Finance and Government Services — Issue No. 5 — Tuesday, October 11, 2005 (HTML)

2005 Legislative Session: First Session, 38th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD

4. The Committee adjourned at 7:56 p.m. to the call of the Chair.

Blair Lekstrom, MLA
Chair

Kate Ryan-Lloyd
Clerk Assistant and
Committee Clerk

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES



CONTENTS

		Page

Presentations		101
	C. Kinsley T. Weninger G. Offet V. Crawford R. Mealey D. Drummond R. Thorn B. D'auray F. McLeod M. Gordon M. Kerr D. Barclay D. Muchowski S. Dubas T. Robertson K. MacKay M. Pearce C. Dezell A. Greenfield V. Candy D. Robertson P. Rans

Chair:	* Blair Lekstrom (Peace River South L)
Deputy Chair:	* Maurine Karagianis (Esquimalt-Metchosin NDP)
Members:	Harry Bloy (Burquitlam L) * Dave S. Hayer (Surrey-Tynehead L) * Gordon Hogg (Surrey–White Rock L) * Richard T. Lee (Burnaby North L) * John Yap (Richmond-Steveston L) * Leonard Krog (Nanaimo NDP) * Jenny Wai Ching Kwan (Vancouver–Mount Pleasant NDP) Nicholas Simons (Powell River–Sunshine Coast NDP) * denotes member present

Witnesses:

Dave Barclay (President, B.C. Real Estate Association)
Vivienne Candy
Valentine Crawford (College of New Caledonia Students Association)
Bob D'auray (President, Prince George Council of Seniors)
Clifford Dezell
Dr. Douglas Drummond (Prince George Regional Hospital)
Steven Dubas (President, Prince George Horse Society)
Myron Gordon (President, Prince George Chamber of Commerce)
Alecia Greenfield (Prince George Railway and Forestry Museum)
Michael Kerr (Prince George Chamber of Commerce)
Colin Kinsley (Mayor, City of Prince George)
Karen MacKay (President, Prince George District Teachers Association)
Fred McLeod (School District 57 — Prince George)
Rob Mealey (College of New Caledonia StudentsAssociation)
Daryl Muchowski (B.C. Real Estate Association; President, B.C. Northern Real Estate Board)
Gerry Offet (President, Initiatives Prince George)
Matt Pearce (Vice-President, Prince George District Teachers Association)
Dr. Peter Rans (University of Northern British Columbia)
Douglas Robertson
Terry Robertson
Rosalind Thorn (President, Northern B.C. Construction Association)
Dr. Terry Weninger (Initiatives Prince George)

B. Lekstrom (Chair): Good afternoon, ladies and gentlemen. My name is Blair Lekstrom. I am the MLA for Peace River South, but I am also the Chair of the Select Standing Committee on Finance and Government Services, which is now touring the province to host public hearings on the prebudget consultation paper that was put out roughly two weeks ago.

Before I ask members of the committee to introduce themselves, I'd like to just explain the work of the committee. We've been asked by the Legislative Assembly of British Columbia to tour the province and listen to submissions at our public hearings as well as review written submissions that will be accepted up until the 23rd of October, and then, by November 15, to complete and submit a report to the Legislative Assembly of British Columbia outlining and detailing what we have heard from British Columbians, what their priorities will be for the upcoming year's budget. If there is the opportunity to invest more money, where would it be invested? Would it be in health care, education, social services, highways or so on?

All of the members of the committee have dedicated themselves. It's a significant task to take this on and have a complete report put together by the 15th of November. I'd like to thank them, to begin the meeting.

It's very important, I think, for British Columbians to take the opportunity, in the democracy that we enjoy and sometimes take for granted, and to have the opportunity to come out and have input into the development of a provincial budget. I think this is a wonderful way to do it. I previously, in 2001 and 2002, had the opportunity to serve on this committee and found it a very valuable experience.

Each area of our province brings something unique with a perspective on what they see needs to be dealt with. Then, certainly in the broader context, we see many things that are very similar, regardless of what corner of the province you are from.

Again, I want to welcome you here. We look forward to hearing the presentations. We'll be here from four this afternoon until eight this evening, at which time the committee will head for Smithers where our next public consultation will be held in the morning.

So at this point, I'm going to ask members of our committee to introduce themselves. I'll begin with Richard on my right.

K. Ryan-Lloyd (Clerk Assistant and Committee Clerk): My name is Kate Ryan-Lloyd. I'm the Clerk to the committee.

M. Karagianis (Deputy Chair): I'm Maurine Karagianis, MLA for Esquimalt-Metchosin and the Deputy Chair.

B. Lekstrom (Chair): All right, thank you. I did miss one part in my introduction. To my right is Kate Ryan-Lloyd. She introduced herself, but she is with the Clerk of Committees. As well, we have Jacqueline Quesnel at the back, at the table when you first entered.

With Hansard, today's meetings are a public hearing. They are transcribed, and this is a full public transcript. It will be broadcast live, as we're dealing with the submissions here this afternoon. Working with us on that is Adam Wang, who is behind all of the equipment, as well as Marilyn Pollard. They're both here from Hansard Services.

We'll begin our process this afternoon and call our first presenter. From the city of Prince George, His Worship Mayor Colin Kinsley.

C. Kinsley: Thank you for the opportunity to present, and a very warm welcome to the great city of Prince George.

It's always a pleasure to invite guests here. I know that on this particular occasion, of course, it's one where, I suppose…. We're usually very congenial, very hospitable and warm. Today I have to bring to you some of our thoughts on how the role of the partnership between the city of Prince George, our regional district of Fraser–Fort George and the provincial government, its programs and policies, may better work together.

B. Lekstrom (Chair): We have ten minutes for the presentation, with five minutes at the end for committee members to ask questions of the presentation, if needed.

C. Kinsley: Okay. In that case I'll speak to my notes instead of wandering like I tend to do.

Once again, on behalf of my council colleagues and the citizens of Prince George, a warm welcome and the opportunity to present to the Standing Committee on Finance and Government Services. Your work before you is quite substantive. I understand you're going to

I want to also compliment the government of British Columbia for developing a sound fiscal plan that I understand forecasts a surplus of $1.3 billion for the '05-06 fiscal year. It's imperative that the province stays the course on ensuring financial stability. If the province is to be financially successful in the long term through municipalities' cooperation, those municipalities must also gain from some of the benefit of those surpluses.

The 2006 budget consultation paper is very positive, with the projection of $2.3 billion in surpluses over the next three years. However, we are concerned about the distribution of these surpluses. The municipality is not listed as a priority — as we have seen it, at least. For B.C. to continue to prosper, its municipalities must see increasing funding from the province in order to reduce dependence on external debt, to maintain service position and to keep a lid on property taxation, which can, in fact, be a competitive advantage for us here in the north.

Our four concerns that I want to share with you today are…. First, general infrastructure. As I presented to this group last year, maintaining and expanding core municipal infrastructure is an essential foundation of economic growth and condition for quality of life. The city of Prince George has an immediate need for increased infrastructure funding. The city appreciates the provincial and federal governments signing an agreement with the Union of B.C. Municipalities with respect to the transfer of a portion of the federal gas tax revenues and looks forward to receiving details concerning the implementation of that program.

The municipal rural infrastructure fund was announced by the federal government in August '03 by then Prime Minister Chrétien and again in February '04 by Prime Minister Martin. The latter announcement indicated that the federal government would contribute $111 million towards infrastructure needs of rural communities in British Columbia. According to the Infrastructure Canada website, six provinces and one territory have entered into agreements under the program, and communities in those jurisdictions are able to apply for funding under that program.

The city of Prince George has inquired about the status of the program numerous times in the past year and a half and has been told that the federal and provincial governments have not yet reached an agreement on the program details but are working towards that. I understand that as of yesterday they are getting even closer.

Our recommendation, of course, is that the priority be kept — that the federal government and the provincial government, in fact, sign the municipal rural infrastructure fund so that B.C. communities can begin benefiting from it.

Issue number two is linear infrastructure. In '05 the city of Prince George conducted condition assessments for five kilometres of sanitary sewers and 4.6 kilometres of storm sewers in the downtown core. The condition assessment results indicated that due to age and poor condition, over a million dollars' worth of sewers should be replaced. The sewers assessed represent less than 2 percent of the city's sewer infrastructure.

Since 2003 the city of Prince George has participated with ten other municipal partners from across Canada in the National Research Council–sponsored project to establish a national standard or recommended process for municipal infrastructure investment planning. The project considers how municipalities can develop a process model that will assist them to plan and invest in improving aging infrastructure. The model will provide how-to steps to prepare asset inventories, calculate asset values and perform condition assessments. It will also provide guidance concerning integrating assets within a capital expenditure plan so that municipalities can finance improvement projects efficiently.

The province of Alberta has provided tools for small municipalities to assist them to manage their linear assets using software that is available under the province's municipal infrastructure management system program. It's our recommendation that the province of British Columbia assist municipalities to develop infrastructure investment strategies that will enable small to medium-sized cities to prepare effective and efficient capital expenditure plans for replacing and/or upgrading linear infrastructure assets.

Issue number three is no surprise to you as a panel or to anybody who is alive and breathing in British Columbia, and that's the mountain pine beetle epidemic and associated fire hazards. The epidemic has killed a vast majority of the city's pine forests, and this year's has largely infested the remainder of them. There are extensive stands of dead, red pine trees, and many more will become red by next summer.

These dead trees have significantly elevated the forest hazard within the city. We understand that Prince George has the largest urban forest in the entire country, and so this infestation has really added to our concerns. As the majority of the city's parks, lands and greenbelts have been impacted, mitigating this natural disaster includes tree and stump removal, site remediation, new park design plans and replanting. This cost the city $330,000 in 2004 and $800,000 this past year alone.

We appreciate the $1.2 million the province has provided the city to manage the province's forests on Crown land within the city with respect to the beetle and fire issue in 2005 and beyond. To obtain the funds, the city is applying for a community forest agreement. The city's application will include a proposal for a viable community forest with a future forest tenure that would support the city's proposed community energy system with biomass. The city will require significantly more funds to manage the infested forests on yet-untreated city lands also.

With Prince George being Canada's largest urban forest, the risk of increased fire hazard resulting from this epidemic must be dealt with in a proactive man-

ner. This is not just a municipal government problem, as residential property owners face the same problem. Residential property owners' safety is also at risk because of dead and dying pine trees. Many residential owners, including seniors and those on fixed incomes, cannot afford the tree and stump removal.

This year at the UBCM convention, just a short week and a bit ago, there was a resolution passed that stated: "Therefore be it resolved that the Union of B.C. Municipalities lobby the provincial and federal governments to declare the mountain pine beetle in the province of British Columbia a natural disaster and provide the needed financial assistance to municipalities, local governments and individual property owners to help eliminate the hazard associated with the pine beetle infestation."

Our recommendation, therefore, is that the province support this resolution and work with the federal government to ensure funding is provided to the city and its residents to cover the complete process, from removal of infested trees to replanting to ensure that safety, fire hazard reduction and quality of life are maintained within our city.

Item four: again, pine beetle — the epidemic and the economy. After the pine beetle the city of Prince George could either encounter a future of recession or a future of opportunity. Prince George is in the centre of the province's forests and the major biomass supply. Through milling residues, logging debris and non-forestry biomass material — on a global basis the biomass supply in this area exceeds all other jurisdictions.

The increasing cost of fossil fuels, close proximity to major biomass resources and the existence of a proven and emerging technology, together with Canada's consideration of signing the Kyoto accord, provide a rapidly growing potential to locate a viable bioenergy centre in Prince George. There is a 15-year window of opportunity — and that's being debated now — during which surplus biomass supply and enhanced fibre sale from this area, if properly managed, could contribute to the bright future of the city of Prince George and the province of British Columbia. The additional timber harvest revenues and a portion of the $100 million received from the federal government to mitigate the effects of the pine beetle epidemic would assist with funding the production of the bioenergy system in Prince George.

Financial support for the proven cogeneration of electricity and for heating and pellet production for sales should be the first move in this direction. Financial support should also be provided for plant construction and, in partnership with the University of Northern British Columbia, for bio-oil and biogas research-and-development programs. Infrastructure and these emerging technologies will provide the platform for the city to benefit from the renewable bioenergy as an internal energy source and as a revenue source.

Proceeding with this direction now would also provide the opportunity to select species for replanting that would provide fibre for bioenergy after the beetle, when fibre and biomass supplies will be reduced. Selecting the species now would ensure the continued supplies required for and the bright future of bioenergy production.

It's our recommendation that the province quickly redefine the mountain pine beetle emergency response, Canada-B.C. information strategy and inform municipalities of the application for funds, encourage B.C. Hydro to give preference to biomass-based co-gen projects in green energy calls for proposals, and remove the barrier that allows industrial customers to sell power to themselves but doesn't allow municipal customers to sell power to themselves. The above would assist the city of Prince George to achieve its potential to become a community that successfully provides environmentally beneficial bioenergy products, green energy and sustainable non-timber forest revenues.

I'm speaking fast. I think I'm close, eh? Thirty seconds? Mr. Chair, this concludes the presentation. I want to thank you again for the opportunity to provide our comments to you and look forward to receiving the continued commitment from the province as we work together to address these concerns and build a bigger, better and stronger British Columbia.

B. Lekstrom (Chair): Thank you very much, Your Worship. You managed to get that in exactly on time. That was a great deal of information.

I'm going to look to members of the committee, if they have any questions. I'll begin with Leonard and then go to Richard.

L. Krog: Thank you, Mayor Kinsley. Tell me, how many square kilometres or miles in Prince George, and how much of that is beetle-infested — lands, parks, greenways, whatever?

C. Kinsley: Well, the first one's easy. The city's municipal boundaries — there are 350 square kilometres. Within that there are about 660 kilometres of road network. All of our parks, golf courses and a lot of private lands, of course, and Crown lands are heavily forested in lodgepole pine. The exact number I can't give you, but by way of an example, the Pine Valley golf course, which is a municipally owned 18-hole par three, has got to be on toward 80 or 85 percent, most of which we've now removed as a safety consideration. The new safety consideration is that now there's no forest to block the fairway, so we've got errant golf balls running around.

A lot of individual homeowners…. Their backyards — part of why they live here — are 100-percent lodgepole pine as well. I've talked to some with a half-acre lot where they've had to remove anywhere from 20 to 30 trees. They've done so at their own cost.

R. Lee: You mentioned here that industrial customers can sell power to themselves but that municipal government cannot sell to themselves.

I know that in the GVRD they have a project, the landfill gas — the gas generated by landfill — and they

can channel back to the system. So I'm not sure. Have you talked to Hydro in depth about that kind of proposal?

C. Kinsley: Right now it's just the rules, and we are already starting to lobby B.C. Hydro as a city — as are others in the province, I think — to allow us as municipalities to do the same thing as industry has done, because we have the opportunity to produce.

Actually, if we get the right kind of support and are allowed to sell the electricity back and allow wheeling…. Wheeling is being able to put it into the system and then send it somewhere else for sale. Right now they allow it at one site, but one site doesn't work for us. If we put a biomass cogeneration plant in and we're only allowed to use it at city hall, it's not cost-effective. But if we can use it at CN Centre, the two aquatic centres, the six ice arenas, our public works yards and all of the city facilities, then it would be worth it. It's a matter of just changing the rules, allowing us to use it that way.

If Hydro would take that power that we produced, it would make it cost-effective for us then to…. We would use a technology that's very common in both Denmark and Finland and, to some degree, in Sweden. We would burn this biomass in new, high-tech-type burners where there are very few, if any, emissions, run it through a high-pressure steam turbine, create electricity — anywhere from 15 to even 25 megawatts — and then through a cooling tower and hot water. We'd put that in a closed-loop system.

Our plan is to do the whole downtown. For all of these hotels and office buildings that have natural gas–fired hot-water boilers for heating, we would, in fact, run this hot water from that plant into those systems. They'd always have the natural gas as a backup, in case there was a problem with the closed-loop hot-water system. As a result, we'd reduce greenhouse gases immensely. There would be no natural gas used anywhere in our downtown core.

You touched on the landfill. We already capture our landfill gases — leading edge in the nation — and we're burning it now. If you burn landfill gases, you actually get a carbon credit. When you burn it, it doesn't contribute to the greenhouse gas effect; it just escapes to the atmosphere.

Our plan is to look to government and the private sector, hopefully. It would be nice just with the private sector, because government has enough responsibilities. We would like to put in greenhouses, actually burn that landfill gas in greenhouses and produce our own products here on site at the landfill site, which would be another innovative way of using the product and contributing to greenhouse gas reduction.

D. Hayer: This new bio-energy — is that like burning chips? Is that what you're using to create electricity?

C. Kinsley: It's a variety of it. It would be at the lower-value chain. It would be a darker fibre. Maybe the feedstock would be something that wouldn't be used, like the fine sawdust that I understand is used in production of pellets. Pellets are really a high-end energy source, and the pellet from the material here in north-central British Columbia is a much higher quality. By quality I mean the heat content in them. The Btu content in a tonne of north-central B.C. pellets is 30 percent greater than that which is produced in an average forest in Sweden, so we're actually sending pellets to Sweden and Denmark.

What we would do for a combined heat and power plant would be to use more of the scrap off the forest floor — the tops, branches and bark. It has lesser value, but the technology is there to still burn it very, very efficiently, and we view that as like free power production, except for the cost of gathering and transportation.

B. Lekstrom (Chair): Your Worship, thank you very much for coming and presenting. Fifteen minutes is not a great deal of time, but you have put forward some very good issues, some very well-thought-out issues. I want to thank you for taking the time out of your busy schedule to come to our committee today and present.

C. Kinsley: On behalf of my colleagues, thank you. We appreciate the time commitment you make to go throughout the province to gather this information. Of course, if you ever need clarity, Blair, you know how to get a hold of me.

C. Kinsley: Or if we need more time. Thank you again. I won't take away from the other presenters.

B. Lekstrom (Chair): Our next presentation this afternoon comes to us from Initiatives Prince George. Joining us are Gerry Offet and Dr. Terry Weninger.

