The Legislature Raids

ENERGY AND MINES STATUTES
AMENDMENT ACT, 2003

The House in committee on Bill 10; J. Weisbeck in the chair.

The committee met at 2:38 p.m.

J. MacPhail [Leader of the Opposition]: ... Let me read this, then, out of the memorandum of understanding between Accenture and the government. "B.C. Hydro and the B.C. subsidiary of Accenture will initially be involved in the new joint venture. After a transition period, B.C. Hydro will relinquish its minority position in the joint business. The new business will be privately owned and operate in the private sector. It will be a wholly owned subsidiary of Accenture."

Now the minister is trying to stand up and say it's outsourcing. He can't tell me how I'm wrong on the privatization. Two definitions so far describe exactly what this government is doing, to a T, and the definition of what this government is doing — mind you, these are only legal definitions — is "privatize."

I'll go back to my question that the minister didn't answer. What's the difference between outsourcing and privatizing?

Hon. R. Neufeld: I will answer the question one more time. This bill lists out what support services are and how B.C. Hydro can move towards purchasing those support services by the authority of cabinet. They can purchase those services from other sources rather than providing those services internally if, in fact, it is deemed by B.C. Hydro and the cabinet that there is a substantial saving to the ratepayers of the province and that the services will be the same level or better.

J. MacPhail: Could the minister answer my question? I heard what the minister said. Could the minister now say what he's been repeating over and over and over again — how that's different than privatization?

Hon. R. Neufeld: I've explained this, I think — what? — six times now.

J. MacPhail: No, you haven't, actually.

Hon. R. Neufeld: I have.

J. MacPhail: No, you haven't. Worried, nervous?

Hon. R. Neufeld: No, I'm not worried and I'm not nervous. We're doing exactly as we said we would during the election. We're moving forward this bill that we're dealing with today. This section of it is to deal with how B.C. Hydro can procure services and what services they can outsource or buy from other people in the marketplace. It's all about saving money for the ratepayers. It's all about doing business in a better way. There's nothing wrong with that, and I think we should look at it in a positive light.

...

J. MacPhail: ... what we're discussing here is whether this particular portion, where they've given a contract to Accenture, is privatization. That's all. The minister won't answer that question. What is the minister's definition of privatization? Not what the New Era document does, because that document doesn't define privatization. It says what you won't privatize. When the minister made that grand promise yesterday that he would resign if B.C. Hydro were privatized, what definition of privatization did he have in his mind?

Hon. R. Neufeld: Let's see. When I look through this bill, I read nothing about resigning in here. I read nothing on any one of the sections that has anything to do with that. I read nothing on any one of the sections that has anything to do with the newspaper. But I do read sections of this bill that demonstrate and are very clear and transparent with British Columbians on how B.C. Hydro will, in the future, receive its non-core services and its support services. I think it's open, it's transparent, and it lays it out very clearly.

J. MacPhail: Is there some reason why the minister doesn't want to call this privatization? Is there some reason for that?

Hon. R. Neufeld: Again, I'm going to go back to the bill that's in front of us. That's the bill we should be discussing. Whatever section we're discussing right now, we should be talking about that. This bill lays out very clearly and demonstrates very clearly to the people of the province about support services as related to B.C. Hydro and core services as related to B.C. Hydro.

J. MacPhail: I'm asserting that this is privatization. Am I wrong?

The Chair: Shall section 2 pass? Leader of the Opposition.

J. MacPhail: Sorry. This is privatization. Am I wrong?

Hon. R. Neufeld: Again, I'll try to explain it. It says it very clearly. I wish some would read it. It describes very clearly in the bill what are support services that B.C. Hydro can outsource only after receiving the authority from cabinet and demonstrating that those support services can be obtained for the Crown — services that they need — at a cost saving, and also to be able to provide the same level of service or better service.

...

The Chair: On the bill, on section 2, please.

J. MacPhail: Although the colleagues in that brain trust of the front bench think that it's not important at all whether this be called privatization or not…. Again, they try to say that this is not the slippery slope of privatization. They use fancy words that they think the public won't understand, like outsourcing. The minister refuses to provide his own definition that distinguishes outsourcing from privatization, but every single legal application of this designation is that they're privatizing one-third of B.C. Hydro. In fact, the memorandum of understanding that this minister has signed with Accenture says exactly that — that this is privatization.

The reason why this is so important is because you then go on to define what this government thinks is part of support services. Perhaps the minister could tell us how the definition of support services came about.

Hon. R. Neufeld: Actually, it's described in (10):

"For the purposes of subsection (9), 'support services' means the services that support or are ancillary to the activities of the authority from time to time, and includes services related to metering for, billing and collecting fees, charges, tariffs, rates, and other compensation for electricity sold, delivered or provided by the authority, but does not include the production, generation, storage, transmission, sale, delivery or provision of electricity."

J. MacPhail: Does this definition of support services capture everything that this government is turning over to Accenture?

Hon. R. Neufeld: The Accenture deal is separate from what this bill is, but this describes the services that could be outsourced. If there are some services that B.C. Hydro could actually procure under those descriptions, they would have to come to cabinet and say, as they have with the other ones: "Can this happen?"

I'm not sure, but I'm sure if you had asked Hydro, they may have some other services that they may wish to outsource.

J. MacPhail: I've not had an opportunity to ask Hydro. It's up to the minister to answer these questions.

I take it that this bill goes beyond support services and captures services beyond the Accenture deal. Am I correct?

Hon. R. Neufeld: She's wrong. It describes the type of services — I read them into the record — that Hydro can look at procuring outside the corporation only with the approval of cabinet.

J. MacPhail: I fully accept the answer. I'm not sure how that makes me wrong. So we have the Accenture deal which privatizes a range of services. The minister is saying that there can be more that can be "outsourced" than the Accenture deal. Is the minister then suggesting — call me wrong; say I'm wrong — that everything can be privatized except for production, generation, storage, transmission, sale and delivery? Everything else can be privatized?

Hon. R. Neufeld: The legislation allows other services that Hydro receives to be purchased from other sources. I'll give the member one example. Fleet services could be. I'm not sure. B.C. Hydro….

Interjections.

Hon. R. Neufeld: Well, no. All right. That could happen if, in fact, they make a case that they could provide those services cheaper by purchasing them in the market. That's just one example that I can think of off the top of my head.

J. MacPhail: Last April, Hydro announced that they were privatizing Westech Information Systems and the vehicle services. That's already been announced. That's not a breakthrough by any stretch of the imagination. What I'm trying to get at here is that the minister refuses to acknowledge that this is privatization, and there's a very good reason for that. It's because his career's on the line, and of course, the whole reputation of the Liberal government is on the line here. Just the same way they said that they're not going to privatize B.C. Rail and campaigned on that. Then it turns out that but for the rail ties, they're privatizing absolutely everything. So I'm trying to figure out what the limits are of this minister and his privatization exercise, because right here, in the support services listed, it says that support services means services that support or are ancillary to the activities of the authority from time to time.

The Accenture deal deals with the privatization of human resources. That doesn't meet this definition. It doesn't meet the definition at all. Those services are not needed from time to time. Financial services — that's being privatized. That doesn't meet the definition under here. Those are continuous services.

...

Support services could mean services that support the activities of the authority from time to time, or it could mean services that are ancillary to the activities of the authority from time to time. That is exactly the legal definition ? exactly. They either support from time to time or are ancillary from time to time. That is exactly what the language means. If there's a legislative drafter over there, that is exactly what the language means.

The minister just received bad advice from the Government House Leader in his usually arrogant way. The Government House Leader thinks he knows everything, and he completely misled the minister. So it means one of two things. It means services that support the activities of the authority from time to time or are ancillary to the activities of the authority from time to time. That's exactly what it means. In either case — either "support" or "are ancillary" — it's qualified by the words "from time to time." What does that mean?

D. Jarvis: Your interpretation is wrong.

J. MacPhail: I've drafted legislation for ten years; I know what it means.

Hon. R. Neufeld: This bill is, I think, very clear. I guess, from the member's words, she knows the legal ramifications of it. That's her opinion. She's quite welcome to have that opinion.

J. MacPhail: Opinion?

Hon. R. Neufeld: Yeah, she's quite welcome to have that opinion. It reads very clearly what support services are and what they are not. For B.C. Hydro to actually have the ability to do anything more than what they're doing now, they would have to come to cabinet and demonstrate to Treasury Board, or cabinet through Treasury Board, that there would actually be some savings and that the level of service could be maintained or improved.

J. MacPhail: What are support services that are needed for the activities of the authority from time to time? It's not an opinion. This minister, just because he doesn't know what he's talking about, cannot accuse me of not knowing what I'm talking about. I know exactly what I'm talking about here ? exactly. These words have to have meaning. Legislative drafters do not put words in the legislation unless they have meaning. What is the meaning of the term "from time to time"?

Hon. R. Neufeld: "From time to time" could mean services that are required from time to time if projects are happening or being built around the province. Maybe the corporation needs to purchase those services. That could be from time to time.

J. MacPhail: What services that are part of the Accenture deal are not needed from time to time but are needed continuously? This is legal language that gives support to the Accenture memorandum of understanding. It is the basis upon which this government has the right to privatize one-third of B.C. Hydro. The legal definition is extremely important, and it doesn't make sense.

