try to get things more in balance. The reason for that, and it's quite important, is that it would be wrong to have one sector of our economy . . . .

Let's say, as we separated the retail sector -- the member recalls that a couple of years ago the retail sector essentially encompassed, on the food side . . . . The very tiny retail corner stores were included in with the very large megastores. If you looked at the accident experience in the small ones, it was negligible, and if you looked at the accident experience of the big ones, it was quite high, and yet both were paying the same kind of premium levels. So that was separated. The principle there is one that's quite important to WCB, in that each discrete sector should pay the premiums that reflect their kind of accident experience, etc.

I've gone much further than I should have, Madam Chair. You should rightfully be chastising me for going this far in talking about the Workers Compensation Board. I'm sure that my colleague the Minister of Labour would be pleased to deal . . . . Perhaps those questions were asked. I believe those estimates are concluded, if I'm not mistaken. Any other questions that the member may have should be directed to the appropriate minister.

D. Jarvis: I want to deal a little bit on compensation, although we have discussed it a little bit before. With regard to the legitimization of mineral claims and security of title, probably one of the most famous ones is the Cream Silver case. The minister is probably aware of it. If this were overturned -- because I understand it's up again -- is this government prepared to compensate all the outstanding tenures that have been expropriated?

Interjection.

D. Jarvis: No. I was just wondering if this government is prepared to compensate for all those outstanding mineral tenures.

Hon. D. Miller: As a general policy statement, yes, we talked earlier about some claims, where there has been a finalization of compensation issues. There are some that remain outstanding. I had a discussion with the Mining Association about that last week. There are some complicated issues around that. There's some difference of opinion, actually, flowing out of the Cream Silver award, which went through a process. An award was made, which some in the mining sector didn't like. That wasn't a decision made by government; it was a decision made by a constituted board, I believe.

So as a policy statement, yes, we understand the issue of compensation and are working to try to resolve those over a reasonable period of time.

[4:00]

D. Jarvis: The compensation aspect could really mount up in the future. Has your ministry considered introducing any legislation in regards to the compensation aspect?

Hon. D. Miller: That is future policy. But no, not at this point.

D. Jarvis: When talking about compensation, I guess we've got hundreds of millions of dollars out there. We have Alcan to consider. I assume there are some outstanding claims -- in the Tatshenshini, Cream Silver . . . . Are we making any preparation for the event that we have all of these claims to pay? Where are all of these moneys going to come from?

Hon. D. Miller: There has been some progress. We did refer earlier to the arrangement we've concluded with Royal Oak, in which, as I said, rather than simply writing a cheque and giving it to them and saying, "Here, we're pleased to give you this money," we've negotiated -- rather than give taxpayers' money away. What we've negotiated is a much larger package, a $400 million project that's underway right now, employing a lot of people, which resulted in the development and opening of a brand-new mine that will provide jobs for 20 years hence.

Similarly with Alcan, we have said that we would like to see more jobs created in this province. That's a reasonable request, I think. Years ago, awards were made with respect to water licences and those kinds of things. I think it's reasonable to assume that if the resources of the province are utilized, they ought to provide jobs and benefits to British Columbians. The Premier has been very upfront and straightforward on this question. We'd like to see another smelter in this province. We think it's appropriate. We think the energy resources are available.

Really, we want to solve the problems, but our attitude is not simply to sit down with a chequebook and have people line up and say: "How much do you want?" That's not an appropriate policy. Nor will I admit, in any sense, to the magnitude of any compensation issues we've got to deal with. It's not at all clear to me that there's an absolute in every single incidence. It varies by of the nature of the claim: tenure-holders versus Crown grants, those kinds of questions. There are lots of very complex issues here. We're going to try to deal with them with the sectors and for the benefit of the people here in the province.

D. Jarvis: Would the minister be prepared to tell us how many dollars we have spent now on compensation claims for the Tatshenshini, excluding the Royal Oak claim?

[ Page 4156 ]

Hon. D. Miller: I don't have it at hand right now, but we will try to find it and see if we have a number and if we can get it to you today, hopefully.

D. Jarvis: Has the minister given any consideration to mining in parks? I notice that Saskatchewan and Manitoba have now changed their policy on that and are allowing mining in parks.

