2008 Legislative Session: Fourth Session, 38th Parliament

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

Monday, September 15, 2008

12 p.m.

1400 – 1410 (Segal Centre), SFU Harbour Centre

515 West Hastings Street, Vancouver, B.C.

Present: Randy Hawes, MLA (Chair); Bruce Ralston, MLA (Deputy Chair); Robin Austin, MLA; Harry Bloy, MLA; Dave S. Hayer, MLA; John Horgan, MLA; Richard T. Lee, MLA; John Rustad, MLA; Diane Thorne, MLA

Unavoidably Absent: John Yap, MLA

1. The Chair called the Committee to order at 12:25 p.m.

2. Opening statements by Randy Hawes, MLA, Chair.

3. The following witnesses appeared before the Committee and answered questions:

4. The Committee adjourned at 3:52 p.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Monday, September 15, 2008

Issue No. 72

ISSN 1499-4178

[ Page 1721 ]

MONDAY, SEPTEMBER 15, 2008

The committee met at 12:25 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): Good afternoon to everybody that's here. I'm Randy Hawes. I'm the MLA for Maple Ridge–Mission, and I'd like to thank you for coming and for taking time to participate in this process.

In preparing the estimates for the 2009 budget, the Minister of Finance is required to release both a fiscal forecast and a budget consultation paper by September 15 of each year. The consultation paper is required to provide a description of major economic and policy assumptions underlying that fiscal forecast, as well as identifying key issues that need to be addressed by the public in preparation for next year's budget.

The Select Standing Committee on Finance and Government Services is charged with carrying out public consultations on the minister's behalf. The all-party committee is required to report back to the Legislative Assembly by no later than November 15, which is when we will have completed our report. If you'd like to review the consultation paper, there are print copies available at the desk and on that information table.

The consultation is conducted by either…. You can make a presentation to the committee, and information on how you do that is available at www.leg.bc.ca/budgetconsultations. Any input that the committee receives in writing or electronic form is given the same consideration as oral presentations that are made here today or on any of the hearing days. Due to the recently announced federal election, we have extended the deadline to receive submissions, which will now be Friday, October 24.

Today we are going to hear from a number of presenters who preregistered with the Office of the Clerk of Committees. Presentations are 15 minutes. We recommend that you take ten minutes for your presentation and then allow five minutes for questions from the committee. If you choose to use the whole 15 minutes, there will be no time left for questions, and we will be following a pretty strict time format.

At the end of the day there will be an open-mike session, if time permits. Open-mike presentations are not longer than five minutes.

Now I will ask the other members of the Finance Committee to introduce themselves, starting with Richard.

R. Lee: Good afternoon. I'm Richard Lee, MLA for Burnaby North.

D. Hayer: Good afternoon. Dave Hayer, MLA for Surrey-Tynehead.

H. Bloy: Harry Bloy, MLA for Burquitlam.

J. Rustad: John Rustad, MLA for Prince George– Omineca.

B. Ralston (Deputy Chair): Bruce Ralston, MLA for Surrey-Whalley and Deputy Chair of the committee.

R. Austin: Robin Austin. I'm the MLA for Skeena.

D. Thorne: Diane Thorne, the MLA for Coquitlam-Maillardville.

J. Horgan: John Horgan, MLA, Malahat–Juan de Fuca.

R. Hawes (Chair): Today we are also joined by our Clerk, Kate Ryan-Lloyd. With us also is Stephanie Hansen staffing the registration desk, and the staff from Hansard, Michael Baer and Polly Vaughan, who are recording and preparing the written transcript of this meeting. I think the meeting is also simulcast on the Web.

With that, I'd like to call on Derek Robertson, our first presenter, from Kwantlen Student Association.

Presentations

D. Robertson: My name is Derek Robertson. I'm the chairperson and director of external affairs for the Kwantlen Student Association. The KSA represents about 17,000 students at Kwantlen Polytechnic University. The catchment area for Kwantlen Polytechnic University carries over about 12 provincial constituencies and also from Langley to Richmond. So it is a very big catchment, covering most of the South Fraser.

Today I'm going to talk about three items: investing in post-secondary education, accessible education and public transportation.

First, with investing in post-secondary education. Historically, the B.C. government has not invested as much in post-secondary education as other industries such as agriculture and forestry. With the baby boomers retiring, this leaves a huge hole in the skilled jobs market. The latest research has said that as much as 75 percent of all new jobs will require a post-secondary education, so this is huge.

[1230]

I think things have begun to change over the past couple of years. The provincial government announced that 25,000 new seats would be available by 2010. The downside to this is that adequate funding for these seats has not been provided. It requires the institutions to stretch their budgets to try to push these people in, so it lowers the quality of education that the people who are in these programs will get.

Also, inadequate and unstable funding. The best example for this would be the 2.6 percent cut that happened in late March this year. This happened during
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the end of the budget processes for all universities. For Kwantlen, for example, on top of being part of the KSA, I'm also one of the student reps on the board of governors. I know firsthand that it caused mayhem when the 2.6 percent was cut out of the operating funds.

Kwantlen got off fairly easy. They only had to shave about $1.6 million out of their budget for this year, and they had about two months to do it, after almost completely finishing their budget. The finance department at Kwantlen was running around like chickens with their heads cut off. Luckily for us, there were a number of people who were retiring, so they were able to offer early retirement, which saved a lot of programs.

I know SFU and UBC were hit far harder. SFU had to cut programs, and I believe both SFU and UBC also had to cut about $10 million each out of their budgets. That is a significant amount of money on such a short notice.

Stable funding, like the three-year budget cycle that was implemented before this cut, is for the most part a good thing. It allows not only the institution to plan for the next three years, but it also allows students to plan. They can plan, you know, that tuition might go up 2 percent this year. I can absorb that. But it's forced for the 2 percent. If they're expecting to make this much money and it ends up costing that much money or if the institution isn't able to provide the same level of education for the money that they earn, that's not really right.

I'm going to present a case for investing in post-secondary education. A couple of years back Campus 2020 was released. It gave a number of recommendations on how to make post-secondary education in B.C. better. Not a lot of the recommendations in Campus 2020 have actually been implemented, so a lot of them are actually just gathering dust.

The B.C. Chamber of Commerce has said that because of the baby boomers all retiring, there's going to be a huge need for skilled labour. With these cuts and with not providing the adequate space to replace the outgoing baby boomers, this will leave the economy in a bad place over the next ten, 20 years. Sure, you will have skilled trades, but you will not have lawyers or doctors or nurses, a lot of the industries that keep the province running.

[1235]

The KSA is recommending to this committee that you reverse the $50 million cut to the operating budgets in order to allow the institutions to expand their programs, to allow for what will be needed for the economy.

Secondly, I will be talking about access to post-secondary education, mainly in the form of upfront grants programs.

In the federal budget 2008 the federal government announced that they would be letting the mandate on the Canadian Millennium Scholarship Foundation run out and would be replacing it with an upfront income-contingent grant. Pretty much what that means is that if you, instead of applying to university and taking the risk of, you know, "I might get a grant or a scholarship, or I might not," causing you to work harder while you're trying to get your education…. This is a system that assesses your need, and then it provides you with the amount of money that you need to do your education.

Let me give you an example. Instead of applying for university and going trying to work through and applying for a whole bunch of scholarships and student loans and stuff like that, this is an upfront grant that will allow you to go to school and remove some of the burden on you while you go to school.

It also came with a repayment plan where you pay the interest for five years, and they assess how much you can actually pay. Anything over that, you don't have to pay right now. After five years you are put into a new program where the government starts paying off your principal. You continue to pay off your loan, but the government starts paying off your principal. After 15 years you are debt-free. They will forgive your debt after 15 years.

This gives the B.C. government a very big opportunity to institute something like this. I know there's currently a review of the B.C. student loans program. I'm also aware that it's more of a technical review. So it's the nuts and bolts of the system instead of: "How can we better service students?"

By instituting a program such as the Canadian student grants program, this will give students the ability to go to school no matter what bracket they're from. It's proven that higher-income families will send their children to school far more than lower-income families. Post-secondary education should be open to all income brackets of society, not just middle- and upper-income.

The KSA is recommending that the government reinstitute an upfront B.C. students grants program, coupled with the Canadian students grants program, to close the access gap and broaden participation in post-secondary education for low-income British Columbians.

As well, we are asking that over the next three years you look at reducing tuition and providing more funding to institutions so that the people who were pushed out of the post-secondary education system when the tuition was deregulated in the early 2000s can return and finish their degrees.

Public transportation will be my next topic. Currently, TransLink has released their 40-year plan for public transportation in Metro Vancouver. Most of the improvements with TransLink will affect north of the Fraser, so there will be very little improvement when it comes to south of the Fraser. There are, I believe, two MLAs from Surrey, so this affects them. Surrey, by 2040, will become bigger than Vancouver, so this is a very big problem when TransLink is not planning for upgrades.

[1240]

Take me, for example. I live in Langley. If I were to go from my house in Langley, which is Langley city, and take
[ Page 1723 ]
the bus to Kwantlen's Surrey campus, it would take me an hour and a half each way — okay? It takes me 20 minutes to drive. It is not acceptable that the transportation north of the Fraser is fairly good but that south of the Fraser you can be waiting for an hour, an hour and a half, for a bus. In some cases you can't even get where you're going.

We are asking that the government expand its provincial transit plan to progressively improve public transportation south of the Fraser. It particularly should provide funding to better align transit systems in the Kwantlen area, because currently, as I said, it would take me an hour and a half to get to the school.

The Premier is very big on green transportation and the environment, so this is a very good opportunity for the provincial government to act and say, "Yeah, we actually do care about the environment," instead of….

At that, I will take questions.

R. Hawes (Chair): Thank you very much, Derek. That's great. Good presentation.

J. Horgan: Thank you, Derek, for coming to the committee to put forward your concerns about funding and particularly student funding.

I want to touch upon the 2.6 percent reductions that Kwantlen and other institutions experienced in March. We were sitting in the Legislature at that time, and the minister responsible was fairly vociferous in his contention that there were no reductions. Yet you, as a member of the student association as well as a member of the board, dispute that.

I'm wondering if you could expand on that a little bit and tell me what the impact would have been, certainly on the student body but also on faculty and administration, trying to manage cuts that in the ministers' minds didn't exist but in the minds of the institutions did.

D. Robertson: All right. Because Kwantlen is a new university, we were looking at expanding our library to better fulfil the needs of a university. So we can't do that. Luckily for us, we had a fair number of employees that were reaching retirement age, so they were able to retire.

If Kwantlen was not able to take early retirement for a lot of people, it would have caused job losses, potentially program cuts. Actually, the program that I'm in would have probably been cut. Personally, I don't think that's a good thing.

It stopped us from doing a lot of things that would allow us to transition into what is a full university. Does that answer your question?

J. Horgan: Sure. If you could focus on the impact on students. You mentioned program reductions.

R. Hawes (Chair): We have run out of time. Sorry. Derek, thanks very much. Your comments are certainly on the record and will fall into the ambit of our consideration.

If I can just take a moment to…. I was remiss earlier in not introducing Josie Schofield, our committee research analyst who actually will be compiling much of this. Josie, sorry for not mentioning you earlier. How could we overlook you?

Our next presenter is First Call B.C. Child and Youth Advocacy Coalition, and we have Julie Norton and Adrienne Montani. As you know, we're looking for…. If you want to give ten minutes and leave five minutes for questions, or if you want to go the full 15, that's up to you. I'll give you a warning when there are two minutes left.

[1245]

J. Norton: Okay. Great. I'd like to say thank you to the committee for welcoming us here and for having this kind of opportunity to come and speak with you today. I think that in every democracy it's great we have the opportunity to meet face to face. I think that a number of you…. I've seen your faces on calendars and newspaper articles, but it's the first time in person — and you're all much better looking.

R. Hawes (Chair): Not on wanted posters.

J. Norton: Not so far, but you have your aspirations, I'm sure. No political in-jokes.

I just want to say it's also great to be talking with you on this auspicious day when there has been this announcement just recently about the budget surplus that we have. What great timing, because we're talking about the budget for the coming year, and we do have some suggestions. We hope you will be open and listening to them, as to many of our colleagues who will be here presenting to you, but of course we want you to listen to ours most.

I'm here as part of First Call. It's a child and youth advocacy coalition. I know you've heard from us before in some of the previous presentations. There's a handout from us, and a list of the many organizations, both provincial and local, that are part of our coalition is there.

First and foremost, I want to say that we're here speaking for children and youth. They were busy. They're in school and day care today, so they couldn't be here, and they sent us instead. They are way cuter than us, but you'll just have to make do.

I want to make the point that it is really important that children and youth — they're not taxpayers — are part of a disenfranchised element of our population. We really want to make the point here that there are many issues that come up, and we don't look at them through the lens of: "Well, what impact is this going to have on children and youth?"
[ Page 1724 ]

Today we're going to more specifically target some of the problems that children and youth in families are having. On the whole, families are doing fairly well, but for the ones who aren't…. They're doing more and more poorly here in B.C. At a time when B.C. has outperformed the Canadian economy every year since 2002, I think that some of the facts and the evidence we're going to present today…. Hopefully, it will be compelling to you to think about ways that we can be even better, that B.C. can take on more leadership, particularly in areas that support families that are vulnerable, that are disenfranchised, that are marginalized.

Most of our policies do work for that middle group, but there is a large portion of families who have children and youth in the household that are not doing well in British Columbia.

We know that the government has invested a large amount of public funds into obtaining a great deal of research. A lot of the research we're going to reference today is from groups like HELP at UBC, which has benefited greatly by investment from the provincial government.

We're also looking at things like the business round table and a Nobel laureate, both of whom reinforce work that has been done, and evidence to support the arguments that we would like to put forward on the benefits of supporting vulnerable families.

We agree with the five goals: that B.C. should be the best-educated, the healthiest, the fittest and have the best supports for vulnerable populations. So we're offering suggestions on how we can make that even more of a reality.

We start from a place of agreement that we have at First Call with all of you — that B.C. should be a great place to raise a family. I think that on a lot of levels it is and that we should use evidence to guide us to make the best public policy practice and spending decisions.

I'm going to talk to you a little bit more about something. This is a word that makes a lot of people uncomfortable, and it isn't usually used in polite company. It's the "p" word. The "p" word is poverty. It does make people uncomfortable. We don't like to talk about poor people — the conditions that their lives are in — but the reality is that many thousands of those poor people in British Columbia are children.

[1250]

Unfortunately, we have the shameful position — and I say shameful because I think all of us as citizens as British Columbia should probably feel some shame or embarrassment — that we've had the highest child poverty rate for five years in a row, from 2001 to 2006, which is the latest data. That does not support our goal in trying to achieve the five great goals, and it needs to be looked at. It's a huge issue, so we're going to talk about a few aspects of it. We do need to take a moment and pause, because I know you've all heard this statistic before. If not from us, it's been in the newspaper. It's out there.

Really think about that. It's five years in a row. I mean if we took leadership in anything else for five years in a row that was that negative…. On business outcomes, on any kind of fitness and health, the government acts on those things. Yet for child poverty, we really haven't done that much. I think it's important to think on every decision that comes up: how is this going to impact children and youth? What does it do for families that are already deeply in poverty, and what can we do?

So I want to put that forward, and I want to pass over to my colleague Adrienne, who is going to talk a little more about some of the specifics and the stats that we have. She's more familiar with them than I am.

A. Montani: Well, we've given you a handout that we don't have enough time to go through. We've given you quite a bit of information there. We hope that it's a useful reference for you that you can go back to and check when you're making your deliberations.

I think, basically, it's a host of evidence about the growing economic inequality for a number of children in this province that's affecting children and families. We have some policy suggestions in that handout as well. We won't be able to go through all of those today as well, but we hope you'll look at them. We'll just highlight some of those. We will submit a more detailed brief as well for the October deadline.

I'm going to just start from assuming that you may be aware of some of this data and that there's an agreement among the business community, among the academic community, among community organizations. The evidence is overwhelming that high child poverty rates have huge social costs for kids in their individual development. It has huge social costs for families and for communities as a whole. Across academic disciplines, you can find lots of research on that.

We have one in five kids in this province poor. There are vulnerable populations — aboriginal kids, children with disabilities, kids living in single-parent mother-led families, new immigrant families — who have way above the one-in-five rate. There's a chart there for you to look at in the handout as well. Some of them are at almost 50 percent. This is really shameful.

So I want to just quote to you. Dennis Raphael of York University is a researcher back east. He says: "What can governments do to decrease poverty? What can you do to threaten the health of the population in general?"

One of the things we know about poverty is that it's toxic to health and particularly to children's development. So what'll you do? Well, you could reduce welfare payments, or you could kick people off of welfare when they really need it. You could remove social housing or access to affordable housing. You could eliminate rent controls, and you can not raise the minimum wage. There are some ways. If you want to lower the health of
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the population, you can do that. So there are policy levers you have at your disposal that can make a difference.

Other provinces, like Quebec and Newfoundland — Ontario is starting one — have poverty reduction plans. They're not in denial. They've said: "Yeah, we have a problem and we're going to address it. We're going to look at all the complex ways, and the policy levers at our disposal, to do that." B.C. has to stop ignoring the problem and develop a plan. So one of our major recommendations is to have a poverty reduction plan — recognize that we have a problem here around child poverty and do something about it. Time lines, targets and then measure how we are doing on that like you would in any business plan.