Hon. R. Neufeld: ... Maybe to help the discussions, I could read into the record the services that are going to be provided to B.C. Hydro by Accenture: customer services, Westech, network computing services, disbursement services, financial systems, HR services, building office services, purchasing department, financial and business support services.

J. MacPhail: Thank you for that information. It's irrelevant to the question I just asked.

This will be my last question for a moment, and I'll turn it over to the member for Prince George–Omineca after this question.

Again, I preface this…. Section 12(10) is the legal raison d'être for this government privatizing a third of B.C. Hydro. It is the legal basis upon which Accenture gets to do the job as a private company. It is the only basis on which this government can privatize those services, so every word has a meaning. I asked the minister. He can't tell me what "from time to time" means. He can't. The list of services he just read into the record has nothing to do with being offered from time to time. They are integral — completely integrated — services that are offered every minute, every hour, every day to every customer of B.C. Hydro. What are those words "from time to time" in this legislation for?

Hon. R. Neufeld: I'll relate again. "Time to time" could refer to projects that are done in different places around the province that aren't continuing operations, but from time to time B.C. Hydro requires services to perform those duties. That, I think, is a pretty good description of what "time to time" is.

P. Nettleton [Independent, Prince George-Omineca, former BC Liberal, ousted for his battle to protect BC Hydro]: This is an interesting exercise. I have no interest in embarrassing the minister, nor do I personally have any interest in seeing him being forced to resign. Nevertheless, I can tell you this. Frankly, I'm a lot more concerned with respect to consumers, be they corporate, industrial or residential. Nothing I've heard here today gives me any comfort that, in fact, this government and particularly this minister have any sense as to where this government is going in and around B.C. Hydro.

The Leader of the Opposition had simply asked, and I was going to do the same thing, for a definition of privatization — pretty basic, pretty fundamental to this whole discussion. We didn't get a simple definition of privatization. It's my sense that the minister really doesn't understand the whole notion of privatization.

Again, in response to a simple question from the Leader of the Opposition, he couldn't define "designation" prior to a discussion in and around privatization. I expect that he may have some difficulty, as well, with a discussion in and around deregulation, another term that's been tossed around by this minister and by this government.

...

I think one of the problems is that we had an Energy Policy Task Force report that was kept under wraps for seven months. It was released in January, short on detail. We've had an Accenture deal. There's been some discussion within the context of Bill 10 here today and in second reading debate on that contract, the Accenture deal, worked out in secrecy. Now we have Bill 10 before us, which doesn't go into the kind of detail that we need in order to understand what B.C. Hydro will look like as three components.

I called in second reading debate for dialogue and consultation with respect to the whole question of B.C. Hydro and its future. Again, I think the minister has talked about privatization, and I would like the minister to provide this House, to provide consumers that depend on this minister and look to B.C. Hydro, with a definition of privatization. Can the minister provide us with a simple definition that people who are listening out there can understand? Define for them, if you will, privatization.

Hon. R. Neufeld: The energy policy that we delivered, although this isn't dealing with the energy policy…. I'll try to be as close to the bill as I can. The energy policy that we delivered November 25, 2002, had a section in it that stated clearly that we would look towards B.C. Hydro being able to outsource support services where costs can be reduced for electricity consumers while maintaining quality of services. That's been out there since November 25, 2002.

What Bill 10 does, again through the Chair, is actually put it in fairly good writing so that people can understand the difference between support services and what does not constitute support services. I suggest the member read it.

P. Nettleton: I guess I'll reluctantly accept that, in fact, either the minister is unable to answer that question — a pretty basic or pretty fundamental question — or he's unwilling. In either case, it's totally unacceptable that he cannot define privatization.

There have been people who have suggested to me that the minister is not the sharpest knife in the drawer, but I stood up for him. "The way he's carved up B.C. Hydro…." I've said: "Absolutely, this guy is sharp."

The Chair: Member, I find that sort of comment inappropriate for this House. It's entirely unparliamentary.

P. Nettleton: That's fine. I withdraw.

The Chair: I would ask for an apology, please.

P. Nettleton: I withdraw. I do have a question, though, for the minister. Why Accenture? Why is the minister, why is the government, turning to Accenture for a contract?

Hon. R. Neufeld: This bill actually is not…. We're not discussing the Accenture deal. In fact, probably fairly soon you will be able to see the Accenture deal in its entirety, and you can make your own decision. This bill deals with what is defined as support services, what are core services to B.C. Hydro, and the ability for B.C. Hydro to outsource.

J. MacPhail: Sorry. We're not talking about the Accenture deal? Is the minister suggesting that there's some reason for this legislation other than the Accenture deal?

Hon. R. Neufeld: The member knows full well that this bill is to allow those kinds of agreements to take place in an open and transparent way. That's what the bill's about.

J. MacPhail: Well, so far the only kind of situation we have before us is the Accenture deal. I think it's absolutely appropriate that this Legislature discuss the Accenture deal because after the government rams this legislation through with its majority, no one will be able to examine the Accenture deal — no one.

Let me put that to the minister: will the B.C. Utilities Commission be able to examine the Accenture deal in any way after this legislation is passed?

Hon. R. Neufeld: Actually, that question has been asked many times. If you go down to subsection (12), I'll read it into the record: "Nothing in subsection (11) (e) precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement designated under subsection (9) when establishing the revenue requirements and setting the rates of the authority."

J. MacPhail: I've been in the House discussing this matter from the time we started discussing this bill, and I've never asked that question. So I'm not sure. Was it his own caucus that was grilling him on that point? Maybe it was, but guess what. There are several members of the Legislature that aren't privy to the private meetings of the Liberal caucus. The public isn't privy to the private meetings of the Liberal caucus. Maybe the minister answered the questions to — I don't know — the member from Chilliwack, but he hasn't answered them in the House.

His answer that he just gave doesn't deal with the question. The section the minister just quoted said that the Utilities Commission will be able to take into account the costs incurred by the Accenture deal, not whether those costs are legitimate or not. That's what the section does. Is there any way the inputs of the Accenture deal can be considered by the B.C. Utilities Commission?

Hon. R. Neufeld: The member's wrong, actually. The B.C. Utilities Commission will review all costs when B.C. Hydro makes its rate application this November. Let me see. B.C. Hydro has not had to appear before the B.C. Utilities Commission, I think, for about ten years. A previous government decided that B.C. Hydro shouldn't have to do that. They will now appear before the B.C. Utilities Commission to justify why they think they need any kind of a rate increase. In that process the B.C. Utilities Commission will be able to review all costs. If they think the costs are too high, if they think any costs that the utility has incurred are out of line with other utilities that are too high, they can tell B.C. Hydro they refuse to accept those and put them in the rate base. B.C. Hydro will have to go away and figure out how they can do the job a little bit better. The B.C. Utilities Commission will have that authority to review all those costs when B.C. Hydro goes forward this fall.

J. MacPhail: That's great news, actually. That's absolutely wonderful news. I'm just going to reiterate what the minister has just committed to. The Accenture deal, in its entirety, will go before the B.C. Utilities Commission. The Accenture deal will be able to be examined point by point by the B.C. Utilities Commission. All of the factors of the Accenture deal will be examined to determine whether the costs of the Accenture deal are legitimate costs when determining rate increases. Am I correct?

Hon. R. Neufeld: Again, selective hearing. That's not exactly what I said, so I'll say it again. When B.C. Hydro appears before the B.C. Utilities Commission for a rate hearing this fall, as they are going to make application to, the B.C. Utilities Commission will review all of B.C. Hydro's costs — whether it's with Accenture or with others — because for ten years the B.C. Utilities Commission has not had an opportunity to review those costs.

For the first time in a decade, actual experts within the B.C. Utilities Commission will review all the costs associated with B.C. Hydro as they review their rate requirement or the rate increase that they're requesting. Through that, I assume — and I believe it will happen — all costs that B.C. Hydro have will be reviewed. The costs with Accenture will be reviewed by B.C. Hydro to make sure that they are fair, equal and that they actually provide the services to B.C. Hydro that they're destined to do.

J. MacPhail: One more question in this area because, clearly, the minister — as I repeated exactly what he said — backed off. He backed off completely.

The minister is relying on the Hydro Power and Authority Act with its new subsection (12) of section 12, which allows the costs of the Accenture deal to be considered. But (11)(e) says that the authority — meaning the Utilities Commission — is not required to obtain any approval, authorization, permit or order under the Utilities Commission Act in connection with the agreement, and that's the agreement we're talking about.

Then it goes on to say under subsection (12) that nothing in that section that I just read "precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement designated…when establishing the revenue requirements and setting the rates of the authority."

The great unwashed public and people like my colleague and I thought that meant that the agreement was shrouded in secrecy. The details of the agreement with Accenture couldn't be considered in terms of its inputs, but the overall cost of that agreement has to be taken into account when rates are established. In other words, the public doesn't get any chance to discuss the way the Accenture deal came about, but the overall cost can be added to hydro rates. But the minister says: "I think I'm wrong on that." The minister is now saying….

Let me try it a different way, then. Is the minister saying that the Accenture deal will be examined in detail by the Utilities Commission and that if the costs are inappropriate for justifying a hydro rate increase, the B.C. Utilities Commission has a right to authorize that?

Hon. R. Neufeld: As I said earlier, as B.C. Hydro goes before the B.C. Utilities Commission with their rate request….

J. MacPhail: It's a straightforward question — yes or no?

Hon. R. Neufeld: Yeah, it is, and I'm going to give you a straightforward answer — again.