Hon. D. Miller: I have a bit of a reputation, and I don't want to make it any worse than it already is. So I'll pass on that one, thank you.

D. Jarvis: I can understand that the minister doesn't want to get caught out somehow, making a statement that would be economical for the industry. But we mine in parks. If it was done in a responsible manner, like in other jurisdictions around the world, it could be done. Seeing as he's not going to make a statement to that effect, I won't pursue the matter.

I want to ask the minister a couple of short questions here. One is not really short, and it quite bothers me. It is with regards to the Forest Practices Code and how it affects the mining industry: ostensibly, the deactivation of roads. I took it up once before with the minister's staff. And actually, it's a specific statement.

I'm not averse to mentioning the name of the gentleman. It's a mineral claim up in the northern part of Vancouver Island, in the Port Alberni area. There are claims owned by a Mr. Herb McMaster. I understand he was in full compliance with all the rules and regulations in mining. He was doing exploration. Unknown to him, forestry came in. It was on Crown land. MacMillan Bloedel had the allowance there to make a cut. When they were finished, they were advised by the ministry to deactivate the roads. I think it was the contractor for MacMillan Bloedel, but they were under instructions by the government to do so.

They came in, and they destroyed quite a bit of his property, his drill holes and various construction things which involve the trenching around there -- to the tune of approximately -- he says; it's hard to say, exactly -- $1.5 million. So now they've come along and said: "No, we weren't allowed to do that. We shouldn't have done that. We're wrong." But he's out $1.5 million, plus or minus.

It's my opinion that the government -- and it was under their instructions -- told the people to go out and deactivate that road, causing damage to, as I said, the trenching and the drill sites. Who would you think would be responsible for that? Do you not think that the government should be responsible in some way for compensation because it was under their instructions that this was done?

Hon. D. Miller: Not at all. In fact, my ministry became involved in, if you like, a bit of a brokering role to try to resolve a difference between two private parties: in this case, MacMillan Bloedel and Mr. McMaster and his company. I believe that we actually did play a productive role in resolving that difference. We cannot be responsible for misunderstandings that occur between private parties and the private sector. Were we to adopt that stance as a general policy, I very much fear that the claims against government would mount in a staggering fashion.

Therefore we have to take a responsible position on this case. A disagreement had occurred between a forest company and a mining company over the merits or demerits of deactivating a road that was also required for access to exploration work. We did play a productive role in resolving that, and it is my understanding that it is resolved at this point. When I say resolved, that doesn't mean that everybody went away absolutely thrilled and happy but rather that the issue has been resolved -- I think in a satisfactory manner.

D. Jarvis: I'd like to tell the minister that I'm aware that his department was involved in it. I think one of his deputies will tell him that I did phone him. They got together, and they went out to discuss the matter.

The point is that it's not between two private individuals or two private companies. Deactivation was required to be done on the part of one of the parties. The government's forestry department told them: "You have to deactivate that road." He said: "No, you can't do that. I have a working permit; I'm allowed to do it." The forestry department said: "No, they're going to deactivate that road." They proceeded and did it before they could be stopped -- under the instructions of the government to deactivate that road.

It's not a private company that's at fault; it's the government that's at fault. The government's instructions . . . . The government told the miner to get off his land -- his own claim, I should say. They wouldn't allow him to stay there; they told him to remove himself; they went in and deactivated it. So the onus is on the government.

[G. Brewin in the chair.]

Hon. D. Miller: Again, in answer to the direct question on the issue of compensation: no, clearly I won't agree to that. I'm pleased that my ministry was able to play a constructive role between these parties, regardless of the origins of the dispute, in terms of deactivating the road or of the involvement of another Crown agency. It ended up being a dispute. With lack of communication on those kinds of things, that does happen. That does happen in our society, and when it comes to our attention and we think we can play a positive role, we try to do that and have done so in this case.

Hopefully, in the future there will be more consultation, joint use or using excess roads -- in this case, a road that was probably there for forestry purposes but then was available for exploration activity. We know we have to deactivate roads in this province for long-term environmental considerations. Hopefully, we can coordinate those activities between people desirous of using those roads for different activities. I don't accept that the Crown is liable when these kinds of misunderstandings occur, and I'm very pleased my ministry could assist in trying to come to some resolution.