One of the things we've found from looking at child poverty statistics over the years is that the majority of poor kids — and again these are in some of the charts we've given you — live in working poor families. So they're not on welfare, although that's where some of the deepest poverty is. Their parents are working. So we're looking at things like why they aren't making a living wage. Why do some people have to do something like…? I was going to give you Erna's story, but I'm short on time here.

Erna is a single mom who is raising one child, who has had to work two jobs for the last nine years. She works 55 hours a week. She goes on the bus at six in the morning to Wal-Mart, and in the evening she works as a dietary care aide. She doesn't make enough in either job. She doesn't make a living wage to support…. She shouldn't have to do that in a province this wealthy. We should have the social supports. Either her employer should pay her a decent wage, or she should have the social supports — affordable child care, affordable housing — things that wouldn't cost her so much so that she could afford to live.

What we do know is that families are working more hours, especially low-income families, and that their incomes are not keeping up with the cost of living. I'm sure all of you are aware of the increases in the cost of living. Nobody should have to work that hard to get by.

So we are urging you to also look at, when you're crafting the budget, what government pays in terms of living wages through their direct employees and where you deliver many, many services through contracts with non-profit employers and through Crown corporations and….

[1255]

Those contracts, specifically in areas like social services, often don't pay a living wage, even to those employees. Or if you look into an area like child care, where child care workers don't make a living wage. The irony is that they can't afford to even put their own children into child care because they're making an average of, like, $13 an hour.

So we ask you, as you're crafting the budget, to look at spreading out, you know, what kind of responsibility government has as both an employer and a contractor in making sure that you give enough money to those community agencies and those service providers to pay their own employees enough to support their families.

We know that this inequality we're describing, which is documented, is hugely expensive for our economy, not only for the individuals. It's a sure way to increase the cost of education and the justice system and the health system. Again, there are lots of studies to show that you will have poorer health, you will have poorer school success, or you're more likely to drop out of school and more likely to have criminal justice involvement if you grow up in poverty.

Those are facts. It's not to say that every poor family has those outcomes, but the statistical probability is high. So one of the things you may have heard before…. There's something called the Perry Preschool study that looked at the Head Start program back east in the U.S. They've been tracking the outcomes of those kinds of social investments in quality early childhood programming. They did it up to age 27, and they came up with the figure that after 27 years the return on the investment for every dollar invested in a quality early childhood program was $7.

They've now come out with a figure for 40 years. Those people are now 40 years old — those little kids who got that boost when they were little — and it's now 16 to 1. Again, there are some slides in there, in the package we've give you, from a Nobel laureate, etc. The evidence is absolutely incontrovertible that if we invest in the early years of children, it pays off well and reduces costs overall. So please take that evidence into account when you're making the budget or making recommendations for the budget.

We applaud the attention given to healthy eating and all that — you know, ActNow and eat well and jump around and get lots of exercise. We think all of that is really good. Good for you, doing that. But remember, again, that it's kind of a cruel irony to say, "Eat all your fruits and vegetables," to families who can't afford them or, "Go get some exercise; join the soccer team," if you can't afford soccer boots.

Again, we have to look at the inequities in making choices. We know that when you have low income, you have fewer choices. You can't make those healthy choices, very often. I could point you to a study that the welfare poor had the lowest frequency of daily fruit and vegetable consumption of all working-age Canadians. There's a reason for that. It's not that they don't like fruits and vegetables; it's that they can't afford them.

Again, heavy emphasis for us on: have a plan, tackle the problem, and look at an investment in early years. We applaud the review that's going on into looking at programs for three- and four-year-olds now, maybe looking at early kindergarten, or whether you call it…. How about just fun, quality child care for those age
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groups? That needs to happen. Make sure you fund it. Make sure it happens. It will go a long way to tackling child poverty.

Think children and youth as you make your recommendations. We have a lot of specific recommendations in there, but I won't go into that.

Questions? I'll stop there.

J. Rustad: Thank you very much for your presentation. Your enthusiasm and excitement about the advocacy job are well-noted. It's good to see.

I want to ask you a couple of questions, and the first is with regards to the shelter assistance program that we have in place for those earning under $32,000 a year. Have you found that successful?

One of the challenges that we've actually seen with this program is getting people that are in the lower-income categories to become aware that this is available, that this is something that they can apply for and utilize. I'm just wondering, as part of your advocacy role, whether or not you've had the opportunity to try to promote that program and try to lead those parents towards that help. On the shelter side, that can make a huge difference on a monthly income for low-income earners.

J. Norton: Yes. I mean, it's not something that we do directly. Of course, we're representative, and we do a lot of work around research, getting information together, and community development. But I know for a fact that some of the partners are out there encouraging people to access it.

One of the problems is that if you're on income assistance, you're not eligible. That is a huge gap. If we're talking about the RAP program, the rental assistance, you're not eligible if you're on income assistance. So that's a real problem because a lot of the people who are living in the deepest form of poverty…. You have to remember that this also includes new refugees, protected persons — so another whole category of people who do not have access to this. And it is a great program.

[1300]

J. Rustad: Just in terms of the second question with regard to that. With the initiative that we are looking at for all-day kindergarten and then looking at age four and age three, a big part of lifting out of poverty is education — being able to help break the cycle, get the kids into the system and allow them to have those educational advantages that can lead them out of this.

I'm just wondering. Obviously, that's something we're doing in terms of analysis. You've touched on it before. In terms of the StrongStart programs that we have in place…. The idea of all-day K and three and four — I take it that's something you think would be of good benefit and something that we should continue to move forward.

A. Montani: We've put in a brief on that, to the consultation that has gone on, so we have a number of recommendations, if you go ahead, on what that should look like. StrongStart is fine, but again, it doesn't serve working families who can't get there during the day.

J. Rustad: But the all-day approach is….

A. Montani: If there is new funding for a new universal program that's an entitlement for all three- and four-year-olds to go, that would be a good thing. There's lots of work to be done to make sure that it's done understanding the needs of young children — a huge amount of work to do there.

B. Ralston (Deputy Chair): In your presentation you say to raise and index the minimum wage. The Minister of Finance this morning said that in his view, the majority of people earning the minimum wage were youth under 25 living at home with their parents. Do you have a comment on that?

A. Montani: It's not true.

J. Norton: I think there are 430,000 in total. This is going back a few years, I think, in our most recent stats — probably '06. So 430,000 people in B.C. are earning under $12 an hour; 245,000 are earning under $10 an hour. We still have that training wage in place, so there are a lot of people who get hired on that, and then, mysteriously, just before that time period is up, they are let go and someone else is hired.

There are a lot of adults being paid this training wage. It's a particular burden to people who are new Canadians or from visible immigrant populations, because there are a variety of reasons, anyhow. But you'll find a lot more people working, particularly in the service industry, and B.C. has signed that agreement with the Philippines to bring over more people to work in the service industry in Canada, in part because a lot of Canadians who are here can't afford to do it. So there is a poverty issue as well as….

That's just a basic piece — the minimum wage. And it's a bigger issue. We agree.

A. Montani: It's been seven years, so it's time to raise it.

R. Hawes (Chair): Our time is up, so I want to thank you very much for your presentation. We've got your information, and we'll certainly read it.

J. Norton: Our contact information. If you would like any more information or discussion, we are happy to provide it.
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R. Hawes (Chair): Okay, we have the Canadian Bar Association — Caroline Nevin, Miriam Maisonville and James Bond.

Welcome. You have 15 minutes, and if you allow some time at the end for questions, we do recommend ten minutes. I'll tell you when you're at ten minutes, and then I'll tell you again when you're at two minutes, if you want to keep going. If you want to take the full 15 minutes, that's fine. Start any time.

M. Maisonville: Sure. Good afternoon. My name is Miriam Maisonville, and I'm the president of the Canadian Bar Association of British Columbia. I'm joined by James Bond, our vice-president, and by Caroline Nevin, our executive director.

As president, I am pleased to speak to you today on behalf of 6,000 practising lawyers in British Columbia. I am proud to say that this is our sixth submission to this Finance Committee. We value this opportunity to make this and to participate in this process every year.

This year I'd like to focus on three policy areas of great interest to the B.C. branch of the Canadian Bar Association. The first area I'd like to address concerns registered retirement plans and the importance of ensuring that the holders of these plans are afforded the same level of protection as pension holders.

[1305]

Secondly, I wish to give a brief overview of our perspective on the issue of student loans and the impact on young legal professionals in British Columbia. Lastly, I will once again make a case for the abolishment of the PST on legal services.

Now, to start with the first matter, we would like to discuss retirement savings. Government encourages individual planning and savings for retirement and, in doing so, accomplishes dual policy goals: less dependence on government and government programs and the creation of investment capital.

What many people don't realize is that pension plans are exempt from seizure by creditors, but individual savings through RRSPs, DPSPs and RIFs are not protected under B.C. law. This is an anomaly in the law and is inconsistent with government policy goals.

The vast majority of British Columbians who are workers, entrepreneurs, small business owners and professionals do not have access to company or government pension plans. Small businesses in B.C. in 2007 represented 98 percent of all businesses — over a million people employed. That's 47 percent of all employment and 27 percent of this province's GDP. All of these people are encouraged by the government policy to save for their own retirement through, for example, registered retirement savings plans.

The data is clear. Since first being introduced in 1957, RRSPs have become an essential part of Canada's retirement system. For example, Canadians saved $600 billion in accumulated RRSP assets as of 2005. In fact, RRSPs have become more popular than employer pension plans.

Protection of registered plans from creditors is needed to ensure that British Columbians have enough money saved for retirement so they won't be a drain on the government social safety net. While it is the duty of debtors to pay their creditors, those people who are self-employed should receive the same protection as those wage earners who have a registered employer or pension plan.

Acting would yield many benefits, including injecting needed certainty into the law, harmonizing B.C. law with federal law and encouraging growth in the B.C. economy.

Lastly, and perhaps one of the most salient of these arguments that we have presented today, is that if the government were to act to protect registered plans, there would be no cost to the government — no additional bureaucracy or government services required, no burden on taxpayers and no additional red tape. It works within the existing legal framework, which also means that it is within the power of the government to act on this measure.

Over the past several months we have been busy talking to other groups that have an interest in this subject. We conclude that the support for this reform is widespread. For example, we have endorsements from the Institute of Chartered Accountants of British Columbia, the B.C. Medical Association, and the B.C. Real Estate Association. This province has, over the years, shown leadership in fostering a positive business environment. This simple action would be meaningful to many British Columbians, and we encourage you to support us in this popular measure.

I would like now to address student loans. To many of you, it should come as no surprise that the cost of a legal education has risen steadily over the years. Today graduating law students confront overwhelming debt.

When articles are considered, graduates must factor in the economics of their decision. They can compete for higher-paying positions in large Vancouver firms, or they can move to smaller and rural centres to start their practice where the prospects may not be as advantageous. Regardless, the myth of the wealthy young lawyer with a six-figure salary is not the reality of many new graduates.

The article period is a full-time educational period. The Law Society has the mandate from the province to set educational standards and requirements, oversee the completion of the program and evaluate students, just like any other educational institution in British Columbia. However, article students must begin to repay their student loans during their articles, but fortunately, the financial burden to these students is preventable.

We propose that the period while a student is articling be considered full-time study. This would result in
[ Page 1728 ]
student loans staying in the no-payment, interest-free status for the entire 12 months of articles and then converting to no-payment, interest-accruing status for the six-month period following. Currently this period commences at the moment the university classroom studies cease.

[1310]

Lastly, I would be remiss if I excluded a discussion of the PST on legal services. For the benefit of new committee members, I would explain briefly that this tax, introduced in 1992, targets legal services exclusively. No other professional service is subjected to this tax. No other province targets legal services for this special tax, thereby making the cost of doing business in B.C. greater than in any other province.

The tax is also regressive. It has a disproportionate impact on low- and modest-income individuals and small businesses who are the least able to afford it. In essence, the tax is unfair and discriminatory. This very committee has agreed with this point in the past.

Over the years no one inside or outside of government has mounted any rational defence of the tax that I know of. In fact, it has been commonly conceded that the tax is indeed discriminatory, bad for business, does not make sense, and yet it remains.

To speak bluntly, the tax remains for one important, obvious reason. It raises money. But we must also consider the damage that the tax does and the unfairness of it. Many unfair taxes would be successful at raising money, but that alone is not enough to justify a tax.

Last year the committee recommended that the PST collected on legal services be applied to legal aid. The B.C. branch of the Canadian Bar Association respectfully disagrees and believes that adequate legal aid funding is the responsibility of all taxpayers, not only those who use legal services.

We believe that access to justice is a fundamental right and is no less important than an individual's right to health care and education. Creating an additional impediment to justice in order to fund access via legal aid, while well-intentioned, simply does not make sense from any political or policy standpoint.

In closing, we look forward to reviewing your report and recommendations later this fall and hope that you will relay to the government the significance of addressing these three important issues. On behalf of all of our members, I wish to thank you for the opportunity to appear before this committee. I'd be pleased to answer any questions that the committee may have.

R. Hawes (Chair): Thank you very much, Miriam. That's a very good presentation.

J. Horgan: Thank you very much for the presentation. I know that the lawyers on the committee will want to speak to the tax questions. Instead, I'd like to focus in on what I think to be quite an innovative ask, in my three years on the committee. That's to do with student loans and an interest holiday or a payment holiday which amounts to about 18 months from your last class to your first payment.

I'm wondering if you could explain to the committee how you came up with that period of time. I understand the 12 months for the articling period, but why the additional six months after that?

M. Maisonville: I am going to put this to our vice-president, James Bond.

J. Bond: The six-month interest-free but interest-accumulating period is a period that every student who graduates from post-secondary education in British Columbia is entitled to. What we've done is said: "Your post-secondary education is essentially extended by a year to include your articling period."

In fact, in British Columbia, if you want to be a lawyer, you have no choice on that matter. You're going to article for a year, and you're going to article under the guidelines set by the Law Society.

What we've said is that it's 12 months, just as though you're going to school. So it's interest-free, interest not accumulating, just as though you were in law school the previous three years and then six months where…. That's the same program that everybody else has available to them and that the students currently have. Only that commences immediately after graduation.

M. Maisonville: So it's just extending the 12 months of the actual articling period, then.

J. Horgan: That's good. That clarifies it.

R. Hawes (Chair): Do you have any idea of how many articling students there are in British Columbia at any given time — roughly?

M. Maisonville: A few thousand, would there be?

J. Bond: I think it's probably closer to about 500 or 600.

J. Rustad: Just very quickly. I was wondering. In the medical profession do you know…? When they go out into their placements, are they in the same situation, where interest isn't accumulating during that period, as you have asked here? I'm just wondering if that's an example, because that would be something that could support the argument you're making here.

J. Bond: There is actually a particular program that's been instituted, because the government, in its wisdom, has determined that in fact access to medical services,
[ Page 1729 ]
particularly in rural and remote areas — and that's where our main concern lies on this — is something that British Columbians should be entitled to. There's actually a program in place that helps students repay their loans in return for service in rural and remote areas.

That's even beyond what we're asking for.

J. Rustad: I'm just wondering, in terms of the ask, whether there's an example of that already set up or whether this is just something that would be new.

J. Bond: This actually is modelled on a current program that's in place in Manitoba. The Manitoba Law Society has been designated an educational institution there. While it's not here in British Columbia in the medical sense, there is a precedent for it in Canada.

[1315]

D. Hayer: One thing. Are you just talking about articling only for the Law Society? How about some of the other professions? Accounting and some of the other professions would probably make a similar type of argument. Are you saying that the government maybe look at all the professions where you have to article for a year or something?

M. Maisonville: We have the support of the other associations at this stage. But at this stage we're strictly speaking to the legal aspect of it. We haven't coordinated or joined forces to that extent.

D. Hayer: And the second part is on page 106, the first argument you have with the registered retirement saving plans. Are there any other provinces that are the same way that B.C. is, or is it different? Are there other provinces protecting the registered retirement savings plans?

J. Bond: There are a number. The first one was Saskatchewan, actually, a few years ago.

B. Ralston (Deputy Chair): Protecting RRSPs from creditors. Are there any provinces that have those laws in effect?

J. Bond: There are a few of them, and Saskatchewan actually was the first on board with this.

B. Ralston (Deputy Chair): Secondly, on the PST question, I think last year the Chair of the committee asked…. I appreciate that this would be non-binding, but would the association, as an expression of public policy, were this to come to pass, say that they encourage members of the association not to raise their fees — to simply take the reduced tax and fill that in as increased fees?

M. Maisonville: If I understand the question correctly, you mean not just keep that amount in place?

B. Ralston (Deputy Chair): No, if the tax were taken off…. I guess the concern is simply that the price of legal services would just go up, or the reduction in the tax wouldn't be reflected in a reduction of the cost of legal services. I appreciate that you can't bind your members to do that, but would the association be prepared to make a public declaration that if this were done, they would encourage their members to actually reduce the fees by the amount that had previously been taken by tax?

M. Maisonville: They wouldn't….

R. Hawes (Chair): If the tax is off, there will be a 6 percent reduction in the cost to your client. It goes up in tax.

M. Maisonville: I think one of the goals of the Canadian Bar Association has always been to support two other angles, to address your concerns — both pro bono and access to justice. Those are two important areas to us in any event already, which we're trying to spearhead. In fact, I'll be at a conference later this week on that regard. I would hope that all people are mindful of that — that in total, that's something they would consider.