They will have to provide to the B.C. Utilities Commission all the costs that go with providing the electricity that they do to their customers domestically in British Columbia. The commission will review all those costs, regardless of where those costs are. It could be for some company that provides transformers or power poles or anything. The B.C. Utilities Commission — that's their oversight. That's something the last administration forgot about when they removed B.C. Hydro from under the Utilities Commission auspices. Only if the B.C. Utilities Commission decides that those costs are fair and are fair to be passed on, can they be passed on. In fact, the B.C. Utilities Commission can say no to some of those costs if they, in their wisdom, feel that they are not warranted.

P. Nettleton: I remain unconvinced, but in any case, I think the minister will live to eat those words another day. But, yeah — informative.

I believe B.C. Hydro itself called the Accenture deal the biggest deal of its kind in B.C.'s history, as I recall. In light of this and Bill 10, which we're examining here today, and the fact that outsourcing functions are removed from public scrutiny, as I believe is the case, would the government — as has been suggested by a political columnist — commit to a review of this deal by the auditor general?

Hon. R. Neufeld: I think I've explained quite a few times in the House now what the bill does — what it allows and what it doesn't allow. We should move on and start talking about the rest of this good bill.

B. Penner: I'd also like to take part in this debate. I have a couple of questions for the minister. The minister and other members of this House will know that I have a great interest in B.C. Hydro, and have had for many years, and have frequently spoken on the issue of B.C. Hydro not only in caucus but here in the Legislature ever since I first became an MLA.

I do have a number of questions, though, for the minister. Has B.C. Hydro or the B.C. government previously done business with Accenture or its predecessor? If so, can the minister give us some details about that and under which administration that work may have taken place?

Hon. R. Neufeld: Thank you very much for that question. The member for Chilliwack-Kent has actually been very active in anything that relates to B.C. Hydro. He's been very active in independent power producers across the province of British Columbia, and in my ministry I respect his input and his knowledge on those items. Yes, Accenture is not a stranger to B.C. Hydro. For the decade of the nineties there was approximately, I would say, $50 million spent by B.C. Hydro on Accenture.

B. Penner: It's fair to say, then, that that money — $50 million — from B.C. Hydro was spent during the previous NDP administration. Is that correct?

Hon. R. Neufeld: Yes.

B. Penner: I've noticed the minister's comments over the last day, where he said that if the government were to break its promise not to protect in public ownership the core assets of B.C. Hydro — including the dams, transmission and distribution — he would have to reconsider his position in government. I certainly salute that because, to me, our campaign commitment around B.C. Hydro is very important. Just as important to me was a commitment I made locally during my election campaign that we'd also improve B.C. Hydro so that we could make sure that B.C. residents continued to receive enough electricity — in other words, that we maintained adequate supplies.

I have become concerned in the past that the last government did not invest in any significant new generation in British Columbia. In fact, the only power plant of significance built under the NDP was in Pakistan at a cost of about $10 million to British Columbians — hardly helping our system reliability. I am aware that we have to make changes, and I support….

Interjections.

The Chair: I want to remind all members that we should restrict our questions and our comments to this bill, please — to committee stage.

[ Page 5072 ]

Member, would you proceed, and I hope there's a question in this.

B. Penner: Given that we need to make changes in B.C. Hydro, I wonder if we can make sure that we protect our interests and, if certain changes don't work out, that we can correct any problems that might arise. What I'm getting at here is that I've heard critics or opponents of the proposed partnership with Accenture state that if the benefits to B.C. Hydro do not accrue — if the project or the partnership doesn't turn out the way it is intended — there is no way for B.C. Hydro to get out of the partnership agreement and there is no way to correct the problem. In part, I'm told this is because of various trade agreements. I wonder if the minister can tell me if he or his staff have looked at this issue and whether there is any protection for British Columbians, if the partnership doesn't work out as planned for B.C. Hydro to get out of the arrangement.

Hon. R. Neufeld: Yes. People from my ministry have been involved. B.C. Hydro folks, obviously, have been involved. The deputy minister responsible for energy development has been involved. Other accounting agencies and legal firms have been involved to make sure that the shareholder is kept whole and that there are all the normal things that would be in a contract of this kind — meaning benchmarks and performance targets. Actually, if they don't perform, there are penalties. All of those kinds of things, I can assure the member, have been reviewed consistently and will be in the contract.

P. Nettleton: I had asked the question: why Accenture? It wasn't intended to be a rhetorical question, but I do have some thoughts with respect to Accenture and why Accenture.

It may in fact be, at least partially, because it's located in Bermuda, outside the scope of court judgments. It's been reported as having numerous cost overruns in different states and so on. Now, with Bill 10, it's being put outside of government oversight. That may explain why the government is doing business with Accenture. I'm concerned, as others are, about what safeguards will be in place for British Columbians. Where will there be some accountability with respect to the operation and administration of this Accenture corporation?

One other question. I'd like to take a final run at this, if I may, with respect to the whole question of privatization. The minister had indicated very publicly in the press — unless, in fact, he's taken the position that he didn't say this…. As I understand it, he's said he will resign if the government privatizes B.C. Hydro.

J. MacPhail: That's what he said.

P. Nettleton: That's what he said.

J. MacPhail: No qualification.

P. Nettleton: I'm just wondering….

The Chair: Member, would you kindly be seated for a second. This line of questioning that's being pursued about the minister's responsibility for his comments — I'd like to know how that relates to this bill and to committee stage, please. You asked a question initially. I would assume that you want that answered.

P. Nettleton: My question is privatization, which I think is fundamental to a discussion of Bill 10 — in particular, this section. Again to the minister: what is it that will cause him to resign that he says is not in the plan for B.C. Hydro?

Hon. R. Neufeld: The comment I made was that I would not be here if we did not live up to our commitment in the New Era document, which each and every member who belongs to the B.C. Liberal caucus made. That was to protect the core assets of B.C. Hydro, that being the dams, transmission and distribution — the core assets. That was the commitment I made. That was the commitment the Premier took forward to the people in the province of British Columbia during the election. That's the commitment we've lived with. That's the commitment written in the energy policy that was released November 25. It's very clearly laid out in the New Era document.

B. Kerr: I'm concerned about the governance here. Will this agreement be signed with Accenture, or will it be signed with a British Columbia company, operating under the laws of British Columbia, that may be owned by Accenture?

Hon. R. Neufeld: The contract between B.C. Hydro and Accenture will be signed with the British Columbia company with a head office in Vancouver, B.C. It will look toward growing that business well into the future and has access to over $50 billion worth of services North America–wide. It can only mean good things and lots of good jobs for the province.

Further to that, this company will pay taxes in British Columbia: corporate taxes, personal income taxes, all those taxes — and obviously, if they're in the city of Vancouver, Vancouver taxes. Just to clarify that.

J. MacPhail: Mr. Chair, I appreciate you keeping us on track. That's very important.

The reason why the issue is important — about privatization and the commitment that the Liberal government made — is that this minister and his government are trying to separate generation, distribution and transmission functions from support services. Somehow, even though the minister has danced around it and spent a half-hour not saying that what they're currently doing with the Accenture deal is privatization, it is privatization.

It has occurred, I think, to several people — if not hundreds of thousands of British Columbians — that the separation of support services from the generation, distribution and transmission functions is an artificial separation. I could be wrong, so let me ask the minister this: are any of the employees that are to be transferred to Accenture currently working in generation stations?

Hon. R. Neufeld: First, they're not being transferred. They have had a vote, and they have elected to move over to Accenture Business Services. I can get some further information for the member on that question. I'm not sure whether I can say yes or no to that question right now, because there may be some places around the province where some of those people may be working, and I'm not sure about that. If the member will give me time — in fact, the gentleman that's with me from B.C. Hydro is not sure either — we'll get that response for the member.

J. MacPhail: They're not sure? How is it that I know there are employees in generation stations being transferred, and the minister and his staff don't know that?

Frankly, I am completely taken aback. Are there employees in the distribution facilities who are being transferred?

You're just lying.

Point of Order

Hon. R. Neufeld: On a point of order. I just heard the Leader of the Opposition say I'm lying. I have tried to answer the questions as carefully and honestly as I can. That member knows that I don't lie in this House. I was quick to withdraw my remark the other day. I don't think we need that kind of behaviour in the House. I don't need her calling me a liar or anyone else calling me a liar. I would ask that she stand and withdraw that statement right now.

The Chair: Member, I clearly heard you say the word. I would ask you to stand and withdraw that, please.

J. MacPhail: I withdraw.

I'd be happy for them to answer my questions. The most senior people are here. Just answer the questions.

Debate Continued

Hon. R. Neufeld: There are about 1,600 people that have elected to move to this new business called Accenture Business Services. I can't tell you in this House exactly where each one of those comes from. There could be some from generation; there could be some from distribution, depending on the kind of work they're doing.

J. MacPhail: Maybe the Chair could introduce the staff who are with him, please.

Hon. R. Neufeld: Yes, I am remiss in that. I appreciate the member reminding me. I have with me Gary Sherlock, the director of finance at B.C. Hydro; and Chris Trumpy, the special adviser to the minister — to me — behind me; and also Les MacLaren, chief executive officer, Crown agencies secretariat, on my right.

J. MacPhail: How is it that B.C. Hydro cannot answer these questions in this House? How is it that B.C. Hydro does not have this information?

