Wednesday, April 30, 2008


Bring back the train to Prince George

Vancouver Sun --
Published: Wednesday, April 30, 2008

Click Here for Larger Image... If we want to connect the northern part of B.C., which is actually the centre of the province, with the south, we need to re-establish the passenger train. I had the fortune to travel twice on this most scenic route. It may not be the Lower Mainlanders who travel, but it will be people from other parts of the world. With the Olympics being paraded as the opportunity for every possible advantage for B.C., passenger train service between Vancouver and Prince George should be a high priority.


Oh yes. And let the restored passenger train service be called "BC Rail". Thank you, Ms Sims.
Very special thanks to Dean Kobasluk for "BC Rail south of Porteau Cove". Dean's beautiful photos of the former BCRail are on Flickr.

- BC Mary.


Monday, April 28, 2008


RCMP told to drop charges

CBC Newsworld on Sunday evening, April 27, 2003 reported on this disturbing case which goes to the heart of basic issues of law in a civil society. CBC interviewed and/or recorded many of the characters mentioned in this news story. The Ontario case hinges almost entirely upon the issue of disclosure and the resulting legal tussle as RCMP tries to obtain full disclosure from the Ontario Attorney General. If read with disclosure in mind, the Toronto case-history creates some insight into other cases, such as Case #23299 (Basi-Virk / BCRail) now stalled in BC Supreme Court on the problem of disclosure. - BC Mary.

RCMP told to drop corruption charges against T.O. officers

Shannon Kari
National Post
: Friday, April 25, 2008

The senior RCMP officer who led a probe into a now disbanded Toronto police drug squad wanted 12 officers charged with corruption related offences, but was told by provincial prosecutors that this number was unmanageable.

As a result, six officers were charged with conspiracy, obstruction of justice, perjury, extortion, theft and assault-related charges in January, 2004.

Detective Sgt. John Schertzer and other members of his former unit were accused of assaulting and stealing from drug suspects, as well as routinely falsifying information related to confidential informants in drug investigations.

All of the charges against the six officers were stayed in February of this year by Superior Court Justice Ian Nordheimer because their Charter rights were violated as a result of unreasonable delay in bringing the case to trial (the Crown is appealing this ruling).

The Ontario Ministry of the Attorney-General's explanation for charging only six officers has been disclosed for the first time, in a confidential report sent by RCMP Assistant Commissioner John Neily in 2004 to the chief of police in Toronto. The report was obtained by CBC radio news and made public Friday.

"The practice of prosecuting conspiracy cases can be limited by the logistics of too many subjects on an indictment," Asst. Comm. John Neily said that he was told. "The rule of thumb among experienced attorneys appears to be to not prosecute any more than seven on one indictment for conspiracy," he wrote.

Four more drug squad officers were named as "unindicted co-conspirators" and would have been required to testify as prosecution witnesses, but they were not facing criminal charges.

A series of affidavits by Asst. Comm. Neily that were unsealed by the Ontario Court of Appeal in 2004 alleged there was "evidence of criminal activity" by 17 officers. In a letter to the Crown in 2003 that was made public in Judge Nordheimer's ruling, the allegations were described as "the largest police corruption scandal known in Canadian history," by Asst. Comm. Neily.

The confidential report he authored in 2004 alleged that Mr. Schertzer (who retired last year) led a "specific group of officers serving under his supervision on a crime spree in the drug culture of Toronto," between 1995 and 1999.

The allegations of corruption against the Schertzer team and other Toronto police drug squads led to federal drug prosecutors dismissing or staying charges in at least 200 cases between 1996 and 2002.

A former drug squad member in northwest Toronto who admitted to using cocaine while on duty is the only officer to be convicted of a criminal offence as a result of the findings of the more than two-year-long task force investigation, which began in 2001.

The then-Toronto police Chief Julian Fantino appointed Asst. Comm. Neily to lead the internal investigation, which was made up of more than two-dozen detectives.

The appointment was made soon after an internal Toronto police "business case" report in June 2001 recommended setting up a task force to avoid a public inquiry into alleged corruption. "That the investigation has an external component, that will provide greater credibility to the results," wrote Inspector Tony Corrie. "The faster the review is done the less chance there is of committing more damage. Taking these steps may avoid a public inquiry," he wrote.

National Post lists additional reports on this story; but I can find no mention of it in any of the CanWest daily newspapers in B.C. - BC Mary.


Saturday, April 26, 2008


2004: Joy MacPhail questions Premier Campbell on police raids, BCRail sale

By popular demand, here is an important chapter in the story of a previous BC government and its Loyal Opposition. - BC Mary.


HANSARD - Volume 25, Number 17

WEDNESDAY, MAY 19, 2004 -- Afternoon Sitting


Joy MacPhail, Leader of the 2-person opposition, is speaking ...

Mr. Chair, I'm going to move on to the B.C. Rail sale and the legislative raids. I'm going to start with the legislative raids and move to how that relates to the B.C. Rail deal. I might also note, for the information of the Premier and his staff, that these matters have been referred to these estimates by both the Minister of Finance and the Minister of Transportation — that this would be the appropriate place to raise the questions that I have raised. I did question it of the ministers at the time. Delegating up is an unusual and courageous act of ministers, but nevertheless they did fully accept that they were delegating up.

For the benefit of the House, here's what we know from the March 2 release of a summary of the search warrants into the December raids on the Legislature. In the course of a proceeds-of-crime and corruption investigation involving the Minister of Finance's top political aide, David Basi, the RCMP uncovered a conspiracy involving Mr. Basi; the ministerial assistant to the Minister of Transportation, Bob Virk; and lobbyist Erik Bornman. However, according to the most recent news reports, Erik Bornman has been informed by the police that he is no longer under police investigation.

This is what we know from the warrants. It's only a summary of the warrants that have been released. That conspiracy offered personal benefit in return for inside access to information related to the privatization of B.C. Rail. Soon after the raids were executed, the Solicitor General assured the public that the integrity of the B.C. Rail deal was in no way compromised. Could the Premier tell us what information that assurance was based on?

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Hon. G. Campbell: Actually, the Minister of Transportation did canvass this in quite a significant amount of detail with the member opposite, but let me say that the police were clear from the outset that there were no elected officials involved with regard to this investigation. It is clear from the fairness report that this has been an utterly fair process. It does not touch on the issue of the B.C. Rail investment partnership. We're moving forward with that.

J. MacPhail: Actually, the police haven't given that assurance, Mr. Chair. Let's be very clear. Their investigation is ongoing. At the time that the government itself cancelled part of the B.C. Rail deal, the spur line out to Roberts Bank, the government said that the RCMP had no information to date about the B.C. Rail deal — the main-line sale. The RCMP have never made a statement to that effect. Let's be clear about that.

I'm not even talking about that right now. I'm asking about how the Solicitor General, very early on in the aftermath of the legislative raids, said that he was assured that the raids had nothing to do with the B.C. Rail deal. Of course, we later learned that part of the B.C. Rail deal had to be cancelled. The sale of the B.C. Rail spur line to Roberts Bank had to be cancelled.

When did the Premier know that the raids on the Legislature were connected to the B.C. Rail deal?

Hon. G. Campbell: In all of the comments that have been made in the past by the ministers or the Solicitor General, it is clear there is no connection with the B.C. Rail investment partnership whatsoever. The comments that had been made have consistently been reviewed with the RCMP.

[ Page 11265 ]

I think it's important to note that, yes, there was an issue with regard to the port subdivision. The advisory committee was put in touch with the minister. The minister asked for a full review. There was a recommendation to the ministry as they went through in the minister's estimates, and the minister, as soon as he was confident about what the recommendation was and what the situation was, made a statement to the public and to the opposition. That was fully canvassed in the Transportation ministry estimates, which took place over 16½ hours.

J. MacPhail: I never asked the Minister of Transportation when the Premier knew anything. I know enough not to do that. I'm asking about the Premier's role in all of this. I'm not quite sure why, again, the Premier doesn't want to engage in this discussion.

When did the Premier know that the raids on the Legislature were connected to the B.C. Rail deal?

Hon. G. Campbell: I don't believe they were connected to the B.C. Rail deal, as the member opposite suggests.

J. MacPhail: The summary itself of the warrants said…. Let me read this. March 2. This is Justice Patrick Dohm. I think he is Associate Chief Justice. Patrick Dohm releases a summary of the search warrants, March 2. It says: "Whether official 1 and official 2 were offered and/or accepted personal benefits…in connection with government business, including B.C. Rail," and whether those officials "passed unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit…." I'm not making this up. That was March 2. That's the summary of the warrants released.