R. Lee: Thank you for the presentation. My question is on the suggestion of extending the interest-free period for student loans. Are there any statistics on, say, new lawyers — their average earnings in five years compared to the average graduate?

J. Bond: There are actually a number of studies done by a number of, in particular, legal journals which look at the average income per lawyer by province and in regions of provinces. Again, I think I would go back to Miriam's earlier comment that the myth of the lawyer making a six-figure salary, whether they be out of law school recently or not…. If they're practising in a rural area, it just doesn't hold water. The local market conditions just don't support that level of income.

R. Lee: I think my question is relative to the average of the graduates.

J. Bond: Sorry. What relative to the…?

R. Lee: In comparison to other professions, other graduates.

J. Bond: I think it's still true that out of the major professions of dentistry, the medical profession and lawyers,
[ Page 1730 ]
we rank somewhere below chiropractors in our average income. We don't make quite what people think we do.

C. Nevin: What we do know is that there is a particular problem in rural areas attracting students, who have large student loans on their backs, outside of the downtown Vancouver core, where they can earn more. So part of it is to try to draw legal services and access to legal services outside of the Lower Mainland as well.

M. Maisonville: As those rural members retire, they are not being replaced. What we would like to do is attract and continue to serve all of British Columbia, because access to justice for us is very important.

R. Hawes (Chair): We are out of time, so I want to thank you very much for your presentation. As John said, this is certainly one that we haven't heard before, I don't think, that I can recall.

[1320]

We have Don Avison of the University Presidents Council of British Columbia.

Don, as you know, it's 15 minutes. If you allow us some time for questions at the end, which I'm sure we'll have, I'll tell you when you are at ten minutes, and I'll tell you when you're at two minutes, if you go that far.

D. Avison: Mr. Chair, my hope is to go less time than that, to have an opportunity to address any questions that you might have. Frankly, if I may, one of the great utilities of these hearings is the opportunity to be alerted to some issues that others are thinking about that would be useful to address.

Having been the beneficiary of the presentation a moment ago by the Canadian Bar Association, I think I'll avail myself of the opportunity to speak to the issue that they put in front of you about student loans, a particularly good point that I think would warrant the attention not only of the government of British Columbia but the government of Canada, given the integrated nature of the loan and remission process in place in the country. I'll try to speak quickly enough so that I can get to that.

Permit me to begin by saying that I once again appreciate very much the opportunity to appear before the committee here this afternoon, particularly as you are about to embark upon the process of hearing from people across British Columbia about the issues that they have on their minds and the issues that you ought to have on yours as you look towards making recommendations for the 2009-10 fiscal period.

I particularly welcome the opportunity, on the first day of your hearings, to give you a sense of some of the issues that are of particular relevance to the universities in British Columbia and, more particularly, given some of the changes from our perspective, the research-intensive universities in B.C.

I wanted to begin quickly, if I could, with a brief overview of where things are at in post-secondary education as we begin a new academic year. I'll start with this: the importance of the reality of the growth that continues across the sector. If you visit any of our campuses through the course of your hearings — and I believe you will — you'll see that we continue to be blessed with significant growth and with infrastructure renewal.

The institution that you're at today, SFU. This has been really quite an extraordinary development of a university footprint in a downtown core. The building that you're in today has been here for some period of time.

We've seen the addition of the Wosk Centre across the street, which has become a very important part of the community with important investments from our donors and from the province of British Columbia, and the Segal School of Business up the street on Granville.

We don't talk enough, in my view, about the significance of and the importance of the soon-to-be-completed Woodward's project, which will house SFU's centre for contemporary arts. This is a vital development in the efforts of the province and the city and of the universities, frankly, to have a positive impact and change here in the downtown core.

It's not simply this. SFU, as you know, has been changing significantly at the Burnaby campus and even more significantly in Surrey, with the addition of SFU Surrey. I'll talk about that a little bit more, because the growth there has been really quite extraordinary within a very short period of time, and student demand is outstripping our capacity to serve it.

The University of British Columbia. The growth of the Okanagan campus continues at a very significant rate. We're hopeful that we'll soon have shovels in the ground to add Kelowna as the fourth component of British Columbia's really quite remarkable distributed medical program. As you know, this involves the University of British Columbia, the University of Northern British Columbia and the University of Victoria.

It may not be as well known that with these investments by government — and we could not have done this without the support and the partnership of government — this will now be Canada's largest medical school, bringing with it a significant increase in the number of doctors available to service the needs of British Columbia communities and one of the largest platforms for biomedical research in the country.

I also wanted to point out to you that the early news is great. At UNBC in particular we have seen…. It will take some time to have all of the evidence in, but the numbers of graduates who are remaining within the north and, I think perhaps even more importantly, making commitments to family practice and general practice…. The news on that front suggests that the policy objectives the government had in mind in supporting this project in the first place are in fact being realized.
[ Page 1731 ]

Some room yet for some important growth. For example, we're not yet producing the number of pharmacists that I think we need to, to meet future needs. That issue remains pressing and substantial, and we're hopeful that we'll see some progress on that front in the coming years.

The University of Victoria. I'll briefly mention the Pacific Institute for Climate Solutions and the work that's going on there, again as a result of the important investments the government has made that facilitates our ability to do important work on that front.

[1325]

Graduate students. This remains a very important issue for the research-intensive universities. Here, too, we've seen significant progress. It's only in the last couple of years that we have seen a return to significant graduate-level funding at $20,000 per FTE. That was an important development for us.

Graduate scholarships were reintroduced. However, I must say to you that we continue to lag behind other provincial jurisdictions in the value and number of graduate student scholarships available. Where we're at $10,000, Alberta and Ontario are at $25,000, and that does place us at a competitive disadvantage.

We would, therefore, ask you to consider making this a priority for this year's budget: increasing the number of graduate scholarships that are competitively awarded and raising the value of those scholarships to $25,000, bringing us up to the same level as Alberta and Ontario, together with the $10,000 research grant.

Again, I emphasize that these would be competitively awarded to extremely high-level graduate students. We ought to be more aggressive than we have been about using these opportunities to bring new talent to the province of British Columbia.

Enrolment. It's important for me to point out that there seems to be a perception that across post-secondary education we are seeing declines in enrolment. It's not an accurate picture. The early numbers for this year are in. SFU's undergraduate total is up by 5 percent, with a 2 percent increase in graduate students. Surrey has been responsible for a significant part of that growth.

University of Victoria domestic undergraduate growth is up by 3 percent and graduates also by 3 percent. UBC has also seen a 3 percent increase in its graduate student enrolments, while the Okanagan campus in Kelowna continues to make significant progress as well. The reality is that our largest institutions are serving the interests of the larger student population this year.

It's also true that this is happening in an environment where base budget allocations available to the institutions have been constrained. It's important to note that base budgets for 2008-09 were reduced by 2.6 percent.

Now, I must add to this that that was a 2.6 percent base reduction prior to the addition of further funds to accommodate additional growth. Nevertheless, the reality of the 2.6 percent budget reduction is a significant one, particularly when you juxtapose that with the reality of the enrolment increases at those institutions that have seen increases in their undergraduate and their graduate student populations this year. The reality is less money to serve a larger student body.

For reasons that will be obvious to you, I'm somewhat reluctant to make this comparison, but in the same period of time the province of Alberta has increased post-secondary education funding by 12.1 percent.

I think it's also important to offer the following observation. When government made significant policy decisions in 2005, it was decided that student tuition increases would be capped at 2 percent to reflect the reality of inflationary costs. It's also important to point out that the cost level in the post-secondary context at that point in time wasn't consistent with the general CPI level of increase. The basket of goods at post-secondary at that point in time was actually higher than the general 2 percent level of increase.

The paradox here is that government did not move then, nor has it since, to recognize the inflationary pressures on operating budgets. It's important to point out that tuition is only part of the piece, approximately 20 to 25 percent of the operating grants, while the balance is in the base budgets provided by government in relation to the operations of public institutions.

My question for you today is this. If it is reasonable for students to pay an additional 2 percent per year based upon inflationary pressures — and I would suggest to you that it is — it ought to follow through, then, that it's reasonable for government to pay a similar amount, a 2 percent increase, recognizing and based upon the same percentage-based increase in the inflationary pressure.

The reality is that this was complicated this year by the 2.6 percent reductions. Not only have we seen the development and the opening up of a bit of a gap between B.C. and other jurisdictions because of the absence of that recognition of the pressure on the base, but this year it wasn't 2 percent. It was, in effect, 4.6 percent before the increase, to reflect new student opportunities.

[1330]

Now, I think I'll stop there, other than to link that to what, I think, is the critical public policy issue, and that's the importance of sustaining the very important and very significant investments that the government of British Columbia has made in post-secondary education. They have been considerable. We have seen, in many respects, a renaissance in funding and support for post-secondary education on a number of fronts, and most significantly on the capital front. It's on the operating side where the need to keep pace with those investments has lagged somewhat behind it and requires additional attention.

I'll use my last moment, if I may, in relation to that very important point that I think the Canadian Bar
[ Page 1732 ]
Association brought up. Given the increased costs of education for students, given the time to completion, the issue raised in relation specifically to articling students might well have application with respect to accounting students and medical students and others. There aren't grant provisions available for some of the medical students and others in the health care field to accommodate some particular public policy issues.

That is one area where this committee could make a recommendation for further work by the Ministry of Advanced Education to ensure that those students who are required to continue to meet a number of conditions before they can qualify to practise aren't unreasonably prejudiced by the nature of the student loan repayment system in British Columbia's universities. We'd support that.

R. Hawes (Chair): Don, you've done very, very well managing your time.

D. Hayer: Thank you very much, Don. Good news about Surrey. SFU is attended by over 4,000 students — in 2001 there were only a couple of hundred students there — which is a very good-news story.

In the '80s when you went to university after high school, you required about 68 percent, 70 percent marks — a C-plus average — to get in there. Then I remember that in the '90s it was almost that you needed in the 90s and in the high 90s to get into some of the programs.

Where does it sit now if a student wants to go from high school to university? Do they still need almost an A average, or are they back to where they used to be traditionally? Many of the students who were fairly successful were able to get to university because of the marks they received in high school.

D. Avison: Thanks very much for the question. I think I'm ethically compelled to disclose that I attended in the '70s.

It became, as you know, more difficult through a period of the time that then followed to access post-secondary education. That certainly was true at a number of the institutions that I represent, and to some extent it remains that case. For the most part it still requires an A average to find admittance to the University of British Columbia.

We have seen some movement in relation to the grade point average required at the other institutions. I'm happy to report that as a result of the investments that the province has made in expanding capacity, it has become much easier for students to access the opportunity at many of our institutions. I'm speaking not only about the universities but the other institutions as well. We see a number of institutions now where the policy objective of students being able to get in with a 75 percent average can now be met.

I can say to you, Mr. Hayer, that the addition to Surrey of SFU Surrey has been an extremely important part of that equation in the area south of the river. I must also say that if you look to population growth, that's also one of the areas where we're going to see things shifting in the other direction. SFU Surrey will hit the wall this year and will not be able to meet the student demand that obviously is in the area that we now know, based on experience, to be the case. It has been, by any standard, an exceptional success.

J. Horgan: Thank you very much, Don. As always, a very informative, very information-laden presentation, and I appreciate it very much.

I was going to touch on the 2.6 percent reduction in March and the impact that had on administrators, but instead, in the time remaining…. Maybe we can do that off line.

I'd like to talk about the proliferation of universities and what that means in terms of diluting, potentially, the value of the five institutions that you represent. As I understand it, UVic, UBC, UNBC, SFU and Royal Roads are within your umbrella, and now we have a proliferation as a result of policies that were not, I believe, particularly well explained in the Legislature this spring of university colleges becoming full-fledged universities.

My question is: how does that impact the five existing universities, and in terms of managing salaries and benefits for faculty, is it going to have an adverse impact or a positive impact on your five?

D. Avison: Quite a few interesting questions there. Actually, I represent the interests of six universities, and I think it's Thompson Rivers University that might have been missed there. Obviously, it does have some implications. Some of those things are things that we're working through at this point in time.

[1335]

I think the most important point here is this. British Columbia has always been the beneficiary of an exceptional differentiated system. Sometimes I think it would be fair to say that we don't adequately appreciate the quality of what it is that we have here.

We have, to begin with — and I'm directly one of the beneficiaries of this — what I consider to be one of the best college systems in the country and maybe in North America. There are many of us that have had the opportunity to move through the college system and then on to the university level with the benefit of a credit-transfer system that is second to none. That has been the great jewel of British Columbia's post-secondary system.

In a way, the policy changes that have take place in recent months and over the last year or so reflect a move towards a greater degree of the recognition of differentiation so that we have colleges that have the capacity now, through the Degree Authorization Act, to offer degrees.
[ Page 1733 ]

We have the benefit of university colleges that now have taken on — I want to make sure I get the language of this right — special purpose teaching university responsibilities. They are exceptional institutions, most of which have been in the business of offering degrees for ten or 12 years now. I think what you will see as a result is an increased level of focus on the third part of that differentiation, which is the responsibility of the research-intensive university.

There are a number of public policy issues that inevitably will arise as a result of that. Let me offer you this, and I'm sure some colleagues and I will have a difference of opinion on this. Does it make sense in the context that for new growth at the undergraduate level and, for example, in science-based areas, the level of funding in the funding formula remains the same whether it's a college, a teaching university or a research-intensive university?

We're also at the point where the level of compression in the funding level between the FTE value at the K-to-12 level — this is, I think, the first time this has happened in the province of British Columbia — is actually greater, and that's a good thing on many levels, than the level available to all post-secondary institutions. I think that is a pretty significant issue when you compare that for things like the science-based programs at the research-intensive level.

So there are a number of policy issues that haven't really yet been adequately addressed and a number implications that I think will only manifest themselves over a period of time. The one thing I think we all can take greater comfort in is that as we work our way through that, we continue to have the benefit of what I consider to be an exceptional post-secondary system that rivals anything in the rest of the country.

R. Hawes (Chair): And on that, Don, you've managed to stretch it out to 16 minutes. Thank you very much for your very informative presentation.

Our next presenter is the Federation of Post-Secondary Educators of British Columbia, and Cindy Oliver is the presenter.

Cindy, welcome back. You've been here, I think, many times before.

C. Oliver: Many times. It's always a pleasure to come back. This is the communications staff person, Phillip Legg, from FPSE.

R. Hawes (Chair): Welcome, Phillip.

As I said to Don before you, I'll let you know when it's ten minutes. If you want to keep going, that's fine, and I'll let you know when you have two minutes.

C. Oliver: Good afternoon to everyone. Thank you again for the opportunity to speak to you on the priorities that we believe need to be emphasized in the February 2009 budget.

For those committee members who don't know, our federation represents close to 11,000 faculty and staff who work in B.C.'s post-secondary education system. Our members have the benefit of seeing how our system works and what our system needs to produce better outcomes for our students and for our province.

Our public post-secondary education system is struggling. Factors like funding shortfalls, deregulated tuition fees and ongoing demographic changes are eroding access and affordability in our system.

I draw your attention to the work done by the Auditor General's office in 2006 when it examined the status of the government's goal of creating 25,000 new spaces in post-secondary education. The report found that progress on that goal was well behind its target. The report said:

[1340]

"Post-secondary education enrolments are sensitive to several factors: tuition and fee increases, revised student aid provisions, changes in debt levels, fluctuations in the labour markets and shifts in demographics. British Columbia has experienced changes in all these areas in recent years.…

"The impacts of these interacting factors help explain the softening in student enrolment. We expected the ministry and institutions to be well aware of these influences and to have been developing strategies to offset any negative impacts. We found, however, that softening enrolment caught many institutions and the ministry by surprise."

It's now obvious that without a clear understanding of the impacts and of its policy choices, the government has created problems in post-secondary education. I want to talk specifically about funding, because it's an area that this committee can do something about.

Our institutions have seen real per-student funding decline over the past seven years. If they simply received the same inflation-adjusted per-student funding that they had when the current government took office in 2001, that funding level would amount to about $10,184 per student in 2008. Instead, the current funding level is closer to $9,145 per student.

Keep in mind that those funding numbers make no adjustment for the changes needed to improve the quality of education for our students. Technology, course materials and curriculum content change rapidly in our sector. Keeping pace costs more than what is reflected in an inflation-adjusted budget.

Unfortunately, there is a view within parts of government that despite those challenges, the post-secondary system must find ways to do more with less. Some might make a case that for one or two years that approach could be endured, but the track record in our sector indicates that doing more with less is not just short-term endurance. It has become institutionalized.

That "do more with less" approach was front and centre in mid-March, when the Minister of Advanced Education told us that post-secondary education oper
[ Page 1734 ]
ating grants would be cut by 2.6 percent. The cuts were imposed while institutions were in the second year of a three-year budget plan.

What that means in practical terms is that post-secondary institutions had made internal budget commitments such as hiring instructors, designing new programs or purchasing new equipment. In a few cases they had built new facilities. They had made those decisions based on a stable and predictable three-year budget plan, and that turned out not to be the case.

The mid-March cuts meant that close to $60 million was being removed from the public post-secondary education system. Those dollars funded programs, course offerings and services to students — all designed to ensure that our province had the skills, knowledge and innovation needed for the future.

They funded programs that helped new immigrants learn English language skills as they upgraded their credentials to meet B.C. standards. They funded programs in the Prince George area that provided citizens in that region with access to training opportunities that would help that region cope with some of the impacts related to the pine beetle infestation. They funded a number of programs in the Lower Mainland that allowed women to access non-traditional trades occupations and gain access to better-paying jobs.