Hon. R. Neufeld: Again, I will offer to provide that to the member at a later date. As we speak, there will be people watching, and someone will get that information to us.

J. MacPhail: Well, you know, there are only three of us in this Legislature who are holding this government to account on this piece of legislation. It is our only opportunity to discuss this legislation. We are talking about the heart of the legislation right now. The minister is surrounded by and perhaps has expertise himself, and he can't answer these basic questions.

Hundreds of thousands of British Columbians believe the minister when he says that they're not privatizing the core assets of B.C. Hydro, and there are hundreds of thousands of others who question the minister on that. So there would be hundreds of thousands of British Columbians who would think that the generation stations operate all on their own and that because the government says it's not privatizing the generation stations, even if they remove all the employees to Accenture, the generation stations would operate on their own.

I'm just trying to find out from the minister exactly what this support service is. He couldn't answer what "from time to time" means, what a support service from time to time is. He can't answer the question now about whether the employees of the generation station are being privatized. The reason why he doesn't want to answer those questions is because people would have to come to the conclusion that the delineation of support services as distinct from the core assets is artificial and means nothing to the reality of delivery of hydro to British Columbians.

The employees who work in those generation stations are being privatized, are being moved to Accenture. The employees of the distribution systems are being privatized, moved to Accenture. The employees of the transmission lines are being privatized and moved to Accenture. This minister has to come to the conclusion that the support services he is privatizing are key to the operation of the core assets which he claims are not being privatized. Just because the minister stands up every day and says core assets are not being privatized, every British Columbian is supposed to believe him, when it is not so.

Let me ask this question. The people who administer the systems for distribution, transmission and generation — are they being moved to Accenture?

Hon. R. Neufeld: Again, I offered that I would get the number of people that may be providing some of the ancillary services and that may be working in a generation station, but people that work in generation, distribution or transmission directly are not being transferred. But I will get the number for you so that you can understand what services they're providing and why they would be moving.

The member tried to state that we were privatizing generation, transmission and distribution. That is incorrect. We committed to not doing that, and we are not doing that.

J. MacPhail: The minister knows who isn't being transferred, but he doesn't know who is being transferred. Hmm. Isn't that suspicious? Do any of the employees who administer the systems for distribution, transmission and generation…? Are any of those employees being transferred — those who administer the systems that run transmission, generation and distribution?

Hon. R. Neufeld: The operation groups in generation, distribution and transmission stay with B.C. Hydro.

J. MacPhail: The operations group? Is that what I just heard? I'm sorry. And could he define what the operations group is? Clearly, the government now, with the staff, knows who's not being transferred. Funny how it is that they don't know who is being transferred. Strange. Perhaps the minister could define what an operations group is.

Hon. R. Neufeld: The operation groups, which I said are the operating groups that work in generation, distribution and transmission, are not being transferred. What I said to the member earlier — and she doesn't want to listen — is that in some of those generation facilities or maybe in distribution or transmission, there could be some people that work now on other projects but happen to work there. The core people that work on those core services are not being transferred, but there could be some out of those operations that provide IT services or something like that. I will get that information for the member.

J. MacPhail: I'm listening to every single word the minister says — every single word. In what way will the employees that are being transferred from generation, distribution and transmission interact with the operating group that's staying behind?

Hon. R. Neufeld: Again, as I said, there are people that are watching — people that work in the generation line of business, the distribution line of business, the transmission line of business — who stay with those groups. I called those operating groups. There may be individuals that perform other services, who may be working in those facilities but are not directly involved with those lines of business, that may actually have elected to move.

J. MacPhail: Let me paint this scenario. The employees that are moving from generation, transmission…. Well, let me do it individually — the employees that are moving from the generation facilities. Can the generation facilities operate on their own without those employees? Does the core asset…? Does the generation keep going without those services that are moving to Accenture?

Interjection.

Hon. R. Neufeld: Someone said it is simple, and it is simple, so I'll try it again.

Under section 10 it says: "…does not include the production, generation, storage, transmission, sale, delivery or provision of electricity." Again, I will say no one that is in direct responsibility with generation, distribution or transmission will have actually elected to move to Accenture Business Services.

J. MacPhail: I'll repeat my question. The people that are being transferred, unless the minister wants to lump all together…. That's fine — generation, transmission and distribution. If those people go, what happens? Does generation just carry on? Does transmission just carry on? Does distribution just carry on? In other words, does the transfer of those employees have no effect at all on generation, transmission and distribution? Is that what the minister is saying?

Hon. R. Neufeld: Through the Chair to the member: I wasn't listening to her, and I'm wondering if she'd ask that question again, please.

[1600]

J. MacPhail: It's the same question I asked before. Let me just assert this because we know it to be true. There are employees that are being transferred from the generation, transmission and distribution stations of B.C. Hydro. They're being transferred to Accenture. They're being privatized. When those employees have gone over to Accenture and if their work was not being done, does the generation, transmission and distribution of hydro carry on in its entirety?

Hon. R. Neufeld: The people that operate the generation, the people that operate the distribution and the people that operate transmission are not going anywhere. They will stay in B.C. Hydro operating those facilities. There may be some people who work in those facilities that are doing other kinds of things, but the people who actually operate the generation, transmission and distribution are not moving.

J. MacPhail: Let me see how I can do this so the minister will actually answer the question. The employees that are going to Accenture, who work for generation, transmission and distribution, are what the minister calls support services. Therefore, he's saying they're not core assets. Is that correct?

...

I'll sit down, and I won't ask another question if the minister could just give me a yes or no to this question. When those Accenture-ized support services are removed from the chain of command inside Hydro, can the core assets, as the minister defines them, of generation operate? Can transmission operate, and can distribution operate without those services provided by the people inside those operations who are being moved to Accenture? Yes or no?

Hon. R. Neufeld: Again, as I mentioned, some of the people that will move to Accenture Business Services provide services to those different generation, distribution and transmission entities. I use an example of computers — computerization. Someone who fixes computers at a generation station may be there doing that kind of work, but that's not absolutely core to that business. The operation of the business — generation, transmission and distribution…. The core people that operate those lines of business will stay there.

J. MacPhail: God, I feel badly for the minister having to fall into these traps. I'm wondering whether the minister has actually seen any of these systems.

Let's just talk about the core assets of the system. The core assets of the system deliver power, so when power stops, that's a real problem. It's a huge problem. It means the core assets aren't working. In hydro that's called a power outage. One of the systems that's being privatized….

Interjections.

J. MacPhail: Well, it's true. I know. Some of the backbenchers are surprised at the technical level of this discussion. I can well understand it, because the minister himself doesn't get the technical nature of B.C. Hydro. I fully understand the backbenchers being completely underwhelmed by the minister's answers.

The minister says: "Yeah, a computer system is…. Those who operate computer systems are going over to Accenture, but that's got nothing to do with the core assets." Well, the core assets are to deliver power. When there's a power outage…. Maybe the minister can tell me what happens when there's a power outage.

Hon. R. Neufeld: I think this is getting a little ridiculous. I think the member knows what happens when the power goes out, because her administration was in the dark for ten years from 1991 to 2001. It's just unbelievable, the kind of questioning that's coming from the member. A power outage is a power outage.

J. MacPhail: I don't know why the minister thinks these questions are ridiculous. It's probably because he's made a commitment to resign if core assets are privatized. We're just trying to figure out what part of the core assets are being privatized.

In fact, the core assets deliver power. When there's a power outage, the employees at Westech go in and fix it. That's exactly what happens. They keep the power going. It's a computer system that regulates this.

Now, the minister says: "It's people operating computers." They use computers to operate the core system. How else does it happen? Part of the privatization is these very employees who operate the computer.

Does this Liberal government think it's people standing and pushing water over a dam? Is that how they think the core assets work? Do they think it's little munchkins that climb up transmission lines and push the power along? It's computer operators who deliver the power through computer systems, and these are the very people who are being privatized.

When I asked the minister whether the system could operate without these employees who are being privatized, he didn't answer the question. There's a very good reason he didn't answer the question: the system goes down without these employees. That's exactly what happens. It makes a mockery of this government's claim that they're not privatizing core assets. It is absolutely ridiculous.

Interjections.

J. MacPhail: I can understand the Liberal back bench feeling extremely uncomfortable with these questions, because it should have been them that asked these questions in their secret caucus meetings, and they didn't do it. They didn't do it at all. If they had asked it, they would have had to get the minister to stop making the claim that they're not privatizing core assets. That's exactly what it will be doing.

Well, this probably should be easier. We now know that the core assets cannot operate without the employees who are going to Accenture. We now know that. Let me ask this question: even with those privatized employees keeping the system going, how does B.C. Hydro get the information to actually charge customers for that service?

Hon. R. Neufeld: Obviously, the services that will be outsourced from Accenture Business Services will be integral to the operation of B.C. Hydro. The core assets are not changing at all, but B.C. Hydro will require services from those divisions that actually will move to Accenture Business Services.

In response to the last question: by meter.

J. MacPhail: How does the business community get the information about what hydro they're using and how much to pay for it? We now know that the actual delivery of power cannot be done without the services that are being privatized. How does the government, through B.C. Hydro, get its money — get paid — for the delivery of that publicly owned resource, B.C. water, without the services of the people being privatized?

Hon. R. Neufeld: No one is being privatized. The people will receive a bill from British Columbia Hydro, as they have in the past. It will be exactly the same kind of bill on that statement, and they will pay their bills exactly the way they have in the past.