Madam Chair, I have to leave the chamber momentarily. If the member has further questions, I'm sure my officials will take notes so that I can respond on my hopefully very quick return.

In the meantime, I do believe that Madam Chair would like to make an introduction, so see you in a minute.

The Chair: Hon. members, I wonder if you would join me in welcoming to the House 26 grade 6 honour students, with and adults and parents, who are here from Keller Elementary School in Kirkland, Washington. They are led by their teacher Mr. Condon. Would the House please join me in making them all welcome.

We'll take a two minute recess.

The committee recessed from 4:12 p.m. to 4:15 p.m.

[ Page 4157 ]

D. Jarvis: I really thank the minister for making the statements he made about the fault: that accidents will happen and all the rest of it. But if I'm driving down the road and by accident I run into you in your car, that doesn't relieve me of the liability; I'm responsible. We're all responsible for our actions.

In this case, the action was that the government -- you -- required the road to be deactivated. Now, the gentleman with the working permit -- to whom your division said: "Yes, you're allowed to go onto that land, do exploration there and put drill sites down" -- went out there and he did that. He was trenching, and did all these things over a period of time -- spent $1.5 million, plus or minus.

The government, the forestry department, said to MacMillan Bloedel, who are also logging on the Crown land in that cut area: "You're now finished logging, so you now must deactivate that road." Now, there is an onus on the government and MacMillan Bloedel to tell that individual that they were going to do that. First of all, that wasn't done; they didn't tell him.

First of all, he went up there and saw that some of his equipment had been damaged. They actually even shot a hole through one of the cabs of one of his pieces of equipment. He told them to cease and desist, stop, that he had the right to be on that mine. Your government's Ministry of Forests employee said: "No, you get off this land; you're not allowed here. My instruction from the government is to deactivate the road."

The onus is still on the government; you can't say it belongs to two private individuals. They came back in again with their equipment -- the forestry department or whoever they had contracted to deactivate the road -- and they caused $1.5 million damage to the drill sites and the trenching, etc., etc. So I say it was not a dispute between two individuals and an accident happened; it was under the instructions of the government. These were the government's rules to deactivate the road, and it was also their instructions to go ahead and do it.

And they kicked the miner off that area when he had all the rights to be up there. Your own division -- the department -- said: "Yes, he has the right to be there." So do you still think there's no onus on the part of the government?

Hon. D. Miller: Yes, I do. I'll respond a little further.

I just want briefly to welcome as well the students from Kirkland, Washington, who are watching this debate. It's kind of timely, since really one of the major developments in our province is the development of the Kemess South mine in northern B.C. It is being done by a company called Royal Oak, which is headquartered in Kirkland, Washington. Peggy Witte, the head of that company, is a very aggressive person in the mining industry. By working in concert with her, we hope that we're going to produce some significant jobs here -- and, obviously, benefits to that company. So you may want to take that message back: we certainly value the working relationship we have with the Royal Oak company.

But, hon. member, really. You've taken some time to outline some of the specific details. I must insist that there is a dispute between the parties and that the government is not culpable in that regard. We've worked in a positive way to assist in a resolution, and that's as it must be.

D. Jarvis: I certainly would hope that the ministry, being an advocate for mining, would give some consideration to it, because it probably will end up in a court case, anyway.

In regards to the class from Kirkland, Washington, I also want to give my congratulations to them. They're having their school taxes paid by businesses that have been taxed so heavily in British Columbia that they have had to leave British Columbia and go south to have a decent regulatory system, a decent taxation system. This government is just driving them all out of this country into other jurisdictions. And we know if it's not Alberta, it's going to be the state of Washington. So I hope that they appreciate the fact that good Canadian firms are paying good taxes to keep them in school and allowing them to come up and look at their poor cousins in Canada.

Interjection.

D. Jarvis: Yes, sir, there's no beg-your-pardon there. That's an actual fact: what your government is doing is driving businesses out of this province and into other jurisdictions.

Interjection.

D. Jarvis: Well, somehow we're able to twist things around, and that's what politics is all about.

Interjections.

D. Jarvis: But it's not me that's doing the twisting. It's yourselves who are doing the twisting. I mean, you've twisted this industry around so badly that $1.8 billion left British Columbia last year to go into other jurisdictions -- in mining alone. As I said earlier, there's $4 billion worth of exploration money in the world, which is ostensibly all Canadian money out there that should have . . . . A portion of that could have come back to British Columbia, but it couldn't come back because there's too much uncertainty here.