It isn't an overstatement to say that government was as surprised by the reaction to their funding cuts as the institutions were to be on the receiving end of those funding cuts. The issue remained a media story throughout the province for nine weeks.

Local municipal councils joined the debate when they passed motions objecting to the proposed cuts and the impact they would have on their local post-secondary institutions. Even more surprisingly, many of the government-appointed board members of these post-secondary institutions became so frustrated with the funding cuts that they spoke out publicly about their concerns.

There is a good reason why the provincial media, local municipal councils and even local post-secondary institution board members were so critical of the 2.6 percent cut. The cut simply didn't square with their view of what our province needed and what our province has the capacity to do.

We have a growing skills shortage, and the very institutions that can help address that problem are facing cuts in funding. It just doesn't add up for most people.

A year ago the Federation of Post-Secondary Educators commissioned some public opinion polling on this very question. We found that close to 75 percent of voters agreed with the statement that investing more in our public post-secondary institutions was one of the best ways to deal with the growing skills shortage. Part of that public perception about investing in our post-secondary education system comes from the fact that we are a relatively prosperous province. We have the capacity to fund post-secondary education.

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For the last seven years we have allowed that funding commitment to weaken. The latest fiscal update only serves to reinforce the view that B.C. has the capacity to make the needed investments in post-secondary education. The current surplus is about $1.8 billion before the forecast allowance.

Even after that adjustment is made, B.C.'s budget surplus is still in excess of $1 billion. Clearly, when the treasury has that kind of capacity, it's no wonder that citizens take such strong objection to a funding cut of $60 million in a ministry that should have a much stronger priority.

These funding cuts provide additional evidence to all British Columbians that the government's policy and funding choices need to change. Hopefully, your final report will reflect that needed change.

I'm going to make a number of recommendations, five in total, that I believe will help begin to improve post-secondary education in our province. They include:

(1) Immediately restore the 2.6 percent funding that was cut from provincial operating grants in mid-March.

(2) Earmark $200 million from the existing budget surplus to allow post-secondary institutions to increase access and affordability. That commitment would move real per-student funding up to the level that was in place when the current government took office in 2001.

(3) Make a long-term commitment to reduce tuition fees over the next five years to ensure that middle- and lower-income families are able to fully participate in post-secondary education.

(4) Revise the research guidelines to allow the five newly created universities, as well as colleges and institutes, to better access provincial research funding.

(5) Bring back the student grant program. Deregulated tuition fees have pushed more and more students into debt. The average debt for students completing their post-secondary education is close to $30,000. Those debt loads are both discouraging new students from entering post-secondary education and penalizing those who are trying to complete a degree.

I thank you for your time with this committee, and I'll be pleased to answer any questions you have.

R. Hawes (Chair): You, too, have managed your time very well.

J. Rustad: I've just got one quick question, actually. If you could provide the statistics that you mentioned, particularly around the per-student funding. From my looking over the budget, since 2001 Advanced Education has received a higher increase than any other ministry. It's been up by about 40 percent. Given that the cost of inflation has been running around 2 percent, 2½ per
[ Page 1735 ]
cent, I'd be very interested in seeing the numbers that you presented here today, if you don't mind forwarding them to us.

C. Oliver: For sure. We're also going to be submitting a brief, either electronically or a mail-in version, and it'll have statistics in there.

R. Lee: A similar question. You mentioned softening of enrolment. It means that there's a decline in enrolment. We just heard that they're actually increasing enrolment at SFU and at others. So I'm not quite sure which numbers are correct.

C. Oliver: No, that's a very good question. Certainly, I respect a lot of what Mr. Avison has to say. His statistics about the large universities, as I call them — SFU, UBC, UVic, UNBC — are correct.

You've got to remember that 60 percent of students attend other post-secondary institutions besides the big ones. Colleges and universities kind of compete sometimes for that B-plus student. That's fine, but we serve a much broader spectrum. We have a lot of students….

For instance, I know that the average age of students in the colleges and the newly created universities is 26. That's a much older age. They're coming to us for re-skilling, upskilling. People have lost jobs. We have a large immigrant community that comes in and learns English as a second language — things that they don't get at, say, the larger universities in any great degree. There's a broad spectrum of socioeconomic groups as well, so we're finding that a lot of students are finding it very difficult to keep up economically.

Members around the province have all indicated to our main office that what's happened over the last couple of years is that very good students have either dropped back to part-time or have dropped out completely to go and get work to be able to afford to pay for education.

R. Lee: Is that because employment is very high right now?

C. Oliver: I think that in some cases it does have something to do with that, especially in the Lower Mainland, but in other areas where employment isn't so great we're still finding that same statistic. They're trying to get work somewhere so that they can save up that money and then put it towards their education.

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We all know the statistic from the board of trade that says about 75 percent of all new jobs within the next five years are going to require some form of post-secondary education, whether it's a degree, a diploma, a certificate or a trades qualification — something along that line. Only about 56 percent of the working population in British Columbia has that post-secondary education, so right there, there's a skills gap as well.

I think there's lots of opportunity for the college, institute and university system to actually pick up on that gap. We just need that access and that affordability to be able to do it.

D. Hayer: Thank you very much for your presentation. One of the questions I have is very similar to John's. Since 2001 there has been approximately a 40 percent increase in the funding for post-secondary education. I have four kids in post-secondary education right now.

In the '90s when the economy wasn't that good, there weren't that many jobs available. Nowadays wherever you go in most of British Columbia, they have help-wanted signs. With most people it's very high-paying jobs, and also sometimes in the middle or at the minimum pay — right?

It's part of the reason…. When I talk to some of the universities, they say that lots of kids are working. They can't keep them inside because so many jobs are there. So for some of the colleges, the reason they have fewer students is that that's part of the problem.

I think another part is…. You're saying: "Increase the funding." When we're looking at the natural gas prices, if they go down by one dollar, you're looking at about a $300 million change in the revenues to the province. Have you calculated there in your presentation, when you are asking for total changes, how much that would cost the province?

Also, depending on if the economy, long-term, slows down a little bit and the $1 billion deficit that you're talking about…. That might not stay there for the long term, because once you add the operating funding, then we will keep running back into deficits unless the government manages the finances very carefully.

C. Oliver: You've mentioned the price of gas. I know what we're paying for gas right now. There should be tons of money in treasury.

We need about $200 million to establish those funding levels. Actually, if you look at the budget papers that came out in the last budget and you look at per-student funding and do that math, you will find that if the funding in 2001 were to be inflation-adjusted, it would be around $10,000 per student. If you look at what the Ministry of Advanced Ed has in their budget for that, it's just a little over $9,000. So there has been that.

That comes on top of this clawback of the 2.6 percent, the $60 million dollars that was removed from the system. It had a great impact in all of the communities around British Columbia. The institutions were quite blindsided by it, and it, I think, made planning very difficult.

B. Ralston (Deputy Chair): I just wanted a little bit further explanation of your recommendation 4. As I understand the guidelines and the laws surrounding
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the creation of the new universities, when they're designated as a primary teaching university, they wouldn't be able to, I think, take research grants in that way without a change in the law or a change in the designation.

It doesn't look like this is legally possible, so you're advocating that the enabling legislation be opened up?

C. Oliver: I think it was when the act was amended that that specific, you know, special-purpose university created…. It was an oversight, really, not to include research as part of the mandate.

We have a very broad definition of research as scholarly activity. There are many forms of it. When people think of research at a post-secondary institution, they often think of someone looking under a microscope or working in some very high-profile cancer research or something like that, but there's lots of different research, and our members do that, whether they're given credit for it or any kind of formal responsibility for it.

There's a great deal of research that goes on in a very applied way at many of the colleges. There are nursing instructors, for instance, who are creating all sorts of innovative programs in their curriculum, and would maybe consider it applied research. We consider it all scholarly activity. But there are other names for it.

I know that in one of the trades programs at Kwantlen, in the millwrighting…. A local company had a serious problem with some equipment they were running, and they had no way of sorting it out. Even the manufacturer of that equipment couldn't understand what was going on with that, what was wrong with it. They came to Kwantlen, now Kwantlen Polytechnic University, and talked to the millwrighting department. They put their heads together and actually did the research and came up with a solution for it.

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So it isn't always like that microscope-based research, but I think it's shortsighted of government to kind of deny the colleges and the new universities the full post-secondary experience.

P. Legg: Just to footnote. Douglas College, for example, has a Canada research chair at the college. This is one of these things that, obviously, wasn't really well-thought-out in terms of the amendment that was brought in, in the spring, because in that institution you're going to be receiving federal research dollars, but they won't be able to match that with any provincial research dollars. That would be one case in point.

R. Hawes (Chair): Well, I want to thank you very much for your presentation. As always, it will go in the hopper, and we will certainly give it due consideration.

C. Oliver: Thank you, and we look forward to the report.

R. Hawes (Chair): The next presenters are from the Vancouver Board of Trade —Fred Withers and Bernard Magnan.

You've got 15 minutes. I'll let you know when you're at ten. If you want to give us time for questions, that'd be great. And I'll let you know also at two, if you choose to go that far.

B. Magnan: Thank you very much, Mr. Chair.

On behalf of the more than 5,800 members of the Vancouver Board of Trade, we welcome the opportunity to present our recommendations for the 2009-2010 provincial budget. In summary, the board recommends — as you can see in slides 2 and 3 of your handout — the following recommendations.

With respect to spending, limit ongoing spending increases to the combined rate of increase in population and inflation, or about 3.5 percent, and implement $1 billion in cost savings.

Implement health care reforms to improve productivity, and limit the need for significant increases in health care spending.

With respect to debt management, continue the government practice of applying unanticipated budget surpluses towards taxpayer-supported debt reduction.

In terms of tax competitiveness, reduce the B.C. tax disadvantage with Alberta for higher-income earners effective in 2009 by (1) raising to $150,000 the dollar threshold at which the 14.7 percent personal tax rate applies, and (2) reducing the 14.7 percent tax rate for higher-income earners.

Reduce and eliminate certain aviation fuel taxes over a two-year period. Restructure the property transfer tax regime, making it more competitive with other provinces. Let me quickly go over some of those in a little more detail, and I'm going to be referring to slide number 4.

Beginning in 2005 and 2006 spending has increased well beyond the board's 3.5 percent guideline, primarily due to significant increases in health care and education costs, as shown on the slide. In addition to health care reforms, to be discussed later, the board recommends that the government undertake a thorough review of lower priority programs and general and administration expenses, with the objective of reducing costs by 3 percent of total budgeted expenses, or approximately $1 billion. This will provide funding for initiatives, such as those recommended below, without jeopardizing the government's balanced budget mandate.

First of all, with regard to the health care system. We believe that there needs to be a meaningful reform of the health care system done in conjunction with the federal government. The status quo is unacceptable, and we are disappointed that the government has not delivered a concrete plan to reform its health care activities.

The board has repeatedly encouraged our governments to look to other countries for ideas on how to
[ Page 1737 ]
improve our system. While there have been significant improvements in the aspects of health care performance in B.C. in recent years, a great deal more needs to be accomplished. In particular, governments in Canada should be looking to improve the management and efficiency of the health care system.

The private sector can and should be used to provide medically necessary surgical and diagnostic services as a complement to those provided through the public sector. Canada is the only developed country where the private sector is not involved in this way.

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In terms of debt management, the government has done an excellent job, and we trust that they will continue to do so. With that said, we do recognize that reasonable increases in absolute debt levels to fund much needed infrastructure investment to contribute to economic growth and provincial competitiveness should be allowed.

If you go to slide 6, the taxpayer-supported personal income tax. The top rate is 4.7 percent points higher than Alberta residents. In addition, our tax bracket threshold amounts are much lower than in competing countries, such as the United States. The highest tax rate in the U.S. applies on incomes over $300,000, compared to $97,636 for B.C.

The heavy burden placed upon high-income earners impedes our ability to attract and retain highly skilled personnel and to retain managers who control higher levels of investment capital. It should also be recognized that with inflation and the cost of doing business and the vibrant economy that we have right now, more people are getting beyond that $97,000 threshold, who were considered middle-income earners, and are being hit by this as well.

The board recommends that the top marginal personal tax rate be reduced to 13.7 percent as one possible measure. This would cost the government treasury $145 million. Increasing the threshold to $150,000 for the 14.7 tax rate area would impact annual revenues by an estimated $40 million.

Slide 7. The board also supports the reduction of B.C.'s aviation fuel taxes. This is not necessarily flying in the face of the carbon tax. In the provincial budget it was indicated that the carbon tax would not be applicable to international flights. Yet we still have a provincial sales tax on fuel that is bought by international carriers. No other jurisdiction that is competitive to B.C. charges a tax on fuel that is for international carriers. We are, therefore, recommending that this be reduced over a two-year period to zero. This would be at a cost of $16 million per annum for the government.

Second to last, the property transfer tax. As shown in slide 8, except for first-time homebuyers, B.C.'s property transfer tax regime is the most onerous in Canada and is exacerbated by relatively high home prices. The government is forecast to collect $1 billion through this tax in 2008-2009 — four times higher than that collected in 2001. In sharp contrast, Alberta and Saskatchewan do not levy these taxes.

The B.C. Real Estate Association estimated that based on first quarter 2007 MLS home prices, B.C. purchasers paid PTT equal to 1.5 percent of average fair market value compared to 1.1 percent for Ontario and Quebec, the second-highest provinces. In addition, they estimated that PTT dollar value levied for an average B.C. home represents almost 10 percent of average household annual income, more than double any other province.

The existing structure was introduced in 1987 when the median B.C. home price was approximately $121,000. With the median home purchase value of 2007 being in the $440,000 range, it is unreasonable to retain the 2 percent rate threshold value at $200,000. We are, therefore, recommending that the 2 percent tax threshold be raised to $400,000 to be more reflective of the median transaction price for homes of $440,000.

Finally, to address the carbon tax. The government introduced a carbon tax beginning July 2008 and is offsetting the tax by returning these revenues to businesses and individuals in the form of lower taxes. It is important, however, to continuously monitor this tax-neutral plan to ensure it accomplishes its climate improvement objectives without creating unintended adverse consequences.

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Inequalities are inevitable, especially in business. The government must be prepared to move swiftly to deal with these inequalities. Government may have to find other means to provide businesses with a benefit to offset the carbon tax. The government must also measure the impact of these measures, making sure that the carbon emission reductions are achieved.

We recognize that recent significant price increases in the price of petroleum products, combined with the carbon tax, have caused many to consider alternate modes of transportation. We recommend that the government postpone implementation of further carbon tax increases pending evaluation of any changes in behaviour and usage of carbon-based products to determine if some permanent shifts in travel patterns have occurred.

Thank you for allowing us to present today.

R. Hawes (Chair): Thank you for your presentation. You, too, are an excellent timekeeper.

Questions.

J. Horgan: I think I just heard some news there. If I understand you correctly, the board of trade is recommending that the carbon tax stay at $10 per tonne and not go up in 2009 and not go up in 2012. Is that correct?
[ Page 1738 ]

B. Magnan: Well, what we're suggesting is that any further increases be postponed until we examine the impact of the first tranche of the carbon tax and see if that has achieved some of the goals that were meant to be achieved with the introduction of this.

J. Horgan: That's great. The other question I would have is…. By my quick count, you're recommending approximately $365 million in revenue reductions to the Crown as well as a billion dollars in savings. I'm wondering if you could maybe highlight some of the areas where you would be able to find a billion dollars in the provincial budget without impacting….

B. Magnan: It's difficult for me to say because I'm not the one examining the various ministries and looking at programs that are existing now that may or may not still be useful.

This is something that we've recommended to the federal government as well. They have a program in place to look at existing programs to see if they have lived out their life cycle and are no longer required to carry out the business of government and, therefore, should be reduced or eliminated completely and those funds be retasked to higher priorities.

J. Horgan: So it's a reallocation of a billion dollars potentially, rather than a reduction in expenditures.

B. Magnan: Potentially, yes.

J. Horgan: Okay.

F. Withers: It would also include the health care field, as productivity improvements in the health care field may contribute those dollars as well.

J. Rustad: Thank you very much for your presentation. I'm just curious, particularly with regards to the carbon tax and that side of things. I know there has been some talk about there being a producer tax that has to be put in place. I'm just wondering if you have any thoughts with regards to that and what impact that may have with regards to business.

B. Magnan: We haven't really examined the producer tax, so I really couldn't comment on that without looking at it further.

J. Rustad: Okay. I guess also, then, with regards to carbon tax and the whole concept of pricing carbon and benefits that that could drive in terms of other types of opportunities in the economy…. Particularly, I'm thinking in terms of forestry and other related activities. Do you have any thoughts around that in terms of possibilities in cap-and-trade?

B. Magnan: One has to recognize that this particular carbon tax is only covering about 70 percent of the actual carbon usage within the province. A cap-and-trade system has yet to be put in place as well. The government is part of the western climate initiative, and that is part of the overall evaluation of what level of cap-and-trade system should be put in place in British Columbia. The reason for that is, of course, to make sure that we are competitive with our neighbouring jurisdictions, as you well know.

So that part of it, the cap-and-trade, has not been put in place as yet. We have only dealt with the actual carbon tax per se and are still waiting for the government's presentation on what it plans to do in cap-and-trade.

That said, we'll go back to what we said originally when we came out in support of the carbon tax. We supported it on the basis that it remain neutral in the hands of the consumer, both business and individual. On that basis we were supportive of it.