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The whole world knew as of March 2 that there were questions around whether officials were offered and/or accepted personal benefits in connection with government business, including B.C. Rail. Did the Premier hear that information for the first time on March 2?

Hon. G. Campbell: As I said to all of the media and the public at the outset of this, I would like to have all of the information that was available to the police as quickly as possible. When the warrants were made public, frankly, I would have hoped that there was more information made available, but it is clear from the warrants that this does not have to do with the government. It does not have to do with the government decisions. It does have to do with, potentially, what has been investigated as the personal activities of individuals.

I can tell you now that the search warrant summary is out — that it was more revealing than anything I knew before. Even in listening to the member opposite read the search warrant — I don't have it in front of me here — I can tell you that I don't believe that connects anything to the decision with regard to B.C. Rail.

J. MacPhail: How can the Premier have it both ways? How can he say that he doesn't know anything, and yet a statement which is only a summary says that official 1 and official 2, who were government officials — one working in the Minister of Finance's office and another working in the Minister of Transportation's office…? Official 2, working in the Minister of Transportation's office, had access to all of the confidential information around the deal and around the legislation. We got that information out of the Minister of Transportation's estimates.

Bob Virk was at all the meetings around the steering committee — well, I shouldn't exaggerate; a lot of the meetings — where the negotiations were done about the B.C. Rail sale. He had the information about the legislation before it was introduced in this House, and now he's involved in whether official 1 and official 2 were offered and/or accepted personal benefits in connection with government business, including B.C. Rail.

Maybe it was business where B.C. Rail didn't have to do with the sale. Maybe it had to do with their ongoing operations as a Crown corporation, but I don't know that, and neither does the Premier. He can't have it both ways, assuming he knows nothing and then asserting that he knows something.

Did the Solicitor General, in his phone calls to the Premier while he was on vacation in December '03 to January '04, inform the Premier of what was or was not part of the raid on the Legislature?

Hon. G. Campbell: The Solicitor General called me in December and informed me that those activities had taken place and that warrants had been issued for the search. The information that the member has in the warrants is, frankly, more complete than any information I had in December.

J. MacPhail: When did the Premier talk to his chief of staff on vacation about this matter?

Hon. G. Campbell: I don't recall if it was December 27 or 28. I think it was a Saturday or Sunday. It was one of those days — probably the 28th. I think it was a Sunday.

J. MacPhail: Why was the chief of staff part of this circle of information?

Hon. G. Campbell: Offices of ministerial assistants were being searched through the warrant. The ministerial assistants report to the chief of staff. He is the appropriate official that should be dealt with in that case. The chief of staff was asked by the Solicitor General and got information from the Solicitor General with approval — and I underline that — of the RCMP. We had to have communication with the two individuals that were involved. That communication was made.

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J. MacPhail: Does the Premier know whether or not the chief of staff was contacted by the RCMP directly?

[ Page 11266 ]

Hon. G. Campbell: I believe the chief of staff was contacted by the Solicitor General. The Solicitor General contacted the chief of staff with the advice and the approval of the RCMP, and the full knowledge of the RCMP.

J. MacPhail: Was it because the chief of staff was the employer of the two individuals involved that solely…? That was the sole reason he was contacted?

Hon. G. Campbell: The chief of staff is the official to whom those two positions report. He is the official who would be requested to act, should action be required. At the invitation of the Solicitor General, with the approval of the RCMP, the chief of staff was informed of what was taking place.

J. MacPhail: We'll get to that in a minute.

Most government elected officials have had to admit that Martyn Brown, the chief of staff, had enough information to act on the employment of the two individuals named in the search warrant — Dave Basi and Bob Virk. We'll get to that in a moment.

When the Premier talked to his chief of staff, Martyn Brown, while the Premier was on vacation, was it solely the employment relationship of Bob Virk and Dave Basi that was discussed?

Hon. G. Campbell: Mr. Brown outlined for me the situation that was at hand. He explained there were two offices that were being searched in terms of the RCMP warrants. He discussed with me the actions that he felt should be taken, and I agreed with him. I felt they were appropriate actions, given the circumstances.

J. MacPhail: Then I guess the Minister of Transportation is right. I should be asking questions about why one was fired and one was suspended, so I will be pursuing those questions with the Premier.

But I just want to ask the Premier whether my information is correct also. There are two bodies of search warrants. I'm sorry. I don't know the legal terms. But there are two bodies of search warrants. We've had summaries of the search warrants that deal with the conspiracy and proceeds-of-crime allegations. The other search warrants had to do with drugs and drug dealing, and we still haven't had those search warrants released either in full or by summary. Am I correct?

Hon. G. Campbell: The search warrants that have been released are public. I'm sure the member opposite has them. I have no more than what has already been released publicly.

The position of the government has been that the sooner all of the information can be made available to the public, the better off everybody would be. But we want to be sure that in doing that, in making that information available, we don't undermine a two-year investigation that's been taking place. I think that's what has been critical throughout this exercise, so our goal would be to have as much information out in the public as soon as possible. If the investigation leads to charges being made, I hope the charges will be made. I hope the charges will be prosecuted, and if there are people that are found to be guilty, then they will be punished. If they're not, then they will not be.

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Clearly, from our perspective — and, I think, from the public's perspective — the sooner this information is all available, the sooner the results of the investigation are there and in the public realm, the better off we're all going to be. But the last thing the public would want is to see a 24-month investigation undermined by the politics of the situation. Our hope is for expeditious and speedy completion of the investigations. The search warrant information that's available has been made available publicly, has been covered quite clearly by the media and is available to everyone.

J. MacPhail: No one is going to compromise a police investigation, so I'm not quite sure why the Premier says anything about the politics of it. No one is going to compromise a police investigation.

There was a seventh warrant that wasn't part of the original summary of warrants dealing with the e-correspondence — a raid on the computer files of government that were seized and have yet to be summarized and released. Am I correct in that? There were discussions going on between the government and the police and the courts about cabinet confidentiality in the release of the e-correspondence — the computer files that were seized as well. Am I correct that the summary of that warrant has not been released yet?

Hon. G. Campbell: I don't believe it has, Mr. Chair. I don't know the answer, other than I don't believe it has.

J. MacPhail: The government is involved in the discussions about cabinet confidentiality, etc. It's not a question that is unfair to ask the Premier. It is through his government and, I think, cabinet operations that the discussions are ongoing about what can be released or not. Can the Premier update us on those discussions?

Hon. G. Campbell: I understand there is a package of information which is effectively being reviewed by the deputy cabinet secretary, the special prosecutor and the judge. The judge is now reviewing that information and deciding what the judge believes should be released. To my knowledge, nothing yet has been released.

J. MacPhail: Yes. It is on that basis that the RCMP can't and won't make any conclusion that government business, including the B.C. Rail main-line sale, is not involved. They can't reach that conclusion until that warrant is fully executed and the summary released.

Now, let me just read the warrant again — the summary of the search warrants, the first batch of search warrants that have been released. That doesn't

[ Page 11267 ]

include the seventh warrant dealing with the computer files in government. It says:

"…whether official 1 and official 2 were offered and/or accepted personal benefits…in connection with government business, including B.C. Rail…and whether these officials…passed unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit."

I think it came as quite a shock to people when the Premier responded to that court summary by saying: "It is clear from the court summary that this is a personal issue; it is not an issue with government; it is not an issue with any elected official in government." Upon what basis did the Premier make that statement?

Hon. G. Campbell: First, Mr. Chair, I think you just have to read the warrants. They speak for themselves. Second, I think it's important to note that…. I'm trying to find the date that this statement was made.

J. MacPhail: March 2.

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Hon. G. Campbell: It was a little later than March 2. In the middle of March — I don't see the exact date — it was pointed out by the Minister of Transportation that: "We have no information to suggest that the successful proponent, CN, has come into possession of any information that would undermine the outcome of the B.C. Rail–CN partnership." That statement was approved by the RCMP.

I think it's important to note that, in fact, there has been no suggestion that there was anything to taint the B.C. Rail investment partnership. I think it's also important to note that the fairness commissioner reviewed all of the documentation with regard to the investment partnership and in fact described the arrangement and the agreement that had been come to as utterly fair. British Columbia taxpayers had got fair value. As well, it had been a fair and open process. The two competitors in that have also agreed that, in fact, there was no reason to suggest anything went wrong.

I am confident in it. I think it's clear from the warrants. The warrants, as the member opposite read out earlier, have to do with official 1 and official 2 and if, in fact, there were any personal benefits. That has nothing to do whatsoever with the B.C. Rail investment partnership.