Seeing that you've now said that you're going to be an advocate for the mining industry, I hope that you're going to do something about it. The whole province is resting on your shoulders.

Now, let's go back to . . . . I've got a few minutes here before I have to go on the . . . program. I want to ask about Kennedy Lake. I had another gentleman call me who has a mineral claim in the Kennedy River area. He says that the government is planning to carry out watershed restoration projects in that area and that the only roads into the area are going to be deactivated. Now, does the minister really believe that this deactivation of roads is going to help the economics of this province?

Or is it just for the sake of some group of people, who have said: "Look, that's one way of repairing all the slides that may occur and all the rest of it"? We know the slides and the problems we have with streams and the cuts in the sides of the banks and all the rest of it happen out there, but there is only a certain way . . . .

It's the typical NDP government, the socialist government. It's unbelievable. You know, that pendulum always has to swing to the far left, doesn't it? It takes years before another government can get back in power and put things back to normal so that we can operate properly. Why would you want to deactivate every road in this province that was put in there? It's a waste of taxpayers' money. The taxpayers paid for those roads, and you're deactivating them. It's opened up this country . . . .

Interjection.

D. Jarvis: Well, I don't think you can deal with it. I just want to know whether the minister was aware of that situation, and I'll probably be back after dinner.

Hon. D. Miller: Can I respond?

[ Page 4158 ]

D. Jarvis: Oh, sure, by all means, respond.

Hon. D. Miller: Indeed, I must confess to being perplexed, to put it mildly. I really just tried to send a message to the students and teachers here that we value the investment made by an American-based company into British Columbia -- some $400 million that is going to create jobs for the benefit of our citizens. We value that kind of investment from outside into British Columbia. The member wandered off on some tortuous path, and I'd suggest the road he was on ought to be deactivated.

Let me deal with the issue of deactivation briefly and draw on my experience as the Minister of Forests some years ago. I'd be happy to have someone either in my ministry or in Forests provide some briefing relative to the issue of deactivation, because it is quite a serious issue in our province, particularly on the coast.

One only has to fly the coast and look at some of the roads that were constructed many years ago to see that a lot of them are suffering the tension failures that accompany roads that were built according to standards years ago that, quite frankly, weren't adequate, either because the basic construction was substandard or the culverting that ought to be in place was not in place. We see those roads failing. When those roads fail, there are slides that wash down mountainsides and hillsides. What that does is take valuable forest land out of production.

It means that those lands, some of which have been replanted in the past, some of which may contain seedlings of second-growth timber -- two, three, four metres and higher -- are lost; they're destroyed.

It's prudent, therefore, to consider those roads in our province that are primary access roads, which must be maintained to ensure that they are constructed to good standards. And it's prudent as well to look at roads that are no longer required and to say, "Let's take them out, let's deactivate them and replant them," and get a new crop of trees growing on land that was really unproductive.

That's the primary issue at stake with respect to deactivation. I think all of the other issues that develop are really issues of coordination, so that multiple users of those roads have the opportunity to utilize them in a manner that's appropriate. Occasionally, there are mixups between two competing users. The member tried to get me to say that really it's our fault when those mixups occur, and I'm simply saying that that's not the case. In this particular case, we've moved in to try to offer some assistance, and I think in fact we have. I'm sure the member will read Hansard to get my response to his question.

R. Neufeld: Well, it was an interesting conversation about deactivation of roads and those issues, and I certainly agree with the minister. I have no problem agreeing that on the coast there are some areas where roads need to be deactivated and where we should be planting trees and those kinds of things. But as I think the member brings forward, there are some really critical issues that happen. None of us likes to see it happen, but in fact, I guess it does. It's a fact of life that more difficulties arise because of the deactivation of roads.

It happens in my constituency, too. I've often said that my whole constituency would love more roads -- or even just the roads we have to be fixed up so we can travel on them. So we don't need roads deactivated; we need roads activated. We need some roads in our constituency, so I guess we're exactly opposite to the way they are here on Vancouver Island or along the coast in places. So far we haven't been too successful in getting a lot of roads built or fixed.