T. Weninger: Good afternoon. Once again, welcome to Prince George. My name is Terry Weninger. I'm chair of Initiatives Prince George.

Just some background. Initiatives Prince George is the economic development arm for the city of Prince George. We have an independent board for the corporation. The board members are appointed by city council, but they come through a process of nomination through Progress Prince George, which is a 22-member board that is representative of all sectors within our business community.

Mr. Gerry Offet is the president of Initiatives Prince George, our corporation, and I would like to introduce him to make our presentation this afternoon.

G. Offet: Mr. Chairman, members of the committee, it's good to see the committee back in our beautiful city. Certainly, there are many more members present than we had last year, and this will give us an opportunity to share our message.

What we want to do today is very briefly share our Vision 2012, which is a compilation of the aspirations — real and not so real — that our leadership in Initiatives has come up with. We've vetted it with city council, and it paints a picture of the kind of city we expect to see in Prince George in the year 2012, which is two years after the Olympics, and which will be our region in the future.

Initially we looked at what was the challenge to Prince George today and how we address it. We have a five-year window of opportunity for diversification. In these better times, with the increased allowable cut, we can prepare for further forest sector adjustments. There are many catalysts we can capitalize on. The 2010 Olympics will be a once-in-a-lifetime opportunity not only for the lower mainland but for communities throughout British Columbia. There'll be new tourism infrastructure; post-secondary education expansion, which is already underway; health care services; transportation developments — air, rail, marine — and there'll be a new partnership with first nations.

Threats will still leave us vulnerable. To a significant degree, we're still a one-industry town. With the consolidation of the forest industry, in some aspects we're almost a company town. The pine beetle and additional cuts, the allowable cut, the skills shortage, the perpetual image problem that resource-based communities have and the lack of destination tourism product will all be very important factors we have to address. We're in a unique opportunity. There's a sense of urgency because of the forest problems we face, but there's also a sense of opportunity that the time is right to make these changes.

What can Prince George be in 2012? We see ourselves as an urban hub, proud of its position as the centre of commerce and the site of services in north-central British Columbia. It is a destination and a gateway combined. The transportation opportunities related to the Asia-Pacific trade and the Prince Rupert port present tremendous opportunities. Quality of life is, and will be in 2012, a strong attraction for new residents. We anticipate that our population will approach 100,000. People will come to Prince George to work, to retire, to go to school, to raise a family. Prince George will be seen as a place that offers increasingly rare life experiences, relatively high incomes, a low cost of living, great access to services — all on a backdrop of a four-season beautiful British Columbia environment.

We will make infrastructure investments that continue to support this quality of life. Prince George will mature from a big town to a diversified, small, vibrant city — a mill town transition to a college and university city with an industrial background. Skills and trades, students, research. The business community already reflects the impact of the university and the college, and we expect that by 2012 it will become even more evident. Rural health with the northern medical program, aboriginal relations as they advance, the challenges of climate change, resource management technologies will all play a part of making Prince George a distinctive community of excellence.

There'll be some very significant workforce adjustments. As we become higher skilled, we increase our productivity, and we diversify into knowledge-based businesses. The recruitment and development of that workforce is going to be a major challenge for our community, as it will be for all communities in Alberta and British Columbia.

Transportation investments will drive the economic vitalities in every sector. Tourism will move from the stopover transition to a layover transition. We'll be a one-stop shop for goods and services in northern British Columbia. The city of Prince George will prosper as we continue to take advantage of the upsurge of the resource economies and capitalize on that to make a lasting difference.

To get us there, what do we have to do? We've started some of this process. Our Vancouver presence in Prince George House will market us, using the gateway of Vancouver to the world. We will promote entrepreneurial spirit by introducing business opportunities. UNBC and CNC continue to inspire a culture of innovation. We'll be looked at as a student-friendly community, and we'll characterize our quality of life.

Now, for Vision 2012 to succeed, the province must play a more active role in working with the civic and regional efforts of our agency, the city and the region. Municipal efforts alone cannot generate the returns that this increase in activity will mean to the province. I think it's no secret that when the resource communities do well, the senior governments do even better. We invite you to participate with this in a monetary and non-monetary way: by recognition of the role of Prince George House and regional marketing efforts in Vancouver by the provincial government; continued support of the higher education institutions; continued strategic investment in transportation and infrastructure, including the airport, bridges and highways; financial support for the 2010 training opportunities for the world; and increased participation in regional export development initiatives.

Thank you for being an attentive audience. Terry and I will try to answer any questions you have.

B. Lekstrom (Chair): Well, thank you very much, Gerry. I note we do have a couple of questions. I'll begin with Dave and then go to Maurine.

D. Hayer: First of all, thank you very much. It was an excellent presentation.

I do apologize. Last year we had lesser numbers because my colleague Arnie Hamilton fell and had a brain injury, and they had to do emergency surgery. Two of my colleagues were attending with him, so we

had fewer numbers there. This time is much happier, and everything's going well.

Where do you get the funding from for Initiatives Prince George? Does some of the funding come from the city and some from the private sector? Where is the funding for your organization?

G. Offet: We have a budget of just in excess of $1½ million; $1.2 million of that comes from the city as a contract payment for the delivery of services in the areas of economic development, tourism, film, events promotion and Export North. The balance comes from other levels of government and through some of our business activities. We are a commercial landlord in the city with businesses that we've brought in.

M. Karagianis (Deputy Chair): Gerry, I'm curious. You've given us kind of a really broad shopping list of things that you're interested in having some support with. Have you already applied for some funding under some of the 2010 programs that are available? In fact, do you have some costs for some of these initiatives?

G. Offet: Yes, we have applied and received approval on some of the matching initiatives that are available through LegaciesNow and the 2010 secretariat. Unfortunately, most of those relate to community-type projects and not outside marketing. With the construction of the Northern Sports Centre at the campus of UNBC, the Spirit of B.C. community committee, which we provide support to, strongly feels — and we agree — that we're in a unique position to attract some teams to train in British Columbia in the years leading up to 2010.

The problem is that there's no program available to provide marketing assistance to, for example, let us send a delegation to Torino to deal with team managers and sport officials. We're in the situation where, at the urging of the province, we created the first Olympic support committee during the bid process, and at the encouragement of the province, it went through a couple of evolutions, including several name changes. We've got all of these programs ready to go and only one well to go to, to fund them.

You test the mettle of our civic politicians when they're the only party at the table. We're hopeful that we can work out something with LegaciesNow or with the economic development department to get some cost-sharing on these marketing efforts, because the benefits are significant.

B. Lekstrom (Chair): Well, gentlemen, I do want to thank you for taking the time out of your busy schedules to come and present to our committee and for fitting all of that information into the short time frame. It's necessary in order for us to hear from as many people at each stop as possible. Again, thank you for taking the time to come out today.

Our next presentation this afternoon is from the College of New Caledonia Students Association. Joining us are Rob Mealey and Valentine Crawford.

V. Crawford: Thank you. My name is Valentine Crawford. I'm the external affairs coordinator for the College of New Caledonia Students Association. With me today is our resource coordinator, Rob Mealey.

We appreciate having this opportunity today to raise a number of concerns that the students at our college have had and to share some of our ideas for next year's budget to make access better for students in the north and across B.C. as well.

We've had the pleasure of presenting to the Standing Committee on Finance in previous years, but seeing there are new members, I would like to take this opportunity to describe a little bit about our association and the College of New Caledonia, or as I call it, CNC.

Our students association represents approximately 4,900 students at the College of New Caledonia in Prince George and on its regional campuses. The student population at CNC is very diverse. It serves the north-central section of the province, with the main campus here in Prince George and regional campuses in Vanderhoof, Quesnel, Valemount, Mackenzie and Burns Lake.

Students take classes in subjects ranging from basic adult education, university transfer and a wide range of certificate programs where students can learn skills essential to employment in forestry management, health sciences and hospitality. It's the only place between Kamloops and Terrace where you can actually take trades.

The types of students we represent are anywhere from a high school student earning credits while finishing their high school degree to mature students who are returning to upgrade their employment skills in order to maintain their jobs or to upgrade with the upgrading of technology today. People attend the College of New Caledonia because not only is it close to home, but ideally, it allows them to access these opportunities without leaving the region. However, it has become a reality that many individuals in this community are no longer able to fully realize their dreams and reach their full potential.

The hike in tuition fees over the past few years at CNC and other colleges and universities is tragic because it has barred a number of students from taking the road to a better future. The charts that Rob will present in a minute clearly show that enrolment has dropped every year since tuition fees were deregulated earlier this decade. Unfortunately, this isn't surprising to us. As we have warned this committee several times in the past, every time fees go up, there are more and more people who just cannot afford the cost anymore. They don't have the resources, don't want to increase the amount of debt already incurred or simply cannot work enough hours at a minimum-wage job to afford their education.

We have heard heartbreaking stories from many individual students of how students have suffered from skyrocketing tuition fees over the past number of years and that they have been forced either to drop out of school or to move to another province in order to complete their education where it's more affordable.

We have heard the suggestion too that maybe enrolment has dropped because more people are working and not going to school. According to B.C. Stats, unemployment in the region served by CNC has remained high, between 9 percent and 12 percent, over the last four years. It seems an indication that in an area where people need access to education and retraining the most, British Columbians are being shut out by tuition fee increases.

British Columbians here in the north need a chance to succeed, to participate in building a strong local economy. Because we know that students at CNC aren't the only ones facing these hardships, we would like to make the following recommendations to the committee.

The first is to reduce tuition fees for all students in B.C., starting next September. Tuition fees have doubled in the last four years for the students at CNC and for almost every student in B.C. Students in B.C. paid $904 million in tuition fees this year. That's twice what students paid in 2001. It was a good first step by the province to put a cap on tuition fees.

The cap has shown students that the government now realizes the hardships put in place by massive tuition fee increases. Now the province needs to take further steps to reduce tuition fees by next fall.

The commitment to increase spaces in post-secondary institutions is welcomed by our members, but making these spaces available will provide little relief for students if those seats are not affordable. Tuition fees have already put college and university education out of reach for many average British Columbians, and 25,000 new seats won't make a difference in the B.C. economy if nobody can afford the cost to sit in them.

A good place for the province to start would be to put all the money that B.C. will get from the federal budget amendment directly towards reducing tuition fees. B.C.'s share of that $1.5 million will be enough to cover the next two years to see that post-secondary education in B.C. will become more affordable. It's also money that won't have to be taken from elsewhere in the province's spending plan and should be used to supplement, not replace, current spending plans. We recommend that the province considers enshrining this in legislation as we have already seen in the province of New Brunswick in the form of Bill 79.

It is especially important that the government invest more resources in developing the north's long-term future, considering changing local economic conditions. As you know, forestry has fuelled the economic engine of the north in Prince George and the surrounding areas, like other parts of the province, for decades. Circumstances beyond human control, like the pine beetle epidemic, will have long-term effects, forever changing Prince George's economy, and by extension, extending to the job market.

It is obvious that the need for post-secondary education in these times of epidemic needs forces people in this region to seek new skills in order to remain employed. Reducing tuition fees to make post-secondary education easier for people to access needs to take a priority. Otherwise, people in the north will be left behind and unable to compete in the economics of the 21st century.

R. Mealey: As Val mentioned, it's critical that the province provide an adequate amount of money to colleges and universities as soon as possible. As you can see by the charts in front of you — and I have a large version here — we want to demonstrate clearly the impact that tuition fee increases are having on our members. In previous years when we've presented to this committee, which we always enjoy doing, we didn't have this information, and now we do. It's actually a shock to all of us when we put these charts together.

It shows clearly that as tuition fees increased at the College of New Caledonia, enrolment dropped. Just to give an idea regarding the tuition fees. One chart here, you'll notice, is titled: "CNC Tuition Fees: University Transfer Program, Arts Major." This is your typical liberal arts–studying student taking five classes, a full-time student at CNC. In 2001-2002, the last year fees were frozen, tuition fees were $1,112 for the average UT arts student. The bottom line you see on that chart indicates where tuition fees would be if they increased only at the rate of inflation, as is committed now by legislation. The top line shows the reality — where tuition fees went after the freeze was taken out in 2001. We see a difference.

What today should be with inflation…. This year, 2005-2006, the college administration froze tuition fees, agreeing with us that tuition fees were a barrier to access and reducing the number of people going to the college. If fees stayed the same as last year and had gone with inflation only, they should be approximately $1,200 per year. That doesn't include any extra costs. But if you look at where they are now, it's well over $2,000 a year. There are many students who have said that even with a $500 difference, they couldn't go, let alone a thousand.

One of the final charts — and there are several other charts that I hope the committee will have time to take a look at, showing tuition fees for some other programs…. Just to give an idea in terms of the impact on enrolment, you'll notice a chart called "CNC Enrolment Levels, All Campuses." The bottom line indicates part-time enrolment, those students enrolled in less than three classes; the middle line represents students enrolled in four or five classes, full-time students; the top line is basically the total head count, the combination of both.

As you can see, the 2000-2001 and 2001-2002 CNC student population was approximately 5,700 students

— 5,780. Today the college is still crunching numbers, and they have yet to provide a final number, but according to CNC administration, as of last week there are actually less than 4,900 students attending CNC at the Prince George and regional campuses. In one regional campus, Quesnel, at which the government actually is funding a campus that is about to open, the student population has dropped by half, from 600-plus to less than 300, in the last three years alone.

It's obvious to us, and again, we implore the committee…. The last couple of years we have urged this committee to take to the minister our message of the need to increase funding, not through tuition fee increases but through operational grants. If anything, we hope the committee takes this as proof positive that there is a direct impact on access with tuition fee increases. This is the proof here, and we are living it right now.

Now, in regard to the student seats, we congratulate the government for adding the 25,000 new seats, but as Val mentioned, though, it won't matter if no one can fill them. Already we have huge enrolment problems at our college. Adding new seats in trades programs is great for trades, but it doesn't help the overall health of our institution.

Another thing I could touch on really quickly is the need to improve student aid. We encourage the government to revisit the B.C. grants program. As you know, in 2004 the B.C. grants program was eliminated, which meant that students who were in the most financial need were now required to take on more debt themselves. A student who qualified for the grant received on average $3,500 a year in B.C. and about $8,000 a year if they had dependents. Without that grant, though, students are forced to take on more of a debt load, and in many cases here in Price George students are saying, "I can't do that anymore," and dropping out.

The loan remission program, while a good step, we feel is happening at the wrong time. The grants program was great because it helped students upfront, when students were looking at the sticker shock, looking at the price of education and whether or not they could afford it. While we do know it works somewhat, loan remission is back-end help that students may not realize or might not know about.

Finally, we also want to talk about something we're very proud of at CNC, and that's our adult basic ed program. We're very proud because not only is it one of the best adult basic ed programs in the province — maybe we're just being proud of that — but also it's free. The college has again and again agreed with us that adult basic ed is a right, and it should be free.

However, other colleges around the province, because of their financial crunch, have decided to re-implement tuition fees. We've noticed that at Kwantlen, for example, if you're trying to get an adult basic education, you're paying upwards of $400 just for one class. While at CNC our members are lucky and they enjoy free adult basic education, there's pressure on the college, because of the financial crunch, to find new sources of revenue.

We urge the committee to find new resources and to increase the resources allocated to adult basic ed, in particular, so that all institutions, not just CNC, can offer this for free. High school education is absolutely needed — let alone post-secondary education — to compete in the 21st-century economy. To tell people they can't get a high school education because they can't afford it is absolutely wrong.

V. Crawford: Just in conclusion, we'd like the committee to take the following recommendations to government: reduce tuition fees by using the federal budget amendments; eliminate tuition fees for adult basic education; implement a system of grants; and increase per-student funding for all post-secondary institutions. The province has an opportunity in the 2006-2007 budget to expand B.C.'s public post-secondary education system into offering the most accessible, affordable, high-quality education anywhere.

Investing in the post-secondary education system will have important economic benefits for B.C., as it will ensure that the province will have a flexible workforce. It will make sure that B.C. can handle changes in local and global economic conditions, but most importantly, it will offer British Columbians the chance to have their dreams.

The province has said that it wants to have the best-educated jurisdiction in North America. The recommendations outlined will help make this a reality for all British Columbians. On behalf of our executive committee and our 4,900 members, we thank you for your time.

B. Lekstrom (Chair): Thank you very much, Rob and Valentine, for your presentation. We do have time for one quick question, possibly two. I have Dave on the list, and I'll get to John if I can. We have a great list of speakers ahead of us, and if we fall five minutes behind on each one, we'll be in big trouble by the end of the day.

D. Hayer: First of all, thank you very much for your presentation. It was a very good presentation. I have two kids in post-secondary, one at Kwantlen and one at SFU, and then my third one in grade 12, who should be going there soon.

The only question I have is about the economy and jobs. I'm going to many towns — I live in Surrey — where there are a lot of jobs available. We were in Dawson Creek. Some of the kids are finishing high school, and they're getting $50,000, $60,000 jobs. Have you looked at it, that as the economy went better and the unemployment went down, maybe some of the kids, instead of going to post-secondary, decided to go back and maybe work for a few years? Some of my kids are working part-time to make some money and get some work experience and then going full-time.

R. Mealey: There is no correlation here. Or if there is a correlation, the fact is that unemployment has remained high — 9 percent to 12 percent, as we mentioned during the presentation. Job opportunities have not increased rapidly in the Prince George area. At the very least, for our members in Prince George and the surrounding towns, we can say that job opportunities have actually shrunk in the last couple of years. If anything, in order to remain employed, the students have either had to take lower-paying jobs or leave this region for other parts of the province or even other parts of the country to continue their education.

D. Hayer: Just one comment. Some of my relatives live in Prince George. They say they have a difficult time finding workers there, and they work in some of the businesses, which seems to be different than the information you have. So maybe they would….

R. Mealey: I invite them to come down to the college and hire students on the spot, then. That's great.

B. Lekstrom (Chair): Gentlemen, our time is tight, but I do want to take this opportunity to thank you. You have brought forward, I think, a well-thought-out presentation for the committee to consider. Again, on behalf of our committee, I express our gratitude to your members for the presentation. Thank you very much.