J. MacPhail: My question wasn't involving the B.C. Rail partnership deal. We have already stated that the government itself claims there is no information as of March 10 to say that the B.C. Rail deal — the main-line sale — was involved. Yet the seventh warrant, which involves all of the computer files of government, hasn't even been completely searched yet.

Maybe at that point that's the case, but on March 2 the Premier is claiming that passing unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit doesn't have anything to do with government. Well, isn't that nice?

Government officials — the Minister of Finance office's main man and the MA for the Minister of Transportation, who sat at confidential meetings of the steering committee responsible for the sale of the main line of B.C. Rail, and the same man shepherding the drafting and approval of the legislation through government that sells B.C. Rail…. Those are the two officials, and somehow it's personal? It's not about government? The warrant itself says it's about government business, and the Premier says this is a personal issue?

Just the day after the Premier made that statement, here's what the Minister of Transportation said. He tells the media on March 3, upon being questioned about the differential treatment between Dave Basi, the Minister of Finance's MA, and Bob Virk, the Minister of Transportation's ministerial assistant, that it was because: "In the one case, they — the Premier's office — felt that there were serious enough allegations being presented by the RCMP to terminate, and the other was much less clear."

Let's be complete here. The next day the same minister stood up and said he was wrong, and he withdrew his comments. When I questioned the minister in estimates about that, his advice about that came from the Minister of Finance, who said: "We don't discuss personnel matters."

What did the Premier's office determine? What did Martyn Brown determine? Over what period of time? What did Martyn Brown determine about the future of Dave Basi and Bob Virk, and over what period of time?

Hon. G. Campbell: My chief of staff had reviewed the circumstances and the information with the Solicitor General and felt it was appropriate to terminate Mr. Basi and to suspend Mr. Virk on the same morning. He talked with me on December 28. I agreed with his actions. I think he took the right actions, the appropriate actions, given the information that was available and given the tasks that the two ministerial assistants whose offices were searched actually had as their responsibilities.

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J. MacPhail: Just to be clear, the people involved in the discussion about determining the futures of Mr. Basi and Mr. Virk were the Solicitor General, Martyn Brown and the Premier. Was anyone else involved?

Hon. G. Campbell: First, the Solicitor General was not involved. It was a decision that the Solicitor General, as I mentioned…. I believe Sunday was the 28th, and Mr. Brown met with the Solicitor General with the approval of the RCMP. Mr. Brown listened to what the Solicitor General had to say. He phoned me and made recommendations as to how we should act with regard to the two ministerial assistants whose offices had been searched. We felt that we acted appropriately at the time given the information that was available, and I

[ Page 11268 ]

still feel we acted appropriately given the information that was available.

J. MacPhail: Okay, so Martyn Brown makes the decision based on information he's received either from the Solicitor General or the RCMP…. I'm sorry. The Premier has already clarified that the RCMP informed the Solicitor General, and then the Solicitor General talked to Martyn Brown with the approval of the RCMP. Then Martyn Brown talks to the Premier, Dave Basi is fired, and Bob Virk is suspended with pay. Why?

Hon. G. Campbell: This has been canvassed quite significantly over a number of months. It was clear that Mr. Basi had a different role in government as ministerial assistant to a House Leader. He worked across ministries in government. He worked with the opposition as well. We felt, in view of the information that was available at the time, that we took the appropriate action in dealing with both of them fairly.

J. MacPhail: I have to laugh when the government always says: "Oh, it's because he dealt with the opposition." I didn't receive a phone call from anybody saying: "Is it gonna be difficult — you working with Dave Basi, opposition?" In fact, I had to laugh that that was the reason the government used, saying that Mr. Basi's role was such that he had to be fired. In fact, it's ridiculous to somehow suggest that Mr. Basi had to be fired because he, at 1:30, tells us what we're going to debate in the House at 2 p.m. each day. It's ridiculous, and it doesn't stand up to scrutiny. Is the Premier saying that was the reason Martyn Brown gave for firing Mr. Basi and keeping Mr. Virk suspended with pay?

Hon. G. Campbell: What I'm saying is that Mr. Basi and Mr. Virk had different jobs. We felt we acted appropriately given the information that was available. I still feel we acted appropriately given the information that was available. I recognize the Leader of the Opposition may have decided something different. That's what we decided.

J. MacPhail: Here's what we know from the facts around this. Both officials are subject to search warrants. They're not separate. Both Mr. Basi and Mr. Virk are being checked out for whether either of them were offered and/or accepted personal benefits in connection with government business, including B.C. Rail, and whether these officials — both of them — passed unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit.

What I know personally, from my own experience around the B.C. Rail deal, is that it was Bob Virk who was part of the steering committee meetings around the sale of B.C. Rail. He was in the confidential meetings. He was the one that had access to Treasury Board submissions. He was the one that had access to the legislation far before anyone else did.

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Mr. Virk sat in on a briefing with the opposition, not Dave Basi. It was Mr. Virk who sat in on that briefing. So what was it that justifies Mr. Virk still continuing to be paid and Mr. Basi being fired? Mr. Chair, these questions have been referred to the Premier by his cabinet.

Hon. G. Campbell: As I said, I appreciate that the Leader of the Opposition may have decided differently than we did. We felt that with the tasks that the two individuals had, we acted appropriately given the information we had available.

J. MacPhail: What is the status of Mr. Virk?

Hon. G. Campbell: Mr. Virk is suspended and on paid leave.

J. MacPhail: I questioned the personnel decision around that with the Minister of Transportation, and he referred the matter to the Premier. What is the suspension with pay? Can the Premier point to the personnel policy that says that when you are involved in a Legislature raid and you're actually one of the officials being investigated for transmitting information for personal benefit, you get to stay on payroll? Let's be clear. Let's see: January, February, March, April, May. We're at about 25,000 bucks that the taxpayer has paid to Mr. Virk while he's under investigation sitting at home. What's the personnel matter relating to that?

Hon. G. Campbell: First of all, this activity with regard to Mr. Virk and the length of time that Mr. Virk has been there has been something we have been dealing with the Public Service Agency on. It is a standard practice, in fact, if people are under investigation. There have been no charges laid here, remember. We felt it was important to protect the integrity of the government that we act with regard to Mr. Virk and give him a paid leave. We also thought, in terms of fairness, that the actions we took were appropriate. We are not in touch with Mr. Virk at this point with the current situation. Any contact with Mr. Virk is through the Public Service Agency, but this is not an unusual practice.

J. MacPhail: Hello. The Legislature has never been raided before, Mr. Chair. It is an unusual practice. It's the first time the Legislature has ever been raided and boxes taken out of ministers' offices. It's the first time ever that a government has had to shut down government activity because of warrants issued relating to government business. It's the first time that someone has been fired because of search warrants on a Minister of Finance's office — two types of search warrants, one dealing with drugs and one dealing with influence peddling. It's the first time we've ever had a ministerial assistant who had access to confidential information about a government sale, about legislation, who is sitting at home suspended with pay.

[ Page 11269 ]

I don't know where the Premier gets off saying that it's not unusual. It's unusual as heck and unique — first time ever that it's happened.

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So if it's Martyn Brown who made the decision about the future of these two men — the very different future of these two men…. One might say that the actions of this government have harmed Mr. Basi greatly without any explanation of why the two men were treated differently, except for this. What the Minister of Transportation did say on April 21 was that Bob Virk is innocent of everything in the eyes of everyone. He did make that distinction. Of course, when I questioned the Minister of Transportation about that, he said: "Well, everybody is innocent until proven guilty." But I guess that's not the case for Mr. Basi. Mr. Basi wasn't given that right. The Premier's chief of staff could have easily suspended Mr. Basi with pay and had him sit at home. That way his role with the opposition wouldn't have been tainted. He could have easily been suspended with pay as well. But no, that didn't occur.

So if it's Martyn Brown, the head political guy, looking after the political staff, what has the Public Service Agency got to do with it? It deals with the public service.

Hon. G. Campbell: Mr. Brown did make the recommendation for the decision to me, and I accepted that decision. Once that decision was made, it was important that it be carried out appropriately. That was done in consultation with the Public Service Agency, as you would expect. At this point it is not appropriate for Mr. Brown to be in touch with Mr. Virk or anyone else. Any activities with regard to that are done through the Public Service Agency.