[4:30]

Earlier I talked with the minister about working with the oil and gas industry on the Forest Practices Code and culverts. He spoke about culverts a while ago -- and not proper culverts put into some areas in the mountainous terrain. What I'm talking about in the oil and gas industry, where most of the work is done in the wintertime when everything is all frozen -- I mean, water doesn't run . . . . Yet, with the Forest Practices Code, companies are forced to put in culverts, if you can imagine. At 30 below they're putting in culverts that they have to take out before the spring thaw.

I mean, those are things that no one can understand. I don't care what spectrum you come from or who you are. It just doesn't quite make sense to anyone that at 30 below you put a culvert in and two months later you've got to pull it out. Nothing has gone through it except maybe somebody throwing a snowball through it.

So those are the issues around the Forest Practices Code, which I was talking to the minister about earlier, that are quite simple and quite easy to understand and that we should be working on. Maybe the minister would like to comment on that a little bit. It just brings to mind a few things that people have talked to me about. How are we going to deal with that?

Hon. D. Miller: I'm absolutely convinced that the lack of progress in terms of roads has nothing at all to do with representation. [Laughter.]

I did deal with the issue earlier, in terms of the work that we're doing jointly with the mining and petroleum gas sector on the regulations relative to some of these questions. I tend to agree with the member, and the member knows. We've had lots of conversations privately about these kinds of questions. That's the trick: having a regulatory regime that makes sense, that doesn't have one arm of government saying one thing that doesn't really make practical sense and that impacts on another. Those are the issues that you constantly have to work on.

I won't comment on the absolute specifics. But to the degree that we are playing a positive role in working with those other agencies and the industry to try to resolve those, hopefully we can see some progress. So I appreciate the member's position. We've talked briefly about this before, and I would like to think that we can resolve those and avoid this kind of mixup.

R. Neufeld: I'm sure we can. In fact, I had no intention of going back to the issue, but when the minister talked about culverts, it triggered something in my mind that said I should ask him about what takes place in the northeast with culverts.

You gave a speech in Prince George in early April to the Northern Forest Products Association, and you dealt briefly with the oil and gas industry in the northeast. There are two issues that I see here, and I'll just read them: "We are exploring the reduction of regulatory requirements such as the energy removal certificate requirements." That's one issue. Secondly: "We are reducing federal-provincial regulatory duplication."

I know the minister has something that is happening now. A press release was released on June 5 about "Government to Streamline Natural Gas Royalty Price Calculation." I know -- at least, I think -- those are two totally separate issues. Could the minister explain to me, on the first two quotes, what he actually meant and maybe give me a little bit of an update on some of the things that we're doing in regard to the energy removal certificate requirements and the federal-provincial regulatory duplication?

[ Page 4159 ]

Hon. D. Miller: Really, there are some issues around the energy removal certificate. It's not as though we're taking a position that there's no longer any requirement for those certificates. There are under certain circumstances, but there may not be under some circumstances. So we're examining that whole field.

I did deal earlier with the other question on the federal-provincial regulatory duplication. We have an agreement with the federal government. That doesn't in itself . . . . I mean, it can in fact mask the fact that simply because we have an agreement, it does not take away the fact that there might be issues, for example, raised by the DFO.

Even though you may have a single process, you still have to deal with some of the issues that might come not from a provincial agency but from a federal agency -- not to get into any technical explanation, because I'm not certain I could give that, but we are working with the industry to simplify our natural gas royalty system. We're doing that together with the industry.

I really tried in the speech I gave, which really had a northern focus, to illustrate the importance of the sector, particularly to northern British Columbia; to illustrate some of the issues that we're working on to try to increase opportunities for employment; and, as well, to indicate that we are prepared to sit down with the industry to look at the regulatory framework -- to simplify it, to eliminate restrictions that may not be required. I think that's the kind of thing that you have to do on a continuous basis, working with a variety of sectors in our province.

R. Neufeld: From this member's point of view . . . . I realize that there are necessary regulations for all industries. I certainly am not so naïve as to think we don't need any. I am appreciative of the fact that the ministry is working with the federal government in trying to reduce the duplication of regulations. I guess "red tape" is the normal term to use. So I'm glad to hear that that's on an ongoing basis and that it's not just at a point in time and then forgotten about.