We are going to move on to our next presentation this afternoon, which comes to us from the Prince George Regional Hospital geriatric assessment and treatment unit. Joining us is Dr. Douglas Drummond.

The submission that I'm going to make to you today concerns obtaining benefit status through Pharmacare for a class of drugs called cholinesterase inhibitors for the treatment of Alzheimer's disease. I think you all have my handout there.

Alzheimer's disease is a disease of great economic and social importance in British Columbia. There are currently some 61,000 affected individuals in B.C., and we're adding about 21,000 per year. This disease is a relentlessly progressive disease, and initially people may be just pleasantly forgetful, but with time they lose more and more of their abilities until they can only stay in the community with constant attention from their family members, which exerts quite a heavy burden on the family. Ultimately they require a facility admission, and this is also very costly for the government.

Now, we don't have a cure for Alzheimer's disease, but we do have a class of medications called cholinesterase inhibitors which can slow the progression of this disease. There are three of these drugs. They've been available since 1997. I'll refer to them by their trade names of Aricept, Exelon and Reminyl. Each of these drugs has had numerous studies performed — randomized controlled trials — which have shown statistically significant benefit on a number of parameters such as cognitive scores, preservation of functional abilities, global impression of benefit, measures of caregiver burden and caregiver time, behavioral and psychological symptoms of dementia and, importantly, the time to facility admission.

Now, although these drugs have been available since 1997, Pharmacare has consistently refused them benefit status, saying that the benefit effect size is too small. They do so on the basis of advice from their so-called therapeutics initiative committee. I believe that therapeutics initiative have erred in a number of ways and that there are good reasons why Pharmacare should reverse their position on the cholinesterase inhibitors.

First of all, B.C. and Pharmacare are at odds with the rest of the country. The only other province that does not give benefit status to cholinesterase inhibitors is Newfoundland.

Secondly, Pharmacare is at odds with expert opinion. At tab two you'll see a document referred to as the TREAD conference, where B.C. experts on dementia got together and independently assessed the strength of the evidence for cholinesterase inhibitors and made a series of endorsements about using them.

Thirdly, and you'll see at tab two, Pharmacare is at odds with clinical practice guidelines. You'll see there some excerpts from practice guidelines developed by the American Academy of Neurology, in which they endorse the use of cholinesterase inhibitors as a standard.

Fourthly, at tab four you'll find a series of studies that demonstrate the pharmaco-economic benefits of using cholinesterase inhibitors, in particular showing that using these drugs in early Alzheimer's disease will delay the time to costly facility admission or, at worst, that they are cost-neutral.

Finally, at tab five I've reproduced the infamous AD2000 study. This is the only study that has really shown lack of benefit to the cholinesterase inhibitors. This is, I believe, one of the principal reasons why the therapeutics initiative committee has taken their stand. I feel that this study is methodologically flawed and was heavily biased against cholinesterase inhibitors. I'll just give you a few examples of that. I've reproduced the whole article so you can see for yourself and also see how well buried some of these facts are.

First of all, the AD2000 study was performed in Britain at a time when the cholinesterase inhibitors were readily available on the National Health Service and paid for and recommended by most experts. Therefore, because of research ethics, they could not randomize patients not to receive a drug that was considered safe and effective. The only patients they en-

rolled in this study were patients whose physicians deemed that they were unlikely to benefit from this drug, and this creates a tremendous selection bias against these medications.

Furthermore, of the patients who were randomized to receive the drug Aricept, half were given five milligrams, which is known to be a subtherapeutic dose. Furthermore, during the course of the study they had several washout periods where they took the patients off the medications. These washouts are known to take away the accrued benefit of these drugs.

I believe that the AD2000 study is not a study that is safe to place any stock in.

In summary, then, the cholinesterase inhibitors provide consistent, albeit modest, benefit to patients suffering from Alzheimer's disease. There is good evidence that the use of these drugs will result in both social benefit and cost savings. We submit that some portion of our province's current budgetary surplus be directed to the health of our seniors, and specifically we submit that aging British Columbians be allowed to benefit from the therapeutic advantages of this class of Alzheimer's drugs, which have benefited many other Canadians.

B. Lekstrom (Chair): Thank you very much, Dr. Drummond, for presenting to us this afternoon. I will look to members of the committee for questions. I'll begin with Maurine.

M. Karagianis (Deputy Chair): Thank you very much, Dr. Drummond, for your presentation. Actually, I have a father with Alzheimer's, who spent two years longer in independent lifestyle because of Aricept. I think this is a fantastic presentation.

What has been the response so far on your lobbying efforts? Or is this the first presentation you've made to government?

D. Drummond: This is the first presentation I have made. There have been many other presentations made — one to this committee some years ago, I believe, but many presentations to Pharmacare to try to change their mind, especially Drs. Feldman and Beattie at the Alzheimer's clinic. Also, the Alzheimer's Society has made a number of presentations.

M. Karagianis (Deputy Chair): It's unfortunate that you've been frustrated in that. I think any family members who have dealt with a parent with Alzheimer's will know the actual benefits of using these inhibitors. I wish you all the best of luck here in continuing to press government to pay attention.

L. Krog: Doctor, thank you for your presentation. I just wanted to confirm that you said there are 21,000 new cases diagnosed each year in B.C.

D. Drummond: Yes, 21,000 — 61,000 currently diagnosed and 21,000 new cases per year. The prevalence of the disease will probably double between now and the year 2025 or 2030, because it is a disease of the elderly, occurring most often in the 70s and 80s. As the demographic baby-boom generation moves through to those AD-prone years, the incidence and the prevalence will rise dramatically.

L. Krog: The percentage is going to vary, obviously, as it relates to age, in a sense — I mean, some people die before they develop Alzheimer's, so to speak — but what percentage is it of population? Have you got some general numbers around that that will develop or are likely to develop?

D. Drummond: I do. The incidence rises steadily with age, so that at the age of 65, only about 2 percent of the population has Alzheimer's disease, but by the age of 85, a third of the population has Alzheimer's. By the age of 90, half of the population has Alzheimer's disease, so it rises exponentially with age.

G. Hogg: Dr. Drummond, am I correct in hearing you say that the therapeutics initiative that makes decisions with respect to recommendations on drugs that are approved is simply basing its conclusions on inappropriate or old data?

D. Drummond: I think it's more complicated than that. I think they are, in part, relying on the AD 2000 study. They certainly used that in their report. I think it's more complicated than that, in that they are an ultra-conservative body. It takes a lot to convince them of the merit of any drug.

G. Hogg: Did they not argue that…? I think there was a drug for arthritis that was not approved in British Columbia, as well, and they argued, because of their conservatism — and it was taken off the market — that they were protecting the patients of British Columbia. Is that your understanding as well?

D. Drummond: They did. Although they objected to the drug largely on the basis of its cost, when safety concerns showed up later that they didn't know about at the time, I think they tried to take credit for that.

G. Hogg: Just one more question. To get these drugs approved, given the structure we currently have for approval, is it a matter of going back to the therapeutics initiative and asking them to review it? Is that your understanding of the process?

D. Drummond: I think it would be fair to say that that step has been taken many times and that they have dug their heels in and have no intention of reversing their opinion on that subject. I believe it would be up to Pharmacare to listen to British Columbians and listen

to other Canadians and listen to the arguments that I've made here. You know, are eight out of ten provinces wrong?

B. Lekstrom (Chair): Dr. Drummond, thank you for coming forward and making this presentation and sharing your views with us. I can assure you that all presentations are taken seriously and considered in our development of our report. Again, thank you.

B. Lekstrom (Chair): Our next presentation this afternoon still comes to us from the Northern B.C. Construction Association. Joining us is Rosalind Thorn. Good afternoon, Rosalind. Welcome.

I'd like to thank the committee for the opportunity to again participate in the government of British Columbia's prebudget consultation on finance and government services. My name is Rosalind Thorn, and I'm the president of the Northern B.C. Construction Association. I'd like to take a moment to introduce our association and also our association affiliations that we have in the province.

The northern association is an umbrella organization of seven local construction associations that operate throughout northern B.C. They operate in Fort St. John, Dawson Creek, Terrace, Kitimat, Smithers, Williams Lake, Quesnel and Prince George. Additionally, we have a plan room set up in Prince Rupert. Through these affiliations, we represent some 260 firms, both from the union and the non-union sectors of the industry, and they operate as general and trade-specific contractors as well as manufacturers, suppliers and allied service firms to the construction industry.

These member firms have involvement primarily in the industrial, commercial, institutional, civil, road, highway and bridge-building sectors and are responsible for putting into place and servicing the material infrastructure required by all of our society.

In more detail, we build and service the bridges, highways, mills, mines, office buildings, retail and commercial buildings, manufacturing facilities, ports, airports, schools, hospitals and to some extent, in some of our northern B.C. communities particularly, single- and multi-family housing. The Northern B.C. Construction Association is one of four regional associations that comprise our British Columbia Construction Association, which has approximately 1,700 members. Together we represent provincewide views.

As many of you well know, the construction industry is a significant driver in the B.C. economy. This multifaceted sector, building the infrastructure required for a prosperous and competitive province, plays a major role in contributing to the economic well-being of British Columbia. Construction contributes a total value of over $15 billion annually, or 15 percent of the province's GDP.

As we enter a decade of substantial growth here in the province, the construction industry will see, over and above the usual construction activity, many large construction projects such as the 2010 Olympics, LNG terminals and additional port facilities, pipelines, the RAV line, mining, and oil and gas expansion. Our B.C. construction industry directly employs over 140,000 British Columbians, which is 8 percent of the economy's workforce and is actually more than forestry, fishing, mining and agriculture combined. The industry affects one in five workers in British Columbia. Employment in construction has been increasing steadily since 2001 and sharply over the past year, where we saw an increase of some 40,000 construction jobs in 2004 alone. So that's been pretty dramatic for us.

Workers in the B.C. construction industry enjoy earnings totalling nearly $3 billion per year. Over the past four years we have identified key areas that, in our view, were imperative to get B.C. building again. Now the focus needs to turn to keeping B.C. building. One of the highest priorities for our industry is the ongoing focus on encouraging investment in our province. The government is to be commended for fostering a business climate that continues to support and encourage new investment. While public investment does provide some work for contractors, this is by far the smaller portion of overall investment. Increased investment from the private sector should always be the ultimate goal, and in our view, government initiatives should continue to focus on that objective.

We would like to see government continue industry training initiatives. For the construction industry, the shortage of skilled labour in Canada is no longer simply a matter for discussion. Rising costs and reduced productivity are expected as companies struggle to attract and retain skilled workers. In fact, recent reports have focused on the impact that such shortages could have on construction for the major projects we're looking forward to and on the need to ensure a steady supply of skilled trades.

Here in B.C. we have been given the opportunity to create an industry-led apprenticeship system. Through our B.C. Construction Association we are actively supporting that concept. During the past year we initiated an advisory council on construction training to act as a resource for industry and government on ICI construction. The council members are all contractors currently involved in training apprentices from right across the province. The advice of this council helps ensure that apprentices in B.C. get the right training to further their careers and establish themselves alongside the skilled tradespeople currently working in our province.

Recently our B.C. Construction Association has applied to the Industry Training Authority for approval to establish the construction industry training organization as the industry-driven training leader and coordinator within the B.C. construction industry. BCCA — building on its experience and the results of ACCT, the organization that I mentioned we created in

an advisory capacity — will take the lead role in creating this training organization. The mandate of it is to be the hub of the training system, connecting, aligning and integrating all stakeholders involved in and interested in creating and retaining a skilled workforce for a changing and growing B.C. construction industry. It will focus on addressing the skill gaps and needs of the industry.

As part of our due diligence in this matter, you should know that our B.C. Construction Association board has determined that we visit New Zealand to gather firsthand information from the stakeholders there, and Australia, who have nearly 20 years' experience with this model. As the ITO model is the model that we are working with today in this province, we want to identify the things that work well and discover any that don't so that we can work within it to make the system for apprenticeship and trades training world-class. Through our Northern B.C. Construction Association, we will be participating in this fact-finding initiative as well, and bringing and looking at regional perspectives.

To move forward, to have a healthy trades training system in the province, it is critically important that government address the increasing concern of employers around the cost of training apprentices. The considerable cost of training a new apprentice, both in time and money, acts as a serious deterrent to taking on this responsibility. The participation of the employer is a critical element to trades training, and we believe such participation should be encouraged by government by offering a training tax credit. We would recommend the tax credit be available on an equal basis to all employers who train apprentices, regardless of the size of their company's payroll. We look to government to introduce such a training tax credit for employers.

In northern B.C. we are working closely with the community colleges to enhance and expand apprenticeship and trades training opportunities for and in the north. The recent announcement of $12 million in financing by the province, the city of Fort St. John and gas sector companies for the expansion of Northern Lights College to train B.C. rig technicians is a good example of how partnerships can really work to address specific regional requirements.

The board of governors of the College of New Caledonia is working on developing a strategy to expand trades training in north-central B.C. Better utilization of facilities is a must, both economically and to reduce significant waiting lists in some trades. For instance, here in Prince George for September, the welding class had 16 spaces available, with 96 on the waiting list. Electrical, here in Prince George, has a two-year waiting list. These are people that are required to build our infrastructure, and somehow we have to find the way to accommodate their training.

Northwest Community College, which is in the Terrace-Rupert-Kitimat area, currently provides only entry-level trades training in most of their trades and is currently looking at how to bring back the full apprenticeship technical training in their institute. I believe that was lost during the terrible economic downtime that they had and suffered so badly to the west of us. Now there's a huge opportunity out there with many major potential projects on the books. So we are going to have to find a way to bring back the full technical training to that institute.

We will be looking to government to support the construction industry by developing innovative and effective responses to the need for skilled workers and their training requirements. Working with our associations and our members will demonstrate recognition of the importance of the construction trades to the well-being of our province.

With regards to standard tendering procedures, we ask government to support the use of them. The use of standard construction documents and tendering procedures will go a long way to ensuring the proper allocation of risk. Where public owners are involved, there should be particular care given to using standard procedures and established contracts.

You've heard me talk in the past about the province of B.C. standard document that was set aside back in 2001. We're still attempting to have government look at bringing back a standard contract and standard front-end document to construction bid documents. Under such circumstances it becomes even more likely that risk will be improperly allocated. Using industry-accepted standard documents that have been properly drafted to ensure fairness alleviates this concern and thus reduces cost to government in the long run. Using standard tendering procedures also provides the maximum level of transparency and accountability that is expected within public agencies.

We ask government to review its commitment towards open and fair tendering procedures, and government is encouraged to work with our B.C. Construction Association and also the Public Construction Council, on which there are representatives from the various tendering agencies and ministries, to support the standard construction documents and the tendering procedures.

We would encourage government to continue to outsource as appropriate. Government agencies in B.C. are continuing to face tight budgets, and the need to efficiently allocate scarce resources is critical. In order that the taxpayers can receive the best possible services, agencies should focus on their core activities and seek to outsource others to private industry. Outsourcing is a proven method that will not only lower costs for government but will also improve the quality of work done and provide expertise and innovation. We can help government meet this objective.

Through our provincial association we have had discussions with the former Ministry of Management Services to establish a working partnership with government-funded B.C. Bid services. Our electronic and physical plan rooms can augment services already provided by B.C. Bid and eliminate the need for further development costs for B.C. Bid. This is an excellent opportunity for government to save taxpayer dollars

We also encourage government to support infrastructure. Roads, bridges, water supply and sewage are necessary backbones to sustaining existing industries and attracting new business to the province. The ability to run any commercial activity is severely impeded if infrastructure is allowed to deteriorate. The B.C. economy relies heavily on trade, particularly with our neighbours. Well-maintained roads and bridges are important elements to the equation if we expect to compete effectively. As we are all aware, an effective transportation system must be maintained.

We applaud government on its Cariboo connector initiative to four-lane Highway 97 between Prince George and Cache Creek. This is a great start, but attention is also required on the highways west, north and east of Prince George, which also need significant upgrading. We again reiterate that the increased traffic due to economic activity, as well as the pine beetle epidemic, is taking a heavy toll upon the existing infrastructure. The roads of northern B.C. are critically important to the continued economic activity of our existing primary industries. To take advantage of the host of opportunities looming in mining, oil and gas, the Prince Rupert container port, and tourism, our transportation infrastructure needs immediate attention.

We recommend that the B.C. government work on an effective long-term planning process for infrastructure projects. Again, we suggest that government consider dedicating moneys from the stumpage fees paid to our highway system, and that's because of the substantial increase of the log-hauling trucks on our highways here in the north.

Planning. We cannot emphasize too strongly how critical the need is for planning capital work, with the volumes that are contemplated and the shortages of skilled tradespeople looming. Consultation with our industry is key in attempting to manage the construction of projects over the next few years. Through our association network, we try to work cooperatively with buyers of construction services, both public and private, and provide advice on the scheduling of projects.

In the north contractors typically experience slower times during the winter months, and we strongly recommend owners consider tendering their work during this period. Not only will you be competing with fewer projects during the bidding stage, but such projects will be ready to commence construction once weather conditions permit in our region. An added benefit is often the alleviation of winter construction, thus reducing the project costs.

In conclusion, as has been demonstrated, the construction industry is a large component of our provincial economy. We believe that our recommendations will not only benefit our industry but the province as a whole. We certainly look forward to working in partnership with government to keep B.C. building. Again, I thank you for this opportunity.

B. Lekstrom (Chair): Thank you very much for your presentation. It was very in-depth, and I think a lot of work has gone into it, as has been the case with our presenters that we've seen to date.

You have used the full 15 minutes, so I would encourage members…. I know you put your business card in, Rosalind. If there are any questions regarding the presentation, I know that Rosalind is more than open to a phone call. I've had numerous opportunities to sit down and discuss issues with her over the years. I would encourage committee members to do that, if it's possible.

Our next presentation comes to us from the Prince George Council of Seniors, and joining us is Mr. Bob D'auray, I believe.