Let me reiterate. I am not saying that the event that took place in the Legislature is not unique. What is not unique is to provide people who are being investigated with the opportunity to be suspended with pay. That's the route we've taken with Mr. Virk. I think it is a fair route in terms of Mr. Virk, and I think we took a fair route with regard to Mr. Basi. We did not comment on Mr. Basi's particular situation except to say he had a different position. We felt it was appropriate for him to be terminated in view of the information that was available, and that's what we did.

J. MacPhail: The Minister of Transportation told me in estimates that it would be Martyn Brown who would have a plan to deal with the Minister of Transportation being forced to carry Mr. Virk's salary for the fiscal year '04-05. That's what he said to me in estimates. The Minister of Transportation's office budget hasn't changed. He's got a replacement person for Bob Virk, and he told me it would be Martyn Brown who would have a plan to deal with that.

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Let me just ask: what is the plan? What are the Public Service Agency rules? Can the Premier tell me that? What's the Public Service Agency's policy or procedure that's being enforced right now?

Hon. G. Campbell: I think I can answer the question this way. Mr. Virk is on paid leave. He is suspended from his activities in the Legislature. His salary will be taken out of the Transportation ministry's budget, as the minister said at the time of his estimates. That's the route we are following at this point. If there are going to be future decisions with regard to that, they will be made in due course.

J. MacPhail: No, no. I'm asking what the Public Service Agency policy is. Is it that you're innocent until proven guilty, and therefore you get to stay on payroll until charges are laid or you're declared no longer under suspicion? What is it? The Premier says this is routine. What's routine?

Hon. G. Campbell: The decision on whether to terminate or suspend rests, obviously, with the chief of staff and, through him, with me. When that decision is made, it's made on the basis of the information available and the circumstances that are there. We've made that decision.

Mr. Virk is currently suspended. He is not at work. He is receiving pay. That is the circumstance which will remain until circumstances change. This is the policy that we've got. If there is a time when this comes up with other members of the public service, for different reasons — hopefully for different reasons, hopefully never, but if it did come up — obviously those circumstances would be reviewed at the time, and decisions would be made.

J. MacPhail: I'm sure the reason why the Premier isn't telling me what Public Service Agency policy is there is because there isn't one. Believe you me, Mr. Chair, the Public Service Agency is responsible for tens of thousands of public servants and has a policy about everything.

If Mr. Virk is charged, who pays his legal fees?

Hon. G. Campbell: I'm interested that the member opposite is so interested in the Public Service Agency. She could have reviewed a lot of their policies under the Management Services estimates, and I understand she wasn't able to attend any of those estimates.

Let me say this in terms of how we deal with our employees. It is speculative to say Mr. Virk will be charged or won't be charged. It would depend on what kind of charge was made or wasn't made, and those are issues that clearly have to be reviewed at the time they come forward. I think it's inappropriate for us to speculate on what may or may not happen.

The Chair: May I remind the member that hypothetical cases are not questionable.

J. MacPhail: Thank you, Mr. Chair. That's a very good point.

Mr. Basi, in his severance arrangements — was this issue addressed about charges and lawyers' fees? That's not hypothetical.

[ Page 11270 ]

[1945]Jump to this time in the webcast

Hon. G. Campbell: The way the government operates, the Attorney General is responsible for the indemnity policy with regard to the legal indemnities, but Mr. Basi received 8½ months' severance, as part of his severance in December. As I mentioned, there was no suggestion one way or another as to whether Mr. Basi was…. We couldn't suggest what the circumstances were with him, but we felt it was appropriate, in view of the information we had available, to terminate him. He had 8½ months' severance. It would be typical in that situation. That is a full and complete package.

J. MacPhail: Did the severance arrangement deal with the issue of indemnification if charges are laid related to Mr. Basi's government activity?

Hon. G. Campbell: The severance arrangements with Mr. Basi are, in fact, confidential, but he was given 8½ months' severance. Any indemnities would be subject to review by the Attorney General, but they would also at this point be confidential.

J. MacPhail: I don't know why they're confidential. Why is the expenditure of taxpayer dollars a confidential matter — or the promise of the expenditure of taxpayer dollars? We've discussed the indemnification policy around court actions in this House many times. In fact, the government, when they were in opposition, raised this over and over again. I know, Mr. Chair, because I had to answer the questions when I was in government.

What is the indemnification policy for political staff who may be charged in relation to their government duties? For those that may not be familiar with it, indemnification, as I understand it, means who is indemnified for covering the legal expenses if one is charged in relation to their government duties.

[1950]Jump to this time in the webcast

Hon. G. Campbell: I wanted to be sure that this was correct. Indemnities are available for elected officials and for staff, if in fact something takes place that is part of being in the course of their duties. If it is something that is outside of the course of their duties, there is no indemnity that's in place.

J. MacPhail: Is there anything in the legal arrangements of the severance of Mr. Basi, David Basi, that would prevent him from asking the government to pay legal fees if he is charged pursuant to his government activity as ministerial assistant to the Minister of Finance?

Hon. G. Campbell: Again, we're getting close to a hypothetical question here. Mr. Basi has not been charged, and neither has Mr. Virk been charged. In terms of people that are involved in the public service, if there is a legal action taken as a result of them exercising their public duties, then there would be some indemnification. If they are charged outside of their duties, there would be no indemnification. That's the simplest answer, Mr. Chair.

J. MacPhail: Isn't that interesting? Taxpayers may be on the hook for legal fees for both Mr. Virk and Mr. Basi, because of course the warrants that we know about so far are to do with them in their official capacity relating to government business. The Premier can't in any way tell me that his government, in severing Mr. Basi, dealt with that issue so that the taxpayer wouldn't be on the hook. That's just another great piece of news for the taxpayer around the whole B.C. Rail fiasco.

Let's turn to the B.C. Rail deal — not the part that was stopped because of the raids on the Legislature, not the failed sale of the spur line out to Roberts Bank that cost the taxpayers a million bucks with nothing to show for it, but the B.C. Rail deal of the main line.

This is what I have gleaned from the estimates debates I've had with various ministers around the B.C. Rail deal — that $1 billion, the deal the Premier said that the taxpayer got a billion bucks for. Here's what comes out of that billion bucks, as I understand it, and I am happy to be corrected. As a taxpayer I hope the Premier can correct me. Now, $255 million of that will be available to CN to write down its business taxes, meaning that CN can use that credit to not pay taxes to the federal government — $255 million of federal taxes that they're off the hook for, which could go to health care for British Columbians. Then there is another $20 million that CN ain't paying in property transfer tax, because the government is paying it on behalf of CN. Isn't that interesting?

When I bought my house, I had to pay the property transfer tax. Every person raise their hand who bought a house and had the seller pay their property transfer tax — not. Anybody out there that had a seller sucker enough to pay the property transfer tax on their behalf, like this government did for CN? No.

[1955]Jump to this time in the webcast

Now, I'd say that's a business subsidy. It's an individual payment or tax expenditure to one company. So there's $20 million. There's about $14 million — the cost of lawyers and real estate advisers and spin doctors and accountants — for the actual sale. There's $53 million in what's called "debt defeasance," meaning because CN isn't just assuming the debt of B.C. Rail, which was not taxpayer-supported by the way…. The taxpayer didn't have to do anything with that debt. It was the shippers that serviced that through their freight rates. The taxpayer now loses $53 million because the government can't transfer the debt to CN. It has to pay it off early. It's called "early redemption penalties." That's another way of saying debt defeasance costs.

Now, the shippers don't get a break. CN will assume that debt and then transfer the costs of that debt servicing back to the shippers, so they don't get a break. The taxpayer loses 53 million bucks. Then there's $200 million that the government is going to use from that sale, into their regular roadbuilding — nothing to

[ Page 11271 ]

do with the communities along the B.C. Rail line. It should be expenditures that this government should be making out of their increased gas taxes that they hiked up — but no, no. That's going to come out of the B.C. Rail sale.

That's almost 650 million bucks there that's of zero benefit. Maybe my math is wrong on that. While I'm saying that, I can do a calculation. I can actually add it up. Am I wrong in the analysis of the deal anywhere, and if so, where?

Hon. G. Campbell: I think it's fair to say that the member opposite's analysis of the B.C. Rail investment partnership is certainly one I don't agree with. First of all, the reason there are tax losses there — and the only reason — is because B.C. Rail was running in the red for a number of years. As the member opposite will know, although she says it was all taxpayer-supported debt, there was a regular write-down. In fact, her government wrote down hundreds of millions of dollars for B.C. Rail because it wasn't able to operate in a way that was economically viable or that could secure the long-term rail operations for the northern part of our province.