J. MacPhail: Well, actually, that's not true. That isn't true at all. Or is the minister now saying that Accenture won't be providing the business and financial support for distribution systems, generation and transmission?

Hon. R. Neufeld: The bills will still be generated by someone reading a meter. That will go on the bill. The rate will be there. The end bill will be paid. It's still from B.C. Hydro. To provide that, service will come from Accenture Business Services, but the bills come from B.C. Hydro and the money goes to B.C. Hydro.

J. MacPhail: ... Those services about determining how much hydro is used, the financial delivery of the services to business, the checking of the accuracy of those billings and the actual collection of the money are done by Accenture. So the minister is somehow saying that it's B.C. Hydro doing these services. How far have we come in this debate that he doesn't know how wrong he is?

Interjections.

J. MacPhail: Yes, he did. He said B.C. Hydro will be doing those services. That is not accurate.

Interjections.

The Chair: Order, please. Order. Let's have the question.

J. MacPhail: Let's give the minister a chance to correct the record. The financial support, the delivery of the information to the businesses and the customers about how much they have to pay, the collection of that money — who does those services?

Hon. R. Neufeld: B.C. Hydro will outsource those services to Accenture. The bill will still be under B.C. Hydro's name. Accenture will provide those services to B.C. Hydro.

J. MacPhail: Would B.C. Hydro get a nickel without Accenture?

Hon. R. Neufeld: If there were no Accenture, B.C. Hydro would get a nickel because they would be sending the bill out and getting the money.

J. MacPhail: I fully understand the stunned silence when I asked that question. The minister knows full well that with Accenture there and the contract he has signed with Accenture and the fact that Accenture is going to be a private company…. Without all of those services, B.C. Hydro will not get a plug nickel, not a plug nickel. The minister stands up and says that without Accenture, B.C. Hydro will collect the money. Exactly. Exactly. The minister is privatizing those services.

The core assets can't operate without the privatized employees. No money can be collected without those privatized employees. What exactly, in terms of the functioning of B.C. Hydro in delivering power to businesses and consumers, will be left? What actually will be able to take place without those employees?

[1625]

Hon. R. Neufeld: I'll correct one thing. I don't, or the government doesn't, sign any contract with Accenture Business Services. Actually, B.C. Hydro signs that contract with Accenture Business Services. B.C. Hydro will receive services from Accenture that will do numerous things for B.C. Hydro. If you want to say: "If Accenture wasn't there…." If Accenture wasn't there — exactly — B.C. Hydro would be sending the bills out themselves and collecting the money themselves.

What they're doing is outsourcing that to Accenture Business Services because in their view, at the end of the day, they can get those services cheaper. Let's remember there are about 6,000 employees with B.C. Hydro and about 1,600 that have elected to transfer to Accenture Business Services. So there are a lot of people still working for B.C. Hydro. The member tries to lead the House into believing that everyone in B.C. Hydro will be moved over to Accenture Business Services, and that is totally incorrect.

J. MacPhail: I don't know where the minister got that. I'm just talking about the details of those moving to Accenture. I haven't mentioned the other employees at all. I have no idea how big the management operation of B.C. Hydro is. I'm just talking about the employees who are moving with Accenture. I'm just asking about their duties. What we know is that the core assets can't operate without the employees moving. We know there won't be a plug nickel collected without those people.

Let me ask this. This is kind of a detailed question, but it's just got to do with dam control. I can fully understand if the minister thinks this is outrageous. The control stations at both Burnaby Mountain and Vernon have employees that are going to move with Accenture. They're going to be transferred — outsourced in the minister's view, privatized in my view. The people who are moving control the computer systems, and these computer systems control the flow of power. They control the dam and the flow of power over the dam. Could the flow of water and the generation of power occur without those employees that are now being transferred?

Interjection.

The Chair: Member, you should make your comments from your chair and not from someone else's chair.

Hon. R. Neufeld: The people that work in Vernon and Burnaby and that operate those facilities stay within B.C. Hydro. The people who service that facility are the ones that will actually be working for Accenture. The member is, in a way, correct. Without those people that are going to be working for Accenture Business Services…. They are important, integral to the whole system. We will need them. That's why B.C. Hydro will contract back those services for those people through Accenture Business Services. They have made the case that they can do that cheaper and provide as good a level of service as they have in the past — in fact, even better: save $250 million over a ten-year period. That's $25 million a year. I think it's incumbent on the board of B.C. Hydro to look carefully at all of those things to make sure they deliver the least-cost electricity they can to the people in the province.

I, for the life of me, can't figure out what's so bad about that. Actually, it amazes me that the Leader of the Opposition is saying B.C. Hydro shouldn't save those kind of dollars. In fact, it reminds me of what took place over the last ten years under the leadership of the last administration. They didn't look at the savings they could have — still provide the same services, still provide the same level of services and actually try to provide better services, if that's possible — and still provide…. The member knows full well that B.C. Hydro has a responsibility by legislation to provide electricity to the province at the cheapest rate possible, and that's exactly what we're trying to do and what's taking place with this bill.

J. MacPhail: The government has no evidence of the savings of the $250 million over ten years — absolutely none, except their word. The contract itself now cannot be examined by the B.C. Utilities Commission to justify whether those savings are real or not. The government is just blowing smoke when they say they're going to save $250 million over ten years. What is real are the immediate, charged-right-now $60 million in costs to the ratepayer of privatizing these services. That's a real cost. We know for sure that is happening, and the savings are at best ephemeral. So far with this privatization exercise, there aren't any savings. We're $60 million in the hole.

We have a government that said they weren't going to privatize operations. We just had a minister admitting that without those employees being privatized at the Vernon control station and the Burnaby Mountain control station, they wouldn't operate. Then he says B.C. Hydro is going to contract back those services. No, they're not. I can't believe that the minister is saying that. They're turning those services over to Accenture, who will be a private entity. Has he read the memorandum of understanding? Has he read this? "B.C. Hydro and B.C. subsidiary of Accenture will initially be involved in the new joint venture. After a transition period, B.C. Hydro will relinquish its minority position in the joint business. The new business will be privately owned and operate in the private sector. It will be a wholly owned subsidiary of Accenture."

B.C. Hydro isn't contracting back. Accenture owns the services provided by those employees, and the minister just admitted that the Burnaby Mountain and the Vernon control stations cannot operate without those employees. The minister stands up and says they can't operate, and then he describes them sort of as a business. They provide business services. Those employees at the Vernon control station and the Burnaby Mountain station don't provide business services. They control the computer systems that control the dams and the flow of water over those dams. News flash for the Liberal backbenchers: that's the core service of B.C. Hydro — a dam; water over it; electricity generated. That's the core service.

Hon. R. Neufeld: Actually, the member's wrong in the way she interpreted what I said. I did say that those people who work at Vernon and Burnaby Mountain will still be B.C. Hydro employees that operate those systems. Some of the services that are ancillary to that will come from Accenture Business Services. That's exactly what's taking place.

The member made reference to $60 million, which was in the service plan. Maybe I should just read into the record what that $60 million comprises. There is $48 million total in '02-03 — $44 million of that is related to Accenture, $35 million of that $44 million is for post-retirement benefits for the employees, $5 million of that is for severance for union employees that elect to sever, and $4 million is for the administrative folks who are transferring. The other $4 million, from $44 million to $48 million, is the Transco implementation that's going to take place. The remaining $12 million will take place in relationship to Transco in '03-04.

It's $60 million, but there are about $38 million or $35 million of those costs that have to do with post-retirement benefits that are actually not cash, but they are a responsibility of B.C. Hydro now. They have to do with B.C. Hydro's operations anyhow. That maybe gives the member a bit of an idea where the $60 million comes from.

Again, Mr. Chair, if we could get back to the legislation, I would appreciate it very much. I think we have strayed far enough away from it that we should get back to the legislation that's before us.

The Chair: Members, we're going to take a ten-minute recess before we proceed.

The committee recessed from 4:35 p.m. to 4:48 p.m.

[H. Long in the chair.]

On section 2 (continued).

J. MacPhail: Mr. Chair, nice to see you. It's the first time you've been in the chair in this session, so it's nice to see you.

We're discussing the section that talks about support services being allowed to be designated in a way that I call privatization. The minister calls it outsourcing. We're trying to distinguish how these support services, as defined in the legislation…. I'm not quite sure what the minister thought we were doing that was somehow off track from the legislation prior to that. We're talking about exactly the legislation designating certain services, support services, and being allowed to be outsourced and not subject to the scrutiny of the B.C. Utilities Commission in the way it was before. Otherwise, there's no reason for this legislation — absolutely no reason. We're trying to figure out how support services differ from core services or core assets.

Let me ask a couple more questions. I'm trying to figure out which services are just core and can operate on their own without ancillary services or support services, because then that would be a real core service or a core asset. So far we've been having a great deal of difficulty figuring out how anything could operate without these services that are going to be privatized.

Let me ask this. Westech, which is now part of B.C. Hydro, is being privatized. When B.C. Hydro was preparing for problems that arose or could have arisen out of the changes resulting from Y2K…. Remember back to those days when the clock ticked over to 2000? There was a huge, huge issue all across the world. When B.C. Hydro was preparing for problems and had their game plan put in place and spent millions of dollars on the preparation and the contingency plans for Y2K, they designated Westech an essential service. I think in today's language, that would be a core function. In other words, Hydro said: "We can't do this without Westech." Now Westech is being Accenture-ized. I think we could agree on that word — right? My definition of Accenture-ization is privatization, and the minister's is outsourcing. What's so different today about these essential services Westech provided in the year 2000 and the assessment B.C. Hydro has done of them now?