B. Ralston (Deputy Chair): Just to go back to the billion-dollar reduction or 3 percent of total budgeted expenses, you mentioned health care costs in a generic way. Can you give any other specific examples of how you would go about achieving a billion-dollar reduction? I'm just wondering then, in the absence of specific reductions, how you came up with the figure of a billion.

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B. Magnan: Well, it was decided that existing programs needed to be looked at. And the way one does this, certainly in business and in other organizations that I've been involved with, is that you look at programs that are already existing to see if they are still required. If not, then you eliminate that program or reduce it to the level where it is needed and take whatever savings are there, either to take to the bottom line — in this case, as returns to the taxpayer — or to repurpose it to help fund costs and higher priorities that the government may have.

I can't go into any specifics other than to say that health care is one area where there are some productivity issues. That has been documented by the OECD, where it shows that Canada has a significantly high level of expenditures in health care but that in terms of productivity in health care, we are at a fairly low level.

B. Ralston (Deputy Chair): Again, to go back to the billion dollars or the 3 percent of that, then would you expect to achieve the reduction that you're speaking of totally from health care expenditure?

B. Magnan: Absolutely not. Every program in every ministry should be examined to see if that program is still a viable program and is one that is still needed. If it is not, then it should be eliminated and those moneys be repurposed.
[ Page 1739 ]

I don't know the ins and outs of every ministry, nor all the programs, so it would have to be something that would have to be examined internally by the government.

R. Hawes (Chair): With that, I want to thank you very, very much for your presentation. Your comments are well received and will be given lots of consideration.

Our next presenters are from Genome British Columbia: Bruce Schmidt and Alan Winter.

A. Winter: In summary, Genome B.C. would not be as successful as it is without the support of the government behind it. So Bruce Schmidt, the founding director of Genome B.C., will make a ten-minute presentation to you.

B. Schmidt: Genome B.C. is an independently governed non-profit organization whose future and purpose are inextricably linked to the economic future of the province and specifically the life sciences aspects of that economy.

Just as solid state physics was to the last century, biology and genomics is going to be to this next century. We need to know more than ever about the human condition, about our environment and about a number of other aspects of our world, as it were, as it changes. This is really one of the promises — and it's certainly one of the promises on page 2 — that Michael Smith had as he motivated not only the formation of Genome British Columbia but of Genome Canada as well.

We have a world-class genomics institute in this province, and it is largely a function of the support that we have been provided by this government. We're here really to help, I guess, crystallize the opportunity going forward.

The fact is that we've put over $300 million in contributions into this research economy in the last six years. We have taken more than our fair share of federal funds. We have been able to attract hundreds of companies, large and small, to come to this province to invest in this research with us — a lot of them being other philanthropic institutes from around the world.

There's been over 1,000 jobs created, and this is at the very fundamental level of technicians to the very high-end scientists that are indeed leading the world in some of these activities.

On page 3 it shows that we have been able to do this by leveraging the province's money to the point where 50 percent of our available funds has come from the federal government. The other 25 percent beyond the province has come from international and industry.

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We've tried to adhere to the principles we were provided, you know, in conversation with government around matching B.C.'s economic concerns, leveraging contributions from other places and maintaining research partnerships around a large cross-section of institutes around the province. This isn't a Lower Mainland opportunity. It's for the entire province, and we find valuable opportunities everywhere.

On the bottom of page 3, you see that we've been able to compete very, very ably with Ontario and Quebec, and we are actually more broadly represented in the life sciences here than virtually any other province.

On page 4. The partnerships have been vital. Genome Canada, which is an Industry Canada–funded organization, along with the province and western diversification have again allowed us to bring in this very broad cross-section of partners, including the Gates Foundation, large pharmaceutical companies, as well as many of the large technology companies.

On page 5, just with respect to the leverage. The Vancouver Board of Trade completed an analysis of just the second business plan. The first one was a $70 million business plan, which the province actually came to the table with half of. This was at the very early stages. As you can see in the last one, we are getting towards the 25 percent. So I think the leverage there has been expanded, as well, because we're less dependent on the provincial government than we were when we started.

What this chart basically says is that for a contribution of $75 million, there's been an economic impact within the province of 8,400 person-years of employment, a $450 million contribution to GDP and, interestingly, equal tax revenues to both the federal and provincial government of about $54 million. This was, of course, on your investment of $75 million.

We feel that this is not necessarily the reason to make these investments, but it's an interesting offset to that decision. And really why we're doing it is because we are internationally focused and acclaimed. We are a catalyst in the life sciences sector, and we are really approaching each one of these major economic sectors and looking for those opportunities for growth, international competitiveness and sustainability.

This is throughout our university system of course. The large universities have some of the large facilities, but the smaller universities and teaching hospitals especially present us with very exceptional opportunities.

On page 6, you can see that we've had a lot of public interest around what we've been doing. Everything from the SARS virus to being able to look at adverse drug side effects in children or indeed to find out why a bug likes to eat PCBs and how we can choose a genetic profile within bugs that could do some of those industrial jobs for us.

This is an Asia-Pacific opportunity. We work worldwide, but we're seeing more and more interest in Asia. We've just come back from a visit to China, and there is a lot of work in Singapore as well as Korea. We see this as an expanding opportunity for us.

Page 7. We are in every significant sector of the economy. In the health sector we are working today on trying
[ Page 1740 ]
to create sustainability, using molecular biology to personalize medicine to the point where we can actually start controlling the per-unit costs.

We spend a lot of money on medicines for people now where they may not need those medicines, and sometimes we even give medicines to the wrong people. It has a lot to do with their personal genomics. So we're now in conversations to look at that.

Another interesting anecdote is that we've just pledged some support to the TB issue on Vancouver Island, and we see that as an important part of how genomics can help us understand not only what's going on in that particular community but how that relates to the rising incidence of TB, in general, in our population. This is an important part of our purpose.

So in agriculture, mining, environment, bioenergy, forestry. We're in the pine beetle issue. We have a $4 million collaborative project with Alberta. We're looking at that problem from a fundamental level and looking for very practical solutions to some of their problems.

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We're involved in fisheries, and we also do a lot of work around the societal impacts. When you have disruptive technologies like this, you have to anticipate the fact that there will be societal issues comprised.

Then, pushing on to the next cycle, we have these three plans: the first and second — the second of which we're just completing as we move into 2010; and then the third one would be 2010 to 2015. This is a partnership of academia, industry and government. We want to build a base of Canadian science, and eventually we want the private sector to be taking it over. On an intermediate basis we need strategic investment, and the province is one of those aspects of that strategic investment.

On page 9. We are now working not only in the research and applied levels, but we're actually looking at actual product development. We are looking at ways of being relevant to the province. For example, we have a honeybee project in the interior. Colony collapse is a huge issue. It's a huge threat to our tree fruits business and our vegetable business. We are now looking at why some colonies collapse and why they don't, and there is a genetic basis to that. We're looking at building capabilities in the province, not only for highly qualified people. We want to keep on leveraging money into the province.

Page 10. We have program elements in our next plan — this $340 million, five-year plan. We are basically leading an applied genomics program which is trying to look at genomics innovation and innovation in human health — as well as consortiums. We have one in particular where we're doing work on the Atlantic salmon, which is our farmable salmon here in British Columbia, and looking at bringing a number of countries worldwide to augment and leverage our money.

We'll be participating in federal competitions. We really do well in that regard, so we'll keep on taking more than our fair share off the federal coffer and then securing economic benefits by translating all of this into sound product development. These funding sources will be similar to what we had talked about before in terms of the 25 percent contribution from the government.

Page 11. The timing now is important, because it's this next 18 months that we can actually go to these major institutions that co-fund us and start leveraging the money that we're provided with from the province into these larger international programs. So we are here, really, to build this support for the future of genomics in the province and also to be able to keep on attracting the best and the brightest people.

On page 12, just to say that we are profoundly grateful for the $50 million we were provided this year. We wanted to just start working with government, and we're starting those consultations on the balance of the $35 million.

R. Hawes (Chair): Thanks very much, Bruce.

B. Ralston (Deputy Chair): I was intrigued with your example of tailoring individual drugs to the specific DNA of the recipient. I'm just wondering in a broader sense: when you talk about commercialization, what is the relationship between Genome B.C. and the pharmaceutical companies which would obviously be interested in that kind of research? Is there an opportunity to create a funding stream, a revenue stream, for the pharmaceutical program of the province which, as I'm sure you are well aware, continues to rise notwithstanding some prudent public policy in the past?

B. Schmidt: You are aware, of course, that there was a consultation which provided a set of statements to the provincial government, and Mr. Avison was the chair of that committee. With that, I believe there is a sound basis to start working with pharma more specifically in the province and to establish institutions and more leverage for us, frankly.

What we have been doing is looking at international pharma as well as local Canadian pharma. Generally speaking, we've had grants from international pharma to do this, and we have a good reputation with them. I think it all just comes together, and we do plan on working with pharma in the future.

I think the whole drug manifestation that we have now in our system is going to impact them dramatically in terms of how they really think about drug development. We're here to assist this province in making sure it's to our best interests.

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R. Hawes (Chair): Bruce, I'm very familiar with how you have been very successful in attracting some of the brightest and best minds in North America. People like Marco Marra and that, that are just unbelievable assets
[ Page 1741 ]
to this province in developing this industry, clearly need to be retained here.

The research money that you receive, that you're able to leverage with the money that you get from the province, are the outside funders, if you will — those that would provide the leveraging — looking at the 2010 end of the cycle and kind of sitting on the edge of their seats wondering what's going to happen for the subsequent years? What impact does that have on your ability to leverage future dollars?

B. Schmidt: Well, I think what we're doing now is establishing strategic plans that will allow us to start moving into this. For example, we have consultations…. We have industry groups that represent each one of these, whether it be agriculture, mining, forestry, fisheries, human health. We have consultation groups that are helping us understand what are the points of pain and where the demand is. We have to get away from the push type of technology, and we need technology that's pulled out of these sectors. That way, we have adoption, and we have relevance.

Truly, we need to keep on doing that, and that will create the demand for all of these exceptional people.

Do you have one comment on that?

A. Winter: Just to add to that, Mr. Chairman. I think any time we open up discussions 18 months ahead for a program — and that program can be an international one, for example, in the area of health, etc. — the question always is: "Well, do you have money in the bank?"

If we do, then it's a much easier discussion with the Gates Foundation or the Wellcome Trust or the pharmaceutical companies, where we can say: "Yes, we do, and we're planning to leverage it." So we can lay out our responsibilities, and then we can compete.

To some extent, the province is the lead investor in Genome B.C. We take that money, and we leverage it up. So by having it in the bank, it allows us to take that 18 months and put the programs in place. That's exactly what we did in 2004 and 2003 ahead of the 2005 plan, and that's why we were successful.

R. Lee: Thank you for your presentation. In terms of leadership in the world, how does Genome Canada…?

B. Schmidt: Genome British Columbia leads in a number of ways. I think, firstly, we have one of the more advanced genome sequencing centres in the world. I think that there are others that are larger, but strategically, we're far more potent. We're far more agile to take on some of the big questions in the world right now.

We have an incredibly successful area in fisheries. We have incredibly successful forestry genomics businesses, and within the cancer area, probably one of the leading institutes in North America, for sure.

I think that we are building a lot around the bioenergy piece now. You may or may not know that microbes are going to be a very important part of being able to break down cellulose, to be able to get at it as a bioenergy source. This is, generally speaking, not a matter of creating new microbes; it's just selecting the best ones of the millions and millions that are out there. That's what genomics can accomplish.

R. Lee: So it's looking at ethanol….

B. Schmidt: Yes, absolutely — and other things from that forestry biorefinery. Many, many value-added chemicals can be produced, including some pharmaceuticals, out of these types of raw materials.

R. Hawes (Chair): I want to thank you both for your presentation, and on behalf of certainly us, thank you for putting us out in the lead, I think, in many areas internationally. You really do British Columbia proud.

B. Schmidt: It's an honour.

R. Hawes (Chair): Dr. Don Nixdorf of the British Columbia College of Chiropractors will be our next presenter. Don, as you know — and you've been here before — I'll tell you when you're on ten minutes, if you choose to go that far, and when you have two minutes left, if you choose to go that far. Then, of course, we'll ask questions.

D. Nixdorf: Great. First, on behalf of the B.C. Chiropractic Association, I'd like to thank the Chair and the committee members of the Select Standing Committee on Finance and Government Services for the opportunity to present today.

After listening to Minister Hansen this morning, we'd like to take advantage of the opportunity to provide our written comments at a later time. He said some interesting things, which we were aware of, some new details. We're going to revise the written portion and then submit that for your consideration later.

[1430]

Let me start by echoing a few words from the minister this morning for the 2009 budget. The one point that was extremely interesting was the rise in 2008-09 from $9.73 billion to $14.89 billion for health care. The next three years — another $5 billion and the commitment to investing in education of students between K and 12, which is going to be a key thing that I'll speak to later.

These comments were rather striking. I had the privilege of being at the budget lockup where Minister Taylor spoke, and of course, the immediate comments in February addressed the carbon tax, which captured the interest of everybody in the room, after which she concluded by saying that every Finance Minister in the
[ Page 1742 ]
country…. Every morning they wake up, and they're traumatized by the health budget.

Then she went on to explain the upcoming rise of the health budget this year and the next three years. What was shocking, apart from these extreme numbers which suggest that if we haven't recognized that we've crashed or we will shortly crash, was that I don't believe there was a single question from the 200 to 300 people in the room concerning where the revenues were and what the government's plans were for addressing health costs and for meeting the services of British Columbians in the future.

This is by no means a criticism of any one government, because all governments have handled this issue over the years. If we look back, all governments have progressively increased the health budget to the crisis that we find ourselves in today. Knowing this, it's no surprise that we're stretched to the limit. Some of these factors include, of course, our ever-increasing aging population — that's well documented; the introduction of costly new technologies — and these are necessary to provide health care to British Columbians; and the ongoing necessary daily care of British Columbians.

We look at health costs primarily through the eyes of a newspaper headline, a television headline or a radio headline, but while those are important things largely representing hospital, emergency and institution-based care, we forget that daily health care is really the largest cost driver and that almost, I think, five or six visits per person can be accountable for costs to the Medical Services Plan per year. So the daily health care needs of British Columbians provided outside the hospital settings require equal attention by both the public and legislators alike.

Indeed, as health care consumes about 50 percent of our current budget, it's projected to be 70 percent in the year 2017. We need to look at new ways of delivering care to British Columbians.

As you may be aware, I had the privilege of co-authoring a book, Squandering Billions: Health Care in Canada, which I know we've circulated to ministries in British Columbia as well as Alberta, and both medical and chiropractic colleagues have looked at it. We like to articulate in this book that there is enough money for health care. We're just not spending it efficiently. To that extent, we address issues such as long-term care and palliative care that do not need to be institution-based. We discuss issues including pharma as well as nurse practitioners.

One of the recommendations that the B.C. Chiropractic Association would make is to continue to assist the Ministry of Health in finding new ways to make our system more sustainable in the future. The challenge in part is that many of the solutions we've tried are currently on the discussion table to try again. So it requires a bit of a commitment by legislators to look at the solutions that have been tried and, rather than doing the same things again with the same outcome, to revisit and see what new opportunities are there.

Government has made the first step, however, in changing attitudes and policies through the reform of the health legislation. We're coming up to the conclusion of what has been a ten-year process of the Health Professions Act. This act and its regulations and bylaws will provide government an easier opportunity to administer the affairs of all the health professions, scopes of practice — reserved acts, as their known in British Columbia.

Importantly, we feel that this will also facilitate the public's awareness and the transparency of the available services of all regulated health professionals. This is a recognition that is absolutely necessary not only to fully implement all the health care services but to support the public's ability to find those health care services they need on a daily basis.

From the public's choice, regulated health professionals are neither alternative, supplemental or complementary but are all mainstream health providers that they need at the time of their situation.

[1435]

Government needs to look at its terminology and definitions and try to align those more generically with recognition of what the public chooses in health care. While the terms "alternative," "complementary" and "supplementary" may be deeply embedded in various forms of health legislation and departmental language, they really don't serve your later work in trying to support the public in the facilitation and transparency of health services.

The second step is that the key to the sustainable future of health care comes in part from prevention. You will hear many reports over the term of your committee that will include prevention.

One of the challenges around prevention has traditionally been that there isn't seen to be a short-term gain for the millions that may be invested. However, I'm sure you'll appreciate that some investment in time and money towards prevention is necessary. Otherwise, this chain will just continue.

The BCCA believes that all British Columbians can benefit from more targeted prevention programs. These programs come with proper funding, which could help provide the tools and resources for British Columbians to make these choices. Over the last several years the B.C. Chiropractic Association has had a number of very effective programs that have targeted children, young workers, mothers and seniors.

The very successful backpack program, Pack It Light, Wear It Right — Ipsos-Reid identified that there was a 73 percent recall by British Columbians of the B.C. government program partnered with the BCCA. We think this is an excellent example to show you that very, very little money, which was funded by the BCCA, can go a
[ Page 1743 ]
long way to increasing public awareness and changing prevention and health behaviour habits.

The young workers program was also partnered with the B.C. Chiropractic Association and WorkSafe B.C. and will currently run again this fall to increase the awareness of a reduction of injury in the workplace. As a result, the BCCA would recommend that programs that support low-cost and demonstrable prevention initiatives be supported by the ministry.