I think one of the critical things, as we look at the whole package for B.C. Rail, is that it's not just a billion dollars of private sector investment. It's the retirement of $500 million of debt and a $30 million-a-year saving. It's the private sector coming and investing in literally hundreds of new cars, which will meet the needs of the north. It is providing opportunities for northern communities in the northwest, in the north central around Prince George, in the Peace River area and in the Chilcotin-Lillooet area. All of those things are part of this overall agreement.

Now, when you look at property transfer tax payments…. I've just acquired a new place to live with my wife, and I paid property transfer tax. Most of us do that. The total transfer taxes are in the range of $10 million to $12 million, and most of those property taxes are payable by B.C. Rail for consolidating ownership under the B.C. Railway Company. Registering the lease of the title on that is going to cost an additional number of dollars. I think that's because — the member doesn't understand this yet, but I'm sure she will, and certainly British Columbians will — we maintain ownership of the railbed and the right-of-way and the rail lines, as we said we would. We have a private sector operator who will know how to run a railway.

[J. Weisbeck in the chair.]

With that ability to run the railway, there are going to be hundreds of new jobs. There are going to be new opportunities across our province — north and south, east and west in our province. It's going to generate substantial additional benefits.

On top of the transaction costs that we have — all of which, by the way, Mr. Chair…. Just so we're clear, all of those transaction costs were identified in the budget this year. I believe it's on page 60 of the budget. All of those transaction costs were clear. I know the member opposite had hours and hours of opportunity to discuss this in quite some detail with the Minister of Transportation, so I'm going to deal with it in general.

[2000]Jump to this time in the webcast

The CN benefits are above the $1 billion transaction and include a 7 percent rate reduction. They include a new Prince George head office. They include 600 new cars. Those are all good reasons for us to complete this investment partnership and for us to move forward.

I think it is an exceptional opportunity for British Columbia. I can tell the member opposite that if you go to the Peace River and talk to Peace River farmers about the opportunities that that northern corridor presents to them, they're excited about it. I can tell you that when you talk to communities about the potential for a new passenger service that can connect communities up and down the line both north and south, and potentially east and west, they're excited about it. When you talk to the people of Prince Rupert about the opportunities that it presents to the port, they're excited about it. It's not just a good financial arrangement for the province, as has been said by validator after validator; it's also a good arrangement for our shippers. It's also an excellent arrangement for our communities. In Prince George itself, it's going to become the new head office for those operations in the north. It's going to become a new gateway to the north for the entire northern part of our province. I think there is a great deal of excitement in Prince George with regard to that.

The $135 million northern development initiative is aimed specifically at doing something that communities in the northern regions of our province have been calling for, for generations. That is for people in the north to be able to take action that meets their needs in a way that is unfettered by interference from Victoria. That's exactly what we've done.

I think the B.C. Rail investment partnership is an exceptional opportunity for British Columbia. It's an exceptional opportunity for our northern communities. It's an exceptional opportunity for our shippers. Frankly, I would hope that we will shortly have the results of the competition bureau's review so that we can get on with it, and British Columbians can get on with assuming and receiving all of the benefits that that investment partnership will deliver.

J. MacPhail: I guess the entire number of British Columbians who believe what the Premier said are sitting right in this chamber, which is very interesting — very interesting.

The Premier says that the property transfer tax costs $10 million to $12 million. On a $1 billion sale, could he break that down, please? Can he tell me how the property transfer tax is calculated?

Hon. G. Campbell: The $10 million to $12 million is basically broken down into two components. It's approximately $5 million to $6 million for the consolidation of all the properties to be provided to the B.C. Railway Company by B.C. Rail. The B.C. Railway

[ Page 11272 ]

Company will — as you know, Mr. Chair, and as the member opposite knows — own the right-of-way.

It's $5 million to $6 million for the registering of the lease and the title of the lease on the right-of-way. That's, in fact, a critical component of the public knowing that this is indeed an investment partnership where the ownership of the right-of-way, the rail and the railbed remains with the public, and the operation of the railway is carried out by the lessee.

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J. MacPhail: I'm sorry. I didn't understand any of that. It may be just that I'm thick. If there's no change in who owns the railway bed and right-of-way, what's to be registered, and why?

Hon. G. Campbell: The consolidation of the properties along the right-of-way is done so that we bring together all of the B.C. Rail subsidiaries and all of the properties. That's put into one publicly owned corporation, the B.C. Railway Company. It's that consolidation that is critical, and that's what generates the cost.

J. MacPhail: This doesn't ring true to me — that somehow this is just about keeping B.C. Railway Company in public hands. That was already there. What cost $5 million to $6 million to register leases on title that was necessary as a result of this deal? I don't understand.

Hon. G. Campbell: Property transfer tax is paid on any leases that are over 30 years. That lease will be registered on the newly consolidated property.

I'm sorry if the member doesn't understand this, but the property was in various property parcels owned by B.C. Rail, subsidiaries of B.C. Rail. That is now all consolidated into one property under the auspices of the B.C. Railway Company. That will cost approximately $5 million or $6 million. The lease must be registered because it's over 30 years. That will cost, it's estimated, $5 million or $6 million.

J. MacPhail: Well, call me stupid; I don't understand a word of what the Premier has just said. I have no idea why five million to six million bucks had to be charged to register leases, register the title of land that B.C. Rail already owned, unless it was to prepare for the transfer of that title to CN. Is that the case?

Hon. G. Campbell: The short answer to the member's question is no, that is not the case. We consolidated it all so that we could have it in public ownership, as we said we would — the right-of-way, the railbed and the rails. It is now consolidated. Since we are entering into a long-term lease, over 30 years, we will now register the lease on that consolidated property.

J. MacPhail: Well, we know that after five years CN can purchase the Crown land on discontinued lines for a buck. For a buck they can do that. So it seems to me that the government has done all the nice little legal work, paid for it for itself to make sure the titles are all nice and clear — for the land that CN can purchase for a buck after five years.

Mr. Chair, I'm going to have to do more work on this — on what the Premier is saying around the registering of the title on the lease. I'm going to need some expert help on this. We'll deal with that tomorrow.

[2010]Jump to this time in the webcast

Let's just look at the property transfer tax. The Premier says it's $5 million to $6 million on property transfer tax. That's right. It was the opposition that pointed out in question period that property transfer tax was being paid by B.C. Rail, not CN, even though that was required under the law — the Property Transfer Tax Act. It's the purchaser of a long-term lease that has to pay the property transfer tax.

This lease is at least 30 years long, and it's $5 million to $6 million. What's the value of the lease upon which $5 million to $6 million was paid?

Hon. G. Campbell: The property purchase tax value is based on the value of the property, as is normally the case. Again, let me remind the member that she did have 16 hours to review this with the Ministry of Transportation. My officials clearly don't have all of the details of that information. She also had an opportunity to review this with the Minister of Finance. These closing costs were detailed and disclosed in the budget this year. I think I have outlined for her both the costs and the overall policy that's reflecting them.

J. MacPhail: Luckily, at my age I can still remember what I discussed with various ministers. The Minister of Finance referred me to the Minister of Transportation, because Chris Trumpy, the negotiator for the government, reported to the Minister of Transportation. The Minister of Finance didn't answer any questions around this deal.

Then when I asked the Minister of Transportation about the value of the prepaid lease, he wouldn't answer me. Please go check the record. No matter which way I approached the question, he wouldn't answer the question about the prepaid lease.

Now, we know that the property transfer tax, which isn't paid on the property…. Or if it is, it means that CN bought B.C. Rail, and I know the government doesn't like to admit to that. The property transfer tax is paid on the lease. What was the value of the lease that led to a calculation of $5 million to $6 million of property transfer tax? Please break it down for me.

Not one single minister has answered these questions for me, and I'm happy to have Hansard stand as proof of that.

Hon. G. Campbell: As I mentioned earlier to the member, the property transfer tax is based on the value of the property or the value of the lease. It is written into the act. I would be glad to have our officials review that matter in detail with the member opposite so she understands how the values were derived.

[ Page 11273 ]

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J. MacPhail: That's why I'm here. That's exactly why I'm here. I allege that the property transfer tax, given what the Premier claims is the value of the deal, would be between $20 million and $24 million. The government, B.C. Rail, paid that on behalf of that poor, desperate CN. It's called a tax subsidy, Mr. Chair. A tax expenditure for one company and one company alone is the definition of a subsidy.

I can hardly wait for this government, as the Premier has promised, to campaign in an election on that. I expect the fact that the Premier won't tell me the value of the prepaid lease that leads to only $5 million to $6 million of property transfer tax is because the price that CN paid for the prepaid lease is pitifully low.