Hon. R. Neufeld: Obviously, at the time of the Y2K issue I believe everyone, regardless of what company it was or what government it was, was very careful about how they were dealing with their technology, because no one knew exactly what would happen. The member may know better because she was there at the time, but I would assume they classified it as an essential service to make sure there would be no labour disruption or something to that effect — I'm not sure — because of what was taking place at that particular time. There's no doubt about it that IT services are important. In fact, in this deal B.C. Hydro will receive those services from Accenture Business Services in the future.

J. MacPhail: Sorry, maybe I used the wrong word — "essential." It had nothing to do with labour relations. Critical services are services that could not be done without, in order to assure — guarantee — the continued operation of B.C. Hydro. That's what B.C. Hydro designated Westech in the year 2000. The reason for that, again, is back to how B.C. Hydro operates, how B.C. Hydro generates, transmits and distributes their one and only product: water for electricity. That's through computerization.

It's the year 2003. We're into the twenty-first century. Computerization is where it's at in terms of the efficiency of B.C. Hydro. B.C. Hydro does not operate at any level, core or ancillary, without its computers. That's why Westech was designated a core, critical, essential service. Again, it just puts the lie to this artificial designation between support services and core assets. Without the services that are being transferred to Accenture, the core assets do not exist. It's a bunch of water, it's a bunch of concrete, and it's a bunch of steel towers. That's it. Generation does not occur without those Accenture employees. Transmission does not occur, and distribution does not occur. The value of the core assets without those Accenture employees is zero, nothing — absolutely nothing — and somehow this government says it's not privatizing B.C. Hydro.

I understand that, because this government places no value on public service — absolutely none. They think, just the same way that they do in health care, that you can contract out services all over the place, and it's got nothing to do with the actual core service that's being delivered. The reality of it is that if these Accenture employees stopped working, Hydro would shut down beginning to end. You wouldn't have to put up a picket line to do that. Just withdrawing the services that Accenture employees offer would shut down Hydro completely.

Well, let me ask this question about Westech. Westech is the IT services of B.C. Hydro. It's a fully — I think…. I'm not even sure if it's a subsidiary. It's probably a subsidiary, but it's a wholly owned subsidiary of B.C. Hydro. The employees of Westech who administer the core systems at Westech will be transferred to Accenture. What level of decision-making goes with them in terms of operating the computers that keep Hydro going?

Hon. R. Neufeld: Policy and operations remain with B.C. Hydro.

I should remind the member that the contract that B.C. Hydro and Accenture will enter into at some time in the future is actually going to save B.C. Hydro some $250 million — $250 million — over ten years. That's $25 million a year on average. I would say it is incumbent on the board of directors of B.C. Hydro to look at every opportunity they can to save money, to spend money smarter — to look to providing services at the same level as they are now or better and save money at the same time — because obviously that money relates to a cost of service that the ratepayers will have to pay at the end of the day.

I have trouble. I can understand where the member's going and where she has been trying to go all afternoon, but it all comes back to the fact that those same services can be provided at maybe a better level — or at least the level they are now — with a saving of $250 million for B.C. Hydro over ten years. I assume the member is advocating that B.C. Hydro should be encouraged to lose $250 million over the next ten years. I elect the first option. We should look at saving $250 million in a serious fashion.

J. MacPhail: Wow, are we getting desperate in this chamber. The minister tries to say that privatization…. I think his argument now is that privatization is good because it saves money. No evidence. We know it's going to cost money, but there's no evidence that it's actually going to save money. Is the minister now admitting that he actually is privatizing? I think he is. He has been unable to delink the privatization of the Accenture services from running the core assets. Every single question we have raised that says the Accenture employees' services run the core assets, he has not been able to delink or dissuade or challenge — not once. So we know.

Now the minister is moving to the argument: "Well, yes, we're privatizing, but it will save us $250 million." Absolutely no evidence of that. Absolutely none except his word. We don't even know the terms of the contract. He's eventually going to make it public.

We're now on a whole different gamut here, aren't we? The truth is coming out — an admission by omission that this is privatization of the core assets, an admission that the core assets cannot operate without these services. It's all in the name of some ephemeral amount of money that we have no idea is there or not. We have no idea whatsoever. Talk about cooking the books. Talk about somehow suggesting that this is good news because there's going to be money saved, when there's no evidence of that whatsoever.

We know that the core assets can't operate without Accenture services. We know that not a plug nickel could flow to the corporation or the government without Accenture services.

Let's actually talk about the customer. Let's actually look at the customers' services. What's the relationship between the customer and B.C. Hydro if Accenture services aren't part of B.C. Hydro? Where does a customer go to B.C. Hydro if they've got a complaint, let's say?

Hon. R. Neufeld: I would encourage the member to get back on Bill 10, which we've been debating all afternoon.

J. MacPhail: Let me ask my question again. The government is somehow suggesting that support services have nothing to do with the operation of B.C. Hydro, which is not being privatized. I would think that a customer and her relationship with B.C. Hydro is pretty important. Without that customer, B.C. Hydro doesn't exist. In fact, there are other options that a customer can choose. In terms of her relationship via service, via complaint, via changing level of service, what does the customer do directly with B.C. Hydro in the absence of the services that have gone to Accenture? And if the minister doesn't understand how that's part of the legislation, he should actually live up to his commitment to step down.

...

B. Penner: Again, then, just to follow up with the minister. If it were to be determined by B.C. Hydro or the B.C. Utilities Commission that the Accenture agreement was not resulting in the benefits that are expected to B.C. Hydro but, in fact, was detrimental to B.C. Hydro, what are the opportunities in the agreement for ending the agreement? I heard the member for Maple Ridge–Mission refer to the opportunity to get out of the contract and is looking for an exit ramp. What exit ramps might exist in the Accenture agreement so that B.C. Hydro can terminate the Accenture deal in the event that the Utilities Commission or B.C. Hydro themselves find that the agreement is not working out as planned?

Hon. R. Neufeld: In fact, those issues can be reviewed. There are and will be benchmarks that have to be met in the contract to provide the same level of service or better service. Actually, the B.C. Utilities Commission has the ability to say to Hydro: "You can't pass those costs on to ratepayers. You have to go figure out how you're going to actually provide that service as cheaply as you possibly can." There will be other benchmarks and other utilities that they will look at, I would assume, at the same time to make sure they are providing those services at the least cost possible to the ratepayers. The B.C. Utilities Commission has the ability to say: "No, you can't pass those on to the ratepayers. Go figure out how you're going to do it differently."

B. Penner: It would be my expectation, as with most commercial agreements or other contracts, that if one party was not living up to their end of the bargain, the other party to that agreement would be able to terminate the agreement and perhaps even recover costs for breach of that agreement. Is that the minister's understanding as well that in the event Accenture does not deliver the benefits they have promised under this contract, B.C. Hydro would be able to terminate that contract and/or recover damages as a result of any breach of that contract?

Hon. R. Neufeld: The member is correct. There will be exit clauses, obviously, in this commercial contract. If Accenture is not living up to the benchmarks that will have been set by B.C. Hydro, which they have to meet or exceed, there will be the opportunity for B.C. Hydro to actually exit the contract.

J. Kwan: Yes, there are lots of questions. Do not fear; I have lots of questions.

I want to ask the minister this question. It's about customers, because without customers there is no need for service. The fact is that there are customers, and when there are customers who have complaints about their service delivery, to whom do they address them? Do they address them to Accenture, or do they address them to B.C. Hydro?

Hon. R. Neufeld: They will make those calls to B.C. Hydro, and B.C. Hydro will have those services carried out by Accenture.

J. Kwan: So the reply to a complaint from a customer will be made from B.C. Hydro, and B.C. Hydro will then direct Accenture to correct or address those complaints? Is that the procedure that it would follow?

Hon. R. Neufeld: The defined policies and procedures will be by B.C. Hydro. They will actually be responding, as I said to the member earlier, to the telephone calls. When someone calls in, B.C. Hydro and the services that are needed are provided by Accenture Business Services of British Columbia.

J. Kwan: So ultimately, who is accountable? Is it Accenture, or is it B.C. Hydro? Who is ultimately accountable to a complaint from the customer?

Hon. R. Neufeld: B.C. Hydro.

J. Kwan: Can the minister then explain the role of BCUC to uphold service standards?

Hon. R. Neufeld: The B.C. Utilities Commission will hold B.C. Hydro accountable. For the first time in ten years we'll actually have a review of British Columbia Hydro by the B.C. Utilities Commission. I think it's long overdue. That member opposite decided, at some point in time when she was part of the last administration, that they shouldn't do that. What we're doing is moving forward in a new way and shedding some new light. We're going to be a little more transparent with what happens with B.C. Hydro, and the B.C. Utilities Commission will review all aspects of British Columbia Hydro.

J. Kwan: There's nothing transparent about the deal with Accenture. The reality is that BCUC would not be able to go through line by line, clause by clause, the agreement and how the deal works. In fact, in the legislation under subsection (e) it states:

"subject to subsection (12), the authority is not required to obtain any approval, authorization, permit or order under the Utilities Commission Act in connection with the agreement or any actions taken in accordance with the terms of the agreement, and the commission must not prohibit the authority from taking any action that the authority is entitled or required to take under the terms of the agreement."