The third step is a greater choice for British Columbians. The British Columbia Chiropractic Association believes that the more educated British Columbians are about their health care programs and their own wellness, the better choices they make.

Indeed, one of the ministry's comments is that the greatest untapped resource in health care is the consumer. Well-informed patients get better care and also assist in better prevention. We think this is a very strong statement by the government, and I think this is one that we would urge you to consider in all of your planning.

Right now there is very little meaningful health education between K and 12. We don't educate the students between K and 12 in some manner equivalent to reading, writing and all the usual programs. Consequently, we graduate children from grade 12 each year that do not have a reasonable ability to deal with health, their bodies and the needs for their life sustainability.

What makes this worse, however, is that we also do not empower them. We urge you in your consideration of programs to spend some time and investment on programs that deal with health education and, if not on health education, on empowerment, so that when they graduate from grade 12, they can become knowledgable, informed consumers.

Finally, the last step is focused on our educational system. We need to grow and develop our own organic health care professionals, because we can't rely on other jurisdictions to do that for us.

We know statistically that at least one-third of all daily health care services provided in Canada are for spine and spine-related conditions. We know this through epidemiology literature. We know this through Workers Comp stats and ICBC auto care stats. We know this through medicare services stats, whether it's Saskatchewan or British Columbia. It's a very large component, as I've mentioned earlier, of the daily health care needs of British Columbians.

Today we license approximately 40 doctors of chiropractic each year. Those students have to go to Toronto or Trois-Rivières in Quebec or the United States.

We have been committed to developing a chiropractic degree program at a public university within British Columbia. This will allow British Columbians to get their education here in British Columbia, and it supports British Columbia in being a leader in education, research as well as the sciences.

This kind of program will also attract international students to come to British Columbia seeking education. Supporting this opportunity will help address some of the health manpower needs that we face today.

The B.C. Chiropractic Association is concerned and excited about the future of care in this province, and we look forward to supporting you further. We are also very excited about the prospect of working with Minister George Abbott and Minister Coell in the upcoming year in an effort to pursue the area of public education at a university.

The future of health care is characterized by an increased need or demand. That will not change. This is subject to ever-changing circumstances of each criterion impacting health care, including the external factors such as we've seen this morning.

[1440]

I'll close simply by saying that the warnings we've seen from the previous Ministers of Finance on the constant rise of the health budget are perhaps a similar warning as we're seeing in the collapse of financial institutions in the United States.

As legislators, you can't ignore that warning anymore. You've all seen the numbers. You know that one ministry cannot be the sole concern of government. In order for the various health providers to be more effective, it means setting aside old conflicts and voluntarily working with government. It is a process which the British Columbia association endorses and looks forward to its active involvement.

On behalf of my colleagues, thank you for allowing us to present today.

R. Hawes (Chair): Thank you for your presentation.

D. Hayer: Chiropractors, I think, are very important. My wife was just telling me that on the weekend, because she had to use them in the last couple of weeks.

I was quite interested in your discussion about getting health education involved in K-to-12. What type of program do you think they should have? I haven't heard anybody else talk about that before, but it's quite interesting.

A very good presentation overall. Everything you covered in it is quite interesting, and there's very good research in there.

D. Nixdorf: We're not going to presume to tell teachers what the curriculum should be nor the Ministry of Education what the specifics are. We do, however, like to draw attention that there really isn't anything meaningful in health education which is going to empower students when they're in grade 12 to understand in an ongoing way their needs for prevention and sustainable health care.

We as the chiropractic profession in British Columbia would very happily work with the Ministry of Education
[ Page 1744 ]
and other partners to identify educational components that would fit into the existing ability to teach students, because we're mindful of time as well as budgets, and also to select those programs at certain ages that are suitable.

We did have a program called Inspector Spine in grades 4, 5 and 6 which was sequential and which was well received by many school districts throughout British Columbia. We funded that one. It was a very simple program, geared to those ages, which allowed the teacher and the students simply to become aware of basic health issues, not unlike how people become aware of their teeth and the preventive care of their teeth.

D. Hayer: This is in addition to…. We have ActNow B.C., which gets people, kids to stay active, to stay fit — you know, moving, exercise and all. This is talking about the body parts and all that.

D. Nixdorf: Yeah, exactly. We're not looking to make dentists, physicians, surgeons or chiropractors out of the students but just to let them know that there are some responsibilities they have, to empower them and to give them some basic knowledge of their body and how it's going to have to be looked after throughout their life.

J. Rustad: One of the things we did during the conversation on health care in Prince George is that we brought together all of the various health care providers, whether they be doctors, nurses or chiropractors, etc. We brought them together to talk about solutions in health care. I was surprised to learn that that was the first time in Prince George that all of those groups had actually got together to have some discussions about health care services.

Now we're trying various programs, such as the primary program, where we're trying to include a number of health care professionals in terms of delivering health care services. I'm just wondering. On a professional level, between one association and another association in the province, have you had the opportunity to sit down with the other associations to talk about a collaborative approach in terms of resolving some of the health care issues and trying to improve the level of services for patients?

D. Nixdorf: We've tried, but there haven't been any meaningful forums for the professions to get together and drive an agenda to see how that will work. However, whether it's the Conversation on Health or your legislative reform of the Health Professions Act and the stakeholder meetings that arose, I think that this is going to evolve. In the Health Professions Act the bylaws include a quality assurance committee, patient relations and also some very clear language that the health professions should start to integrate and cooperate more fully.

We certainly welcome all of the community initiatives that have been created for health care. I know that B.C.'s chiropractory doctors would be only too willing and too happy to participate in those.

R. Hawes (Chair): Don, thank you very much for your presentation. We'll look forward to getting the revised written submission that we know is coming.

Our next presenter is Bev Ramey from the Federation of B.C. Naturalists.

B. Ramey: Thank you very much for this opportunity to present.

[1445]

R. Hawes (Chair): I will tell you when you're at ten minutes if you want to speak that long, and at 15, well, there won't be time for questions if you go that far. If you want to go ahead, you're on.

B. Ramey: My organization is named B.C. Nature. Legally, we are the Federation of B.C. Naturalists. We just have this more public operating name now of B.C. Nature. We represent local natural history clubs throughout B.C.

There are 50 clubs in the province. I'm just going to name a few, as they might be familiar to some of you from your ridings: the Victoria Natural History Society, the Bulkley Valley Naturalists, Timberline Trail and Nature Club, Prince George Naturalists, Burke Mountain Naturalists, Alouette Field Naturalists, White Rock and Surrey Naturalists and Nature Vancouver.

I'm just trying to make a point here that we are a largely volunteer organization. We have one paid office manager. We believe very much in volunteer and community work, and I see from your bios on the website that this whole committee is very active in your communities.

My presentation today has to do with a proposal to increase the budget for B.C. Parks. A big component of the reason for that increase is to reach out to communities more and get communities' youth and skills more involved in B.C. parks.

The overall budget of B.C. Parks is very small. Some of the dollars that have been put on the table while I've been sitting here…. We're talking about a $37 million to $38 million budget for B.C. Parks. It's probably the most cheaply run park organization in all of North America.

It's good to be frugal, but I think that in the case of B.C. Parks, it's too cheap. There are so many lost opportunities, especially when people are now, more than ever, valuing healthy lifestyles, getting people out in the outdoors, connecting kids and families to nature. This proposal is talking about a $10 million increase to B.C. Parks that could go a long way.

As an example of this sort of project, you may have read last month in The Vancouver Sun…. There was a
[ Page 1745 ]
photo. It was a high school class, I think, from West Vancouver that had built a shelter in their high school shop class and then, through community involvement and some free helicopter time, got it up to the Howe Sound Crest Trail. In the summer some of the students, with direction, put up these two shelters.

Now, that's the sort of volunteer project that I think is so wonderful to have. You know, I think of those teenagers out there in a B.C. park in the wilderness doing something that is really useful and appreciated by people. They are learning good skills. To make that type of project happen, you need staff in the system, because there's a lot of behind-the-scenes work to make that happen.

On the second page I mention three of the goals that are in the service plan for the Ministry of Environment that this proposal would help meet, including shared environmental stewardship. I wanted to draw to your attention that there is a performance measure of increasing the number of park visits to 21.6 million people by 2010-2011. In order to do that, you need more information about the parks out there. You need to encourage park visits.

As a side note, I also wanted to remind people that 2011 is the 100th anniversary of B.C. Parks, so it's a great celebration to be looking forward to.

There are three areas of budget increase. The first is for park information, visitor services and interpretation. B.C. Parks has a great website, but much more is needed in terms of print and actual brochure material available in the parks.

Many of you have seen those brochures for individual provincial parks that used to exist and don't so much now, although many communities, again, are coming up with innovative ways to print those brochures. You'll occasionally see some, like for Shuswap park, where local businesses have their logo on the back. That's the sort of thing….

Again, you need staff in the system to outreach and work with local communities to get just a small sponsorship that covers printing a brochure. With no staff you can't do that kind of outreach.

[1450]

My organization has been involved with park interpretation since 2004, when we struck up a partnership with the park facility operators, the private companies that operate the front country of our parks and with B.C. Parks. We've gotten Service Canada grants. From 1974 we had six positions in parks. This year, this past summer, there were 37 interpreters.

Now, 16 of those were funded through conservation corps, which is a great program of the Ministry of Environment that gets young people out there working. Some of the parks where there was interpretation, again in some of your ridings: Golden Ears, Rolley Lake, Boundary Bay, the Semiahmoo wildlife management area, Mount Robson, Lakelse and Goldstream. There were 73,000 people who took part in programs in the parks, and an additional 56,000 people were in contact with an interpreter in the park.

Although this program is growing and it sounds good, there are many lost opportunities — again, in terms of outreach, working with school groups, working with community groups — to train others to do park interpretation programs. B.C. Nature has put together a proposal, and we're meeting later this month with Minister Penner to request half a million dollars to grow the interpretation program.

I have copies of that if anyone is interested. It's got a lot of detail in it, and I know there's not time today.

The other two big areas on the back are a budget increase for park rangers and area supervisors. These are the front-country people — the people that the public often see in the park. I'm not sure if you're aware that there are only ten full-time rangers in B.C. parks. We have 893 parks and protected areas and only ten full-time rangers. Now, the budget increases have been helpful in the past few years, and there are now 145 seasonal rangers. That's a lot more bodies out there, and that is good, but they're mostly three-month positions.

For those of you with teenagers or older who are out there getting jobs, you can just imagine…. If you graduate, even, and you get your job for three months and it's a good job and you're trained, you're going to be off to another job. The next summer you're not going back. There's a real need for six-month positions at least, so that you can keep the better people and bring them back. They're the valuable ones that would work with community groups. You need somebody who knows the community and the community groups.

The last area is additional money for park signage, trails and back-country facilities. The big bucks that B.C. Parks has been spending are for improvements to the drinking water, and those are very costly. They're good to do, but in many areas the back-country facilities have been overlooked. There are some improvements, but a lot more could be done.

In concluding, I'll just come back to the first page and mention again what these improvements will do. They will encourage more people to visit parks, thereby contributing to a healthier lifestyle. They'll connect kids, families and communities to nature. They'll help ensure meaningful, safe visits to the parks; increase spending by tourists; ensure protection of the natural habitats in B.C. parks; and provide outreach to schools and community groups.

For the actual dollars that I'm proposing here, it's a very small amount. I know every dollar is important, but I thought it important to come and put in this plea for B.C. Parks so it's not forgotten.

R. Hawes (Chair): Thank you very much, Bev. If we could get you to leave a copy of the proposal for the
[ Page 1746 ]
information and visitors' service interpretation proposal with the registration desk, it could be helpful too.

R. Lee: One of the attractions for people visiting parks is the campsites. Do you support campsites around parks so people can live there for a few days and enjoy?

[1455]

B. Ramey: Yes, certainly, and also group campsites that are not too far of a walk in, so that youth groups could make their way for a first-time backpacking experience. Golden Ears would be a great park to have a campsite — about a five-kilometre walk in.

J. Horgan: Thank you very much, Bev, for your presentation, particularly in highlighting Goldstream Park. I'll highlight it again for Hansard's sake.

Many of the people that come to me, whether through e-mail or directly into my constituency office, talk to me about the lack of trails within the newly created parks, whether they were created in the '90s or in the early part of this century. Increasingly, with an aging demographic, clear, easily accessible trails are the key to more activity for seniors as well as young people. I was wondering if you could give me an indication of what your organization's view is on accelerating trail development in existing parks as well as those conservation areas that have been proclaimed recently.

B. Ramey: Yes, we certainly support that, and the trail location would follow a plan that the parks staff would have agreed to. I mean, certainly there are a few sensitive areas that you wouldn't want a trail going through. A good example would be the Yew Lake Trail at Cypress Provincial Park, which has recently been improved. It's handicapped-accessible, and it's beautiful. Yeah, we certainly support improvements and new trails.

J. Horgan: Just supplementary to that would be the advent of parking fees or user fees for day parks. I can understand that as a revenue opportunity, the government doesn't want to foreclose on many of those. But for school trips, for longtime residents buying an annual pass at a greatly reduced rate…. Are those issues that your organization is bringing to the minister's attention as well?

B. Ramey: Yes. Just on Sunday I was at Mount Baker. It's always interesting to see how the U.S. government handles it. Everyone pulls up to the ranger office there and pays for their $5-a-day parking pass — no complaints. But what they're getting is staff, information, well-built trails, good signage.

D. Thorne: I'm not sure if this is even relevant — I'm new on the committee — but I agree with what you're saying here about the need for this. I do belong to the Burke Mountain Naturalists, so I already know about a lot of this. What I'm wondering is…. These kinds of grants and the money that's needed…. You say you have a partnership. Has your group talked at all about getting some of this money perhaps through the budget process through the new healthy living program, not just through B.C. Parks but through that as well? I'm wondering if….

B. Ramey: That's a good suggestion. We have not sent it to another minister.

D. Thorne: You don't really care where it comes from — right?

B. Ramey: Exactly.

D. Thorne: I mean, we could consider anywhere besides B.C. Parks — right?

B. Ramey: Exactly. Yes.

D. Thorne: It might fit in with some others. Okay.

B. Ramey: Yes, because a good part of it is about healthy lifestyles, for sure.

D. Thorne: Exactly. A lot of this fits in. The other part about the student positions and the short-term jobs is a huge problem. I had a son like that, who had a great education and went into construction because he couldn't get more than a three-month job. I think anything that we can do in government to follow up with getting students into those positions — more students, all students — would be good for everybody. You'd agree with that?

B. Ramey: Yes.

D. Thorne: Okay, great. Thanks.

R. Hawes (Chair): I guess the only comment I would make, Bev…. I live in Mission. In the northern part of Mission there is an area that is not a provincial park, but there are some municipal parks there.

There is a forestry road, which is used now —because there's not enough recreational opportunity for a lot of people from the GVRD, etc. — by people who come there with stolen cars, and they burn them. They bring guns. They're shooting guns all over the place in there. It's like the Wild West. There are huge parties that are out of control. The police have to try to be up there and take away from the resources needed in the urban part of the city. It is really a terrible thing.

I'm not sure if you have experience or your group has experience with that sort of thing in other areas, but any assistance or suggestions you could give, certainly I can
[ Page 1747 ]
tell you that the district of Mission would welcome. I'm sure that the minister would welcome those too, because I know that's the sort of thing, in some areas, that we experience as well.

[1500]

B. Ramey: Just by getting kids from elementary school through high school involved in their parks and doing projects, I think you can turn around that attitude towards the park. It is a major problem.

R. Hawes (Chair): It is.

B. Ramey: But it takes a community to kind of try and set it right. That's why you need the communities involved, all working together.

R. Hawes (Chair): I want to thank you very much on behalf of the committee, and if you'd leave that presentation with the registration desk, that would be a great thing.

Motion Picture Production Industry Association of British Columbia.

Peter, I'll tell you when you're at ten minutes, and then I'll tell you again when you're at 13 minutes.

P. Leitch: Thanks very much for allowing us to speak today. I'm not going to completely follow my handout, but I just want to talk a little bit about the industry, which I've been involved in for the last 21 years.

I think it's a real success story for British Columbia. It's now a billion-dollar industry here. We saw from the figures last year that the domestic production is up fairly dramatically, even though there was a writers strike in the U.S., which dropped our U.S. production down last year. But that's settled now. We've still got a bit of a nagging Screen Actors Guild issue in the U.S., but other than that, business has been pretty good in British Columbia.

As a comparison, in Ontario, which is our…. You know, we'd call it our major competitor in Canada and one with similar tax credits, although they have the benefit, I guess, of being treated as an export product for provincial sales tax purposes. But I don't really need to address that here. But just to let you know that there's a level playing field there.

They're struggling, and their business is down about 50 percent as a result of competition directly south of their border in states like Michigan, New York, Connecticut and Illinois. We don't have that same disadvantage, because Washington State and Montana haven't been as aggressive in pursuing the industry as some of those other states have. Having said that, there are about 50 jurisdictions there competing for the film industry in North America. Vancouver is still number three on the map after Los Angeles and New York, so we've really held our own quite well.

Currently we've got a little bit less television as a result of the high dollar, but we have got some big feature films in town, including Farewell Atlantis 2012, which is a $200 million feature film, which certainly is going to drop…. If you knock off some of the big cast and the director and things like that, it will drop at least $50 million into the economy in British Columbia. We've got another feature called Night at the Museum 2, which is at our facility out in Burnaby, which again is going to drop another $50 million into the economy.