Another issue in the northeast is the transportation of crude and H2S in high volumes, and whether there is a requirement for scrubbers to be put on the trucks so that we reduce emissions into the air. Because it is associated with your industry, with crude oil, I don't know whether to deal with that issue with the minister for energy and mines or with the Minister of Environment.

I bring it up with you to start with. I'd hate to go to into Environment and have the minister tell me I should have dealt with it with you. Maybe the minister could just help me a little bit there, or let me know if there are some movements towards requiring tankers that transport this product, such as there are in Alberta . . . . They are much more heavily regulated in Alberta, to tell you the truth. They need better scrubbers than we do in British Columbia. It's all to do with air quality and the H2S that's allowed to go into the atmosphere.

I think the minister is well aware how dangerous this gas is, and that it's lethal. Just with a small whiff of it straight out of a tanker, you're dead. I wonder if that's within the minister's purview or with the Minister of Environment.

Hon. D. Miller: It is under the Ministry of Environment, but we are involved with working with that ministry and with the industry.

In September 1996 there were new regulations dealing with the issue of discharges. As well, regulation includes emission control strategy for truck transportation of odorous production liquids. There are some regulatory issues around the exemption regulation -- fees and those kinds of questions -- which, I gather, have not been finally concluded. But we are continuing to consult with the Ministry of Environment, Lands and Parks and industry on the regulation, to formalize administration of it and to determine if amendments may be required.

So for these estimates purposes, that's the extent of the note I have. Obviously, there's a lot more to that in terms of some of the technical questions. I'm not sure if the member wants to pursue that here, or if we could provide some technical advice for the member outside of the estimates process. But it is being worked on.

R. Neufeld: I don't want to get into the technical part of it. I want to know whether we are moving in that direction. I get a lot of complaints about it from people in my constituency, and also from the people who work in the industry and would like to see something done so that we can alleviate this problem as best we can.

On the other side of it, as government makes those decisions, I would hope that they give some time to the industry to be able to adapt to the changes that are required. That's basically my interest in the whole issue. As far as getting technical about it, I'll leave that up to the folks that get technical in that kind of industry.

I understand, from the minister nodding, that there will be some discussions with the industry and that we'll work collectively to try to alleviate the problem, and not do it in a heavy-handed way that may be a hardship for some people to do right away. I think most of the industry wants to clean up, and I think it's just a matter of getting there.

Actually, some of the issues that surround . . . . I'm sure the minister is tired of hearing about some of the things that they do in Alberta to deal with the oil and gas industry. But I think we have to recognize that they have an oil and gas industry that completely dwarfs ours; ours is so small compared to what they have. They dealt with these issues years ago, and I'm told that some of our issues that surround emissions -- H2S and those kinds of things -- are actually quite far behind what takes place in Alberta.

I'm not usually standing up here and telling you to put more regulations in place, but I think there are areas that we have to look at collectively. In the interests of all people, especially those who live on farms in the rural areas of the province and have animals and all those kinds of things . . . . So it is an important issue. I understand it's going on, and I'm happy about that.

In dealing with that, I bring to the attention of the minister the issue of Kaiser Energy and their sour gas proposal, just out of Fort St. John, and all the concerns that we've had from people that live out there. The minister is also aware that there are some issues on the Blueberry reserve in regard to sour gas. We've had some discussions about how we go about trying to rectify what has transpired and how we can look at it in the future.

I'll just leave it there, and maybe the minister can update me on what's taking place within the ministry, and how we deal with land sales that are close to a populated area, and those kinds of things. Maybe he has already started something that I can go on from.

Hon. D. Miller: The primary concern, in terms of our process -- and ultimately in decision-making -- is the safety of the residents in the region of the community in proximity to the proposed well.

[ Page 4160 ]

As I have indicated in public statements in the past, while we did sell that property, the sale of the property in no way suggests that it was an automatic approval of authority to drill, and there is an ongoing process. As I have said -- and I'll say it publicly to the member -- any advice that he wishes to give on this question will be listened to very carefully. So I'm open, hon. member, for anything that you may wish to advise us on with respect to the approval process.

[4:45]

Believe me, I am not trying to take a jab here. But it's kind of interesting, given our discussion last night about how we have to adopt standards, particularly in terms of those cross-border areas so there's not a perceived advantage or disadvantage . . . . We were talking about different kinds of standards last night. We were talking about labour standards and, to some degree, tax structures and the like. I guess it's not always the case . . . . There are reasons why you ought to look at your own jurisdiction and adopt standards you think make sense.