The authority in this case, of course, is Accenture. Actually, in the legislation itself Accenture is not required to obtain any approval, authorization, permit or order under the Utilities Commission Act in connection with the agreement — the agreement that this government has signed with Accenture. That is the reality of it. To suggest otherwise is, well, erroneous in the context of this legislation, Bill 10.

If the minister says that there would be some role, what is the specific reason, I would like to know, for exempting this deal from BCUC? What is the specific reason why BCUC is exempted from the examination of this deal? That's what it says in the legislation.

Hon. R. Neufeld: The member was absent earlier, and the member for Chilliwack-Kent had asked a number of questions around that. I think I answered them fully at that time.

J. Kwan: Actually, no. Of the questions that were posed earlier by my colleague from Vancouver-Hastings and the member for Prince George–Omineca — and I sat through most of the debate in this House…. The minister refused to answer any. He has yet to make clear why BCUC is being exempted from the examination of this deal. That is the reality of it.

The minister likes to claim that he is operating under a transparent government. The legislation and the action to date preclude anything from the Accenture deal being transparent. It's anything but transparent.

I'd like to ask the minister again: what is the specific reason for exempting this deal, the Accenture deal, from the BCUC?

Hon. R. Neufeld: I draw her attention to subsection (12): "Nothing in subsection (11) (e) precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement designated under subsection (9) when establishing the revenue requirements and setting the rates of the authority." The "authority" means B.C. Hydro.

J. Kwan: Subsection (12) that the minister just read out only deals with the issues around cost. There are other issues which relate to the approval, authorization and permit or order under the Utilities Commission Act in connection with the agreement. There's a whole lot that is actually being exempted from the BCUC's examination, and the minister knows it. If the minister doesn't know it, he ought to. That is pertinent information that the public should have the right to know and that the public should be able to get the answer on. Members of the opposition should be able to get the answers in this House. That is not being provided by the minister.

The answer the minister has given does not answer the question. I put the question to the minister once again. It's a simple question to the minister, and he ought to know the answer. What is the specific reason for exempting this deal from the BCUC?

[1725]

Hon. R. Neufeld: I read out the relevant clause. The member should know and maybe doesn't recall that I spoke earlier about how, once the deal is completed between Accenture Business Services and B.C. Hydro, the deal — other than the very commercial heart of it or some of the commercial parts of it — will all be on the website. Every bit of it will be on the website. The member can sit in front of the website for as long as she wishes, review the deal that was made and make her own opinion. Along with that will be other opinions, third-party opinions, that will be on the website talking about the deal between B.C. Hydro and Accenture.

J. Kwan: The minister says the information will be made public after the deal is signed. That does not answer the question about BCUC having an opportunity to review the matter and take it up at that level, so it doesn't actually provide the assurance that is needed for the public.

I want to ask the minister this question: what matters will be commercially confidential in this agreement that would not be put up on the website?

Hon. R. Neufeld: Again I say that all that information will be put on the website. You can read it and make your own opinion. There will be opinions as to whether this is a good deal for the ratepayers of British Columbia. I can only assume that $250 million over ten years is not a bad deal for the ratepayers in the province.

J. Kwan: As we're debating this bill in the House, as the minister and this government are going to ram through the passage of this bill with a large majority, that examination of whether or not this is actually a good deal for British Columbians needs to take place in this House, not after the fact. It's sort of like the Minister of Human Resources who says to the people with disabilities: "Don't worry. We're going to reassess you, but don't worry. You'll get the support that you need." In the meantime he's thrown chaos into the system.

The reality is we have a bill called Bill 10 that we're now debating in this House. We're debating the Energy and Mines Statutes Amendment Act, 2003. Yet this bill is being debated right now in this House, and the minister is not prepared to provide the information. He claims that there will be some sort of savings of $250 million. The only thing we now know is that there would be a spending of $60 million in relation to the Accenture deal. That's the only thing we know, the only information that is before this House and the only basis on which British Columbians can assess whether or not this is a good thing.

The reality is this: the government has committed a deal with Accenture in which the public have no access to the information provided within it. The legislation precludes BCUC from examining it clause by clause, every aspect of the Accenture deal. That's what we know, and that's what the legislation allows for.

The legislation allows for further privatization of services, services that are core to the delivery of B.C. Hydro services — core and essential. Yet the government says no — that there's a core within the core within the core. The services that were mentioned in relation to distribution, generation and transmission are not going to be privatized. Yet we know those services ensure the system works, and they are core services to B.C. Hydro. But the minister and the backbench MLAs have all chosen to stick their head in the sand because they don't want to see the reality and the truth.

The minister answered the question earlier when I asked what matters will be…

Interjections.

The Chair: Order, members. Order.

J. Kwan: …commercially controversial in the agreement. He said there would be information that would be kept confidential. I would like to know and ask, on behalf of the people who have questions about this deal: which matters will be commercially confidential in the agreement?

[1730]

Hon. R. Neufeld: Actually, we are turning the light on in British Columbia on B.C. Hydro for the first time in ten years. The B.C. Utilities Commission will actually be able to review all the costs associated with generating electricity in this province, something the last administration didn't want to do and, in fact, forced B.C. Hydro not to do so that they didn't have to go out there in the public, in front of everybody, and tell people why they were paying this for this service and that for that service and have an independent body of experts actually review those costs to make sure those costs were in line.

I would ask the member: when she was part of the last government, did she bring the project about Raiwind, the Pakistan program, to this House so we could debate it? I guess we didn't. There had to be a police investigation to find out about that.

It's absolutely amazing that that member sits there and talks about how this is such a bad deal. I can understand why she wouldn't like a $250 million saving, when you look at their purchases of fast ferries. Did they bring the fast ferry contracts into this House to discuss in full and debate with everyone in this House? They never did that at all. They wasted $500 million or $600 million on fast ferries. To be chastised by that person about not looking after the taxpayer is just a little bit hard for me to take. So the B.C. Utilities…. Just settle down. The B.C. Utilities Commission will have an opportunity to review the costs of B.C. Hydro — the first time in ten years.

Hon. R. Neufeld: The B.C. Utilities Commission will be able to review the costs and make sure the B.C. ratepayers are getting the best dollar and the best dollar spent for the services they receive. I think that's turning the light on in British Columbia.

J. Kwan: It's very telling when the government side, the ministers, don't have the answers to the questions that they know they're on the hook for. You know what they start to talk about? Fast ferries. That's the only recourse they can go back to. But you know what? This is about this government's ability to answer questions and to be transparent and to justify their actions, and the minister so far has not been able to demonstrate that. He has not answered the question, and he's been evading. He's projecting that somewhere out there, there's some sort of savings. But do you know what, Mr. Chair? It's sort of like the deal that they actually said at the beginning, when they were first elected. They said that the tax cuts were going to pay for themselves. Do you know what? Oops. The tax cuts didn't pay for themselves. Who's paying for it? They're gouging British Columbians — middle-income and low-income British Columbians — so they could make up for the tax cuts that didn't pay for themselves. That's why we're having an increase in the gas tax, that's why we have an increase in the MSP premiums, and that's why we have the increase in Pharmacare. And the list goes on.

The Chair: Member, member. Member, I think all the members here should stick to Bill 10, please.

J. Kwan: I would be happy to, if the minister would answer the question. It is not that complicated. The question to the minister is this: what matters will be commercially confidential in that agreement? What would be shielded from the public? What information would the minister deem to be confidential so the public would not have any idea what the government really is doing with the Accenture deal?

Hon. R. Neufeld: Anything that would harm their commercial position would obviously not be available on the website. That's not uncommon with what happens now with B.C. Gas, PNG, Centra — all of those that are regulated by the B.C. Utilities Commission.

J. Kwan: Does the minister consider the viability and profitability of generating stations and reservoirs to be a core service?

That's the tactic of the Liberal government. I understand that. When they don't have the answer to the question or they want to hide from the public, do not get up. The minister responsible should not get up and answer the question that opposition has asked. That's the practice. That's the practice of this government. Hide. I see no evil; I hear no evil. That is the approach of this so-called transparent government. It's been adopted as a strategy by many ministers.

The Chair: Members, I want to remind you not to get into general debate — that we stick to Bill 10.

J. Kwan: Well, yes. Thank you, Mr. Chair. I'd be happy to stick to Bill 10 if the minister would just get up and do his job and answer the question. That's why he's being named as the minister. Unless maybe he will just step down, like he said he would. He actually said if Hydro is being privatized, he would step down, and Hydro right now, as we know it, is being privatized. If he actually lived up to his own commitment, he would step down.

Let me ask the minister this question, seeing as he wouldn't answer the questions that have been posed so far. Westech has been providing expertise in energy systems to B.C. Hydro for over ten years. Westech has been involved in the recent B.C. Hydro energy system initiatives, including the business transition program, where they had a major role in the development of the commercial management and commercial resource optimization projects designed to manage the commercial viability and profitability of generating stations and reservoirs.

Why is the minister — this government — privatizing core functions?

Hon. R. Neufeld: We're not privatizing any core functions.

J. Kwan: The answer from the minister can only lead one to two possible conclusions: either (a) he does not know his file, or (b) he's not forthcoming with the information. The truth is this. The operation of B.C. Hydro includes, as mentioned earlier, computer services that control the flow and therefore the delivery of hydro to customers. The fact is that people who work at these reservoirs and control stations have every role to play with the core services in the delivery of B.C. Hydro.