So you can see the value of getting these projects. They're looking again all over North America and possibly Europe to see what makes sense, where they should be shooting. In cases like the next feature that we just landed, Gulliver's Travels, that again is going to be well in excess of $100 million. I know they're going to be doing a lot of the exteriors in Romania, because it kind of fits what the script is looking for. But having said that, there's another feature that's probably going to drop another $50 million into British Columbia.

We're employing 20,000 people directly and another 15,000 indirectly. We've also got about a billion dollars' worth of infrastructure that has been built up in the industry over the last 20 years. We're now becoming a real world-class film centre with the sound stages, the post-production facilities. Those would be things like your sound studios, like Sharpe Sound and Post Modern Sound, which are world-class facilities, which will do the sound effects on projects that aren't even shot in British Columbia. They can be shot anywhere around the world. Because it is a digital world now, in some ways it doesn't matter where you're located, but British Columbia has become a place of choice.

We also tie in very well with the tourism industry and with new media. Companies like Electronic Arts…. We're benefiting from them, and they're benefiting from us. Now when you do a feature, it usually ties into a game. And then there's Internet marketing, etc., and there are all sorts of different platforms where people are watching these things, which both our industries take advantage of.

[1505]

For instance, my kids are now watching movies over their iPhones or over their cell phones or certainly over their computers, whereas before we used to consume them through the big screen or the television. I think you're going to see that change going forward. So we have to be very nimble in our industry to make sure that we're making the necessary changes to be effective going forward and to have a prosperous industry going forward.

I think one of the most important changes, of course, has been the introduction of digital technology. Not only do we have some advantages in that because we've been established here for quite some time, but we do have a very knowledgeable base here. Again, the gaming industry has been very helpful for us in terms of building that
[ Page 1748 ]
base. It has been threatened recently by additional tax credits in Ontario and Quebec. That's the gaming side of the industry, which is going to impact us.

I think that going forward there's a really good future in here, because we've now developed some pretty good training centres for this technology, and we're starting to churn out students. I noticed Capilano University is now putting a degree out for film programs. So I think we're fairly well positioned going forward.

The government has been an extremely important partner to us, and I can't overemphasize that. Without labour tax credits — which are offered in any successful film jurisdiction, excluding Los Angeles — we wouldn't have an industry here, certainly not to the size that we have it now. We certainly wouldn't have the billion dollars' worth of infrastructure we have now. That's been extremely important. So to continue to maintain that is vital for the future of the industry.

If I look at our facilities…. We have two film studios. I can only look out, really, six months to sort of see how we're going to do over the next five years. That's how portable the industry is. Every project decides where to shoot based on their script and where it makes sense financially and where it makes sense in terms of infrastructure and crew base. Vancouver has always come out, you know, pretty close to the top on all of those decisions up to this point in time. But with the higher dollar and the introduction of tax credits in the U.S., we definitely are under threat to a certain extent.

What can we do about that? Well, I think we've seen rises in the tax credits a few years ago with Ontario. Then recently, about a year ago, we increased the tax credits again. The reason for that was to help compensate for the increasing dollar. But I think we're at limits now which are sustainable. There are some jurisdictions in North America that have better and more attractive tax credits, but I don't think we can compete on cost anymore to the government.

I think we're at the right levels now to sustain the industry going forward, but there are changes. The legislation is about ten years old now. And I think that we have to look at what little changes we can make to make our legislation the best legislation. We've become the leaders, basically, in the introduction of these tax credits. Now everybody has copied us. Now there's some fine-tuning that I think we need to do. I've introduced a couple of points there that we can address that'll not cost very much money and that will be very effective in continuing the industry.

We've just met with the finance department recently to go over some of these changes. So we're working closely with government there. I've got a meeting with Minister Bill Bennett in the next week to review this with some of my colleagues that are owners and leaders in the industry to make sure that the changes we make are going to be effective and sustainable.

Things have been going fairly well for the industry here, but Toronto, which has a similar program with us, is down 50 percent, as I say. It really shows how fragile the industry is and the importance of us working closely with government when things are changing as rapidly as they are now so that we can continue to maintain our status as a world-class film centre.

I think those are basically my comments today, and I'm open for questions.

J. Horgan: Thank you very much for your presentation. It's certainly gratifying to see the success of this policy over the course of, I guess, 20 years now, or 15 at a minimum, and to see the growth and the impact it's having on the Lower Mainland economy and all across B.C.

[1510]

I want to focus in on your ask with respect to post-production activities. With the advent of digitalization and the youth that we're turning out with a games focus…. Also, that can be adapted to full-length and even shorts. How would we see that take hold? Would it mean an increase in training, an increase in skill retention in the area? Those in the post-production industry now are primarily located in California. How would we get them out of California and into B.C.?

P. Leitch: Well, I think you're seeing some real leadership in British Columbia now, with companies like Rainmaker that did all the visual effects for The Da Vinci Code and A Night at the Museum. You're seeing local companies doing a lot of the work on it. So a lot of the work is now coming up here. We just saw Deluxe now come up here, which does a lot of visual effects, which is a major company in the U.S. that has now established themselves up in Vancouver in the last two years.

We're seeing a lot of those companies locate here. I think when we're talking about what changes need to be made…. A number of years ago the digital animation and visual effects credit was introduced, and that has helped us land these huge feature films that we're talking about, including A Night at the Museum I and these other blockbuster shows like X-Men and Fantastic Four. All those have a huge visual effects component.

Now, the visual effects part of it is covered under the DAVE credit, but as an example, the sound that goes along with those visual effects, which really makes it spectacular, is not covered.

So now we're seeing them doing the visual part of the effect here, but then quite often they'll take the sound and just do it in Los Angeles. At the end of the day, the creative forces are generally down there in terms of the decision-makers, so they like to keep things at home if they can. But if we've got great talent, which I think we do up here, and are competitive in terms of price points, then they're going to stay up here.
[ Page 1749 ]

That's something that if sound was covered under that, and it's not going to cost a lot of money, but it's going to really build that industry…. That's an industry that also….

Paul Sharpe, who runs Sharpe Sound, which again is a world-class facility, is now losing employees to Electronic Arts and Radical Entertainment because the gaming people can afford to pay them all year round because they're continually creating these projects. Whereas we had a bit of a slump in our industry with the U.S. writers strike, which was out of our control, and so they sort of bailed out at that time.

Here are employees that have been with them for 15 years. But if we have this additional credit for sound, that's going to maintain that company and grow that company. Then we can completely finish the entire project here more often. We still do entire projects here. That will allow us to do that more often. Then you get a reputation for doing it, and then it's easy for them to do it.

R. Lee: We have a film distribution policy in place as part of the International Financial Centre policy. How well is that policy utilized in the industry?

P. Leitch: Well, it's interesting. I just set up a meeting with Bruce Flexman, head of international finance, this morning. We're meeting him on the 29th, I think — at the end of the month.

I think there are opportunities in markets like China, for instance, where there is a contingent of film industry people from British Columbia that went over there. They're looking to come into this market.

It's a little bit tricky when you talk about profits — that your profits are going to be tax-free. Because a lot of our work is service work right now, we're trying to build up the domestic work so that these domestic companies can own product. Once they own product, then they'll start to see advantages in terms of the International Financial Centre.

Those are some of the things that…. But I think there are some opportunities in China. Richard Brownsey with B.C. Film is going to join me at that meeting, and we're going to explore that and see where those opportunities are with the International Financial Centre. That's why we did set up that meeting, so the question is timely.

D. Hayer: Thank you very much, Peter. In Surrey we've been very successful shooting many of the movies that have been shot there. I also know from other countries, the U.S. also coming here…. I know India is also looking at using our facilities here.

When you're looking at this change, how much total value — thinking dollarwise — would the government lose having this change made, and how much revenue would it generate for the province and create extra jobs?

P. Leitch: At a minimum, for any of these programs…. I think it's our obligation to cost them all out and look at what the revenue streams are going to be. But I think certainly our goal is that any of the changes are at least revenue-neutral. I think if it's revenue-negative to the government, then it's not worth pursuing.

I think there are advantages in supporting the arts and domestic production. I think there are advantages there. But when we're talking about the service work, which is currently 80 to 85 percent of the work we do, any changes we make certainly have got to be, I think, revenue-neutral for the government. Then they've got to be industry-building too, and they've got to be sustainable in the long term.

Our goal, because we know that government is going to want us to cost them out, is to make sure that they're revenue-neutral to the government.

[1515]

R. Hawes (Chair): Peter, we know how much the average income is in the mining sector. Just out of curiosity, do you have any idea what the average annual salary is for the 20,000 workers in the film industry in B.C.? What would be their average?

P. Leitch: You know, I'll tell you why it's a bit difficult to determine that. I'll give you an example. An art director that I'd worked with at Camel films, who's one of the top guys — and he's now employed again — was off work for ten months. When he's working he's going to make a very good salary.

These people are working long days. On average, an annual salary, I would think, is…. You know, when you talk about extras and things like that, these people are making minimum wage — a lot of the extras — whereas a director of a huge feature film, that's usually U.S.-based, believe it or not will make about $20 million. But we're not paying a tax credit on that. We're just paying a tax credit on the Canadian people that are employed.

I would say that a department head would probably make close to $100,000 on average. Some of them will make more, and some won't make as much. It depends on how much they work. The salaries are generally decent but competitive to other jurisdictions, and our salaries would be a bit lower than they are for an equivalent position in Los Angeles.

One of the things we are seeing now is that the real top talented people, if there's a shortage of work here, don't hesitate to move where the work is. We have lots of production managers that have worked out of Toronto and worked out of the U.S., especially in the year we had the writer's strike happening. They would just go wherever there was a project available.

I would say it pays fairly well for the top people. The other people…. It just depends how fortunate you are to work on more than one project during the year.
[ Page 1750 ]

R. Hawes (Chair): Thanks very much. We've got your…. It'll be fed in, and we'll be giving it lots of consideration.

Next presenter: Donald McInnes from Plutonic Power.

D. McInnes: Thank you, Mr. Chairman, and thank you, ladies and gentlemen of the committee, for allowing me to present to you today.

I'm the founder and CEO of Plutonic Power, a renewable power company that today is investing, with our partner General Electric, $660 million for a close to 200-megawatt run-of-river hydro plant near Powell River, which is employing about 250 people during its three years of construction.

This is the sixth time I've presented to this committee over the past few years, and I'll do something a little different today. I don't have a PowerPoint presentation to share with you. It will be mostly verbal, and I'll submit a written summary of my remarks to the committee.

I want to focus on energy development in the province and ask that the committee utilize the budget lens to promote something that I think we should all support, and that is to make a serious effort to build our province as a green energy powerhouse. To set the context for this vision, I think we must first understand what is happening in the global energy arena.

The world has entered into an era of irreversible change associated with the dynamics of what many are now calling the energy century. If you look back through time, all improvements to the quality of life of mankind have increased demand for energy consumption.

Historically, the light bulb, electric motors, and of late, computers, medical imaging devices and a whole array of electronics have transformed this modern information age. In the future, who knows? Widespread penetration of electric plug-in cars. The hydrogen highway. And maybe even cold fusion. But the common theme of all these advancements is increased energy consumption.

Thus far the energy century has been marked by incredible, volatile market prices in oil and gas and electricity, coupled with a slower-moving but massive global change event called climate change. Combined, these twin forces are driving an increasingly urgent call for a transitional shift out of non-renewable energy into more renewable forms of energy generation and an even more pronounced understanding of the dire economic consequences of the failure of governments to reverse our ability to be self-sufficient to meet our needs.

These changes present challenges but also tremendous opportunities for British Columbia. As the effects of climate change are well known, I'm going to focus my remarks on self-sufficiency.

[1520]

At current oil and gas prices, we're witnessing the largest and certainly the fastest transfers of wealth between nations in our history. Today over $700 million U.S. a day is leaving North America and going to the Middle East nations to import oil. This flow of wealth is to government-controlled state enterprises, and it's mortgaging our children's future and our province's opportunity.

More directly, high oil prices have a tremendous cascading effect across integrated economies. Consumption patterns for products are changing rapidly. Just ask any autoworker in Ontario.

All of our energy sources including renewables are increasing in value, and therefore in cost as well. Most nations are today looking at energy security as a critical policy focus, driving change. So what we're seeing across the west is that high energy prices are combining with climate change plans to push forward a dramatic increase in renewable green energy generation.

While Europe has played a significant lead in this area, North America is playing catch-up, with only half the jurisdictions today implementing renewable portfolio standards. I am pleased to acknowledge that British Columbia is leading the way with the most aggressive target, of 90 percent clean energy, clean electricity.

However, all these policy shifts will do nothing without massive shifts in our energy infrastructure. To put the enormity of this endeavour into a global context, the International Energy Agency estimates that it will take a $45 trillion investment in energy infrastructure to cut carbon emissions in half by 2050 — a daunting task.

There's no question that the type of energy we're experiencing right now is at the front end of the energy century has an unsettling feeling about it….

So what is this British Columbian multi-lifetime opportunity? It's far more than electrical self-sufficiency. It's everything that comes with it. British Columbia, being an importer, is a micro-example of the loss that accrues to the United States every day when it sends its $700 million to the Middle East. The global economy is very fluid and volatile if we don't act opportunistically, and it will compromise our future.

Where is the bold "what if?" if we get just ten percent penetration of plug-in hybrid cars in Vancouver, in the GVRD, that have the efficiency of a Prius? That one real possibility would consume almost 25 percent of the electricity that would come from the on-again, off-again Site C project. I almost honestly think, though, that plug-in car penetration of ten percent will be a reality before Site C gets brought on line.

So the core of my remarks today is about securing our future with electricity self-sufficiency and using this opportunity as a tool for economic and social development. Numerous small-minded special interest groups have had the audacity to question the vision and opportunity of the energy plan. In the electricity sector British Columbia has a long but now sadly distant tradition of making strategic infrastructure investments that have produced significant benefits for the province over time.
[ Page 1751 ]

We forget that the dam infrastructure created by successive Bennett regimes was significantly overbuilt for British Columbia's industrial and domestic needs at the time. This overbuild, though, has provided British Columbia today with a foundation of infrastructure that's been key to our current competitive advantage.

Unfortunately, we now have to play catch-up as we did not build on this legacy until the current policy regime of the energy plan. In the decades since our dam and transmission infrastructure was built, we have seen a steady erosion of our net electrical surplus as a disturbing, undercapitalized…. And our existing potential electricity generation and transmission assets occurred.

The effect is that British Columbia with all its wonderful endowment is under electrical siege, with urban substation and backup systems failing, a growing reliance on importing polluting thermal power and a pronounced inability to use what exists to its potential. Today one in eight homes is powered by thermally imported electricity. The July substation failure in downtown Vancouver caused our engineering firm to lose $100,000 in the five-day blackout. What was the total loss to British Columbia?

Additionally, supposed authorities involved in this debate, like economist Marvin Shaffer, feel we should rely on imports and Burrard Thermal instead of building to become electrically self-sufficient. This facility built in the early '60s is an obsolete, expensive, air-polluting mess. I imagine that Chilliwack parent Anne Russell, whose five-year-old son was hospitalized four times as a toddler for severe asthma attacks, thinks this energy policy is a great idea.

Or what about the 14,000 people in the Fraser Valley who signed petitions against Sumas 2? Do you think they think we should run Burrard Thermal to meet our energy needs, electricity needs?

What's perplexing and disturbing from an economic, social and environmental perspective is the dishonest ignorance of the benefits that have been bestowed on British Columbia from the current plan. There's a fundamental contradiction in the logic of those who praise past dam-building efforts on the one hand, and on the other now support importing power to meet our needs.

Fortunately, through the government's energy plan we now have an opportunity in British Columbia to stop the export of jobs, taxes and capital to other jurisdictions and build the capacity we need here. To more directly address this issue, let's look more closely at the demand and cost of electricity.

[1525]

On the demand side, we know that throughout history that population growth and technological improvements have all been directly correlated to greater electricity consumption. Did you know that the population of British Columbia has increased by a million and a half people, or almost 50 percent, since 1984 when we saw the last power plant of consequence built in our province? It's 23 years later.

The current energy plan is a good, responsible start to re-securing the future. This lack of investment has been an absolute dereliction of responsibility to the electorate. Anyone that thinks a responsible energy policy should include a reliance on importation is living in a fantasy world of global economic reality, and history has proven such champions wrong.

Even if we wish to rely on importing coal-generated electricity to keep the lights on, the system can't be relied upon. We have three main transmission lines used to import electricity in our province, two built before 1974 and the newest in 1986. The transmission infrastructure we use to import and trade with Alberta is so antiquated and problematic that publicly available data shows that it works at just 47 percent of its transfer capability.

While we can all applaud and look forward to significant benefits from conservation, there are simply too many factors that will result in more, not less, electricity consumption. Homes today are 50 percent larger than in 1970. Computers alone are going to consume twice the electricity they consume today in less than five years, and I could go on. These are the honest facts.

I already mentioned the population increase in the last 23 years. B.C. Stats estimates that our population will grow by another 1.4 million people, or 36 percent, in British Columbia. Their demand alone for household energy would consume all of that from Site C. So more fundamentally, the question we must ask ourselves on pricing is: why on earth would we take the risk of relying on imports, particularly when our province's renewable portfolio should be cheaper to build than in many other jurisdictions?