B. Lekstrom (Chair): Ah yes. Well, I've got a little French in me — just not near enough, obviously.

B. D'auray: I've brought two handouts with me. One is a survey that we had done by a volunteer that shows the inventory and stock of senior-friendly housing in Prince George. The other is just a copy of my speaking notes so that you can…. You have a lot to remember, so it's not exactly written out, but it's there in point form.

I thought I'd start by giving you a description of what the Prince George Council of Seniors is and what we do. We're an umbrella organization, we're a non-profit society, and we represent about 11 different seniors groups in the city. We advocate for seniors on any issues that we feel we need to.

To just give you an idea of the diversity and the number of organizations we're involved with, our member groups are: Elder Citizens Recreation Association, Hart Pioneer Centre, North Central Seniors Association, Prince George and District Seniors Activity Centre, Spruce Capital Seniors Recreation Centre, Nechako Métis Elders Council, B.C. Government Retired Employees, B.C. Retired Teachers Association, Federal Superannuates, Métis Elders Society and Sacred Heart Senior Citizens Society. Roughly, about 3,000 seniors comprise our membership.

In addition, we have a volunteer board of directors that directs the operation, and we have four paid staff. We try to count on volunteers to run our four programs wherever we possibly can, and we're fairly successful with volunteers.

The four programs are…. I've got one down there as MOW, which is Meals on Wheels, a program which provides healthy food to seniors in the bowl area for a

reasonable price. Again, the drivers are volunteers. We do have a contract with a local organization to provide the food, but we've been using as many volunteers there as we possibly can.

CAP is the Computer Assistance Program, which is a program that provides seniors with basic computer skills. It's amazing to see them in those classes when their eyes light up when they figure out that a computer isn't going to hurt them or they aren't going to damage it by touching a mouse. Again, volunteer instructors prepare lessons and provide those classes.

Info line is a big part of what we do. It's a telephone number that people can call and get information on a myriad of topics, everything from pensions to rental accommodation to somebody that needs to have an electrical outlet fixed. The other day we had a lady who needed…. Her bathroom fan was grinding to a halt, so she phoned up. We had a retired electrician who went over to her house and took it down, cleaned it, put it back up, and away she went. That's the kind of thing that we like to use volunteers for.

The final and fourth program is the seniors outreach program, where we try to match volunteers with seniors. We try to combat some of the isolation that seniors face by getting them out with their volunteer into the community to take part in different events. Maybe it's just going on a trip to a restaurant or the bank or a movie or any other social kind of thing that we can do for them.

When we sat back and thought about what to talk about in a ten-minute presentation, it was difficult to come up with just three topics. These aren't all the concerns we have, but they're our top three.

The first one, we felt, was safe, affordable and accessible housing for seniors. The survey, which is called Seven Steps Up, Seven Steps Down, shows that most of the accommodation in Prince George was built during the pulp mill boom, which was late '60s, early '70s. The facilities are out of date, the bathrooms don't have grab bars, doors aren't wide enough for wheelchairs, and so on. Very few places don't have steps, where you have to go up and down to get into your place. So if you've got a walker and a bag of groceries…. It makes it pretty difficult for some people.

There are new places being built that have the new facilities and new amenities, but not nearly enough according to the survey. We are working with the city and other associations in town, the Handicapped Housing Association, to try and remedy the situation. If there's an area where we could put extra money, that would be one of them.

We're hoping to have communities where people can live in a community where there are children present, where there are families and where they can have their pets. We're not too crazy about warehousing people until they do us a favour and pass away. With people living longer and being healthier, they need to have more than just housing and food. They need their well-being looked after. Hearing the sound of children outside your place…. While sometimes it could be a nuisance, I think it's pretty good sometimes.

Having their own pets. Pets are a big issue, we find, with people who phone in that they're having to give up their home and move into a condo. "I have to give up my dog" or "my bird" or whatever. It doesn't seem like a very…. It seems rather trivial when you sort of think about it, but they're really attached. You know, they may have lost a spouse, so they have concerns for their pets.

The second priority that we chose was a little bit more general. We'd like to maybe talk about funding for the charities from gaming. We learned that bingo revenues are shrinking. In order to qualify, the revenue has to be from an actual bingo game. I don't know; you're probably aware of this. You have to actually sit down with a card and play bingo with those things — I don't know what they call them. If it's electronic bingo or poker or pull-tabs or any of that, none of that money goes to the charities. So bingo revenue is shrinking as a result of those things, and that means gaming is trying to cut funding to the different charities.

Of all these organizations and our own organization that I mentioned here today, all of us get gaming money of one sort or another. If there are any surplus funds, they could certainly go to replenish that loss of revenue from bingo. Further, we think the gaming philosophy should maybe be rethought to allow for some form of core funding such as rent and utilities for the different organizations.

We're spending more and more of our time scrambling for money, doing fundraising, which distracts us from our primary mission, which is serving the seniors of Prince George. Not only that, but the uncertainty of where the money's coming from or if there'll be money next year causes anxiety for our workers, for our volunteers, but most of all, for the people we serve. If Meals on Wheels service dried up, well, there'd be some people in Prince George that would be in serious trouble.

The third priority. I'm going to echo a little bit what the previous speaker said. It was about health care, I guess, in general. This is a huge area, so we've broken that down a little bit. We were happy to see the announcement that low-income seniors will get assistance with their rent, which helps them towards that goal of safe and affordable housing, eh? The calls we receive from the info line, though, from seniors tell us that seniors have a great deal of trouble getting dentures.

That also may sound…. You know, $1,200 for a pair of dentures — it's no big deal. But if all the teeth in your mouth are bad and your gums are sore and you've got gum disease, it's pretty hard to get decent nutrition. Not only is it a matter of having good teeth, it's a matter of maintaining a person's weight and their health. We have about nine people on a waiting list right now that we're trying to get dentures for. There's a place that we could use extra money.

A lot of seniors have to pay — this is where I'm going to echo the good doctor — higher deductibles for

Pharmacare now. The fact is that a lot of drugs they need to take aren't on the approved list, so they're dipping into their savings and their pockets for money for their drugs as well. I guess I should say prescriptions, not drugs.

Anyhow, that's pretty much my presentation, other than I'd just like to thank you for the opportunity for letting us provide input. If you have any questions, I'd be happy to try and answer them.

B. Lekstrom (Chair): I'm going to look to members of the committee to see if they have any questions regarding your presentation.

J. Yap: Thank you for your presentation. You gave us the handout, Seven Steps Up, Seven Steps Down, a seniors' guide. This guide — is it published already?

J. Yap: I just want to say, as a comment, that the information seems to be very useful, and I can think of opportunities for me to bring back to my community some input from what you have here to enhance the seniors' guide in place in my community of Richmond.

B. D'auray: Sure. We were very, very fortunate to have that done by a retired person who decided it was something that she wanted to find out. She approached the council and said, "You provide me with an office and a chair and a few business cards," and away she went. She worked on it for six months. It's very complete, and it shows the state of housing in the city right now. Plus, the city of Prince George is helping us defray the costs for printing it, and we're just in the process of getting that set up now. Of course, they'll be making use of it. They've sponsored a committee to look into housing for seniors, disabled and so on, so that information is all going into a big pool along with information from Professor Michalos at UNBC. He's doing some lifestyle-type surveys as well.

All of that information will be available, if I'm not mistaken…. Don't quote me, but I think that survey is on our website already. It will be published, and we'll be happy to sell you one for $2.

R. Lee: Thank you for the presentation. In the lower mainland there are a lot of seniors societies there for prevention — physical fitness programs and that kind of thing. Does your organization also promote some similar kinds of programs?

B. D'auray: We don't have any facilities directly, but a number of these seniors centres are recreation associations. Elder Citizens is downtown here. Hart Pioneer Centre is north of the city. We have one west of the city in College Heights. They all promote recreation and fitness as well.

Carpet bowling is a big one. I haven't tried it yet myself, but in another ten years I may. Tai chi, yoga and those kinds of things — yes, all of those organizations are offering those to their membership.

B. Lekstrom (Chair): Bob, again, I want to thank you for taking the time to come and present before our committee here today. A lot of thought has gone into your presentation as well. I congratulate you for that. Thank you for making the presentation to this committee.

B. D'auray: I should say that we really appreciate the opportunity of doing that. If this comes to Prince George again, we'll be back.

Moving along, our next presentation this evening comes to us from school district 57, which is the Prince George school district. Joining us this evening is Fred McLeod.

F. McLeod: Good evening. I bring the greetings of our board chair, Bill Christie, to you. He's unfortunately unable to make it here tonight. The lot has fallen on me to provide you with some information. We heard it was finance, so we thought funding and money are good things, and school districts certainly can use all the money we can get.

I'd like to draw your attention here. There should be three pieces of paper, three documents, that you received. One of them is a document that we presented a couple of years back, and it has to do with transportation. The transportation funding for the school was historically based on: what you spent in one year, you received in the next year. As the new funding formula that was driven through in education came through in the last mandate, what they did was take those transportation costs, basically, and roll them into the new formula.

Districts that had gone through any kind of saving measure on transportation were penalized. In fact, we were bearing the cost of having a very efficient transportation system and not getting the appropriate dollar. What this document talks to you about is really to say that if you're going to fund on a per-student basis, then please fund us on a per-kilometre basis as well. If we were funded on a per-kilometre basis, it would be a much easier way for us to deal with the costs of transportation.

School district 57 does, in fact, contract out its buses. In the course of the last decade the cost for

transportation provincewide has gone up by 25 percent. This is before we get into any oil or energy increases over the last bit. In school district 57 the cost of our transportation has gone down over the last decade by 17 percent. Three years ago, you'll see in that document, we tendered out a contract. In that contract we saved the school district $283,000. Over the course of the contract we're going to save about $2½ million on it.

That money we're getting now, actually, we can put into the classroom, but we would like Education — through Finance, if you could give them the nudge — to look at the transportation costs on a kilometre basis and to see that those districts that are providing a very equitable and efficient system can then take those moneys they're saving from transportation and roll them into the classroom, where they're so desperately needed.

There are graphs on the back of that. You'll also see that there are districts in the graphs that are compared to heartland districts. We didn't put any names to them, but the costs and figures of transportation are on the back pages. I'd ask you to peruse that, and if you think it has some merit, then nudge those in Education that have to deal with funding.

The second piece I'd like to bring to your attention really is more emergent of why we're here tonight: the cost of energy. The energy costs to a school district are no different than those for homeowners or for those of you who are having to go to work. Our costs for energy are going up quite dramatically. For those of you in the government, not only has your cost for some areas gone up; your revenues have gone up quite dramatically as well. What we would like to have you look at is that both levels of the senior government are now reaping record dividends, and it's from the increase in the market costs for fuels.

As demand for those new fuel sources grows, exploration also goes up, as well as the various tax levies. The government is doing well. The surplus is looking good. Unfortunately for us at the school district level, we're seeing our energy costs go up in heating and in transportation. School districts are major consumers of energy. We need to have some kind of a break on this — whether it's a temporary blip or what's going on, it's a real hardship for us because the dollars we have to put into furnaces or lighting or the gas tanks on the school buses have to come from somewhere. The only place it's coming from is really the classroom.

Again, we would like to see that. We understand that it's going to be a flexible time period, but somehow we need to have a break, and sooner rather than later on that.

F. McLeod: The third thing, a really important thing to us…. You've flown in here today or driven in over the last little while. You have seen the epidemic of the mountain pine beetle. Not only is it ravaging the countryside around here, but it's ravaging the communities and our schools.

Most of our schools were built at a time when people thought: "You know what? We need to provide the natural buffers that are there. We need to provide an environment for the kids to play in and the squirrels to play in and the birds to land in." For many of our school yards, those were pine trees, and they were beautiful. Alongside the school, oftentimes we had a buffer area that the city had, and what was in there were pine trees. In this last year we took 3,000 pine trees off school property in the bowl area, the Prince George area.

Now, the impact of that on the schools, on the kids and on teachers and those working is huge, but it also has an impact on us, because we have to pay to take those trees off. Although the trees do have some value, it costs you more to take the tree off than you're going to get value back for. Every tree represents somewhere between $40 and $50. Depending on the location, they'll cost you more.

We need to have some help for us in dealing with the pine beetle epidemic, because not only do you cut the things down and it costs you, but you'd like to be able to plant something in its place so that the next generation can also enjoy having the trees and the bushes around. In one of our schools they're getting blown off the playgrounds because there are no buffers and windbreaks anymore.

What we would like to see is something that can happen — and we've had promises of interdepartmental…. In his letter of May 12, Ministry of Education Deputy Minister Dr. Emery Dosdall recognized that the use of the annual facility grant is appropriate for the purposes of replanting. Well, instead of putting our buildings in paint and putting new roofs on, we're now going to be putting it into planting and reforesting our schoolyards. This position leaves our district a two-time loser: once at the loss of cutting the trees down, and the second time at the cost of trying to put something in its place. Really, what we are saying is that we don't care what organizations, agencies or departments we have to work with, but we would really appreciate some help with the pine beetle epidemic and with our reforesting of our schools.

B. Lekstrom (Chair): Thank you very much, Fred. Your timing is very good. It allows some time for questions from members of the committee. I will look to see if there are any.

R. Lee: Thank you for your presentation. About the pine beetle trees, you mentioned that you had to spend $50 to remove one tree. Are there any private companies that would like to just take the trees and use the fibre?

F. McLeod: What we did, Richard, was…. The city went out and took tenders on cutting trees down on

city property. There is a value to the tree, but getting the tree out and down to the market…. For many of these trees, the size of them, it costs you money. It will cost you to get the tree. The city had reached an agreement through their tendered process, and then we actually just piggybacked onto the city, because the administrative costs were borne through the city. They had the people, also, that could go out and probe the trees. I mean, we're gaining expertise within our own district. For a community, the city work and our school district's work were done at the same time. It cost us $40 to $50 a tree — even higher. If it's a tree that's close to a building, it costs you more than that.

F. McLeod: But understand that when you're thinking of trees for value, what you're thinking of is trees where they're just knocking them down. They don't have buildings around, and they don't have places they have to bring them out with care to get them out.

J. Kwan: Just to clarify for me on the issue around maintenance, in this instance it happens to be, I guess, pine beetle infestation impacting your community. Correct me if I'm wrong: it used to be that the maintenance dollars were funded by the ministry separately, but now that's rolled into the overall grant.

F. McLeod: We get the annual facility grant. The annual facility grant was expanded to cover more things. There used to be minor capital and major capital that you went to the ministry and asked for. Some of the minor stuff we can now do internally. The annual facility grant was doubled, but in that there was also an expectation that you took care of the problems that happened. It used to be that if you needed roofing, you could go…. There was a whole prescription of things you could go for. The money was increased and made simpler, but you're liable for it all. If we discovered there's asbestos in our building, there used to be an asbestos abatement program. Guess what. Now it's the annual facility grant.

F. McLeod: How much do we get for our school district? The secretary-treasurer is behind me: $3.2 million.

J. Kwan: How much do you estimate the cost would be for you to actually do the maintenance that's required? I'm talking about not just the beetle infestation component but all of it.

F. McLeod: The thing is that to do the maintenance required…. What you have is that you build a cycle in where you're trying to do so much on your buildings per year. If you have $200,000 that you've got to put into cutting trees, it means that there's $200,000 you don't have for painting, for floors, for building walls, for putting a roof on. You've got to do the roof, because if you don't put the roof on, the thing rots out. I think what happens is that you'll see the things just get pushed back further.

J. Kwan: One last question on the estimate of the cost of the beetle infestation piece. How much do you anticipate…? What is your estimate of the cost of that?

B. Lekstrom (Chair): Fred, maybe if I could step in with a question. I was intrigued by your issue on the funding for transportation and the formula. I certainly represent an area that faces challenges that are very large. I haven't had the chance to read your full presentation yet. Does it take into account regional diversity in the sense that…? Certainly, our school buses are up and running at five or 4:30 in the morning for some time when it's 30 below to get them warmed up. I mean, winter driving is far different than summer driving. In your presentation, does it reflect any of that?

F. McLeod: When we talk of the heartland districts, we're talking of districts that are similar in our scope. I would say that we have kind of a great blend in this district, because you have the busing from the rural communities into central Prince George but also busing down through Robson Valley out into Mackenzie, which is really a rural busing to a rural area. Some of those buses cover huge distances, and not many kids are picked up on them. But that's the cost of the public education system.

For us, I guess, the big thing was to go to a contracting-out system. They're their buses. You haven't bought a bus. As a government, you haven't bought a bus in Prince George for 20 years, 25 years, whatever. You'll buy buses in all kinds of other places. Those buses are used, and eventually the value on them is very little. When our new contractor came in, we had a new fleet.

B. Lekstrom (Chair): Possibly one quick follow-up, then. If it was, in looking at what you're talking about here, a per-kilometre fund, for instance — funding the government could fund to the school districts based on that…. You put it out to tender. You may get it for two or three cents less per kilometre, based on the competitive bid. Then what I'm hearing you say is that if you save that and if it works out, then you could take that money and reinvest it where you see fit — in the classroom, in issues like that.

F. McLeod: I think that you may also have those distinct areas where you may look at it and say: "You

know what? The cost is greater in this area." If you're in the Stikine, it may be one where the cost per kilometre is one that you look at…. Although you've got that standard formula, you look at that and say: "You know what? To take money out of their classroom because it costs more is not fair as well."

I think you need to look…. Some of them are pretty out of…. I was going to say out of whack, but they spend more money.

In closing, I want to thank you, Fred. The other document that you spoke about — if we could ask you to submit that to the committee. I've received the two: the reasons for funding transportation…. If you could leave us your complete package, we'll make sure that committee members receive all of them.

B. Lekstrom (Chair): Terrific. Thanks very much. I appreciate your presentation, Fred.

Our next presentation this evening comes to us from the Prince George Chamber of Commerce. Presenting are Myron Gordon and Michael Kerr.