In December or the end of November — I can't remember — of 2003, the then-Minister of Transportation revealed that the value of the prepaid lease for 90 years was around $150 million. Wow. One and a half million bucks per year CN was going to pay to lease the rail line. Then the new Minister of Transportation wouldn't admit to that. In fact, I had to prove to him that the former Minister of Transportation had actually revealed that figure. Then he went on at great length to deny me the current information around what the prepaid lease was. Now the Premier is denying me the information on how they calculated the property transfer tax subsidy that they're giving to CN.

Well, let's be clear. This government really negotiated CN to the ceiling. The Minister of Transportation and the Premier have said: "Well, in the toing and froing of negotiations, we got CN to reduce freight rates by 7 percent." But, Mr. Chair, those 7 percent rate reductions…. We have no idea how long that's going to last. It's 7 percent on one-third of the freight costs that shippers pay to B.C. Rail, and the value of that reduction is around $7 million — a $7 million reduction in rates to the shippers on a $300 million annual freight cost to shippers.

So $7 million. Let's say the Premier's tax subsidy analysis is correct for CN — that it only cost the government $10 million to $12 million that CN should have paid. Well, CN is still five million bucks up — aren't they? — even after they paid for that freight rate reduction of seven million bucks. The government then handed them back a gift of twelve million bucks, and I expect it's double that. And the government says they got a good deal? Wow. I want to negotiate with this government. I want to get in there and wrestle them to the ceiling.

Now, this deal was supposed to have got through by March 31, 2004, but we know the competition bureau is taking the absolute maximum amount of time that the government predicted it would. It's been six months since the deal was announced. No competition bureau report yet. We're two months…. No, I'm sorry, Mr. Chair. B.C. Rail's fiscal year is a calendar year, as I recall. I could be wrong on that. The Premier could feel free to correct me. I think their fiscal year is a calendar year, so we're well into the '04 business year of B.C. Rail. Who gets the profit for this fiscal year?

[2020]Jump to this time in the webcast

Hon. G. Campbell: First, I think the member opposite knows that there obviously are statements of adjustments when you finish and complete an arrangement like this. The competition bureau will complete their review, and then hopefully we'll be able to get on with this.

I think it's interesting to hear the member opposite decry the potential for the B.C. Rail investment partnership. In fact, if the member opposite spent time going across the north and talking to northern communities, if she spent time going through the interior…. I just came back last week from a meeting with the North Central Municipal Association, all of the communities north of 100 Mile House.

I can tell you this right now, Mr. Chair, and the member opposite. They are excited about the potential for this B.C. Rail investment partnership, and they're excited for good reason. They're excited for the same reason that Chief Harley Chingee is excited about the B.C. Rail partnership. Let me just point out to you, Mr. Chair, that he said he applauded the business decision of the B.C. government to convert an ailing Crown asset into a tool for economic growth and prosperity. Clearly, that's what is taking place here. The member opposite can say: "Oh no, Chief Chingee is just trying to butter the government up."

You know, Mr. Chair, even the former Premier of the New Democratic Party has said that this is a great opportunity for the north, that this is providing synergies that we've never had in northern development. Maybe the member opposite doesn't know this, but the northwest of the province has had a pretty tough time over the last decade. I think the former Premier, Mr. Miller, knows that in fact the CN Rail investment partnership is going to create huge opportunities for the town of Prince Rupert, certainly, but also for the town of Prince George, for the town of Smithers, for communities in the Peace. All of those benefits are coming out of the B.C. Rail investment partnership.

Let's just go through this, because I think it is important to remember this. The B.C. Rail write-offs have come to almost $1 billion over the last 15 years. That is a huge cost to taxpayers. We had northern communities come to us and say: "You know, you've got to do something to get this rail back on its feet." We had shippers saying to us: "You have to do something to get this rail back on its feet." We can't continue to write down losses year after year after year for B.C. Rail.

What we did was say: "Let's maintain the public ownership of the right-of-way and the railbed and the rail. Let's get someone who knows how to run a railway, who can generate the synergies you need to come and look at the potential for adding to the economy of British Columbia — adding in a billion dollars of private sector investment; writing off $500 million in debt and saving the taxpayers of this province $30 million a year; maintaining that infrastructure and indeed improving it with 600 new cars and lower rates and lower costs for shippers, providing them with a competitive advantage."

[ Page 11274 ]

Looking at what's taking place in the Prince George corridor and looking at the new Chicago express, I can tell you, Mr. Chair, that with the access we're going to have to the forest industry of the north central part of our province, there are going to be reduced costs for that industry in getting their product to their customers. That creates a competitive advantage.

If you look to the west, Mr. Chair, you see the vastly growing Asian markets in India and in China, and you see the opportunities that are created in the port of Prince Rupert. That's going to create not just hundreds of new jobs but ongoing synergies as those jobs build and develop. We talked yesterday about the advance of cruise ship opportunities in Prince Rupert as well. That port is opening up, and it's going to blossom.

You know, it's not just the government that sees this as a major advantage. It's not just communities along the line that see it as an advantage. If you go and read the reviews from Merrill Lynch, they will tell you that the potential cost synergies create significant growth opportunities. They remain confident in CN Rail's ability to improve B.C. Rail's operation as a market-competitive entity. Prudential Financial: the integration process will yield substantial opportunities for service improvements. Deutsche Bank Securities: an abundance of synergy and growth opportunities.

That abundance of synergy and growth opportunities is taking place right here in British Columbia. I know the member opposite spent a decade watching as our economy actually had a little bit of trouble attracting investment. I certainly watched as northern communities suffered under the previous government's policies.

Morgan Stanley: as a sign of that potential, they see huge opportunities. CN has already announced it's going to ship iron ore from upper Michigan iron range through Prince Rupert. That's one of the things they're looking at doing and expanding that opportunity. J. P. Morgan talks about the competitive position of the rail vis-à-vis trucking. This new synergy will create those opportunities and create those jobs.

[2025]Jump to this time in the webcast


Hon. G. Campbell: No, everyone gets this arrangement.


The Chair: Member, listen to the answer, please. You'll have your chance to speak.

Hon. G. Campbell: Some $135 million is going to the northern development initiative. I know the member opposite says: "Oh, just $135 million. Who cares?" The fact of the matter is that the communities care. It's $15 million for northern investments across the north; $15 million for the Peace River to decide what they are going to do to improve their economy and their social infrastructure; $15 million for the northwest of the province, which the previous government turned their back on in terms of economic growth and economic opportunity.

We're opening it up, and as we open that up, we're opening up great new opportunities for all of British Columbia. Prince George, with the new head office…. How many times, I wonder, in the member opposite's career as an elected provincial official did she go to Prince George and they asked for the head office of B.C. Rail to be located in Prince George? That is what's actually going to take place here. It's going to be in Prince George. There's going to be a new $4 million expansion to the Prince George Airport. There's going to be the new million-dollar state-of-the-art wheel shop in Prince George. That's jobs. That's opportunity for British Columbians and for the north of British Columbia.

Talk to the people in Squamish about the benefits that the B.C. Rail investment partnership will create. There are 71 acres of B.C. Rail land available, currently leased under Nexen, that will now be available for them to have a whole new plan for their future that they're excited about and they're building right now in the Squamish valley.

The B.C. Rail investment partnership is great for first nations — $15 million to the B.C. Rail first nations benefits trust. Over a dozen first nations are already saying they want to be part of this. They're excited by it and what it can do for them in educational opportunities and economic development.

You know, Mr. Chair, this is going to be a great project for British Columbians. It will generate a billion dollars in benefits. On top of that billion dollars of benefits is a substantial upgrade of the line, substantial upgrade of the equipment, huge opportunities for shippers. This is the kind of agreement that we needed to have in the province long ago. We needed it because the north needed it. We needed it because the interior needed it. When they cried out for help before, they were greeted with a deaf ear. I do think the B.C. Rail investment partnership is ready for the people of the north.

We are waiting anxiously for the competition bureau to complete its review. It can never do it quickly enough. There is no question that this is a bold initiative that will create a better future for the people and the families that live in the north and the interior of our province.

J. MacPhail: Well, I know that the investment houses think this is a great deal for CN. The quotes that the Premier had from Merrill Lynch and that are their analysis of how well CN did in shareholder reports. It's an analysis to the shareholders of CN. Of course they got a great deal — at the expense of the taxpayer.

It's interesting. The Premier says this is great news for the north. I might remind the Premier that the unemployment rate in the northwest has gone up under his government — has gone up. That will all be put to test within months, as the Premier says he wants to campaign in an election on this deal.