There's a compelling case to be made for the energy goal of self-sufficiency, purely on demand and cost. However, what we should find equally, if not more, compelling is the direct positive economic effects of developing the renewable power sector right here. As our rural economy in particular suffers from the forestry situation, the IPP sector is helping to provide jobs, new tax sources, capacity and resources for first nation peoples; economic diversification; and reduction in our greenhouse gas footprint.

The two most recent calls for power have resulted in contracts that will see over 3,000 person-years of employment, that provide over $15 million a year in water taxes alone back to government as well as additional property and school taxes, that provide enough energy to light over half a million homes and that avoid 4½ million tonnes of CO2 emissions. And that's just the beginning.

There are billions of dollars of investment waiting to come into the renewable energy sector. Internationally recognized leaders in the field of green energy — like General Electric Energy Financial Services — are putting
[ Page 1752 ]
their time and resources into making this province a powerhouse.

To realize the potential of the energy plan, it'll require continued provincial leadership and capital ingenuity of the private sector. I applaud those in government who are now challenging vested interests and want to see our province move beyond self-sufficiency to a situation where British Columbia does even more in terms of renewed energy development.

Today we are being left behind by the likes of Quebec and Manitoba — yes, Manitoba, with their longstanding NDP government, who have seen the benefits that accrue from exporting power, significant amounts of power, for the benefit of ratepayers and the overall economic development in their environment.

Let's imagine we actually wanted to secure our future to the greatest extent possible. We would export whatever we could as the sale of goods and services outside our boundaries is the single best way to create wealth. So why not export more than the mainstays of our economy, like our depleting coal and natural gas resources, and expand on our trading of electricity to a net export level?

If just 10 percent of the cars delivered into the state of California annually were electric plug-in hybrids as efficient as a Prius, that would consume 35 percent of the electricity from Site C. In three years alone that penetration would provide tremendous export of electricity in British Columbia, helping to pay for the delivery of education and social programs here.

Let's look at other specific benefits. Mark Brown, the CEO of Northern Trailer Ltd. of Kamloops, tells me his firm kept 175 people employed for nine months building two construction camps as a result of the last call for tender. The Western Forest Products district manager in Powell River credits the building of Plutonic's Toba-Montrose project with keeping virtually all the logging community in Powell River gainfully employed over the last 12 months while the rest of the coastal forestry industry collapsed.

Let's look at the hundred first nation members from the Sliammon, Klahoose and Homalco Nations who have been employed by Peter Klewit Sons in the Toba Valley, or Brad Bodnar from the Campbell River–based Strategic Forest Management thanking me last weekend for keeping over 30 of his professional and technical staff employed while they otherwise would have been laid off. The Klahoose Nation leveraged its Plutonic relationship to get the only, to date, first nation–owned geoduck farming licence in the province.

[1530]

From an educational perspective, school district 47 has secured guaranteed funding for 30 spots in its technical college as a result of the profit it'll make from running a catering a contract in the Toba Valley at Kiewit's camp.

Kim Barton has been able to launch the Success By 6 program for youth in the Sunshine Coast from a $22,000 donation from a charity golf tournament that our suppliers and Plutonic put on last weekend as anchor funding to secure the future for disadvantaged youth.

In the future, once B.C. Hydro completes the next call for tender, it's estimated that over $10 billion of construction will be facilitated, creating over 1,500 jobs over an eight- to ten-year period.

I'm too rushed to get through the rest of this, but I'm just suggesting that an aggressive energy policy leads to many distributed opportunities and benefits throughout our province, to rural British Columbians, urban British Columbians, first nations peoples and non–first nations alike.

I think we need to be aggressive with the energy plan. I think we need a lot more fast planning for transmission infrastructure, and we would improve the investment climate dramatically, Mr. Chair, if we moved to revenue-sharing with the first nations peoples on water taxes, which would improve the business certainty for the private sector power development.

J. Horgan: Thank you, Don, for your presentation. I know we have very little time. Suffice it to say that you and I, as you know, disagree on many of the elements that you just presented. Rather than get into that, absent the document in front of me, I'll ask you two quick questions.

First, of the $660 million you referenced in partnership with GE, what percentage is capital from General Electric, and therefore, what ownership share do they have?

The second question would be with respect to PG&E's report last spring that characterized B.C. run-of-the-river projects as non-green and not in compliance with the system operator's call in California. How do you believe that'll impact your industry, and to what extent are you taking steps or actions to change that perspective?

D. McInnes: General Electric, once Plutonic had gotten the Toba-Montrose project through the permitting process and the public consultation process, made an investment of $100 million, and then we jointly arranged $560 million of debt and letters of credit and standby guarantees. That secured a 60 percent ownership position for General Electric in that project.

The second aspect of your question. The 30-megawatt threshold in California that exists, which changes the labelling of energy generated from hydro if it's over 30 megawatts and not green, is a holdover from 20 to 30 years ago, when there was a push to halt giant — like Hoover dam–giant — dam development in that jurisdiction.

We're not doing anything with PG&E or anyone on that issue. PG&E has been very clear publicly that they
[ Page 1753 ]
would like to work with Powerex and B.C. Hydro and have them be aggregators of energy, which was the original foundation on which Powerex was created, and have them deliver energy to California.

I'm not sure how that's going, but for the record I believe that B.C. Hydro and Powerex have a tremendous opportunity to buy long-term contracted energy from the private sector and use most of that energy to meet domestic need. If there are trading opportunities that can accrue to help keep rates down — which is what B.C. Hydro, through Powerex, has been doing for a long time — I think that we should be aggressively pursuing those opportunities.

R. Hawes (Chair): Thanks, Donald. That was an excellent presentation. I take it you've got something in writing for us.

D. McInnes: We're still polishing, but we'll make it a proper written submission.

R. Hawes (Chair): We have the B.C. Association for Community Living, and it's Laney Bryenton. She will be joined by Leila Rahemtulla and Annette Delaplace.

L. Bryenton: Thank you for your time this afternoon, for listening to us. My name is Laney Bryenton. I'm the executive director of the B.C. Association for Community Living.

Just to make sure that everybody's really clear, the B.C. Association for Community Living is a non-profit organization that advocates on behalf of both children and adults who have developmental disabilities and their families. We are not CLBC, or Community Living B.C., which is the Crown corporation that runs the services and that is funded by government for people. There is too often some confusion about those two entities, and we want to be clear today who we are.

As I said, we have two board members with us today, Annette Delaplace and Leila Rahemtulla, both of whom are moms and both of whom have two lovely children, which brings them to their contributions to our organization. You have their pictures and their stories in front of you.

Before I ask them to tell you a little bit more about themselves and their stories, I'd just like to give you a little bit of background information. Like the gentlemen before, I've been here I don't how many years in a row in front of the committee, and while some of you have changed, some of you haven't.

Unfortunately, the sad reality is that the circumstance for families has not changed. The wait-lists are longer, and families are increasingly deepening in crisis, with no access to supports for their children or their adult children.

[1535]

I do want to put the context of what we heard last week, which was an expected budget surplus of a billion dollars, with some people maybe even thinking that that billion dollars will be doubled by the time we get to the end of our fiscal year. As we reflect back since 2006, that is a $10.3 billion surplus, and whatever is added on to what occurs this year. We are a robust and healthy province, and we have left families behind.

One of our jobs is to take the calls from families who have kind of come to the end of their rope and don't know where to turn, and the system has left them behind. They are repeatedly more distressing in nature and more often, and we have less and less to say to them, except: "Please go and talk to your MLA." So on behalf of them, we're here to talk to you about the many people across B.C. I think both Leila and Annette can exemplify the families that we're talking about.

It's not about data; it's not about being a person on a wait-list. It is about very real families and very real children, and I think their stories will help you understand that.

L. Rahemtulla: My name is Leila Rahemtulla. First of all, I want to acknowledge the committee and your willingness to hear from us, hearing from British Columbians and organizations.

As Laney said, I'm on the board, but more importantly, I'm a parent of a young man who's 19 years old. He has Down syndrome, and developmentally he's about three. I'm here to share my experience of the last year as we have transitioned him from children to adult services.

I'm here as a parent, but I'm also here to represent the families that can't be here — people who have English as a second language, people who can't get the time off work to attend hearings like this and people who are too afraid of actually sitting in front of a committee and saying: "Here's my life." It's really hard to talk about your private life and certainly the struggles that you face. So I'm here for my son, but I'm also here for those families as well.

I know, according to CLBC, that there are about 200 families like mine in Vancouver alone that basically have children who have turned 19 and who have absolutely no support services in place for them. Although it was hard to be here — even getting care in place for my son was difficult — I'm really pleased to be here.

Just in terms of background, my son turned 19 last December and, as I said, lost all funding, all support — no support with his medication, no support with respite. Any of the programs that are in place basically come to a grinding halt when a child turns 19.

Although we kept him in school with a request to the school board, as of June I had to quit my day job to look after him and be his primary caregiver, and I've been doing so. I was working as an educator in post-secondary
[ Page 1754 ]
education as well as a management consultant. I pretty well put all my clients, including ministries, on hold because I cannot serve them anymore. This is my job now.

I've been working with CLBC and the Ministry of Children and Families since Hussein was 16, trying to put things in place for his future. I think it's our role as his parents to try to do that. Even though I was in direct contact with them from last December, I never got calls back. I never got anything much more than: "You're on a wait-list; we'll let you know."

Finally, by spring I couldn't take that anymore. I was losing more and more contracts, and my livelihood was really being affected, as was Hussein's future. I finally just refused to take that as the response. It wasn't until I went to my MLA and explained to them the situation that we actually got an acknowledgment that Hussein actually exists in the system, and that was last month. So after almost a year of pleading with them that Hussein needs support, that our family is in crisis, that we need help, last month was the first time they acknowledged that.

When I met with Assistant Deputy Minister Andrew Wharton, he was very compassionate and very willing to hear this, but what we need is help. We don't just need compassion. We need support in what we need to do.

Most of the families that I have talked to give up way sooner, but I can't do that. I need to be here, because it's so important for our kids. We're told that we're wait-listed and that funds are only available if we're in crisis. Basically, unless we're prepared to put Hussein in harm's way or our family is falling apart, they don't want to hear from us. The analogy that I used with CLBC is that if they were a hospital, basically they've closed every ward but the emergency room. We're not emergencies yet, so we're told to wait.

[1540]

Hussein's education is on hold. We have no respite. Over the summer I could not take a shower until my husband came home from work, because he had to be watched 24-7. So our lives, basically, came to a halt.

Some of the counselling that we were given, in terms of feedback, was: crawl over the backs of other special needs families. If you want something, it'll be by getting yourself at the front of the line and at the expense of another family. Ethically, my family can't do that. I'd rather be part of a system that's being fixed rather than one where you've learned the politics of it. That's why I'm here. I think the integrity is lost in the system, and we need to fix it.

Currently we've tried to self-fund Hussein in a day program for adults for five hours. We've been told that if we want it, we pay for it ourselves. It's upwards of $2,000 a month, and I still can't go back to work because I have to pick him up at two o'clock each day. The double whammy is that I don't even get to make a dent in that family expense that we have. I don't know many families that can do $24,000 a year in addition to everything else that they have in place.

For those of you who are parents, you probably appreciate this. We want to try to do what's best for our kids. I've quit my job. We've borrowed against our home. There's nothing else we can do. Even doing all of that, we're not providing Hussein the future he deserves.

We love our kids, and we're told that if we give them up to foster care, they'll get what they need. I shouldn't be punished because I want to provide my child a loving home.

Families are nearing crisis. I think that more and more families are going to get close to the point where we put our kids into care. If we look at the numbers…. I'm asking for $4,000 a month in Hussein's plan, which I had to write up myself because I'm on wait-list for a facilitator. The numbers from a UBC study say it costs $16,000 a month for a child in care. If families give up their kids, this would be upwards of four times the cost, if we leave it to get to crisis.

Adults with special needs are a very vulnerable population. I think it's appalling that we're letting this happen to a group that has very few self-advocates. They're relying on their families and their friends and their caregivers to come forward.

The things that I would like to request the committee to do are to provide financial support for the people with special needs, to address the wait-list situation with an urgent call to action and then, finally, to make specific recommendations to restore the integrity of the system, because it's not working. I want to be part of something that works, and I want to be proud of something that I've done for my son and for children like him.

I once heard that a measure of a society is how we treat our most vulnerable. I really want to be a part of a province that does that in a way in which we can stand up and be proud and set a model for not only Canada but for the rest of the world.

I know Annette has some things to add as well.

A. Delaplace: I will just jump in and say that our family does receive some support, some funding, and we are grateful for that because it does make such a difference that our family can go on from day to day. But we believe with that service and those funding dollars comes a responsibility to be a voice for the many, many families who get nothing and who are simply turned away.

We have a system that is inaccessible for many, many families. We have a system where you hear, as in Leila's family, a child turns 19, and they are simply lost in the system because it is so flawed.

I'm trying to jump ahead here so that I don't take more time. I think what we need to know is with the wait-lists as well. There are many families that go to their facilita
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tors with individual support plans, and because there is no funding available, they are told that they won't accept the plans at that time. Those families are simply turned away. There's no record kept of the families. There's no record kept of the plans.

What we have in this province are many, many families that are invisible to government. How do you bring those families into your planning if you aren't aware of the fact that they're there? It's a very difficult situation.

I know that you'll be hearing from many people and organizations as you go on through these days. Please remember that the decisions you make are around individuals who are vulnerable. These decisions can tear families apart. They can destroy individuals' lives. When you make these decisions — hopefully, to help these families — realize that these families aren't an expense. They are an investment. Strong, stable families can contribute to their communities, and strong individuals, as well, can contribute to their communities.

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Just as an example, if you take a young adult and you give them support — often just a little support — it can make the difference between them living a life where they are on assistance to a life where they can actually have employment and they can be making real dollars and have a real life and community.

In closing, we were promised the best system of supports in Canada for persons with disabilities. The best system of support is a system that is responsive and is open to the input of citizens who require its services. Families, individuals with developmental disabilities and also the many incredible people who work with us…. We really want to be part of making that system work, and we hope very much that we can work with you to make that promise a reality.

I know Laney has some very important things to say.

L. Bryenton: As we said, you no doubt will hear from other folks across the province, but because we're in Vancouver, I thought you might be interested in a few statistics about what we're facing right now for both children and adults.

The Vancouver infant development program is a program that helps families when their baby is born with a disability or has been identified as having a developmental issue and they need intervention, they need professional support. There are 232 families waiting to see a professional in Vancouver, and they will wait sometimes more than two years for services.

There are 272 preschool-age children with special needs in Vancouver that cannot get into either preschool or day care because the specialized supports that allow them to go there are not available to them.

We know the role of special needs preschool in the developmental life of a child, and it's particularly important for a child with special needs. We also know, those of us who are working parents, the role of day care in our lives to make sure that we can earn a living. What we are forcing people to do is go onto welfare.

The story we heard last week was that a single mother was forced onto welfare because her child with a disability could not get access to day care because the special supports weren't there. The wait-list is upwards of two years for her. Her option was welfare.

I don't think that's what we want to do in this society. I don't think that we accept that as a practice. In a province that is as prosperous as this one, in a province in which we say that it's the best place in the world — and it is a wonderful place to live — I don't think that this is what we meant to do to young children and families.

I don't think that we truly understand the impact of what's happening for families with young children with disabilities and adults. And we need your help to pay more attention to this in the future budget.

Thank you for your time.

B. Ralston (Deputy Chair): I just wanted to give Annette a chance to just add to something that you've got in your written presentation about the change of the community living authority regulation regarding IQ eligibility requirements to enshrine an IQ of 70 or below as a criterion for receiving services. That's an arbitrary decision the government made by order-in-council, as you're aware.

Can you tell me about some of the impact that's having on some of the families that you work with and that you represent?

A. Delaplace: I'll start, and perhaps, Laney, you can add onto it.

To have an individual come and either provide services or have services denied on one IQ point…. You can imagine that can be quite devastating to families. What the real issue is, is that it's not about IQ.

We really feel strongly that there should be a functional assessment part of that criteria. A functional assessment would give you a clearer idea of what an individual's abilities are now and also what the possibilities are. That's what's so important. That's why we feel so strongly that that should be part of the process.

L. Bryenton: There are many people who are caught by that. One recognizes that that kind of decision gets made as a budget management tool. It isn't very helpful to increase the access to people with higher IQs, even if you know that that's the right kind of public policy position to take. If you already have hundreds of people on a wait-list to get service, it doesn't actually help — right?

We really need to go at this from two ends. We need to be able to fund the people who are currently on wait-lists and then look at these vulnerable people who tip over the edge of this 70 IQ.

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Some of them tip quite far. I mean, the two gentlemen that were part of the lawsuits that we were involved with — Fahlman and the infant that wasn't identified…. Both of them had IQs higher than just a few, but everybody was very clear that those two gentlemen would be trouble for themselves and trouble for others without having adequate supports around them.

So we make the decision. Do we choose to have the social service system become the system of support, or do we choose to have the justice system become the social service system by default? In both those cases they will move into and did move into the justice system because of lack of supports.

R. Hawes (Chair): Laney, the time is up, but I want to thank you for the presentation. Both of you, your stories are very compelling. Certainly, this will form part of our deliberation.

L. Bryenton: Thank you for your time, all of you.

R. Hawes (Chair): Seeing that there are no further witnesses today, I'd like to adjourn the meeting.

We are reconvening tomorrow morning at 9 a.m. in Kitimat, and we'll be leaving here at five to get to the airport.

The committee adjourned at 3:52 p.m.

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