M. Gordon: Good evening. Thank you very much for letting us speak to you today. This is about the fourth or fifth year we've spoken to this committee. We certainly appreciate it when we are allowed to come and bring Prince George Chamber of Commerce and bring to you what topics are important in our communities and the businesses we serve.

Just some background on the chamber of commerce. We've been around about 94 years here in Prince George. We have over 930 members at present, ranging anywhere from a one-person business, such as the one I operate myself, or businesses such as Canfor. The city of Prince George is a member. The school district is a member that was just up here, UNBC, CNC — a large number of members and a large diversity in our membership.

Just some quick things that we've noticed over our last four to five years that we've been doing this presentation. Our message has been fairly consistent, and it's not going to change much today. If you're looking for something new, you're not really going to get it. We're just going to be reiterating what we normally say and maybe emphasizing a few new things.

Information that we always like to pass along about northern B.C. is that northern B.C. generates a lot of revenue that goes down south. It doesn't always come back, and we're not afraid to tell you that and to tell anyone else that wants to listen, but that does happen. We don't mind helping the other parts of the province, but we do want to make sure we get our fair share back, so we just like to see some go and some come back.

One of the other things we want to make sure we get across is that economic development needs to be done on a region-by-region basis. We have to ensure that all regions are treated in…. While it may not be in an equal fashion, at least given the same time of day, if you can say it. Areas such as the Kootenays, Okanagan, Prince George and even north up in Atlin all need to be looked at — not just the lower mainland and Vancouver Island, as we normally see, where most funds and attention are paid to.

We also note that our economy is certainly improving, which is good news for the province, and is certainly good news for Prince George here. We've seen our financial picture of Prince George improve greatly over the last year or two, and it appears that it will continue to move along.

Moving on to what our issues as the chamber of commerce are. As I said, things haven't changed much over the last years. Our big priority — and what we see as a priority here — is reduction of the province's debt. We've put that 40 to 50 percent of any surpluses should be directed to that debt, and I don't think that figure has changed from what I've seen when I've been reading all previous documents.

What we would like to see from any spending cuts that come into play is that that money is, of course, directed to reducing some of that debt. Increased revenues — which we should, hopefully, be seeing as the province's economy picks up — should also be going to that debt reduction. We know that personally, if our debt is high, we can't do a lot. That's the same with the province or any business. High debt means you don't have a lot of leverage, and it means you can't do a lot of new activities, so we want to continue to see the debt in the province being reduced. That, in the end, will of course help the province move along even further onto prosperity.

Probably the next issue and the one that has really moved into the forefront in the last year or two is our trades and skills training. We're looking at…. About 10 to 20 percent of any surplus should go in this direction. Currently, a lot of businesses, especially here in the north — Prince George, up Dawson Creek, Fort St. John — are seeing skills and trades shortages. We, number one, don't have all the labour we need to get the jobs done, and of course, we don't have the skilled labour to get the jobs done.

What we need to do is focus to make sure that institutions — and CNC and Northern Lights College are examples here — are given the proper funding they need, and not just capital to get buildings put together but the operating funds which will allow them to get new programs up and running or to continue operations of existing programs. Probably, we also need to see some focus going on getting this labour pool even earlier, likely into — as in school district 57 that was just in front of us — the school system and start pushing it from there. We know that not everyone is going to go to university, as much as we'd like to see them go

to university. For those ones that aren't, we do need to get them focused and moving into a skilled profession, which will obviously help the economy here in Prince George and in B.C.

We've certainly kind of seen an issue with costs rising in a lot of our institutions. As I heard previously, costs such as heat are adding up. Those costs are going up, but the money to fund those extra costs is not being increased. We need to ensure that the funding does keep up with the added costs. We certainly will see added costs if we ever have a really cold winter up here. Like, we want to kill the pine beetle, but we do need to focus and make sure that those operating funds are not only kept up with but expanded to help the new programs that we have to bring on line and expand the ones that exist, plus take care of any operating costs that are increasing.

Transportation, again, is another issue which has come more to the forefront in the last couple of years. Just like education, we believe we should see about 10 to 20 percent of any surpluses spent in that direction. At present we are seeing movement of goods through Prince George as a major issue. If anybody's been out on the roads recently, they will certainly notice that the logging trucks, due to the pine beetle, are out there and causing havoc on some of the roads. The roads are taking a fair amount of abuse, never mind the safety issues that come out of the number of trucks on the road.

The other issue involving that is getting some of those goods transported, hopefully, to our new port in Prince Rupert. We certainly need to make sure that the Prince Rupert port is put together properly and is up and running and functioning as soon as possible. We know we're going to see a lot of jobs come out of that, and there's a lot of opportunity. What we will likely see is some inland ports developed because of it. If that's the case, then we need to make sure that we have infrastructure such as roads, rail, even Internet connections. They have to be there, up and running.

We need to see Highway 16 — B.C.'s section — upgraded. B.C., at present, only has one real east-west connector, which is down in the south, and that only serves maybe a third of the province, so we certainly need to take care of the other two-thirds. Highway 16 does need to see some focus, especially if it's going to handle the traffic that's heading out to Prince Rupert and back, and down through Edmonton and Chicago.

Health, of course, is always a concern to us. As business, we need to ensure that employees are healthy, and we need to ensure that we do have access to health care. Of course, I'm sure you've heard this before, but Prince George has always felt it hasn't got its fair share of health care services, and I think that still stands.

We've been looking for a health centre and, possibly, a cancer centre up here. A lot of time and money is spent by families when they're transporting family members back and forth to the lower mainland or wherever there's a cancer clinic. We see nothing with advancing a cancer clinic and health centre up here so that people in the north do not have to travel there. That would decrease a lot of time away from families and away from work. It would, obviously, help our businesses and communities up here to maintain stronger employees and stronger ties with employees. Recruitment and retention is an issue, and having a good health system here in the north will certainly help to keep people here and recruit new ones. It is a big issue, and we continue to view health as a big issue.

Finally, the last thing I'll talk about before I turn the mikes back to you is tax rates. We certainly know that tax rates in B.C. have room for improvement. If we compare ourselves to the neighbours in the south, which we normally seem to do, we note that their tax rates are lower than ours, and that tends to stimulate business down there as opposed to getting businesses to locate up here. We would look to see tax rates continue to decline, both personally and on the business side. We know that that's going to help the province's economy as it moves on in the future here as we cater to the markets in China.

Just to go through the last couple of issues quickly. Science and technology infrastructure. Currently we're saying we should probably put about 5 percent towards that. However, in the north we're very innovative, because we have to be. We're away from the major centres. We also have things such as severe winters that come through. Winters last longer here. We don't have all the access to resources that come out of the south. We depend a lot on innovation, on technology, on those sorts of infrastructure programs such as funding innovation centres, to get a lot of our work done.

Most people don't realize the forest sector is very innovative and focused on technology. A lot of that comes out of the north, where we need to be innovative if we're going to get the job done. We want to make sure that the government continues to focus on science and technology, not just in the lower mainland but up here in central-northern B.C., where a lot of innovation occurs.

The last thing I'll talk about is city development — to ensure that distribution of funds to cities is not just based on population. Obviously, costs are higher in the north. Even road maintenance is higher, with winter. If you just allocate funding based on a population base, it actually doesn't work out quite as well for us. We tend to suffer a bit, because our costs are higher for heating, for road maintenance, for purchases of most goods.

B. Lekstrom (Chair): Well, thank you very much, Myron and Michael. I note we do have a couple of people wishing to ask questions.

J. Yap: Thank you for your presentation, Myron. Your first priority, debt reduction — as you know, we are on that track. There's also the counter-argument that we have major investments to be made in infrastructure throughout the province. That puts pressure,

You have listed here two ways of reducing debt: cut spending and increase revenue. With regard to the first one, cut spending, I'm curious if you have any more specific thoughts. In the first mandate of this government there was a focus on more efficient delivery of services. I'd be curious if you have any specific thoughts on where more efficiencies can begin.

M. Gordon: You actually hit it right on the head in regard to cuts to spending. One of the things we've seen throughout Canada is that we're not as efficient as the U.S. Obviously, creating some more efficiencies through government programs, government spending, some of the programs that government funds…. We certainly need to look at that. Using a P3 opportunity with partnerships is one way we might be able to be more efficient at doing that.

I see lots of opportunity for that. We're certainly looking at a few here in Prince George. There's one opportunity I would really hope that the government would continue to look at, using the P3 method.

R. Lee: Thank you for the presentation. In your submitted proposal it's mentioned that the containers from China…. When the containers are returning to China, the cost is only $800 per container; when they come here, it's $4,500. What kind of manufactured goods do you think would be benefiting from this kind of cost-efficiency in the near future?

M. Gordon: Almost anything could benefit, obviously, from there. Lumber is certainly one. Value-added wood products are going to be another one that would come out of the north or come through. Anything that can benefit from containerization hits that, and any large good like lumber works quite well, because it can be packaged in an inland port. Pulp out of our pulp mills here can go into a container, and off to Prince Rupert it goes and over to China or the Asian markets.

M. Kerr: Light manufacturing as well. Light manufacturing goods moving even as far as the Prairie provinces and heading back. It could even be from raw materials from China that are going back to China or Asia, in general.

The other thing that is a key right now is that the wood pellet industry is huge. Containerizing or bulk shipping of that — even to Europe, going through the Panama Canal and over — is a huge opportunity for the players right across even to Saskatchewan. Some of my colleagues over there are telling me that Saskatchewan has a huge bio-energy….

M. Kerr: Correct. In fact, next week I'll be in Paris promoting that very thing at an international bio-energy conference.

L. Krog: In your presentation you talk about trades and skills training, and in the presentation of the Northern B.C. Construction Association, they, as well, talked about a lack of skilled workers. In fact, in many European countries business does not look to government to provide that training. Business provides it itself. If you require skilled workers, you ensure that you take them into apprenticeship programs, and you look after it, so the contribution by government is much smaller.

I'm just wondering: given that you're representing the free-enterprise voice here tonight, why is it you expect government to look after this when in many other jurisdictions it's industry that looks after it? If the free market applies in terms of construction bidding and things like that, why doesn't the free market apply with respect to labour and companies training their own workers?

M. Gordon: Actually, it's not the same system, so we can't quite compare apples to apples there. One of the things we need to do is to see the government really expand the program even into the junior secondary and secondary level to get those untapped possible workers who are not going to go to university. Get them into thinking "skilled." We need to work there, and of course, we can't actually do that. We don't have control of those students right now, as free-enterprisers.

However, one of the things we certainly do see with small businesses is that when they train someone, someone else will come and actually do what we call "poaching." That discourages smaller businesses from doing the training. We somehow need to work out a system. We're not saying we have all the answers, but we're certainly saying we want to work with government on this problem.

We need to find some way to encourage small business owners, such as those with 20 or fewer employees, to take on that training and those apprenticeships and get those people on board, knowing that somehow they're going to be able to retain them or bring in new people. Right now what usually happens is that a small business will train a new machinist, and within a couple of years, once they're trained up, a larger firm will come along and poach them.

B. Lekstrom (Chair): Myron and Michael, I would like to thank you for having taken the time out of your schedules to come and present to our committee here this afternoon. Thank you.

B. Lekstrom (Chair): Our next presentation this evening comes to us from the British Columbia Real Estate Association. Joining us are Dave Barclay, Delores St. Amand and Daryl Muchowski.

Thank you, Mr. Chair and distinguished members of the committee, for this opportunity to submit the B.C. Real Estate Association's 2006 prebudget recommendations. Our association represents 12 real estate boards across B.C. and their nearly 15,000 member realtors.

Joining me today is Daryl Muchowski, past president of the B.C. Northern Real Estate Board, located here in Prince George. Although I am here as the president of the B.C. Real Estate Association, I am an active realtor residing and working in the north — Smithers. BCREA is committed to improving the quality of life in B.C. communities by promoting economic vitality and housing opportunities, preserving our environment, protecting property owners and building better communities across the province.

On behalf of the real estate profession, I commend the provincial government for recent actions to help improve the quality of life across B.C., including tax reductions, affordable housing assistance for seniors and measures to combat the mountain pine beetle. I also want to acknowledge the dedicated work of all MLAs, who give tirelessly of themselves to serve our province. Thank you, everyone.

Last year more people bought homes in B.C. than in any other year on record. More than 96,300 were sold on the Multiple Listing Service last year, eclipsing the previous record, set in 1992, by 2,700. Consumers invested a record $27.8 billion in residential real estate across B.C. in 2004, shattering the 2003 record by more than $3.6 billion, or 15 percent.

Since 2001, residential real estate sales have made a significant contribution to the provincial economy. The Economic Planning Group found that home sales have generated approximately $9.4 billion in related spending and created nearly 78,000 jobs since 2001. It estimates that every home sold on MLS generates at least $28,000 in related spending, contributes more than $12,500 to the province's gross domestic product and generates more than $5,400 in tax revenue. The B.C. housing market is expected to continue posting impressive numbers for the remainder of 2005 and into the next year.

Through its prebudget consultation paper, the committee posed some important questions to British Columbians. I'd like to take this opportunity to respond to them.

We commend the provincial government for achieving successive balanced budgets and paying down the province's debt. Maintaining a balanced budget is not easy, and paying down the debt is important. Indeed, there are challenges to achieving and balancing budgets. Maintaining them isn't easy either, and the government's approach to managing risks may well result in unforeseen expenses. As such, it's prudent that the provincial budget contain a contingency fund and forecast allowance to help cover those expenses.

However, British Columbians must manage challenge and risks as well. Therefore, we address the following issues through recommendations that include tax relief, focused services and economic prudence.

The provincial government has taken modest steps over the last couple of years to make housing more affordable. Several of the government's initiatives are noted in our submission. Unfortunately, market forces move fast and ultimately minimize the government's efforts.

RBC Economics finds that home-ownership for most housing types remains firmly out of reach for the median-income earner in British Columbia. In the September edition of its affordability report, RBC determined that an average two-storey home now requires as much as 60 percent of the median provincial income and insists that affordability is poised to get worse. As already escalating house prices outpace wage increases, mortgage rates begin to climb.

The property transfer tax continues to negatively impact affordability, despite record-setting house sales in many areas of the province. For example, a young family entering the housing market must pay $6,000 in property transfer tax charges on the purchase of a $400,000 home. This family would not qualify for an exemption under the current threshold for first-time buyers. Since the tax cannot be included in an application for mortgage financing, an additional loan to cover the tax payable ultimately results in an inflated loan payment over the longer term. As a result, the family must leverage itself to unprecedented levels for the privilege of owning a home.

Affordability is a top priority for British Columbians. In fact, 65 percent of respondents to a January 2005 BCREA Ipsos-Reid survey indicated that affordability is the most important influence over where people choose to live. The majority of respondents — 68 percent — support advocating the elimination of the property transfer tax, while 42 percent strongly support the effort.

The tax also reinforces the perception that B.C. is an extremely expensive place in which to live and invest compared to other provinces. Is this the message we want to reinforce with skilled workers and investors?

The real estate profession would like the provincial government to eliminate the tax. It is an arbitrary levy that is tied neither to the household's ability to pay nor to the benefits derived from public services. Its burden falls heavily on first-time homebuyers and middle-income purchasers and does nothing to assist low-income earners.

However, we're realistic. We know that the revenue raised by the tax is an important contributor to the government's revenue account. We've also heard that the tax could be eliminated if alternate revenue sources

As a first step, we commissioned Malatest and Associates Ltd. to assess the tax's economic impact under two scenarios: removal of the 1 percent payable on the first $200,000, and outright elimination. The full research report, which focuses on the residential real estate market, which accounts for 86 percent of the PTT revenue, is included with this paper as an appendix.

BCREA recommends that the provincial government do two things. First, develop a plan to review the tax. The plan should include consultation with BCREA and other sector groups to determine the tax's broader economic impact and continue the process to identify alternative revenue sources; and an annual amendment of the terms of the tax, including simplification of the conditions for exemption and raising the threshold ceilings for first-time buyers to ensure that they keep pace with marketplace dynamics. Second, table a plan to eliminate the tax or, at the very least, significantly reduce it.

D. Muchowski: We commend the government for taking aggressive action to address the worst natural disaster ever to hit B.C. forests: the mountain pine beetle infestation. Remediation of the beetle represents a huge challenge. Millions of dollars have been designated to help attack and remediate beetle-infested municipal properties and Crown land, creatively market affected wood and help impacted communities plan for their future. Unfortunately, measures to address pine beetle infestation on private property have not been introduced to any degree. It concerns us that private property owners are on the outside of this problem looking in.

As the provincial government has noted, the direction and spread of the beetle infestation is impossible to predict. Mountain pine beetle outbreaks develop regardless of property lines and can develop in residential backyards and subdivisions the same way they strike in wilderness areas and on municipal and provincial Crown land. By the government's own account, the beetle will have economic implications for at least 30 communities across the province and impact thousands of families.

Therefore, we recommend that the provincial government do three things. First, assign a portion of the $201 million, as designated by the provincial and federal governments to help address infestation, to remediate infested trees on private property. Second, develop a plan to inform private property owners about the options available to them to help deal with pine beetle infestation. Third, act on the recommendation found in resolution A5, "Pine Beetle Infestation," which was endorsed by the Union of British Columbia Municipalities at its 2005 convention, that the "provincial and federal governments…declare the pine beetle infestation in the province of British Columbia a natural disaster and provide the needed financial assistance to municipalities…and individual property owners to help eliminate the hazards associated with the pine beetle infestation."

As an example, we have provided this aerial photograph of the Prince George Golf and Country Club in 2003 and 2005, which is a good indicator of how it has affected central and northern B.C.

D. Barclay: Last year realtors outlined their concerns — to this committee, all MLAs and Members of Parliament — with Finance Canada's proposed changes to the federal Income Tax Act that would limit the deductibility of interest and other expenses. In short, the proposals would move the current test for deductibility, which says owners must have a possibility of profit, to a probability of profit, which is a much more exacting standard. As well, profit would be redefined to exclude potential capital gains. Therefore, an investor who expected to realize a profit on the sale of a property but not on a regular income stream, such as rental revenues, would be unable to deduct losses from other income sources. Clearly, this would have a severely negative impact to small investors who choose to invest in real estate.