[ Page 11275 ]

I might also remind the Premier that there are 25 first nations bands along the B.C. Rail line. It used to be that there were 21 bands who had signed on to the great trust, and now it's down to about a dozen. There will be hundreds of first nations people on the lawns of the Legislature tomorrow, and we can ask them directly. They're the bands from along the B.C. Rail line, and we can ask them directly what they think about the B.C. Rail deal and how it affects their rights and title.

Of course, the Premier isn't telling us anything that he didn't know during the last election, when he promised that he wouldn't sell B.C. Rail. I guess that's why people think that he broke a promise. I guess that's why Ben Meisner…. Now, I think it's safe to say that Ben Meisner isn't a New Democrat. I certainly recall from my years in government that Ben Meisner, the Prince George talk show radio host and Prince George Citizen columnist, isn't a New Democrat. Here's what he said within the last month about the B.C. Rail deal — April 21. He's talking about the B.C. Rail deal. He says: "It's about to backfire, however. No other single issue has hurt the Liberals more in this part of the province than the B.C. Rail deal."

[2030]Jump to this time in the webcast

God, I never thought in my life I'd quote Ben Meisner. But, Ben, I did it.

In all of this the Premier says to me: "I'm sure the member knows that in these kinds of deals, there are adjustments as the deal closes." Well, no, Mr. Chair. I don't know, because the deal has been completely secret, and what has leaked out has gone exactly counter to the message of this government.

Perhaps the Premier could be specific. The Minister of Transportation said that the minute the transaction agreement and the revitalization agreement are approved by the competition bureau, they will be released publicly and will be implemented. What happens to the '04 profits of B.C. Rail at that point? Who gets them?

Hon. G. Campbell: I understand that all profits up to the completion of the agreement will flow to B.C. Rail, and in turn those profits will flow to the government.

J. MacPhail: Can the Premier say what the profits are to date of this terrible company, B.C. Rail? What are the profits to date for '04 fiscal?

Hon. G. Campbell: I don't know the answer to that, Mr. Chair. But I can tell you that the member opposite had 16 hours and 43 minutes to deal with that with the Minister of Transportation and approximately six hours to deal with the Minister of Finance on it. I don't have that information available.

J. MacPhail: Oh, I know I work very hard in this Legislature, and I think the voters are recognizing how hard New Democrats work on their behalf. Every day they're acknowledging that.

Let me just read from another commentator in the last four weeks, Don Cayo. He is talking about P3s, and we're going to move to public-private partnerships…. I hope we'll get to it before we have to rise tonight. But here is what he said. He is talking about Partnerships B.C. and their lack of success.


J. MacPhail: Don Cayo from the Vancouver Sun. He comments in the business section. He used to be the editorial page editor of the Vancouver Sun, and now he is a business commentator for the Vancouver Sun. He is talking about Partnerships B.C. and the private-public partnerships. This is what he says. He is talking about Larry Blain, the CEO of Partnerships B.C. He says: "Significantly, Blain also promises the imminent release of new guidelines that will spell out when and how details of all future public-private partnerships will be made public. This is an overdue policy statement that could have, should have saved the Campbell government" — I'm sorry, Mr. Chair; I'm just quoting — "a lot of the self-inflicted grief it is now going through with the B.C. Rail fiasco." This is dated April 21, 2004. He also goes on, though, to say: "To be fair to Blain and his agency, I point out that they did not quarterback the B.C. Rail deal. The 'credit' for that one must go directly to Premier Gordon Campbell and crew."

Of course, Mr. Chair, I also will tell you…. My apologies. I was quoting from the article. I must say that the Minister of Finance refused to answer any questions about B.C. Rail, and the Minister of Transportation refused to answer the questions that I am now asking. It was the Premier, as I recall, who made that big glitzy announcement, so it is appropriate for my questions to be here.

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I have heard that the profits for '04 for B.C. Rail, that terrible company, exceed $25 million already in the first-quarter fiscal. Yet it turns out the government is giving all of that away. Isn't that interesting? Gee, I wonder how well the people along the northern B.C. Rail line will feel about the fact that a well-run, competitive Crown-owned railway that turned $95 million of profit to them last year and is already on the road to exceed that this year is all going to go to CN Rail now.

Does the minister agree with the Minister of Transportation that "the moment the competition bureau is finished with its analysis," the rail deal will go ahead? Is that what the transaction agreement says?

Hon. G. Campbell: I can tell the member opposite this. We will complete the transaction as quickly as possible following the review of the competition bureau. I do think it is important to note that the rail company has done relatively well this year. I think it's clearly a reflection of the turning around in the economy. I think it's a clear reflection of the changes in mineral markets that are taking place, of the shipping of fibre south of the border as a result of some of the issues we've dealt with in regard to softwood lumber.

[ Page 11276 ]

But you know, Mr. Chair, there is really no question that B.C. Rail in its current state is not sustainable. Taxpayers, in fact, wrote down more money for B.C. Rail over the last 15 years than they did for the fast ferry project — $860 million, as the member opposite already identified. There is over $200 million of potential tax losses there. That's not because the company was profitable. It was because it was losing the dollars.

There is no question that since the government took office, we have asked for the B.C. Rail board to try and get it more economically viable, and I think it is encouraging that they have managed to secure a partnership agreement where the fairness commissioner said this was an utterly fair process. He said that in terms of value, we got good value for the people of British Columbia. When you see the benefits that are going to take place…. You know, the member opposite clearly isn't talking with the mayors in northern communities.

Colin Kinsley urged the provincial government to find innovative solutions with regard to B.C. Rail. Their recommendation would be for the province to retain ownership of the railbeds and rail tracks and their partner to offer freight rail and passenger services. That's what we had the opportunity to do under the B.C. Rail investment partnership. Donna Barnett from 100 Mile House: the provincial government needs to take bold steps now, which they have introduced. That's a very important point for the people in the north-south corridor.

I think sometimes that because the member opposite maybe isn't getting around as much as she used to — or maybe she didn't get around much before — she doesn't understand how important this project is to the entire northern part of the province. If you look at the information that has been provided by the mayor of Prince Rupert about the opportunities that are presented there, the pending partnership between CN Rail and B.C. Rail means significant benefits for Prince Rupert and indeed for communities of northern B.C.:

"Our region has ridden the rails of false hope many times in the past, but it is now time to move ahead. Now we are on the threshold of truly revitalizing the economy of Prince Rupert and communities across the northern region of British Columbia. CN Rail promises to make a significant commitment to our community's future, and they are backing that up with hard cash."

These are exciting times for northern communities. You know, it is critical. I understand that it's great to have the debate, and I understand that the member opposite doesn't agree with the B.C. Rail investment partnership. But I can tell you that in terms of northern communities, in terms of the economy of British Columbia, in terms of the opportunities it creates, in terms of the jobs that it will generate, I think there is no question that the B.C. Rail investment partnership is not just good for the people of the province today, but it will be good for the people of the province in the future.

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J. MacPhail: When will the Prince Rupert Port Authority be done then? The great hope — when will that be completed?

Hon. G. Campbell: We'd expect the container terminal announcements to be within the next two to three months. There's been a great deal of work done with regard to that.

Obviously, with the completion of the B.C. Rail investment partnership, there will be an additional $30 million to aid in that activity — with the potential for future passenger service. That obviously doesn't happen in a week and a half. You have to plan a season ahead, but there are opportunities for that by 2005-06.

There is a building sense of opportunity in the northwest, and I understand that the member opposite and her party don't care much about the economic future of the northwest. They're opposed to aquaculture. They're opposed to offshore oil and gas. They're opposed to the B.C. Rail investment partnership. It's hard to find out what they're in favour of for the northwest of this province.

We're in favour of an economic future that builds on the strengths, the imagination and the entrepreneurship of the people of the northwest. That's how we're going to drive this economy forward. It's how we're going to drive their economy and their communities forward.

J. MacPhail: I'm actually looking for specifics, not rhetoric. Has the Premier got a commitment from the federal government to invest the $54 million they're counting on in the Prince Rupert Port Authority, then? Nothing can happen without that federal money. Has he got a commitment on that basis?

Are you going to applaud that answer too?

The Chair: Member, that's inappropriate behaviour.

Hon. G. Campbell: Needless to say, the port authority in Prince Rupert is driving this project. We are working with them. As I mentioned, we will be making an announcement in two to three months.


Hon. G. Campbell: You know, the member opposite can joke and laugh and make her faces at Prince Rupert. I can tell you that it's a great town with a great future, and it's going to have a great future with the B.C. Rail investment partnership.