It is kind of interesting to note that the ministry's policies and guidelines regarding sour gas wells near residential developments are based on a considerable amount of work and study carried out in Alberta since the late 1970s involving experts from the Alberta Energy and Utilities Board, the industry, the health sector, academia, government and the public. Of course, that work in Alberta has resulted in the establishment of standards and practices for locating, drilling and operating sour wells near urban centres, and objectively appears to represent the best knowledge and thinking on those issues.

Those are the standards we adopted, so here's a case where we . . . . The member is right. The size of our industry relative to Alberta is like the elephant and the mouse. We took the best thinking on that question from Alberta and applied it to British Columbia. Even with that, you still develop these individual situations that you have to deal with, and the Kaiser proposal is one of those situations. So if the member has any advice on that question, we are very interested in hearing it, and our decision will be made with the primary consideration being the safety of the residents involved.

R. Neufeld: I appreciate the minister's response. I'm not going to get into the political end of it, but the minister says that what we adopted in British Columbia is what they do in Alberta, but not according to Kaiser Energy, which is the proponent of the well. There are some distinct differences -- some things that the oil industry has to go through in Alberta that they don't have to in British Columbia.

I'll just bring one of them to the minister's attention, and that is that anyone who lives within the vicinity of a proposed or existing sour gas well, or anything that has to do with the production of sour gas, can lay a concern. That has to then be heard before the Energy and Utilities Board, and they make the decision on whether it happens or not. In British Columbia, it's only if you're a landowner; it's not the citizenry. So to be honest, Kaiser is going further than they really have to in British Columbia by including the citizens that live around there. So they've been responsible.

I'm certainly not indicating that they haven't been responsible. In fact, they've gone the extra mile with that particular part of the regulation.

What I'm talking about is that this one issue . . . . I think the last letter I got was one from the school district. I think the minister got the same one -- from about 1,500 school children downwind from this site. I think that what we should do -- and I'm certainly not trying to say there's a magic answer to any of this . . . . I think it's a matter of some education for everyone, us included; but the people in the north should understand what the regulations are, what really happens. I think as the north gets populated more and more all the time, that's just something that we're going to have to look to.

When you look at what you went through to drill a couple of wells in the Fraser Valley compared to what you go through to drill wells in the northeast, there's just absolutely no comparison. It's because there's a heavy population of people that feel they don't want to be infringed on for whatever reason, whether it's well water, whether it's noise, whether it's a blow-out -- whatever. Those are actual concerns.

The ministry did go through a prolonged process of dealing with the two wells that were drilled in the Fraser Valley, and I'm certainly not indicating that we should do that with every well in the northeast. But I think that what we have to do -- because it is getting more populated; not just in the urban centres, but in the rural areas -- is start looking at some process where we start gathering some information from people. I'm talking specifically about the farmers that live out there, or those that live in rural residential neighbourhoods.

We have to start coordinating the land sales where those people are settling. The ministry will know, or the industry knows, almost exactly what they're going to hit down below. They don't always, but they have a pretty good idea -- such as this, of course, with the sour gas. We have to start doing that, so we can set up . . . I don't know if it's some regulations, but some educational information stuff, so that people understand.

I have people in the agricultural industry coming to me and talking to me about how it's affecting their animals, because there are all kinds of sour gas wells on their land. They have no authority to say: "No, we can't do it." The ministry sells the right, and if you don't agree to it, arbitration comes in and the well is drilled. That's exactly how it happens -- some of them right close to their homes.

All I'm saying is no, we don't want to stop the drilling, but I think an educational process and a gathering of information from those people, before we start selling land right close to where a lot of people live -- specifically like this piece of land . . . . I certainly wouldn't want to say that it was wrong for the ministry to sell the land; I would think that they did it with the best intention. No one expected what would happen, either. All I'm saying is that we can try and get more prepared to deal with issues such as this, instead of the way we're trying to deal with it now.

I don't think there's any magical way, but I think there is probably a better way than how we're trying to deal with it now. Maybe the minister could respond to that.

Hon. D. Miller: Really, I'm not certain. We certainly need to continue to do what we can to inform the publi