A few months ago the federal Minister of Finance acknowledged opposition to the proposed changes and asked the federal government staff to redraft the proposal. As expected, a new proposal is emerging. Under the new proposal, which has not yet been formally tabled by the federal government staff, deductibility of interest and expenses will be limited to situations where it can be shown that they were incurred for the purpose of earning net income from a business or property. In this context, deductibility will depend on whether the taxpayer's purpose was to have the positive income stream from the particular investment, and it will be made clear that an intention to receive a capital gain will no longer count in this determination.

The impact of this revised proposal will have the same impact as the original: it will devastate real estate investments made in good faith and depress real estate markets in B.C. It is quite probable that lending institutions would discourage future investment in real estate on the basis that they would refuse to provide loans to investors, as disallowed expenses could affect repayment.

The proposed amendments, which would take effect in 2005, must be rejected. Therefore, BCREA recommends that the provincial government urgently recommend to their colleagues in Ottawa that the proposed amendments to the Income Tax Act not be tabled and amendments that reflect the federal Minister of Finance's directions to staff be drafted.

With this recommendation, we conclude our presentation. Thank you for the opportunity to bring our budget suggestions forward. We're pleased to respond to any questions that you may have.

B. Lekstrom (Chair): Thank you very much, Dave and Daryl, for your presentation. I will begin with John.

J. Yap: Thank you for your presentation. On your last point regarding the deductibility of interest and the CRA's potential change to the rules: how imminent is this potential change? In your wrap-up you said 2005. My understanding was that it was still at the discussion stage.

D. Barclay: Last year we were told that it was basically off the table, but it was sent back to redraft something in the final submission. Now we've just learned through the Canadian Real Estate Association…. They actually monitor a lot of the new legislation and all this type of stuff; they watch everything. We've just learned of this. It hasn't formally come out yet, but apparently it's on its way out again.

We strongly urge the provincial government to lobby to have them retain it. This would also affect existing people that maybe have made an investment last year, this year or five years ago.

J. Yap: Yes, and I concur with you. We'd rather not see it, given that the real estate and construction industries are so key in our economy.

D. Barclay: Small-time investors and stuff, rental housing, all that type of stuff that people buy and put into place — it would really have a large impact, I believe.

B. Lekstrom (Chair): Are there any other questions from members of the committee?

Seeing none, Dave and Daryl, again I would like to thank you for coming out and putting your presentation forward to our committee here this evening.

Our next presentation this evening comes to us from the Prince George Horse Society. Joining us is Steven Dubas. How did I do, Steven, on that?

S. Dubas: Thank you for having me. I'm sort of new to all of this, so bear with me. I'm the only individual.

I'm president of the Prince George Horse Society as well as the president of the Horse Council of B.C. for the zone, and so I get to see a lot of what's happening within the industry, within the sport — part of it — as well as the facilities that are out there. Basically, the presentation that I have here touches on the communities within the region and outside of the lower mainland as well. The presentation is also based on the industry and on giving you some facts as to what impact the horse industry has on the province.

The vision of the Prince George Horse Society and the Agriplex is to provide a venue for education, events and boarding. This complex is unique in British Columbia in that it has the ability to enhance all of the other riding facilities in the area by providing a venue to provide training, education and opportunities as well as hosting various competitions where spectators can watch, learn and enjoy. There are similar venues like this throughout the province. Prince George has the advantage where it has been built by private and public funds. Dawson Creek is also in this situation; 100 Mile really doesn't have a facility; Quesnel does; Williams Lake does, as well.

I'd like to get into some interesting facts to lighten everybody up as to what's going on in the industry in British Columbia. Most of the statistics and information are drawn from the publication B.C. Horse Industry in the 1990s, which was put out by the B.C. Ministry of Agriculture in 1998. The survey was completed in 1998 by the B.C. Ministry of Agriculture to research the horse industry in British Columbia. We can extrapolate some interesting information.

This survey looked at five distinct sectors: recreation, sport, racing, ranch and guide. The survey states that some 37,000 owners use 245,000 acres of land and spend $407 million annually in direct operating expenses to support 90,000 horses and over 10,500 full-time-equivalent jobs. Since this publication went out in 1998, the numbers have increased.

The annual economic impact of the industry, including racetrack operation, is $771 million. The survey reported that horses were the second most common livestock reported on farms, behind cattle, but grew faster than cattle between 1991 and 1996 — 13 percent as compared to 5.6 percent. This is before BSE.

With regards to economic impact, recreation accounts for 37 percent; sport, 34 percent; racing, 22 percent; ranch, 5 percent; and guide, 2 percent. When we look at the sector size by number of horses, the economic impact changes. Recreation accounts for 43 percent; sport, 24 percent; race, 18 percent; ranch, 14 percent; and guide, 1 percent. With regards to potential growth, the survey indicates the industry is still planning to grow, with almost half of the respondents, 45 percent, indicating that they planned to increase their involvement in horses over the next five years, while only 10 percent indicated that they would reduce their activity. This survey does not include the potential owners.

The next on this thing is an estimate of horses. Basically, it breaks down those 90,000 horses within the region, with the lower mainland having the largest portion. But as you can see, there's a fairly large spread throughout the other regions.

The next table is the number of horses by sector — recreation being the largest, sport being second, race, ranch and then guide. If you look at the number of horses — 36,000 — and the sport horses — 19,000, almost 20,000 — you can almost combine those two statistics, because there's a crossover between recreation and sport.

Horse owner demographics. Through its historical importance and treatment in the media, the horse industry has often been associated with wealth and status. The survey does not support this view. While

the cost associated with keeping a horse would naturally eliminate some lower-income households, the profile of the horse owner is not very different from the average British Columbian.

Across the four major sectors the characteristic that stood out the most was the level of university graduates in the industry. Compared to the general population, 50 percent more horse owners have university degrees.

This has been the experience of the Prince George Horse Society. With the creation of the University of Northern B.C. there has been the demand for more riding facilities. Within the last ten years four new indoor riding arenas have been constructed and are now operating at near-full capacity. The Prince George Horse Society has enlarged the facility to assist in the demand for boarding and riding in the community.

With regards to gender, there is a definite higher number of female riders in recreation and sport, but not in racing or the guiding industry.

Direct economic benefit to provincial and federal governments. The provincial government receives almost $25 million annually, with the federal government receiving $52 million annually from direct operational expenditures by horse owners. The industry has seen growth in the mid-'90s. The horse industry is set for more growth past the year 2000. As I have indicated above, this is actually happening.

The provincial and the federal governments are having difficulty in determining classification within the horse industry. Is it a business, or is it a hobby? The 1998 survey identified horses involved in activities that would qualify as a farm business and/or for the land to be classified as farm because of the horse business. Horses as part of the business account for 63 percent of the economic activity in the industry and 60 percent of the horses.

However, there's a problem for many horse owners, since some of what they do can be considered as a business and various taxes apply, while for other parts of their business various taxes do not apply. Even within the various government bodies there is a grey area where horses are considered as companion animals, and a slight change in the interpretation can deem them as livestock.

The horse industry has a major impact on the economy of this province. The revenue generated does not reflect the level of importance that it should be viewed at.

Cost of competing. If you look at the sport activity, the cost to compete is not like any other sport. There are two athletes, the horse and rider, which make up a single team. As stated in the horse industry survey, the largest constraint to growth in the industry is cost. A quick, estimated breakdown of the expenses to compete is as follows.

I'll let you look at that and review it by yourself. These costs are conservative and looked at from the point of view of getting into the sport at this point in time.

Recommendations. Sport facilities. Sport in a community is an integral part of a healthy community. It's a known fact that sports promote community spirit, a sense of well-being, less crime and a healthier community in general.

There is an economic discrepancy between the lower mainland and the rest of the province. The regional population tax base is unable to support the construction of new sports facilities. However, people moving to the region would like to enjoy the same activities that they had elsewhere. We are in a catch-22 situation, where a community would like to attract more industry but the communities do not have the same infrastructure as does an area with a larger tax base. Without the facilities in place to make a community attractive, it will simply discourage future growth. Without growth the facilities cannot be built.

Our recommendation to this select standing committee would be to invest in infrastructure such as sports facilities. However, the present system of a 50-percent division of costs is inappropriate. The cost to upgrade or build any facility is extremely high, and to expect an already overstressed corporate and private sector to provide funding is impractical.

Sports events and event tourism. The B.C. Summer Games were once looked upon as an athletic challenge with many participants. As it has now become a stepping stone for athletes who wish to compete in Olympics. The standards are high, and in some regions the type of facilities and coaching cannot produce the high level of athlete.

A recommendation would be to look at developing more provincial sporting events that could be enjoyed by all types of sports and to have the events move about the province. In addition, provide funding to coaching programs for development and to bring the quality of athlete to a higher level.

Educational opportunities. The horse industry has stated earlier it's growing within British Columbia. However, the ability to learn trades within the province is limited, and those who want to pursue a career in the horse industry must leave the province. British Columbia has the third-largest population of horses in Canada, with Alberta first and Ontario second.

A recommendation would be to invest in the horse industry by providing programs through community colleges. Quesnel is presently trying to develop an equine science program, which will lead to the development of a farrier program, Kwantlen College in Langley has a waiting list, and the alternative is out of province. The growth in the horse industry does warrant the need for more out-of-the-mainstream education.

In summary, increase the level of funding available and change the formula to communities out of the 604 area. Look at developing sport within the province by increasing funding of sport groups, and provide additional funding for them to develop a higher standard of coaching. Increase funding to educational programs that are not mainstream, and provide these programs in community colleges.

Allowing communities to provide an active and healthier lifestyle will reduce health costs, reduce crime and become more attractive for industry to locate in our region. To use the phrase: "The best place on earth to work…." Let's add to it: "The best place on earth to work, live and have fun."

B. Lekstrom (Chair): Thanks very much, Steven, for your presentation. I'm going to look to members of the committee if they have any questions about what you've brought forward.

L. Krog: In reference to sports facilities, you talked about the present system of 50- percent division of cost. What specifically are you referring to? Are you talking about the organization versus government's contribution? Is that…?

S. Dubas: As it sits right now, any kind of granting has to be supported by 50 percent, so the province will chip in half of what is raised by the other part. It usually has to be done by the community itself. The corporate structure, which is already being overtaxed because we've got health care…. People are always talking to the main — Canfor for one — to support them. If we could look at possibly reducing that by a 60-40 split, where the community includes 40 percent….

These facilities themselves are long-lasting. The facility we're in right now has been in existence for over 25 years. It's being looked at as it's being expanded. The change that the city is looking at right now will sort of force it to change because of the way they're changing the environment.

Dawson Creek, for one — their facility was actually condemned. They had to look for funding elsewhere. The funding formula was at the 50-percent basis so they couldn't really complete it to what they needed. Quesnel is in the same boat, where they're looking at providing an equine science program, but the facility doesn't really warrant it. In order for them to provide an educational opportunity…. It's not there. So the 50 percent…. If it could be maybe a 55-percent or 60-percent split, that would be excellent.

L. Krog: There were previous programs within the provincial government. It was a one-third, one-third, one-third — one-third the organization, generally a non-profit one, one-third from local government and one-third from the provincial government.

S. Dubas: I would think so. The city itself is being overly stressed as well, because it's our tax dollar that's doing it. There are other people applying for this funding.

B. Lekstrom (Chair): Seeing no further questions, Steven, I want to thank you for taking time out of your schedule to come and present to our committee here this evening. Thank you.

T. Robertson: Thank you for listening to me today. My name is Terry Robertson, and I'm here as a parent. I know a few faces at the table. I'm here as a parent of a young woman with a significant disability. My husband and I have spent 19 years caring for our daughter here at home — that's Bree-Anna — and we benefited greatly from the restructuring fund that Community Living put forward a few years ago. We're one of the first families in the province to benefit from the program, and the program has since — I think, July 1or June 1 — been basically cut off. It's not getting any more money to support families. That's really been a hardship for families.

It took my husband and me a lot of lobbying to get attention to our problem, but for $69,000 we're keeping our daughter at home. The house is going to be put in her name. In fact, we met the lawyer a few weeks ago. We have a long-term plan for our daughter so that she'll stay in her home, and it's not going to cost the ministry or the government the kind of money it would cost to put her into agency care.

We have developed a microboard. We have a small amount of funding from MCFD and Health to hire staff. It's not enough. It's there, and it's a start. We just have to keep going back and getting more each year, if we can. But there are a lot of families lined up to get the dollars. I know tons of families who have benefited. I know families in the community who got renovations like we did, but there are also families lined up that weren't as lucky to get their renovation….

They had a hard time getting quotes, which in a booming economy is great. But when you only have a $70,000 renovation to a home, most contractors right now won't even come out to give you a quote. That was a big problem for families all over the province. My husband and I took calls from all over the province, because many, many families want to know how we got through the system.

Of course, we're well on our way to having the planning done in advance of the restructuring fund going together. In fact, once it was initiated by Community Living, we were one of the first families who had all of the pieces together and could move forward. I really would ask the committee to reconsider putting some money back into that restructuring fund for long-term care of kids — to stay home and save money in the long term.

I'll also make a little plug here for Community Living in general. I'm sure it's probably not the first time you've heard that, but many families are now looking to do what our family is doing and not necessarily putting our kids into agency care, which is a much higher cost to government.

In 2001 when my husband and I started down this road, my daughter was very, very ill. She was home from school for over three months with whooping cough.

We were up for five straight weeks caring for her, suctioning her hundreds of times a day because if she went into hospital, there was risk of catching other things. The only thing we were offered was foster care. Our daughter doesn't talk. She doesn't sit; she doesn't stand. She's total care, so the thought of sending her out of the house for somebody else to look after wasn't even a consideration. That was sort of what pushed us down the road to wanting the restructuring fund to come into existence.

I've been through the transition steering committee work. I sat on that committee and the original interim authority board and so have been well immersed in the last four years of the development to Community Living B.C. Many, many families, I think, will look at doing things for individualized funding for their kids rather than moving towards agency care.

I would like you to consider, perhaps, enhancing that ability to let families stay together, stay at home. We're trying to find all kinds of innovative ways to keep us together. Instead of costing…. The quote I had in 2001 was $300 a day, 365. It works out to just under $110,000. Today's numbers are about $150,000 to keep her in an agency setting. We're getting $28,000 from MCFD. So while we're trying to make ends meet, I would encourage you to think about keeping families strong. We'll make it work, but there are many families who don't even have what we have.

B. Lekstrom (Chair): Thank you very much, Terry, for coming in. Certainly, the passion is clear in your voice and in what you bring to our committee. I want to extend our appreciation for you coming forward to speak to us about this issue.

G. Hogg: I think three successive governments in this province have taken the initiative, driven by parents such as the Robertsons — Terry — to move towards looking at greater independence for people who have special needs, allowing them to have the independence necessary. The ability to live with their families, keeping their families together, should be the overriding and driving principle in terms of this.

The restructuring fund, which Terry referred to, is one that had great utilization across the province. We heard many, many parents talk about how that fund assisted them to make changes, perhaps structurally, within their homes to allow them to be able to keep their families together.

T. Robertson: The original amount was $20 million, and they expected it to last two years. It's only lasted about 18 months. That's how fast families moved once they heard about it.

G. Hogg: I think all of the experience we had was that it was very positively utilized. Families were responsible in terms of the utilization of that. I think this is the first time we've heard someone speak specifically about the restructuring fund. I'm certainly a big fan of the fund and looking at ways to be able to re-fund the fund. Does that make any sense — "re-fund the fund"?

J. Kwan: I'm just wondering…. The $20 million that was set aside for the fund — do you know how many families had access to it? Was it standard across the board that everyone got access to $69,000, or did it vary from family to family?

T. Robertson: I think it varies. Costs were higher for families in Vancouver just because of the construction rates.

I know that it was open to agencies. Even though there is someone here from AiMHi, which is the local community living association…. They also got money. Quite frankly, that bothered me to some degree, because I had thought the original vision was to keep families at home. There was a percentage of the overall $20 million that went towards expanding, say, four-bed houses into five-bed houses, and that kind of thing. My original understanding was that it was to have families keep their kids at home or, if they were in agency care, bring them back home. That's what I originally….

R. Lee: The microboard model has been used around the province for a while. On your board, how many volunteers are working?

T. Robertson: There are ten of us on that board — a lot of family members, a couple of non–family members. We do the hiring, the training, the everything. You know, I'll be honest. We get some money from Health and not as much money from Health as I wish we could get, but we're making do.

We have enough support to have Monday to Friday…. I'm not allowed to lift anymore, because she's now about 90 pounds. I have some cracked vertebrae, so the neurosurgeon just says: "If you want to be in a chair…. You'd better just stop lifting." So we have care when my husband is away at work. When he comes home from work, he starts his second job, which is Bree-Anna care.

B. Lekstrom (Chair): Terry, I want to thank you on behalf of our committee for coming and presenting here this evening.

Our next presentation comes to us from the Prince George District Teachers Association. Joining us this

K. MacKay: The document is just being presented to you. We actually have to admit there are two little mistakes we need to correct before we begin. Once a teacher, always a teacher. I'll just wait till they're all handed out.

In the first paragraph, three-quarters of the way down, the sentence that starts with "Just…." It says: "Just lake week…." It's "Just last week…." It's on the left-hand side.

Then on the second page, third sentence from the bottom of the first paragraph: "economies of scale."

The teachers in Prince George would like the committee to revisit the findings of the 2003 report of the Task Force on Rural Education. We would also like the committee to address the damage that legislative flexibility and financial restraint have inflicted on all our schools, both rural and urban. The past three years have been a very difficult time to be a member of the educational community in B.C.

The freezing of the education budget has resulted in cuts due to inflationary pressures. Legislative flexibility, via contract-stripping, has resulted in school boards and school-based administration having to make decisions about what services and programs will be cut or closed. Libraries have been closed or restricted. Class sizes have gone up, and support has disappeared for our most vulnerable students.