Westech, where they had a major role in the development of the commercial management as well as the commercial resource optimization project designed to manage the commercial viability and profitability of generating stations and reservoirs…. Core services to B.C. Hydro are being transferred — outsourced, as the minister likes to put it. "Privatized" is the true word to describe that. Those functions are being privatized. Those core services are being privatized. Why?

Hon. R. Neufeld: I already answered that question. Nothing is being privatized.

The Chair: I would like to remind the member to carry on to another question. This question has been asked on five or six occasions.

J. Kwan: The unfortunate part, of course, is that the minister has failed to answer the question. Maybe he doesn't know what privatization means. Maybe he doesn't know. Let me just give the definition to the minister from the Webster's dictionary. "Privatize: change from governmental to private control or ownership." That's what privatization means. You can call it outsourcing or any other term — re-engineering, if you want to call it that. The fact remains that it is privatization.

These core services have been provided by Westech for over ten years. The issues around the profitability of generating stations and reservoirs…. Are they not core services? Maybe I'll just put it simply to the minister: are those not core services — yes or no?

[1740]

That's the strategy. Don't answer the question. Have the Government House Leader come in to tell the minister: "Don't answer the question." That's really the strategy. Then, of course, the member for Vancouver-Kingsway would just say: "Well, you're just a socialist." That's how he heckles the member for Vancouver-Hastings and me all the time, as though somehow it actually makes sense in the context of the question.

We're debating Bill 10. Legitimate questions are being asked of the minister, and the minister has continually refused to answer those questions. It's a simple question to the minister. It's a simple question on the viability and profitability of generating stations and reservoirs. Are those considered to be core services — yes or no? It's not that difficult. All the minister has to do is get up and say yes or no.

P. Nettleton: Yes, I do expect this debate will carry on for some time, and I look forward to the debate. I want to make a comment prior to the adjournment of the House, if I could, with respect to the discussion here today. I have sat here carefully listening to every word, to the questions that have been asked — the questions that have remained unanswered. In my opinion, the minister could have saved a lot of time and we could have moved on if he had answered some of these rather straightforward questions, many of which were a simple yes or no.

Instead, he chose to obfuscate — skate, obfuscate — and this leaves a very serious question in my mind as to what is going on here. Perhaps, if the minister had not unwisely chosen to offer his resignation sometime earlier, he would not have had such strong reservations in terms of answering some of these very straightforward questions. All they required was an honest, open, transparent response.

I'm extremely disappointed but not unhappy that we are not resolving some of these unanswered questions here tonight. I expect this is not the finish of this matter. There are a lot of questions we will be putting to the minister over the course of the next few hours, perhaps days. I expect that perhaps we will get some answers at some point. Those are my comments for the moment.

J. Kwan: It's obvious the minister is anything but transparent. One can only explain the fact that he's not answering questions, because either (a) he doesn't know the answers, or (b) he doesn't want to be forthcoming with the answers so that he can hide from British Columbians what the real truth is.

Interjections.

J. Kwan: I have a series of questions, and those who are anxious to hear the questions, stay tuned, because this debate will carry on until tomorrow.

Can the minister confirm that the employees known as collectors or customer service accounts reps will have the ability to cut off power once they're Accenture-ized?

Interjection.

J. Kwan: The House Leader would like to argue that this has nothing to do with the bill. This has everything to do with the bill, Bill 10. We're talking about the Accenture deal. We're talking, within that context, about the impacts of this deal on British Columbians. Part of that deal will impact the delivery of services. Part of that, when services are being cut off, will mean who gets to do that. Will the employees known as collectors or customer service accounts reps have the ability to cut off power once they're Accenture-ized? Yes or no?

[1745]

Perhaps the minister doesn't know the answer, or maybe the minister doesn't care to know the answer. Maybe, for him, customer service is unimportant. Perhaps he deems it not to be a core service. After all, it's only the customers who pay the bills. But, hey, collecting those moneys is not a core service, so what does he care? What does he care when a customer's service gets cut off, and who gets to do it? Is that the attitude the minister is displaying by just sitting there, not answering the question, not fulfilling his responsibility as the minister who is responsible for this bill and responsible to provide answers to British Columbians, to members of this House? Is that his approach?

This is the third time I've asked this question. I've had no answer from the minister to date. He says it's not relevant to the bill, yet the bill deals with the Accenture deal. That is why we're debating this bill in this House, isn't it? The Accenture deal. Once things are Accenture-ized, once the deal goes through, once the bill gets rammed through by the majority in this House, then we have to know…. I would like to know, on behalf of many people in British Columbia, who will have the ability to cut off power. Why wouldn't the minister answer that question, or does he not know the answer?

The answer is this. I suspect Accenture does get to cut off the power. Does the minister feel…?

Interjection.

J. Kwan: The House Leader is sitting there going: "Why ask the question?" Why ask any question? God forbid anybody in this House should attempt to hold the minister and this government accountable. They just go around assuming — hey, you know what? — everybody knows the answers. The fact of the matter is that the government is hiding. They're being anything but transparent, and they're not providing any information — any information — to British Columbians.

So, yes, it is up to the opposition members to ask the questions in this House. You know why? The otters, the sea otters….. Oh, sorry, I didn't mean that, Mr. Chair. Those would be, actually, the backbench MLAs, the backbench government MLAs who are not asking the questions, because they have no capacity to attempt to hold this government accountable. The only member who actually did was the former member, the member for Prince George–Omineca. When he raised the questions, he got kicked out of his caucus. That is the truth.

Interjections.

The Chair: Members, order. Order. Order. I think, members, we could stop the heckling. Go on with the questioning, if you have a new question.

J. Kwan: I have lots of questions.

The Chair: The member for Vancouver–Mount Pleasant on a new line of questioning.

J. Kwan: The trouble is that I have yet to get an answer. That seems to be the problem. Maybe the minister will focus and think through, concentrate hard, to see if he could actually come up with an answer to the questions. Does the minister feel comfortable with Accenture having the ability to cut off people's power? Is he comfortable with that? Does he not see that as a core service?

P. Nettleton: I have some difficulty with the way the minister is conducting himself. If he has no respect for the member of the opposition, he should at least, out of deference and/or respect for the general public that's watching this debate and expecting answers, very simply….

The Chair: Does the member have a question for the minister?

P. Nettleton: I do. Would you please answer the question the member asked previously?

J. Kwan: I don't know why I'm surprised that ministers in this House within the Liberal government regularly — regularly — refuse to answer questions. I don't know why I'm surprised that this particular minister is employing exactly the same tactic.

Maybe their approach is simply not to provide answers to questions from opposition members to make sure that British Columbians don't know about the questions and the answers, so they can claim this is not privatization. Maybe it's so that the minister himself will not have to resign from the cabinet post because his career is on the line. Maybe those are the reasons. I don't know why I'm surprised. Almost ten years in politics and I'm still surprised, though, that ministers would not live up to their responsibility to provide simple answers to simple questions.

Let me ask the minister this question. In what way will customer records and personal information be kept confidential when Accenture assumes control of billing? Exactly how will the minister guarantee that those records and that personal information will be kept confidential?

So as far as the minister is concerned, confidentiality is irrelevant. He doesn't care how the new company deals with that. He doesn't care. As far as the minister goes, when the customer's power gets cut off, and who gets to do it…. He doesn't care about that either. It is unimportant to him.

Customer service perhaps is irrelevant, because all of that is now being privatized and Accenture can deal with that. He just sits back and says, "Hey, whatever. Customers, you're going to have to deal with that on your own; it's not my responsibility" — even though under Bill 10, which we're debating today, the government is bringing forward the Accenture deal to allow for these critical services to be privatized. That is what this government is doing.

Let me ask the minister yet another question for which I suspect he probably won't have the answer or will not answer. I'm going to ask these questions because British Columbians, many of them, want to know, and it is the responsibility of this government and this minister to provide those answers.

Westech is involved in designing the computer systems for the managing of water levels for our dams and reservoirs. The employees at Westech are going to be privatized to Accenture. That we know. The minister doesn't know or doesn't want to deal with it. Our power trading and domestic sales are based on firm commitments to customers. When computers crash or systems fail, the essential delivery of electricity is interrupted, and people are finding themselves without power. Why isn't this considered a core service? If the computer systems that control water flow aren't core services, then what are?

You know, it is quite amazing. All the government backbench MLAs, including the Government House Leader, are sitting and saying: "This has nothing to do with Bill 10." Well, a core section of Bill 10 exists because the government is going to privatize a substantial portion of the delivery of Hydro services — core services, Mr. Chair. Then they sit around and pretend that it has nothing to do with anything and won't even answer the most basic questions that are being put forward to the minister.

In the MOU between Accenture and B.C. Hydro, there are a number of ancillary agreements or schedules that were not released with the MOU. In the interest of openness and accountability, will the minister table those — the transaction agreement, the joint venture agreement, the master transfer agreement, the marketing alliance agreement, the B.C. support services, the milestones timetable agreement and the transition structural overview as well as the CIS agreements? Why won't the minister table them now?

Hon. R. Neufeld: I said earlier that the deal between B.C. Hydro and Accenture will be on the website once the deal is signed. You can have a look at it and read everything you want.

Hon. G. Collins moved adjournment of the House.

Motion approved.

# posted by BC Mary @ 10:02 a.m.