J. MacPhail: What I do know about Prince Rupert is that unemployment has skyrocketed since June 2001 and that one out of three houses is for sale in Prince Rupert since 2001. That's what I know.

Talk about false hope. The Premier says, "Oh, the port of Prince Rupert," and the minute I ask him for some detail — which is that they're giving $17 million

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and that the federal government has to contribute $54 million — all of a sudden: "Oh, that's the port of Prince Rupert's responsibility." There is absolutely no commitment from the federal government on that whatsoever — none. Nothing can happen. The Premier promising any hope at all for the port of Prince Rupert on that basis is completely meaningless.


J. MacPhail: The member for Vancouver-Quilchena says that Skeena Cellulose was false hope. You tell that to the 9,000 people who were employed when Skeena Cellulose was operating. Maybe the reason why the unemployment rate has skyrocketed in the northwest is because this government gave away the cutting rights associated with Skeena Cellulose to a failed entrepreneur, and he shipped off raw logs without creating any value-added whatsoever — under their government. That's the record of this government in the northwest. But we'll have plenty of opportunity within months to put that to the test.

Let's be clear. The port of Prince Rupert cannot go ahead without federal investment of $54 million. CN isn't putting one dime into the port of Prince Rupert — not one. Talk about false hope, Mr. Chair.

[2045]Jump to this time in the webcast

I don't in any way blame Herb Pond, the mayor of Prince Rupert. He has every right to demand as much hope from this government as he possibly can. But let's be clear. Prince Rupert in 2004 is far worse off than it was in 2001 — far worse off — and I dare any local representative to stand up and challenge me on those statistics.


J. MacPhail: Absolutely.


The Chair: Order, please. Let's have order on both sides of the House. Order, please.

Leader of the Opposition, you have the floor.

J. MacPhail: I love it how this government says that the NDP is out of touch with the province. I will tell you something, Mr. Chair. The last time I was in the northwest, I got a tour of the Skeena Cellulose operation. When would that be — about four months ago? Yeah. They were holding out great hope that Skeena Cellulose would start up again, only to have their hopes dashed.

Maybe the member for Vancouver-Quilchena would like to take back his cheap shots — his absolute cheap shots. It turns out that that was false hope about Skeena Cellulose starting up. That was what Prince Rupert wanted and what Terrace wanted — to start up again. All their hopes were dashed, and they're left with nothing.

In fact, I think they also showed us when we toured that the aquaculture activity had shut down under this government — not the previous government. Under this government the aquaculture industry in the northwest came to a grinding halt. Oh, but that would make me out of touch, because that information is — what? — only three or four months old. Yeah. Maybe the government would like to stand up and say how that's going to get going again for the northwest.

Let's be clear that when this government sells all of the great benefits of the B.C. Rail deal, we have absolutely no idea whether they've got the facts or not, because it's secret. It's absolutely secret. They just continue to say: "Oh, this is all great news."

Let me ask the Premier this: what happens to the aboriginal rights and title of the 25 bands that make claim to land along the B.C. Rail line?

Hon. G. Campbell: Let me just say that it's always interesting to hear from the member opposite about what we have done in three years. She seems to forget what she and her government did in ten. What her government did in ten, actually, was started the demise of the forest industry in the northwestern part of the province. Her government would go on trade missions, and they'd forget to even put Prince Rupert in the brochures, Mr. Chair.

Let's look at just what's happened in terms of the northern economy. We've seen an increase in the forestry investment in the northern economy in the last year. We've seen a $200 million OSB plant for Slocan in Fort St. John. We've seen the Hixon sawmill expansion for Dunkley. We've watched as Lignum has expanded some of its opportunities in British Columbia.


Hon. G. Campbell: I know that the member opposite would rather heckle than listen to this, but I tell you that the people who got the jobs as a result of this are pretty darn pleased. They're pleased that at last they've got jobs that their families can count on and that are going to be there for the long term. In British Columbia at last we again have a province that encourages investment and stability and recognizes the importance of our resource industries, and that's important.

We've got the member opposite and her party saying that they don't really like mining much. Go talk to them in the northwest about how they like mining. They love mining. They love the fact that we're trying to return the mining industry to this province — the industry that the previous government wiped one out of two jobs out of. Not a tear was shed by the member opposite — not a whimper from the NDP about what they did in the northwest when they did that and about the families they affected in community after community across the whole province.

[2050]Jump to this time in the webcast

What are we doing? We're opening up exploration in the northwest; we're opening up transportation cor-

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ridors in the northwest; we're opening up a port in the northwest. We're looking at Prince George. We're opening it up as a major gateway to our forest industry and our resource industries. We're providing, for the first time, real access for our Peace River farmers to Asian markets. We're providing real access for Canadian agriculture out to the Asian markets, and we're providing that a day and a half sooner than we could have otherwise. That's part of what the B.C. Rail investment partnership does.

We're providing new passenger opportunities that will be run effectively and efficiently and will generate hundreds of new jobs. I think it's important to note that as we look at the northwest of this province, they are the ones that are the most excited about the potential for offshore oil and gas.

What does the other party say? They say no to offshore oil and gas. No, not now, not ever. Forget the science. Forget that we can do it in British Columbia. Forget that there are hundreds of millions of dollars that can go to support health care and education. Forget the opportunities that are presented. Let's turn our back on the northwest, they say.


The Chair: Member, please come to order. Listen to the answer.

Hon. G. Campbell: We are not going to turn our back on the north or the northwest or the Kootenays or the Cariboo-Chilcotin or Lillooet. We are going work with those communities.

While the member opposite can belittle the work that the city of Prince Rupert has done — or any number of other cities she doesn't happen to just agree with — I tell you this. They have a very bright future in Prince Rupert. It's a future built on tourism and mining and forestry and aquaculture and energy production. That's with this government. I can't tell them what kind of future they'd have with another government, but I can tell you this. This government is going to continue to work with the town of Prince Rupert.

We're going to continue to work with the likes of the former Premier, Dan Miller, and the current mayor, Herb Pond. We're going to continue to work with first nations communities up and down that line. We're going to provide them with $15 million of benefits — educational benefits, economic opportunity benefits.

You know what we're going to see happening in British Columbia? We're going to see a revival of the north. We're going to see a renaissance of opportunity, and we're going to see this province moving to its rightful position, where families know they've got a long-term, secure future they can count on based on the resources of this province and the entrepreneurship and expertise of the people who live in our communities.

J. MacPhail: Of course, the Premier didn't answer my question about what happens to the 25 bands, to their aboriginal rights and title, with the conclusion of the transaction agreement — those 25 bands along the B.C. Rail line who make claim to aboriginal rights and title — because you wouldn't be able to answer that question in a way that would bring stability and certainty to business investment. The biggest single impediment to business investment in this province is lack of settlement of aboriginal rights and title. Anywhere you go, that's what they say.

In fact, the most recent survey about investment in the north from business people said that it was lack of stability and confidence and certainty of settlement of aboriginal rights and title. Of course, this government didn't even bother to consult with first nations, in their duty to accommodate, around the B.C. Rail sale that will show Crown land sold to CN after five years for one buck. Oh, that's just great. That will bring a lot of certainty to business in this province.

The Premier likes to give his set speech, which frankly no one's buying, about the benefits of this. He doesn't like to answer the hard questions about aboriginal rights and title. Well, he's going to be asked to do that in a very forceful way by first nations bands, many of whom are bailing from the first nations trust of this deal, Mr. Chair.

I feel very badly. I wanted to get to the highlights of the Parks review of the Abbotsford hospital and cancer centre request. I was motivated to do that when the Premier was touting what a wonderful man Ron Parks was and how his report stood on its own and the public should just accept Ron Parks's work without any interference from government. I'm so upset that I'll have to wait till tomorrow to review Ron Parks's report on the Abbotsford hospital and cancer centre, but once again, I do look forward to another day.

Noting the hour, Mr. Chair, I move that the committee rise and report progress and certainly ask leave to sit again.

Motion approved.

The committee rose at 8:55 p.m.

The House resumed; Mr. Speaker in the chair.

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

Hon. R. Harris moved adjournment of the House.

Motion approved.

Mr. Speaker: The House is adjourned until 10 a.m. tomorrow.

The House adjourned at 8:57 p.m.

Hansard Services publishes transcripts both in print and on the Internet. Chamber debates are broadcast on television and webcast on the Internet.

Special thanks to Meaghan Williams of Somena Media for keeping this segment of Hansard on her web-site, and then helping me find the original. - BC Mary.