Just last week we had a member hospitalized after a special needs student pulled a chair from underneath her as she began to sit. The child used to have a full-time aide, but due to flexibility, he is just one of a class of 27 with no aide time for parts of his week. Our member, with her head injury, is a vivid illustration of the outcomes of the funding freeze and the new-found flexibility and choice.

M. Pearce: The PGDTA, on behalf of the teachers, would like the committee to focus on the following recommendations that we feel have not been addressed.

Recommendation two: make the improvement of the rural-urban equity of educational outcomes a Ministry of Education priority. It is our view that change to per-student funding has increased, not decreased, the inequity found between the densely populated urban settings and the rural schools.

In order to address this widening gap, the government has to acknowledge the same education inputs in rural schools fail due to lack of economies of scale. Our students have substantially less course and program selection now than when this recommendation was made. It is our view that it has not been an educational priority.

K. MacKay: Recommendation five: work with education partners to build a network of rural educators and leaders. It is our view that the relationship between the people who deliver the programs and services to our students in rural areas and board and ministry personnel has been damaged by constant legislation of teachers. Trust and faith in any ministry initiatives are at all-time lows.

No network can exist in these hostile conditions. We have seen no evidence of network development in our local area since this report was delivered.

M. Pearce: Recommendation 13: review the funding of rural schools. Two quotes from the task force: "The task force found the commonly held view that the new funding allocation system does not work for rural British Columbia. This view was consistent with the findings of the 2003 Select Standing Committee on Finance and Government Services." Number two: "The task force recommends a consultative examination of the current allocation system. It would benefit rural B.C. students, parents and communities."

The report speaks about when the province's economic conditions improve, the funding of rural schools would be investigated. In light of the many rural schools that have been closed due to the funding shortfalls, we feel that now that the province has a large fiscal surplus, a reinvestment in rural education is long overdue.

The task force also chose to use the word "consultative." We strongly recommend that the educators closest to the students be legitimately included in any discussion about where any new funding for rural schools is placed. In our view, it is a poor management practice to consult everyone but the professional staff that delivers the programs and services.

K. MacKay: In summary, we feel that the majority of recommendations from the task force have not been implemented due to funding issues. The quality of rural education has declined even further relative to urban settings. Now that a surplus exists, those recommendations that we highlighted deserve real consideration and implementation.

B. Lekstrom (Chair): Thank you very much for your presentation. I'm going to look to members of the committee to see if they have any questions regarding what you've put forward.

G. Hogg: In looking at your submission, at the beginning you talk about how the contract-stripping has resulted in school boards and school-based administration having to make decisions. My understanding is

that you're talking about it being targeted prior to then, and then moving from targeted funding so the decisions were made locally. A little later on you say that educators closest to the students should be legitimately included in the discussions. For me, that's a little bit of a disconnect. I thought the intent was, by taking away the targeted funding, to move it towards the decision-making being made closer to the students, similar to what you referred to at the bottom of page 2 — that principle. Yet the other principle talks about avoiding that. Can you help me understand that apparent disconnect?

M. Pearce: I think I can answer that. Under the current funding model, the decision-making has gone further down the chain to school boards and school-based administrators, but teachers are completely locked out of that process. We are not allowed to discuss any of our working conditions — it's illegal. We're the only teachers in a G-8 country that that is true for. Since we are a group of 40,000 professionals with 200,000 years of university training and about a million years of service, I find it ludicrous that we're not even consulted about where funding would best meet the needs of our students.

G. Hogg: Yet in the old model where it was targeted funding, the decisions were made in Victoria. Was that a better system?

M. Pearce: Well, there were guarantees that our kids would be guaranteed a certain minimum level of service. I can give you an example. In one of our rural schools that only has 120 students — it's a small school in a small community — that school cannot afford to have a librarian of any type. They have zero librarian time. The library is open; it's manned by a clerk. But if our goal for our students is achieving some literacy, certainly providing a library and a librarian at least halftime to our rural students would be something that we'd be interested in. It doesn't exist in the current model.

G. Hogg: If I could ask one more question. I understand that, organizationally, the decision-making process has gone from the targeted funding decision that we made in Victoria. Now it has moved to the board level, and what you're advocating is that it needs to move closer to the students with respect to their education. Is that a fair interpretation of it organizationally?

M. Pearce: I think what we're saying is that neither model is very good, but a mix of the two should be investigated.

J. Kwan: I think there's a little piece underlying what you're saying, though — that being the funding piece. I suspect that the school trustees, who actually closed the libraries or cut the staffing, didn't really want to do it. They were forced to do it because they had no other funding, because the money was frozen in the last three years. I would suspect that that would be part of the issue.

Part of the respect issue is to ensure, in the consultation process or in the discussion process around what's best for the education system, that everyone is actually invited to the table, including teachers. I'm reading between the lines here in terms of the answer that you just gave to my colleague.

Let me just get into the piece around funding a little bit, because it centres around the urban-versus-rural divide, if you will. Can you elaborate and give me some examples of where the inequities of the funding formula apply and how they impact the rural communities? I'm from an urban centre, and so it would be very educational for me and, I think, for other community members as well.

M. Pearce: I can give you an example at the high school level. In the lower mainland, in general, in the urban settings you have very large high schools, sometimes 2,000 to 2,500 students. That is not the case in rural settings. Our largest high school in Prince George, which is a very large high school for the north, has 1,300 students, but some of our high schools have as few as 700 because of the geographical range they would be taking students in from.

In a setting like that, the students on a per-student funding basis don't generate enough money for the school that they can offer the course selection that a school of 2,500 would be able to offer. Some of our schools are stretched to the very limit even to offer the basic courses that students need for graduation.

One of our local high schools with 700 students was contemplating not offering physics 12 this year because they didn't feel they could afford it. They had 18 students signed up for it. That is a course that many students — engineering students, lots of students going on to university — have to have. In fact, one of the students wrote to the University of Alberta, asking them: "Would you waive that, because my school might not be able to offer that course?" The reply from the university was: "You need to switch schools."

In rural settings the choices our students are getting are not the same as in the urban settings.

K. MacKay: Can I just add to Matt's comment? Matt's a secondary school teacher, and I'm an elementary teacher. At the elementary level we've actually had 14 schools close within our district. Some of them are rural schools, and the board had to make that decision because of the lack of funding. The trustees were forced to make those kinds of decisions: to close a school that is approximately 45 kilometres from the nearest community. Those students are now bused in 45 kilometres each morning and home again in the afternoon every day. There, again, it's showing the lack of funding and the inequities of being in a northern rural community.

R. Lee: Thank you for the presentation. It's always a challenge when the number of students is decreasing in a district. For example, over the whole province there are 30,000 students…. There's a 5-percent decrease in the student population. I believe there is about a 10-percent increase in the last four years in terms of per-student funding, in terms of actual funding. The plus and the minus would be about a 15-percent increase in per-student funding.

You mentioned there's a freezing of the education budget. From my point of view, nothing is frozen. But I think it's a challenge to manage if a district has some kind of a decrease — a big decrease in your area.

I also believe there is some extra funding in your district to handle more than the per-student funding. There is some extra funding there. How much are those…? I believe it's not enough, but still, there is some extra funding. Do you have a number there?

M. Pearce: I don't think I have a number, but I think just to say that the budget was frozen is understated. The government of 2002 imposed a contract on teachers and did not fund the last two years of it. Although the funding may have gone up by 10 percent, and I don't know the exact figures, much of that funding did not go into classrooms. There was an imposed and unfunded contract on the teachers. That money had to come out of classrooms. School boards, again, were left with the dubious choice of where to make those cuts in order to fund a contract they had no say in, and nor did the employees.

Up here in the north we're seeing a tremendous number of closures of our schools. As Karen said, we've lost 15 schools in our district. We have a lot of children who no longer have a community school, and that impacts a lot of other things that would have occurred. In the small communities when they lose their schools, they don't lose just the place where the kids go to school during the day; they lose a great deal more than that.

D. Hayer: Thank you for your presentation. I come from the Surrey-Tynehead constituency. Many times over the last four years…. Every time I met with the teachers as well as the school trustees, they used to say: "We must have per-pupil funding." They said we were treated the worst in British Columbia — the Surrey school district. Finally, our district was really happy to see some balance. The minister said that what she was trying to do was balance it so that when you come to…. You'll have per-pupil funding, but based on considering the population and considering the district area…. In some of the areas, like my city, you can go from one end to another in half an hour. In other areas it takes you a lot longer, so travel time is a lot longer.

Do you believe it should be per pupil, maybe based on the size of the district and the kilometres they have to travel for school? Or do you think it should be totally based on each district and have nothing to do with per-pupil funding?

M. Pearce: I think whatever funding model is arrived at needs to have some per-student funding, and then the nature of the school district must be taken into account. The rural districts are much different from Surrey or metro Vancouver, and applying one basic formula to all of the students and districts in British Columbia has been damaging to the rural areas. For a place like Surrey it might have been a positive change, but I think a balance can be struck between two extremes of targeted funding and per-student funding.

D. Hayer: I thought they'd found the balance, but you're saying the balance was not found — right? I thought the new formula was based on per-student funding plus reflecting the kilometres they have to travel from the school to the….

M. Pearce: The balance hasn't been met in our area. Our students have less opportunity than students in urban areas. They have fewer course selections, there are fewer programs, and some courses aren't offered at all because we don't have the student numbers to generate the classes anymore.

K. MacKay: Can I just add to that? Our district goes from here to Valemount, which is approximately three hours to the east, and north to Mackenzie, which is another two hours to the north. The high school in Mackenzie is only able to offer classes like physics 11 and 12 every second year because they don't have the enrolment to offer it every year, so those kids are again at a disadvantage. They can't get the courses they need to enter university.

B. Lekstrom (Chair): Karen and Matt, I want to thank you for taking the time to come and present to our committee here this evening.

Our next presenter this evening is Cliff Dezell. Good evening, Cliff, and welcome.

C. Dezell: Mr. Chairman, it's nice to see you again. I'd like to thank the committee for taking the time to travel around the province and, particularly, to this part of the province. You probably will hear something slightly different from all of us, but I expect it will be a reflection of the uniqueness of the north, which you certainly know, Blair.

I'd like to introduce myself. I am currently a city councillor for the city of Prince George, but I'm not here in that position. I'm here to talk about the Ministry of Children and Family Development. In 2002 one of the people sitting at your table, in fact, appointed me as the chair of the non-aboriginal planning committee for the north region. Our task was to work with our aboriginal colleagues throughout the north to try and prepare this region for eventual governance and operational control of much of the ministry's services — not all, but much.

We were close to that. In 2004 the government disbanded our planning committees and put the move towards regional governance on hold, while, in their

words, "capacity in the aboriginal communities was increased." However, at the same, I believe they reduced the budgets for the aboriginal planning committees, which made that goal very difficult to achieve. It is the government's intention, as I understand it, to restart the regionalization initiative in 2006-2007.

A bit of background. In 2002-2003, some of you will certainly remember, the government's intention was to reduce the budget of the Ministry of Children and Family Development by 23 percent. After a very rigorous Treasury Board review, that figure, at least in the north, wound up at about a 13 percent reduction — in my judgment, still a very draconian cut but probably manageable in the short term. The staff in the north, who are astonishingly good in spite of their limited numbers, managed to manage that very significant reduction.

My information is that the current budget for the north region is about $79½ million per year. Over the last year or so there has been additional funding for such things as initiatives in early childhood, child and youth mental health and child care, all very encouraging and all badly needed — throughout the province, not just in the north.

I'd like to discuss briefly the implications of restarting the regional government's work. When we did the work, when we first looked at the statistics in the north, three-quarters of the children in care were aboriginal. Of some 1,200 children, more than 900 were aboriginal. There is a handful of delegated aboriginal agencies, probably five or six right now, working throughout the north to attempt to provide services to aboriginal children.

Capacity for these and other delegated agencies to accept responsibility for aboriginal children must be increased. I certainly agree with the government of the day that capacity was an issue. I just think they made the wrong decision around that and used that as the wrong guiding principle. There are some cost implications as this capacity is increased and as transfers occur. As these agencies develop their capacity and as aboriginal agencies are increased, the ministry won't go away. The ministry still exists. The ministry will still have to provide services.

Staffing for aboriginal agencies continues to be a concern. Staffing for the ministry is a concern, but right now I am told that staffing in the north is probably at the highest it's been in decades. Around 92 percent of the positions that are available are filled. Staffing throughout the north, as most of you know, is a problem for all professions and all communities, but in particular, staffing for aboriginal agencies continues to be a concern. The agencies, of course, want to and need to employ qualified aboriginal professionals, and the pool of those available qualified people, although growing, is very small.

Regionalization will require additional resources — I don't think there's any doubt about that — in the short term. More importantly, it requires a political and leadership mindset change. It's not sufficient, as we found out two or three years ago, for only the politicians to believe in the vision. The senior bureaucracy and the middle managers need to believe it also. They need to understand that it's important and that it needs to be done. If they believe, as frequently they do, that they're working themselves out of a job, it probably requires a saint to do that, and there aren't very many in the province, let alone in Victoria. It requires great willpower and selflessness, and I think those are always kind of hard to come by.

The resources to change the system over the long term, I believe, must come from reallocation and reduction in headquarters in Victoria, but in the short term additional bridge funding has to be found. As I said, staffing in the ministry in the north is at an all-time high. It can't be sacrificed to meet arbitrary and unrealistic budget targets.

I spent more than 30 years in health care and went through innumerable regionalizations closer to home, new directions, and on and on and on. I was a board member at Riverview at one time, when we were downsizing Riverview.

Many ministers, many governments, in my judgment, made the same mistake all the time. They attempted to radically change the system out of savings from the old system. The history in British Columbia is clear: you can't do that. In the short term you have to provide additional bridge funding to build a new system, and then find the savings on an ongoing, generational basis. We are talking about a change that will take 20 or 25 years to achieve. It requires the government of the day to think long term, to plan long term, and to have some hope, I think, that people after them will continue to do the work.

I'm trying to be dispassionate about this because it's really easy to get very passionate about children. I strongly believe that the capacity for local and regional governance for all children already exists. I have never accepted the argument that we have to wait for capacity, in the aboriginal community or otherwise, before we can go to the new system. We need to go to regional and local governance, put people in each of the regions who live in the communities, who know the issues, and for them to find the solutions, because what we do need to work towards is capacity for operational responsibility and authority.

Much of the work needed to shift to regional governance has already been done. It was done by the planning committees, aboriginal and non-aboriginal, in five regions. I know I still have a copy of the plan that each of the five regions did. I suspect the rest are sitting on a shelf somewhere in Victoria or somewhere else, and that's unfortunate.

One of the best things about the process was the willingness and enthusiasm by which the staff of MCFD — the line staff, the front-line staff, the people in the regions — and the people in the communities wanted this change to happen. I can remember several years ago, going out to…. I think we surveyed more than 100 communities in the north, which as some of

you know is a huge region, and they all said to us: "This is never going to happen. Why are you telling us this? Why are you consulting one more time?" We all said: "Trust us. The government said it's going to happen, and we believe it's going to happen."

It still can happen. I strongly recommend that the government provide sufficient resources to adequately fund the regionalization initiative, separately from the regular ministry budget, and that increased support be given to filling front-line staffing vacancies within the ministry and to assist delegated agencies in recruiting and retaining qualified aboriginal staff.

I haven't read exactly what I wrote, Mr. Chairman, but I hope you get the message.

B. Lekstrom (Chair): Well, thank you very much Cliff, and certainly your message is well-delivered. I'm going to look to members of the committee to see if they have any questions. I'll begin with Jenny.

J. Kwan: Just a quick question: can you define for me what a sufficient resource is? Or can you clarify for me? Do you have a dollar amount, for example, attached to that?

C. Dezell: I'm trying to remember what we did back in 2002. We thought it was possible to go to governance in that existing budget. Now, in those days that was some $15 million or $20 million for the north more than it is currently. I don't know whether that's still an accurate amount. I think the staff that currently work for the ministry, and the people in the communities who were interested in regionalization, could tell you better now. I don't think we are looking across the province at a significant amount of money in terms of the ministry's budget, but I do think some additional money needs to be put in so governance can happen, and then operational responsibility can be planned for over the long haul — over many years, I suspect.

But it's been two years, probably, since I was involved in ministry budgets, so it would be a guess. It is a guess that I'm giving you.

G. Hogg: I think the principle at the time was that if we were able to maintain operational services in the way that they are, and then have parallel funding to allow the governance law to go into place, just as was done eventually when the Ministry of Health was able to make its to actually build two structures in place. I think that was the ideal model that…. So operations remain exactly the way they are. Then you provide funding to allow for the governance model to come in parallel, and the transition will take you over.

You said, Cliff, that you were trying to avoid being passionate about some of those issues. It might be helpful for me to hear, and maybe for others, why you believe community governance is the right way to go. You've talked about community governance and wanting to go there. You've talked about the cost. What do you see as the ultimate benefits to the children of this province in being able to move to that type of service delivery model?

C. Dezell: Well, in the north, as I said, three-quarters of the children in care of the ministry are aboriginal. It's pretty clear that the push in child protection for a number of years now in British Columbia and other places to deal with children's issues by putting them in care, by increasing the number of children being protected, is completely wrong. Children wind up being in the care of the ministry for years and years. The families remain dysfunctional because the ministry doesn't put any significant amount of resources into helping them, or the ministries don't. It's the responsibility of a lot of different people in the system.

I've spent all my life in local government, and I know — I don't just believe; I know — that when you have local people in communities making decisions about the delivery of care, whatever it happens to be, and having real decision-making power, those decisions are better.

We have proven over many years, certainly in British Columbia, that the model of a centralized ministry trying to look after children, trying to protect children, simply doesn't work. There are a few examples around the world and a few in North America that we looked at in 2001-2002. As they moved towards some kind of local governance, regional governance, the number of children in care went down, and the care improved for those children.

Of course, you have to put resources into providing support to families. Not all families are able to take their children back immediately. But if you give them enough support — professional support, whether it's in social work or health care or whatever — they will be able to at some stage. Whether a child remains a ward of the state forever or whether the family remains a ward of the state forever, their lives never get any better. They're never able to make decisions for themselves, and that is simply wrong.

B. Lekstrom (Chair): Well, Cliff, seeing no further questions…. Although you tried to disguise your passion, it's evident. What you speak about, you believe in, and I appreciate you coming before us here.

C. Dezell: I have a six-year-old granddaughter who is very dear and is very fortunate, and I wish other children were as fortunate.

Our next presentation this evening comes to us from the Prince George Railway and Forestry Museum. Presenting is Alecia Greenfield.

A. Greenfield: I'm speaking on behalf of the Railway and Forestry Museum here in Prince George. Brought to our attention by Pat Bell, who suggested it would be worth our time to let you know what we think….

When developing your recommendations for the 2006 budget, please consider some local solutions. Organizations like the Railway and Forestry Museum are creating opportunities for our community. We're drawing in net funding from outside our region and spending it almost entirely locally.

At the Railway and Forestry Museum we're drawing international interests to our region. Every year down at the site I'm meeting people from Alberta, from across the United States, from Europe and the whole world, although some of them I can't speak to. They're coming to our region to experience the unique cultural assets that can only be experienced here.

At the Railway and Forestry Museum we're developing business plans for an expanded site to better take advantage of these existing assets. What kind of impact can we have on our provincial economy? Let me tell you about an example. In 1997 Moose Jaw was in terrible economic straits. Enter the Tunnels of Moose Jaw project. They invested significantly — $40 million — into their tourism infrastructure, but it has paid off.

In addition to the cultural values, by 2001 travellers' spending had increased by 252 percent to $37 million. Direct tourism employment increased by 37 percent, and retail sales were 25 percent above the Canadian average.

Tonight, because it's the end of the day, I only have one point. Not-for-profits have unique assets, but we're prohibited by our very structure to generate the venture-type capital to take advantage of our world-class assets. We need help; we need investments. But that investment can pay off significantly.

In conclusion, you've asked us, the people of British Columbia, what we would like our government to consider in the 2006 budget, and I invite you to consider investments in projects like the Railway and Forestry Museum. We need that economic diversity.

See, I'm already concluding. I told you I was brief. By appearing before you today, we hope that, of course, you'll come knocking on our door to assist in the first phases of our project. Barring that, we hope that in the 2006 budget you'll remember the energy and the creativity, the know-how and the opportunities that not-for-profit organizations around British Columbia bring to the economy of our province.

B. Lekstrom (Chair): Well, thank you very much, Alecia. I'm going to look to members of the committee to see if they have any questions. I'll begin with Dave.

D. Hayer: How much money will this total project cost, and how much money are you looking at from the province's point of view? Or are you looking for any money from the province?

A. Greenfield: How much did the whole project…? We've just received the first phases of a business plan that we have set up into phases. We are looking at $6 million for a hole in the ground completely built first phase of our project. Right now we're looking for about $100,000 to complete some of the phase-type activity, the environmental assessment, the engineering — all the stuff that needs to go in the ground but that we are stuck on.

Over the next couple of years we're hoping that you'll hear from us regularly, and we will be asking for additional funding.

M. Karagianis (Deputy Chair): Alecia, have you applied for any funding — things like LegaciesNow or anything — for your project?

A. Greenfield: We're just starting now. One of the other things we believe quite strongly is that there is a certain tendency in not-for-profits for volunteers to be run by their passion and not necessarily by their business opportunities. We've just completed the business plan two weeks ago, so we're just in the place where we're going to start piecing it out and seeing where the opportunities funding-wise lie.

M. Karagianis (Deputy Chair): Have you linked forces with other museums as well, looking for maybe some larger benefits?

A. Greenfield: Absolutely. We've been talking with all of the cultural venues locally to ensure that everything we're doing is in conjunction and in partnerships. The boards of all the organizations met a couple weeks ago down at the library. Yeah, we're certainly making sure that those partnerships happen.

B. Lekstrom (Chair): Seeing no further questions, Alecia, I want to thank you for taking time to come out and present to our committee today.

B. Lekstrom (Chair): Okay. Well, that concludes the presentations that were submitted to us and booked, but we do now at the end of each session allow for an open-mike session. We do have a number of people that have put their name forward to address the committee during the open-mike portion of our public hearings. Our first presenter will be Vivienne Candy.

Good evening, Vivienne, and welcome. It is nice to see you. You should be commended. You've sat through and listened to as many presentations as our entire committee has today.

V. Candy: Thank you. I'm glad to be here. I've been here for the last five years speaking to different governments

I'm here today. I've been an advocate here in the community for 20 years. I started a group 20 years ago called the Handy Circle Promotion Society to look at issues concerning people with disabilities. My goal was to see that Prince George would be the most accessible place in the province for people with disabilities. My main concerns — and I hope that things can be changed a little towards improving the quality of life for everybody — are to look at health care, education, transportation, recreation and employment, which all concern people with disabilities as well.

Last year there were some changes where people with disabilities could be trained for employment. With our organization — which I'm not representing here, really — there is a concern that though you are looking at letting people get back into the workforce, not everybody can do that. You have increased the allowance up to $70, but what was a concern to me was that some of those people that were on an allowance of nearly $100 were reduced and taken off. Really, they now only get about $30 out of that amount.

My main concern regarding health care is long-term care beds. I do have great concern about this, because last year the Northern Health Authority — the last two years, I think — closed down Rainbow Intermediate Care, I think it's called. It's gone from one intermediate to complex. I get it confused. Anyway, they closed it down, and now they've reopened it, having it as a holding area for people looking for long-term care beds. I think there's a waiting list. I made some inquiries, but there seems to be a waiting list of four to five months before they can get into a long-term care facility.

We had three here available, with Parkside, Jubilee Lodge and a private care home called Simon Fraser Lodge. Simon Fraser Lodge cut back 40 beds last year, and the funding for this went into assisted living. Now, I agree with assisted living, but I don't like the idea that you can go into assisted living and you've got a button to press and you're back in the hospital, and then you're waiting again for a long-term care bed. You may be returned to assisted living, and you don't get the nursing care. A lot of people just cannot afford private care.

I'd like to see a different sort of way of looking at this. Instead of having a more institutional setting, rather look at developing housing which could be in a flexi-housing complex. I mentioned this last year — that I thought there was one that was going to be built here. I believe there's one in Williams Lake that's going to be built this way, where they have independent living, assisted living and round-the-clock care. I found out last week that it seems to entail that you have to have a different type of licence for the nursing care. That can't all be put in one complex, but I would like to see some way of that being developed, because I think a lot of people don't want to go into an institutional setting. I personally wouldn't want to.

Another thing. Dr. Drummond spoke earlier about Alzheimer's disease increasing. I feel that you really have to look at this, at more long-term care, because I don't know where these people would go. We have Simon Fraser Lodge, which is three-quarters full with Alzheimer's. I think that eventually they're going to be all Alzheimer's. There is no other way for long-term care except in the hospital — at Jubilee, which is attached to the hospital here — and in the other one, which is Parkside. I really hope the government will seriously think about more long-term care.

There are two other things which really aren't to do with those special needs, but it's to do with everybody. I feel that tax relief could be in the form of the PST being reduced from 7 percent to 5 percent. I think this would help the retailers, independent business and consumers.

I'd also like to mention that in my view, the 2.5 percent tax that was put on gas by the government three years ago should be eliminated. With that, it would help many independent businesses, especially taxi drivers. Everything is going up. The cost is going up on every service, especially in the north. It's much more difficult for people to run businesses up here, especially with gas being at this price.

B. Lekstrom (Chair): Thank you very much, Vivienne, for presenting to us. I think you've put some ideas certainly worthy of thought for this committee. I want to express our gratitude as a committee. It's not often we see people who will come and sit through, for the most part, the entire sitting of the public hearing. I think it takes a great deal of commitment and belief on your part to contribute to British Columbia. So I thank you for that.

Our next presenter this evening is Doug Robertson with the community living restructuring fund.

D. Robertson: Good evening. Thank you very much. No relation to Terry Robertson — none. Somebody had to give me your phone number for me to call.

The community living restructuring fund, which was administered by the Victoria Foundation, was one of the best experiments ever created by the government of B.C. I'm just going to give you a quick background, a bit of heart and then some wallet. The wallet seems to come at the end.

In 2003, at the very end of the financial year, March 31, the fund was established, with $20 million being put into it. That ran until about February of this year, when the fund had no more money in it. There was a further input of $4 million, which carried us through till part of September. We're not sure how many of the September applicants will receive funding, but nonetheless there's a bank of them.

The typical grants were to do things that we don't even think about: wheelchair-accessible bathrooms and vehicles; tracking — part of these are provided through

government programs now — to hoist a person out of a wheelchair and into a bathtub; ramps to get a person into and out of a house; wider hallways. This isn't magic stuff, but if you don't have them, then somebody has to carry somebody to a bedroom or a washroom. For older people — I'm talking about youths who are transitioning into adulthood, at 16, 17, 18, in that age range — it's suites so they can continue to live in their family home. That's the type of things that we're coming across in terms of requests for funding.

The heart part. I don't have a child who's disabled in any way, shape or form. I've been involved in the community living movement for about 15 years. What I was completely unprepared for was the mental toughness and strength of the families, the physical frailty of the same families. You've listened to Terry say, "Yeah, the doctor says I better not do this, because I've got fractured vertebrae," and this, that and the other thing. She's lucky that's all she has. There are individuals who are crippled and heading for wheelchairs themselves.

The other thing that struck us was the overwhelming desire for families to remain whole. That's not: "Yes, this is my brother, sister, mom, dad and…. Oh yeah, but he's somewhere else." The desire to keep families whole and one is just a tremendously strong drive. I was unprepared for it.

Over $24 million was spent. That was accomplished through moneys going into the Victoria Foundation. All the costs of running the committee — rent, fax, staff — were taken out of investment earnings or interest earnings from the Victoria Foundation, so it ended up that over $24 million was directly spent on agencies, youth and youth in transition.

The money part. I'd love to invest in a business like this. Cost reductions. Average payback time, 26 months. I don't know where you can get that: money back in 26 months. Some of it was avoiding costs of care. If you have your family whole, then you don't need to send them to a service provider for whatever services they require. The 24 months is just a phenomenal payback period for government. By the way, all of this was done from getting up and trying to develop some policy on April 1, 2003, to the expiry of the fund — the commitment of the fund — in September. We did that without any advertising at all. Does anybody recall government saying: "We just put $24 million into…"? No. It was all done through word of mouth, through the Victoria Foundation and individuals like Terry.

The proposal that we made to Treasury to continue this was to commit to ongoing, flow-through funding of $10 million a year for the next three years, to be utilized in the same manner as the existing restructuring fund and establish, secondly, a permanent endowment fund with a commitment to invest $5 million a year for the next five years. That was commencing April 1, 2005. It's a little past. With the Victoria Foundation, that would pretty well make that thing self-sustaining in five years.

The needs are not going away; they're increasing. The costs of care are not going down. The numbers that I gave you were based on community living, CLBC, using $35,000 a year for an individual in care. I tend to take Terry's number of $300 a day as probably being close to the mark, so the payback periods would be correspondingly lower. But let's not argue about that. If you want to make them higher, make it a three-year payback. It doesn't matter.

B. Lekstrom (Chair): Doug, I want to thank you very much for coming and speaking to our committee here this evening. As well, you have sat through a large number of presentations here. We can tell that what you speak about, you care a great deal about. I appreciate, on behalf of the committee, your coming to speak to us here this evening.

D. Robertson: My printer decided that you would not have a copy of this today, but I'm e-mailing a copy.

B. Lekstrom (Chair): Terrific, and we will make sure each member of the committee will receive that and have that as a hard copy as well.

B. Lekstrom (Chair): Our next speaker this evening is Dr. Peter Rans, who is with the University of Northern British Columbia.

P. Rans: Thank you for seeing me. I may actually be the last person to present tonight, about which I'm sure you'll be very happy. I'm going to try and make it really quick.

What's being distributed to you right now is a motion that was passed by the B.C. Chamber of Commerce at their recent policy convention this summer. It has, essentially, two parts to it. The first part of it is a recommendation that the government consider a tax credit to promote cooperative education placements, particularly in small businesses. They themselves have internally modelled how much they think that would cost, given the assumptions that you see built into the rest of the recommendation. I would encourage you as a panel to talk to somebody like John Winter — you know, one of the policy people at the B.C. Chamber — who could tell you what they think it would cost to do that.

You've heard already from several other speakers who have talked about the trades and the skills shortages that are looming over the next three to five years and in some cases are already here. One of the things that co-op education does is put students into the workplace while they're studying. That's the whole purpose of the cooperative education model. Students who work in the north, as an example, will tend to stay in the north. So it encourages retention in those very

businesses you've heard from that are having trouble getting skilled staff to stay within their environment. For those reasons alone, we think that co-op education is a model that you would want to promote and invest in, in the future.

The second part of the recommendation comes in point five, and that is that government itself is a major employer. Government itself, particularly the large public service that exists within government, is going to face its own succession planning problems over the next three to five years. We personally believe that one of the ways of solving, perhaps, some of the succession planning that you're going to face in the public service is to increase the number of co-op placements within government across the province. We would encourage you to consider that, as well, as part of your budgetary process over this next year and indeed in the years to come.

I could talk for many hours about cooperative education, but I'm not going to do that. I've attached my business card for you. I'm here not just representing the University of Northern British Columbia. I'm here not just representing the University of Northern British Columbia. I should make it clear, as well, that I'm the chairperson of the Accountability Council for Cooperative Education for B.C. I'm here representing all of the universities, university colleges and community colleges that have the co-op option as a part of their program offerings. You may see some of my other colleagues when you visit other parts of the province.

I'm happy to take questions now. Obviously, you can e-mail me, and I'll follow up.

B. Lekstrom (Chair): All right. Well, due to the fact that I believe you are our last presenter, traditionally the positions for the end, the open mike…. There are no questions, but we do have a few moments.

J. Yap: A quick question. Are you recommending the same tax credit for all sizes of business?

P. Rans: The chamber has recommended that it be targeted at small business because they have more trouble, I think, affording co-op placements. Personally, I would also extend the argument to the not-for-profit associations as well. The difficulty is that you couldn't deliver that with the tax system because many of them don't pay tax. As you've heard from people like Alecia, those people that work in historical sites and in museums, and so on, have an equal challenge in being able to afford co-op placements. So you may want to look at another mechanism for assisting that sector, as well, in meeting some of its human resource needs because they, too, are very pressed.

B. Lekstrom (Chair): All right. I do have two other questioners now to end the evening. I'll go to Richard and then to Dave.

R. Lee: Do you think that tax credits should also apply to apprentice programs?

P. Rans: Personally, yes, because I think you obviously have a shortage of people in trades. If you applied that to those community colleges that have apprenticeship programs rather than co-op programs, that, too, would be a good idea. But obviously, what you need to do, as you're trying to do, is balance all of those needs and figure out where best to invest money. I would simply encourage you to consider co-op as one of the vehicles of investment.

D. Hayer: You have also given us these recommendations from the Chamber, (a) to (e), regarding cooperative education tax credit 2005. Do you support these, or are these for our information?

P. Rans: This is what was passed by the B.C. Chamber, and we certainly support those motions. I guess I would say to you that, like anything else, how much you want to spend would determine the model that you would use to spend it. So if you believe there's a more efficient way of delivering on the intent of that by a different model, we would like to sit down with small business, with the B.C. Chamber and ourselves in cooperative education and work collectively with you on a model that would work. But like everything else, it depends on how much you're willing to invest as to what model you should use for that investment.

G. Hogg: I really like the notion of being able to use co-op students in the non-profit sector. You mentioned that we have to find some other model for doing it inasmuch as the non-profits don't pay taxation in the same way. Are you aware of any place or any jurisdictions we could go to where that might take place, and how would you see us being able to make that type of recommendation?

P. Rans: No, I'm not aware of any other jurisdiction that's doing that right now, which of course gives you the opportunity to be entirely innovative, which I would support. We would obviously love to sit down with the not-for-profit sector and figure out how that could be done, if there was an opportunity to work together on that.

B. Lekstrom (Chair): Seeing no further questions now, Dr. Rans, thank you again for taking the time to come and address our committee.

P. Rans: Thanks, and I just encourage you to e-mail me if you have further questions.

B. Lekstrom (Chair): All right. That will bring our public hearing to a conclusion in the Prince George area. I do want to thank all of the people that took time out of their schedules today to come and present to our committee.

We have a number of other hearings. Tomorrow we'll be in Smithers. Throughout the week we will cover Cranbrook, Kelowna and Kamloops. Next week we will conclude with a hearing in Vancouver. At the end, we hope to have a report that will be submitted…. Well, we don't hope; it will be submitted to the Legislative Assembly by November 15.

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

1)	City of Prince George	Mayor Colin Kinsley
2)	Initiatives Prince George	Gerry Offet Dr. Terry Weninger
3)	College of New Caledonia Students Association	Rob Mealey Valentine Crawford
4)	Prince George Regional Hospital, Geriatric Assessment and Treatment Unit	Dr. Douglas Drummond
5)	Northern B.C. Construction Association	Rosalind Thorn
6)	Prince George Council of Seniors	Bob D'auray
7)	School District No. 57 (Prince George)	Fred McLeod
8)	Prince George Chamber of Commerce	Myron Gordon Michael Kerr
9)	British Columbia Real Estate Association BC Northern Real Estate Board	Dave Barclay Daryl Muchowski
10)	Prince George Horse Society	Steven Dubas
11)	Terry Robertson
12)	Prince George District Teachers Association	Karen MacKay Matt Pearce
13)	Clifford Dezell
14)	Prince George Railway and Forestry Museum	Alecia Greenfield
15)	Vivienne Candy
16)	Douglas Robertson
17)	University Of Northern British Columbia, Canadian Association for Co-operative Education	Dr. Peter Rans

Committee Staff:	Jacqueline Quesnel (Committees Assistant)

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES