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

Wednesday, September 17, 2008

9 a.m.

Grand One, Quality Inn Northern Grand

9830 – 100th Avenue, Fort St. John, B.C.

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

Unavoidably Absent: Harry Bloy, MLA; John Yap, MLA

1. The Chair called the Committee to order at 9:05 a.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 10:12 a.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

Wednesday, September 17, 2008

Issue No. 75

ISSN 1499-4178

[ Page 1785 ]

WEDNESDAY, SEPTEMBER 17, 2008

The committee met at 9:05 a.m.

[R. Hawes in the chair.]

R. Hawes (Chair): Good morning, everyone. I'm Randy Hawes, and I'm the MLA for Maple Ridge–Mission. I'd like to welcome all of you to this, we think, very important meeting and to thank you for taking the time to participate.

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

The Select Standing Committee on Finance and Government Services is charged with carrying out public consultations on the minister's behalf. This is an all-party committee, and we are required to report back to the Legislature by November 15.

If you'd like to review the consultation paper, it is available at the registration desk. There are a number of print copies there. If you want to make a presentation to this committee, particularly for those who are listening on line, information on how to do that is available on the website at www.leg.bc.ca/budgetconsultations.

Input can be made either orally in person or in written or electronic form. If it's in electronic or written form, those submissions are given the same weight and the same consideration as the oral presentations that are made to the committee.

With the federal election recently being announced, we have extended the deadline for written submissions till Friday, October 24.

Today we will hear from a number of presenters who have preregistered with the Office of the Clerk of Committees. These presentations can take 15 minutes, and we recommend that you try to keep it to about ten minutes to allow some time — five minutes — for questions and answers. I'll tell you when you reach ten minutes. I'll give you the high sign when you reach ten minutes. If you choose to carry on, that's fine. I'll give you another high sign when you have two minutes left.

Time permitting — and it looks like it will — we also have an open-mike session at the end of the hearing. The open-mike session will allow presenters five minutes, and there will be no question period.

I'll now ask the other members of the Finance Committee to introduce themselves.

J. Horgan: John Horgan. I'm the MLA for Malahat–Juan de Fuca on southern Vancouver Island, and I'm the opposition Energy critic.

D. Hayer: Good morning. I'm Dave Hayer, MLA for Surrey-Tynehead.

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

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

J. Rustad: Morning. I'm John Rustad, MLA for Prince George–Omineca and chair of our northern caucus.

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

D. Thorne: Diane Thorne, MLA for Coquitlam-Maillardville. I'm the Housing critic.

R. Hawes (Chair): Joining us today, I'm also pleased to introduce our Clerk, Kate Ryan-Lloyd. Also, in the back is Stephanie Hansen, who is manning our registration desk. As you see over here, we have Hansard Services, Michael Baer and Polly Vaughan, who are recording all of the proceedings today and will prepare a written transcript. As I said, they are also broadcasting this live on the Internet.

With that introduction, I will call on the town of Fort Nelson and Mayor Chris Morey and Randy McLean to begin their presentation.

Welcome.

Presentations

C. Morey: I'd like to introduce Randy McLean. Randy is our city manager for the town of Fort Nelson and the Northern Rockies regional district.

I would like to address you today to tell you about some of the challenges facing Fort Nelson and the Northern Rockies, challenges that are rising exponentially with the escalating excitement surrounding the large shale gas potential in the Horn River basin, which is potentially a development of such magnitude that it could easily overwhelm our community infrastructure and services.

The Horn River development has generated over $1 billion for the provincial treasury in the past few months alone. The regional council was originally fascinated with the rhetoric and publicity which suggests that this project could well be the largest gas development in Canada, if not in North America.

When the impact started to be felt within the community, sale of industrial properties and real estate jumped as oil and gas companies as well as local service companies began to position themselves. Pressure has grown to open up more land for industrial development, and B.C. Hydro is being severely questioned on its capacity to meet the expected power loads rapidly coming at us.

[0910]

My regional council realized that this was not likely to be a typical cycle in the oil and gas industry and that our community needed more than a newspaper article and rumours to begin to come to grips with the magnitude of this development and its future impacts. As a consequence, we organized a Horn River symposium, which was held in Fort Nelson on September 3 and 4. The Horn River development group, made up of eight major producers with stakes in this development — Spectra Energy, first nations, the Minister of Energy, the Oil and Gas Commission, other specialists and the regional council — all attended and shared their latest information and positions.

This symposium drove home the need for an integrated and synchronized approach, as we came away with two major agreements: that the four major partners — first nations, industry, the province and the regional council — agreed that the need to establish a formal structure for communication and sharing of information and plans was necessary; and that the Horn River shale gas resource is potentially one of the largest gas resource plays in North America and, subject to economics and technology, could well become a highly productive and massive development.

We certainly would like to take this opportunity to congratulate the Premier and the provincial government on their ceaseless work over the past seven years in making B.C. one of the most highly competitive investment climates in North America.

The Horn River and Montney shale gas deposits were identified decades ago, but it is the progressive royalty policies introduced by the Minister of Energy and the province, together with the advancement of technology, that underpin the feasibility of developing shale gas in B.C.

The province has focused on substantial provincial investments in transportation and access development, on skill and trades training, on education and on building capacity of the first nations as well as service centre communities such as Dawson Creek and Fort St. John.

Our vision of the future of Fort Nelson includes ample jobs for our citizens; first-rate amenities, facilities and services; a protected and sustained environment; and a healthy, vibrant community. While our vision is clear and bright, there are challenges. We have short-term challenges, like replacing our collapsed recreation centre during a period of uncontrollable cost escalation. We are challenged with the downturn of the forest sector and the resulting job losses and economic uncertainty that brings.

We have the challenge of a significant infrastructure deficit which must be addressed in the short term, and we are challenged with advancing our case to secure provincial infrastructure assistance to place us on an even, competitive footing with Peace River communities.

In the midst of all of this we have been advancing a regional municipality project. In addition to all of that, we have to come to grips with the reality of the impacts and challenges that we will face as the Horn River development unfolds.

Since the village of Fort Nelson was incorporated in 1971 as B.C.'s first and only resource municipality, we have evolved to a town, plus our own regional district, to this November, when our citizens will vote on the incorporation of the Northern Rockies regional municipality, a new single-tier government model and the first in the province.

This will not only introduce the most effective and innovative local governance structure in B.C. but will also mark the introduction of the most progressive and disciplined industrial property tax policy in the province. This industrial tax policy provides the oil and gas and forest industries with fairness, certainty and predictability, factors that will be integral to resource investment and in particular to the Horn River development.

Following extensive consultation with industry, we were very pleased to receive full support from CAPP, CEPA and Canfor. The province has also endorsed our property tax plan.

In 2007 we completed an evaluation of the condition and standards of our existing community infrastructure. We benchmarked our facilities and infrastructure against communities that we compete with for workforce, professionals and service industries.

We have an infrastructure deficit, similar to Fort St. John and Dawson Creek prior to the provincial infusion of grant support to those communities. We have been in discussions with both industry and the province over the past three years for a similar provincial infrastructure assistance agreement for the Northern Rockies.

[0915]

I want to acknowledge the support of Minister Neufeld in supporting this work and in constantly battling for more resources and priority for the communities and for energy development in northern B.C.

We anticipate receiving and achieving a provincial infrastructure agreement similar to the 15-year agreement signed in 2005 that provides Fort St. John with approximately $250 million and Dawson Creek with $170 million.

The Horn River development comes at a time when cities and towns across Canada are confronted with an inability to fund a growing, massive infrastructure deficit, to the point where it is emerging as one of the major future impediments to economic expansion and growth in this country.

There is increasing awareness that the property tax system simply cannot provide enough revenue to fund infrastructure replacement and renewal. Increasingly, this is being acknowledged by provincial governments across Canada, which are beginning to recognize the severity of the issue. B.C.'s Fair Share infrastructure grant program is a case in point.

As a result of extensive research and lobbying, municipalities in the province reached an agreement that will see over $700 million provided directly from provincial
[ Page 1787 ]
funds for municipal infrastructure in the Peace River area. It is basically a grant in lieu of industrial property taxation. We are anticipating receiving a provincial infrastructure agreement for the Northern Rockies.

We also have an eye on what's happening to our counterparts in Alberta. The oil sands development provides us with a bit of a case study. We believe there could well be a developing parallel, especially in terms of the need for infrastructure planning and development to be upgraded and expanded in a planned and integrated basis, directly linked to the rate of resource development.

Fort McMurray was a small, isolated northern community located in the midst of a massive oil sands development, not all that different from the Fort Nelson and Horn River scenario today. Faced with a phenomenal growth rate, Fort McMurray has engaged in a decades-long struggle to deal with the cost of expanding the community infrastructure to keep pace with development. The province of Alberta moved to resolve the funding issue by creating the Wood Buffalo regional municipality in 1997, which incorporated the oil sands tax base into a single municipality that included the former city of Fort McMurray.

While this is held out as the solution to funding the cost of community infrastructure, unfortunately, it has not resolved the problem. Despite higher than normal borrowing limits, the municipality reached the point of resistance with property tax levels, as local residents, business and industry opposed attempts to fund the ongoing and escalating cost of community infrastructure from the property tax base.

The province is only providing grant assistance to Fort McMurray at the same level as all other Alberta municipalities. Despite years of lobbying and appearances before regulatory authorities, Fort McMurray does not receive any special grants as one of the highest-growth areas in Alberta.

What we can learn from this is that massive developments have massive impacts. They require housing, transportation, social, health and education services that are expanded in synchronization with growth of the resource activity. We can — and I want to advocate that — quickly move beyond the polarized debates around who is funding what service and move to a consensus that resource development impacts must be funded on a planned and predictable basis.

Our province has entered a series of economic benefit agreements with a number of first nations within the treaty 8 area of northeastern B.C. that provide significant sharing of economic benefits from resources located in the treaty 8 area. The Peace River community infrastructure program, Fair Share, will provide Peace River communities with $700 million in direct provincial grants to upgrade and expand community infrastructure.

These Fair Share grants are, in essence, provincial grants made in lieu of local government directly taxing the oil and gas industry assets. The oil and gas industry in the Peace River currently pays local government property taxes that are 40 percent less than in the Northern Rockies. We expect the province to provide the same level of infrastructure funding to the Northern Rockies to prevent further exacerbation of these rates.

The impacts of inaction would be, from the industry perspective, to add additional cost to the economic feasibility of development of the Horn River basin and the expansion of conventional oil and gas in the Northern Rockies. The net result would be to create a two-tiered property tax policy for northeast B.C. — one for the Peace River and one for the Northern Rockies.

[0920]

From the community perspective, delay in upgrading the existing infrastructure will jeopardize the ability of the community to attract and retain the workforce and service industries needed to underpin not only the existing oil and gas industry but also the startup of the Horn River development. In our view, it is patently unfair that millions of dollars in revenues flow from the Northern Rockies to the south, subsidizing health and education costs, while we who live and work here in the Northern Rockies, where the resources are extracted, do not have the same level of basic infrastructure and community amenities that are widely enjoyed in most southern communities.

Inadequate infrastructure and community amenities not only reflect a poor quality of place for Northern Rockies residents, but it also makes it difficult to attract doctors, dentists, nurses, engineers, accountants, lawyers and other professionals to our community, including skilled tradespersons and a related workforce in general.

Through our regional municipality initiative and our property tax policies, we are building the fundamentals for a positive investment climate and for sound community development. The economic forum which is proposed for the new regional municipality is being included in the letters patent and is planned to be a permanent and ongoing opportunity for the partners to meet on a regular and continuing basis to deal with development infrastructure and community issues.

We are leading with the establishment of a model local government and a development forum that will give us all the opportunity to meet the shared challenges with a new and innovative approach, an approach that will be in our common best interests. We accept our responsibility to represent our citizens and the local community. We intend to do so with vigour and determination, to see this development proceed with adequate recognition and care for the needs and interests of our community.

We see ourselves as one of the four key partners, and we will act from a platform of cooperation and integrity as we move forward into this exciting new era of the development of the Northern Rockies.

On behalf of the regional council, please accept my appreciation for the opportunity to submit this brief. The
[ Page 1788 ]
presentation I just made was a condensed version of the brief that we have submitted, in the interest of time.

R. Hawes (Chair): Thank you very much. That's a very informative presentation. We have time for a few questions.

J. Rustad: I just wanted to thank you for the presentation. It was great information. In particular, I want to thank you for the innovative approach that you're taking on leadership in the area. I think that's showing that the north knows how to lead, and that's good. Around the province, as we celebrate the sales and the revenue that we get from natural gas, it does need to be recognized where it comes from, and the efforts they have….

The question I have around this is.... The growth that you currently have in the community. What kind of changes have you seen over the last couple of years, and what is the projected growth for the community in terms of population and those infrastructure needs?

C. Morey: Until we know the exact potential of the Horn River development, it's very difficult to try to put a number on that, and that's why we draw on the comparison to Fort McMurray. What we want to do is have a planned development. When we had our symposium, our theme was "Getting it Right" so that we could just all work together — the province, the first nations, ourselves and industry — to try to meet that demand.

Industry has told us that they're pretty optimistic that the resource they think is there is actually there, which is considerable. They have told us that within the next year — 12 to 15 months — they will have a better idea if this can be commercialized to the extent that they hope it will be. At that point, this is going to go.

J. Rustad: I just wanted to say that I came up there this summer, and I enjoyed being up there and look forward to a chance to come up again.

C. Morey: Sorry I missed you.

J. Horgan: Thank you, Mayor Morey, very much for your presentation. I regret that time prohibited you from saying "carpetbaggers" for the record, as I read the report. I think that would have been a first in committee history. So I've put that on the record for you, and thank you very much for that.

It's also, I think, important for those listening and those who will be reading these transcripts in the south to acknowledge the importance of oil and gas to our provincial economy. This resource, a provincial resource, is tremendously important to us as we see other revenues dropping, whether it be forestry or others.

At the same time, it is a provincial resource, and as a southerner, I acknowledge that those who are paying the price for that development need to receive some of the benefits. It does trickle down. In fact, it flows down in a tidal wave to the south and other parts of the province.

[0925]

With respect to the infrastructure discussion, the Fair Share program started, the Oil and Gas Commission — a whole host of initiatives developed by the province to assist the region in meeting these challenges. I wonder if you could give me a sense, in terms of demographics, of what the population shifts have been in the regional district, not so much down to Fort St. John but in the Fort Nelson area, over the past ten to 15 years.

C. Morey: I guess I could just give you a personal example. When I first moved to Fort Nelson 22 years ago, the population there was about 2,700. The population now, including the immediate surrounding area where most people in the regional district live, is close to 7,000.

R. Hawes (Chair): I just have one quick question, Mayor Morey. As we travel the province, we're asking people for their opinion on what we should do in terms of tax cuts, etc., if there were additional taxes placed on the oil and gas industry. Do you have any sense of at what level the increased risk would perhaps jeopardize the Horn River project?

C. Morey: Yes, and we've actually been working very hard on that, so that the impacts on our community for infrastructure are not totally achieved through the property tax base, because that would make the whole development very unattractive, we believe, for industry and for the community.

The other thing that we looked at through our project was…. We established a three-rate ratio for industrial property taxation. That will be frozen for a period of about five years to provide the industry with some certainty and some predictability in the local tax rates.

R. Hawes (Chair): I was thinking more along the lines of the provincial taxation regime. If the province imposed additional taxes on the oil and gas industry, it would increase, obviously, the costs of operation in the north.

C. Morey: Oh absolutely. I think it would have a negative impact on the developments, on the….

R. Hawes (Chair): Is there room for additional taxes on them, do you think, or do you have any…?

C. Morey: Our sense, which we have gotten from talking to industry, is that they do pay through the royalty system and that they do pay considerably through the land acquisitions. We understand that there's generally
[ Page 1789 ]
a significant cost to that. As far as the taxation of the assets within the Northern Rockies area, as I pointed out in my presentation, it is 40 per cent higher than what they're paying in the Peace River area.

I can't speak to what the province would levy as far as higher taxation, but I know from speaking to industry that that is not where they see the assistance coming from in funding infrastructure.

B. Ralston (Deputy Chair): In your discussions with industry, what has been their reaction to royalty review in Alberta?

C. Morey: In Alberta?

B. Ralston (Deputy Chair): Yeah. You mentioned Fort McMurray as a part of the royalty review process. It's a very extensive process, initiated by the Auditor General in Alberta initially. Then, I think, the provincial government there has had a couple of runs at it, once before the election and once after. What have you heard from industry about their satisfaction or not with royalty review in Alberta?

C. Morey: I have heard from industry that the climate in British Columbia is more positive. That's what I'm hearing currently. That's where we're seeing the massive investments by some of these companies that operate not only in Alberta but in British Columbia. It has made it more attractive for them to come in and look and to do the explorations and commit the large investment dollars that they have.

R. Hawes (Chair): Mayor Morey and Randy, thank you very much for your presentation. It's been very informative, and we'll all look forward to reading the less condensed version. We'll certainly be considering this as we move on in our process.

Next we have Save Our Northern Seniors Society — Rick Bourdon and Jean Leahy.

Welcome back. You're certainly not strangers to this committee.

[0930]

J. Leahy: Thank you. It's good to be here again. I should tell you, though, that there was an article in the paper to say that you were coming, and that was a couple of weeks ago. We happened to find it again last week. Other than that, we didn't know about it, so I think the advertising sometimes is a little short.

As we say, we were here last year, and we'll probably come back next year if you're here as well. It is a nice opportunity for us to voice some of our concerns. They are directed mostly at health in our community. Both Rick and I had or have parents that are in the system. I've actually been involved in the health care system for about ten years, so we understand it pretty well. Rick is going to present the first part, and I'll do the latter part.

R. Bourdon: Since our presentation in 2007 we have seen some improvements for our seniors, and the future appears somewhat optimistic. We're aware of the plans for the new hospital, including the 123-bed complex care facility. This is very welcome news, as the current 85-bed facility is overburdened with up to 16 of our senior residents finding care in the hospital facility while they're awaiting placement. This carries on most of the time, and of course, it causes other health initiatives to be postponed or passed over by locals.

We also have eight beds for psychiatric patients. Some of these are filled with residents outside of the community of Fort St. John, and we have as many as six of our residents in the Peace River Haven in Pouce Coupe. It would be so nice to see this transitional location come to an end for our locals so that they may find placement within the community that they grew old in, so that they have a familiar surrounding and can rest for their final years.

We have a 24-bed assisted-living facility. It's full, and a number of these residents require higher levels of care. We predict that with a modest growth rate of 5 percent in this community, the new facility — I'm referring to the 123-bed facility — will most likely be full when it opens. We understand and are pleased that the plans for the facility will take this into consideration and that future expansion is being factored in.

Last year there was an announcement of 550 units of independent living to be built in the province. This leaves us feeling a little left out, as none of these units have been built here. We have Heritage Manor I, which is under B.C. Housing's mandate, and it is fully occupied. Fort St. John has one private rental apartment building for seniors, fully occupied and with a waiting list. We need more care for our seniors.

J. Leahy: Well, I'll maybe just add a bit on Heritage I. I was very involved with the building of that and the occupying of it. It was built as a supported-housing complex, which meant at the time that a third of the residents were required to pay a full rent; the rest, a subsidized rent.

B.C. Housing has changed that mandate. It now only builds assisted-living or subsidized housing. So while those people could afford to pay some rent, they're not rolling in dough. This now leaves other people in the community, who could afford to pay some rent but who need a safe place to live with wheelchair accessibility and all that sort of amenity, out in the cold. There's simply no place for them to live.

Home support. Support workers in the community are receiving less pay than those in facilities, and we disagree
[ Page 1790 ]
with that, because home support is a prevention program. It was to keep people in their homes as long as possible.

[0935]

In our minds, community care aides are every bit as important as care aides in the facility, and it's just not right that they receive $2 an hour less. These people have to go from home to home. They use their own vehicles, and their work is not any nicer than for the care aides in the facility. In fact, maybe it's worse. So we do object to that happening.

We're suggesting that maybe they could be hired on a part-time, casual basis. They have first-aid training and can be and are enticed into the oil industry because the camps have first-aid attendants. If they're able to go, they can go there and work. They might be on duty 12 or 14 hours a day, but they do very little — only if an accident happens. They get very good pay, so lots of times they're siphoned off to the industry from us.

That was our suggestion — that they be hired with benefits and on a different basis. I'm sure that if care aides in the community facilities were hired on a full-time basis with full benefits, they would also stick around. But right now they're not all hired on a full-time basis, so they don't get the hours that they'd like to have.

Food. Our society wishes to see the kitchen that's available in our care home utilized to promote facility-cooked meals. The kitchens are still there, but we're bringing in the frozen food.

As it happens, I'm in the care home nearly every day, sometimes twice. I always go at mealtime to help out, and I have to shake my head at some of the entrées that are put in front of the people. I'll give you an example of one: beef stew out of a can. Have you ever eaten it? Put it on a plate with a slice of bread on top, and that's the main meal of the day.

There are some improvements. Some of the cooks are a bit innovative, and they cook something on the side, like a salad. Ordinarily, they don't have salads, but some of the cooks now are sneaking a salad onto the table, and that is very much appreciated. But it shouldn't have to be that way. That should be something every day.

The other issue we take issue with is the carbons that are used to ship frozen food around the province. If the food were produced locally — and it can be; the majority of it could be here — there would be less carbons used. To be shipping this food around the area sort of flies in the face of government policy to cut carbons now. I'm not exactly sure where it comes from anymore. It comes from Edmonton. Where it was before that, I don't know. At one time it was Toronto.

Our society is in the process of gathering information from local buyers through the farmers' market as to how much they may have available, what their storage capacity is and if they would be able to supply food for the new facility. We have been told that in the new facility, the cooking will be done on site. Now, I hope that's true. If it turns out not to be, you'll hear from us a lot more.

I do have a letter from the minister talking about the fact that the carbon tax is levied against health authorities. We feel that's not quite fair either, because the health authorities are always short of money. If they have to send money back to the government by way of a carbon tax, that just means less money in health.

We're open for questions.

R. Hawes (Chair): Thank you very much for your presentation. As always, your suggestions are pretty direct.

R. Austin: Thank you very much for your presentation. I just had a question. It relates to what was told to us in a previous presentation in regards to the Fair Share program and how much of the dollars are sent back to the communities of Fort St. John and Dawson Creek. I believe it was $170 million and $250 million.

My question to you is…. Those are fairly significant amounts of money.

[0940]

I come from a part of the province that, unfortunately, is not generating a lot of revenues to Victoria and therefore can't accept any kinds of moneys coming back. Why is it that these kinds of dollars are not being used to take care of the kinds of issues that you are here to talk about, in terms of senior care?

J. Leahy: Well, I think those sums you heard are over a period of time; they're not every year. There was an agreement with government and the municipalities that the Fair Share money would be used for infrastructure.

R. Austin: Only.

J. Leahy: Uh-huh.

D. Thorne: I thank you, as well, for your presentation and for your obvious tenacity. You're back again before the committee. It's my first time, but it's not your first time.

I just had a couple of quick questions. You're talking about the support workers in the community receiving less pay. Is that strictly because of the way they're hired as casuals, is it because they're classified as doing a different kind of work, or is it both?

J. Leahy: Well, I think it's a bit of both, but it's obviously a Northern Health policy. I don't know if every health authority does the same thing. I don't know that. I just know that it's done here.

D. Thorne: Okay, so we can look into that for you.
[ Page 1791 ]

The other thing is the food issue, on which I'm hearing a lot from the Lower Mainland as well — about the not-fresh food or not-cooked-on-site food. I assume that this change was done since you last presented. I mean, have you ever had food cooked in the kitchen?

J. Leahy: Not since this health authority took over, no. Before that, it was. It actually changed, in fact, before the present health authority. About the last year before government changed, they started with the frozen food.

D. Thorne: They started with the frozen food. So the kitchen is basically shut down, not utilized for anything other than tea or coffee or something?

J. Leahy: Well, they've installed what they call combi ovens. That's a steaming process to heat the frozen food. Now, the odd time they fire up the grill and have a pancake, but not very often.

D. Thorne: Not very often. Okay, thank you.

J. Rustad: I just want to follow up on the issue raised here around food. First of all, I'd start off by thanking you for presenting. It's always great to hear the issues, particularly as we go forward. We need to know what we should be looking at in terms of focusing for our report.

With the approach that you're taking with local farmers in terms of local production — I'm a huge supporter of trying to have local production and local consumption — how receptive has the local agricultural industry been? What more do we need to do around that to help try to promote the utilization of those local products?

I tend to grow a few vegetables and stuff in my back yard and those sorts of things, and they always taste so much better than what you can get in the store. There's no question the local production seems to have higher nutrition or seems to have higher flavour, if nothing else, and in my opinion is better quality than what you can get elsewhere. So I'm just wondering: in terms of our committee, where would you like to see us spend some resources to help promote along those lines?

J. Leahy: Well, it's sort of taking off. There's an organic producers association here. There's a Branding the Peace Country Association, and that's what that's all about — branding the food that's grown and produced in the Peace and trying to use it here.

Where some of the shortfalls come in is the inspection. There are some inspection sites, all right, and especially for meat, but we're going to have to have some pretty strict inspections in the vegetable industry, too, to make sure of the quality being allowed to be taken to the care homes, because that is a touchy issue.

Even food going into the care home from the community is a touchy issue. It has to come from a café, although the odd time they do allow it in, but I can tell you what happens there. My sister-in-law and I provide one meal a week to about 16 people at the care home, and they come and take samples of that, put it in the freezer for three days, take it out and see if it's okay to eat. That's a little late, but if it wasn't okay when they tested it, we would not be able to do that again.

J. Rustad: Right. Okay. Thank you.

[0945]

D. Hayer: Thank you very much. A very good presentation. Also, last year you made a very good presentation.

My question. Do they have enough staff available for these positions in the homes and the health care facilities, or are you having challenges with that?

J. Leahy: No. There's always a shortage of help — always.

D. Hayer: I know that most southern districts seem to be having the same problem of attracting enough people to fill all the positions.

J. Leahy: Weekends are extremely bad. Sometimes you go up there, and there are four care aides for 40 people. They work both sides of the place, sometimes to the other 40. So lots of volunteers.

R. Hawes (Chair): Jean, just before you go, you did mention earlier that you spotted the ad in the paper. Otherwise…

J. Leahy: I wouldn't have known.

R. Hawes (Chair): …you might not have made it. So do you have a suggestion for us on how…? Like, we have a fairly short list of presenters here today. How would we better get into the community?

J. Leahy: Well, maybe if you sent some information directly to the people that participated in previous years.

R. Hawes (Chair): That is a good suggestion.

J. Leahy: I'm disappointed that there aren't more here too.

R. Hawes (Chair): Okay, thanks very much.

Next we have school district 60, Peace River North. We have Linda Sewell and Doug Boyd.

As you know, it's 15 minutes. I'll tell you when you hit ten. If you can leave time for questions and answers at the end, that's great. Then I'll tell you when you have two minutes, if we go that far, in terms of your presentation.
[ Page 1792 ]

L. Sewell: I'll introduce myself. I'm Linda Sewell. I'm a trustee and chair of the finance committee for school district 60. We'd like to welcome fellow former trustee John Rustad. Welcome, and I see a few familiar faces from last year.

I'm just going to briefly say a few words, and then I'm going to turn things over to our secretary-treasurer. This is Doug Boyd. He's new to the position this year, and he has a wide experience in education. It's exciting to have somebody in this position that really knows the business.

I'll start by saying that we are unique in the north, as John will acknowledge. We have issues that are very different from the rest of the province, particularly in our district with the activity in oil and gas.

We do have a large northern district that has a heavy dependence on fuel for heating and transportation. Our district encompasses areas in the west from Hudson's Hope almost to the Alberta border, Clearview. We also have a shortage of workers in the north. You're probably seeing common themes from the people that are presenting to you today — a shortage of employees and a proximity to the Alberta border.

Also, we have a very stable enrolment compared to the rest of the province — enrolment as to the numbers of students in our district. We project an increase. We are at maximum capacity, and we're looking for ways to alleviate that. Some of the methods that the government is coming forward with, financially, to help districts are not helping our district — for example, the full-day kindergarten. We then need to find space.

With that, I will hand things over to our secretary-treasurer, Doug Boyd.

D. Boyd: As Linda has indicated, I am new to the position. However, I'm not new to the district. This is my 34th year here, and I started out as a teacher. I've been a principal and also a director of instruction. This year I had the privilege of having the board ask me to take on this role. The finance part of it is an intriguing thing.

I would like to echo Jean's concern in regard to the advertising of this process. We, too, found out about it from the newspaper, and it was only by the good luck and good eyes of our secretary that she brought it to my attention and then brought it to the board's attention. Again, that may be somewhat of the reason why there are a limited number of presentations that you have. Again, I don’t have any real, solid answers. Although, if it was brandished around to many organizations, that might be of assistance to you.

[0950]

First of all, we appreciate the attempt to support the recruitment and retention issues with local market adjustments. However, the current process still does not recognize the significant gap in wages for us locally, nor allow for more immediate response to the competitive nature of the employee market. It is difficult to retain long-term employees, who are very loyal but end up working with newer employees being paid more because the position has been vacated and was difficult to fill.

I'll give you an example of that. We have a long-term employee of over 20 years. Because he's loyal, he has stayed with us. But because we could not fill another skilled position, we were able to elevate the dollar amount for that wage. So we have now an apprentice making more than this individual who has a long-term history, and it's very frustrating. His question to us was: "Do I have to quit, hope no one else applies for it and then reapply for my own job?" That's a sad state, but that's a real one here.

Both skilled and entry-level positions remain unfilled because we do not have the ability to respond or adjust to the labour market, as indicated by the local economy. At this point, we have been over a year without an electrician in our district. We are actually paying more to contract out to individuals within the community, to try to get service when and where we can. As for the entry-level custodians, we do not have one spare custodian. So if somebody is ill, we cannot replace. We just have no one to fill those positions.

We again ask the committee to recognize the significant gap in wages for us locally, and ask that we be provided the necessary funding to allow us to manage our organization and respond to the desperately needed ongoing local adjustment in a manner that is timely, effective and fiscally responsible.

A letter to Hon. Richard Neufeld, which is attached to the presentation, dated November 26, 2007, states "support for the province's aggressive stand on greenhouse gas, as well as the direction the district has taken relative to this issue. However, we are unable to support the implementation of a carbon tax that will not only impact our ability to implement conversion to sustainable energy in school district 60, but will also have a negative effect on the education of our children due to moneys being redirected to pay yet another tax."

Northern communities are facing a difficult task of meeting the desire to achieve the government's carbon-neutral target due to the transportation and heating requirements. Our plan includes the installation and conversion of the heating systems from natural gas to geothermal heat sources, inclusive of new buildings, new additions and, in turn, all existing buildings. Current conversion installation costs are high and may not meet the short-term payback that the government requires.

However, we believe that if significant changes in energy consumption and resulting emissions are going to take place, upfront funding is going to be required.

The progressive carbon tax adds to the difficulty of finding available dollars for this worthwhile endeavour. To date, our request for a meeting to discuss our direction in seeking sustainable energy resources has
[ Page 1793 ]
gone unanswered. Without financial support, we will be unable to proceed with further investigation and/or implementation of our plan.

We're looking at geothermal heat. Just to give you a little bit more detail, we have in fact done engineering studies and so on, so we are prepared to embark on that. We have a very active career program that involves residential construction, where our students are building homes that are affordable for our community. With the last two homes, we were able to do geothermal, so we are truly testing our theory that we can make it work. We believe we have accomplished that and will continue that route. However, again, we need assistance. We have that proven track record.

We support the letters to Hon. Shirley Bond from school district 91, expressing concern regarding the carbon tax impact on school districts. Our past record involving a total district refit of all our lighting and central systems — which has resulted in electrical savings of approximately 45 percent, natural gas savings of 32 percent and propane savings of 22 percent annually — speaks directly to the desire to be an active player in reducing and eliminating carbon emissions.

[0955]

We ask that the government review the carbon tax on school districts and provide the necessary funding to achieve the required refitting of schools that will result in achieving emission targets.

The continuing rise in our district's transportation costs due to escalating fuel prices requires immediate attention. Our vast geographical area requires an extensive transportation system, with a fleet of approximately 60 buses on the road each day. These costs will also increase with the carbon tax, and we therefore support the request of Nechako Lakes to increase the transportation funding.

As stated in their letter to Hon. Shirley Bond, which is also attached, dated June 4, 2008: "Funding for transportation services for 2008-09 is still based upon the cost of providing transportation services from nine years ago."

I don't know if you've had a chance to drive around, but our pumps were showing $1.539 for regular gas. Again, the gas comes out of the ground. It's really hard to justify those types of expenditures. I travelled about two and a half hours to Grande Prairie, and it's often much cheaper, even on the border, which is an hour and a half away.

So we are facing a real dilemma here. When you're adding carbon tax to the already high price of fuel, it's just unbelievable. And the expectation is for us to still provide those much-needed services for the students of our district.

As the communities in school district 60 continue to grow, so do our schools. Last year revealed that most were beyond their nominal capacity, and previously available multipurpose rooms had vanished due to required classroom space.

We are currently operating with 18 portables in place, and both ministry and local projections indicate a continued increase in student population, which will require additional space. Current discussions of all-day and early-years kindergarten have the potential of putting further demand on unavailable space.

Our district has embarked on today and tomorrow discussions for the past year to maximize space utilization while providing the best educational opportunities for students. These discussions are not only investigating best practice but also looking beyond the traditional brick-and-mortar delivery in order to provide relevancy to student education.

However, with growing populations and extended age groups in our schools, additional space will be required. We ask that the ministry join in our review of required space and provide funding to address these issues.

That is our presentation.

R. Hawes (Chair): Thank you very much. Lots of information there.

B. Ralston (Deputy Chair): On Monday, as part of these hearings, the Vancouver Board of Trade suggested to the Minister of Finance and to this committee that the next step-up of the carbon tax be delayed in order to begin to address some of the problems among them that you've pointed out. Would you support a delay in the implementation of the next step-up of the carbon tax?

D. Boyd: Well, at this point I could say that we would support any delay with the idea that it was going to be reviewed in particular. We're not sure it needs to take place in its entirety. If in fact we are given the opportunities to address some of the issues with funding that will help us address them, then that may eliminate the need for schools to be facing a carbon tax.

The issue for us right now is that we have no dollars that we can redirect, without affecting education, to some of the things that we believe can happen. We do believe in the whole sustainable energy issues, and we also believe in the controlling of carbon emissions. That's not the issue for us. The issue is: how do we go about doing it?

Hopefully, that has answered your question.

J. Rustad: Thank you very much for your presentation. The challenges that you're facing here are somewhat better than challenges some of the other districts with declining populations face. However, they are still challenges nonetheless, particularly around the all-day kindergarten. If we go to age three and age four for types of facilities, obviously, in growing districts that means there will need to be investments for space, because you don't have the space.

Around transportation, I do know there is a group provincially that reviews that — the superintendence
[ Page 1794 ]
around that. I know there's representation from the north with regards to that issue. I'm not sure when that next review is, but I'm pretty sure they do it on a yearly basis with regards to those sorts of costs and try to make adjustments.

[1000]

Certainly with the message that you've sent around, it is pretty clear and it's something that, from the work we're doing on this committee…. You'd be advocating that we try to promote that review and perhaps the look of the whole regional balance, since that hasn't really been done in ten years.

The question I would have around the whole carbon tax, around the whole utilization…. You're talking about going to geothermal. What are you finding in terms of the expense around that — in terms of capital costs for, say, any kinds of renovations? The reason why I'm asking is if we're going to be looking at programs to offset some of the challenges that come with the higher natural gas prices that we have today, what kind of dollars are we looking at for a school district like yours in order to be able to, say over a ten-year or a 20-year period, convert over by using something like geothermal or other energy needs?

D. Boyd: Our previous secretary-treasurer had done some estimates. These are just the actual conversion costs and not the preparatory work that is included in it. They range from a very small school setting of $350,000 to an elementary school that has around a 350-student population of $1.1 million. That was the actual conversion cost. Again, part of the issue is the drilling and the timing and all of those.

If you look at just simply a residential construction home where we have more experience right now, a typical home of around 1,000 square feet is costing us around $24,000 to do the full installation — new equipment and drilling and so on. The district, in their wisdom, has actually looked at and purchased a drilling rig to go through this process so that we can try to reduce the costs as much as possible.

That's also part of our experience in that and what we're trying to make decisions on. If we are unable to do it, then of course the investment in the rig will be regained by selling it. But at this point we are looking at trying to do anything possible to meet this. This was before the carbon tax that these discussions were entered into.

So you can see that our district is very much at the forefront of trying to do this, and for the right reasons.

J. Rustad: I applaud your efforts. Thank you.

L. Sewell: I'd just like to add to that. For the residential construction program the cost of $24,000 is estimated to have a payback of between five and eight years — is it, Doug?

D. Boyd: Yes.

J. Horgan: Thank you very much for your presentation, particularly with respect to the impact of energy costs on your budgets. We could talk about per-pupil funding formulas and how that impacts growing districts as well.

What really interests me is how the district is managing recruitment and retention not just of educators but of support staff in a hot economy where the private sector is paying premium dollars to bring in unskilled people. How are you managing to maintain skilled people, when you don't have the capacity to meet those private sector wages?

Supplementary to that, what suggestions would you have for the Minister of Education to add to your budget so that you can manage those needs?

L. Sewell: Can I just say a few words to that? There are two sectors here. There's the CUPE, which is our support staff, and then there are our teachers, which fall under BCTF. There are different problems in each of those sectors. But the CUPE is affected more, I guess, by the local supply and demand of workers in our area and is more subject to those inflationary dilemmas.

Our teachers. We are faced with a shortage. With the close proximity to the Alberta border, we still don't have that parity that the TILMA agreement was trying to pursue so that we could hire teachers and have them fully accredited to teach in B.C.

That's with regard to the jurisdiction of the college of teachers, so that really doesn't affect you as the Finance Committee, but those are some of the issues that we're facing and that I'll let Doug address, maybe in more detail.

[1005]

D. Boyd: Just very quickly, the support staff side is a very difficult thing. I think I gave the example of the custodian, where we do not have any spares at all. When we advertise, we get little to no interest in it because of the very fact that we cannot compete. We have no way of escalating those dollars, based on the control that BCPSEA has over those issues.

With skilled workers, it's the same thing. Our salaries were extremely low, even on a provincial basis, so we did seek approval for certain positions that we were having difficulty filling. For those positions, we actually achieved a $6-an-hour increase.

It still didn't touch the local economy, and that really, then, spread a disparity amongst the other workers. There's infighting that takes place because of that. You can't say that one group is more valuable than another within the same union or with the same organization, and that has caused us unreal difficulty in that area.

Again, with the teachers we are still having difficulty, although I applaud the attempt of giving the $2,200
[ Page 1795 ]
retention bonuses for teachers in the local area, because the harmonization was one that we were going to suffer for big-time, as $2,200 isn't a huge amount.

We are trying to be the best place and the best employer that you can work for. We are respectful of our employees, and we try to generate that loyalty through any way we can.

R. Hawes (Chair): We're at the end of the time, but we have three people who still want to ask a question. So with the committee's indulgence and providing those people will get directly to their questions without making speeches, we'll maybe carry on.

R. Lee: No speeches. My question will be very direct. We directed the carbon tax to tax reduction, but you're also suggesting that probably, with new resources, there should be some subsidy for conversion from, say, natural gas to geothermal or to solar power, etc.

What kind of scheme would be better — a lump sum payment, a percentage of the subsidy or some kind of formula? I understand you did some studies for the households and also for the facilities. So what do you suggest? What kind of formula would be fair?

D. Boyd: Again, I think if we had some way of directing and putting forth projects that would be considered…. I don't suggest a formula across the board and just saying that this is going to work, because not all school sites can be addressed the same way.

When you're doing geothermal or any conversion, you have to have the space and the opportunity to go either into a horizontal or a vertical drill setup. So I think if there was a way of addressing the immediate needs of conversions, especially when a building is coming up…. For example, a few of our buildings have the need for upgrades in boilers or whatever. That may be the time to immediately address those issues and put the dollars directly into that.

If I can address the first part, where you were saying that the idea is to take that carbon tax and invest it into savings, it's very difficult for us to invest in those savings if we're already paying the tax upfront. How do you then generate it so that you can generate savings to reduce that amount? That's our issue.

Again, the formula system…. I think we'd have to review it very closely to see how that would work and make it effective. We're not asking for dollars for anything. We want to be very proactive in it.

D. Thorne: I was just noticing that your office is very close to your MLA's office and that you've been waiting ten months for a meeting. I'm just wondering: do you think there's a reason for that? What is the feedback you're getting?

D. Boyd: Well, again, I wasn't involved in that particular aspect of the letter-writing, but we have not had a response to that letter. We are also now inviting all of our local MLAs to a meeting, and we're in that process, again, to try to activate that very process.

D. Thorne: To see if you get some movement there.

D. Boyd: Yes.

D. Thorne: Good luck with that.

D. Hayer: When we heard the last mayor, she seemed to say she had been able to get a hold of the MLA very quickly. You seem to be saying you're having a difficult time finding him, which is quite different from the last one.

What's the total number of students in your district? Also, I was really impressed with your presentation when you said that with a total refit of lighting and central heating, you were able to save 45 percent in electricity, 32 percent in natural gas and 22 percent in propane. How much did the total cost come to, to do that, and where did the money come from?

[1010]

D. Boyd: I don't have the actual figures in front of me, but these are figures that were generated from our previous secretary-treasurer, and it was over a period of time. Those moneys came from our operating budget as well as our annual grants to try to do that retrofit. Again, it was a project that the board took on with the intent of saving dollars down the road, and it has paid for itself by doing that.

D. Hayer: And the total number of students in the district?

D. Boyd: We have just over 5,800 students right now.

R. Hawes (Chair): Thanks very much. I think we all hear what you're saying about the carbon tax with respect to its effect on your budget, and I know that one of the questions in the consultation paper is: how would you suggest that we implement further tax reductions from carbon tax money? I'm taking it that your answer would be: “Either eliminate the tax against school boards or school districts, or at least redirect the money back into energy-saving projects for school districts."

D. Boyd: That's correct.

R. Hawes (Chair): I take it that that will be your response.
[ Page 1796 ]

D. Boyd: Yes.

L. Sewell: Or provide the funding to allow us to pay the tax so that we don't have to take it out of the classroom, because it is coming out of the classroom.

R. Hawes (Chair): Okay. Your presentation, as always, is very high-quality. We hear what you're saying. Thank you very much.

So we have now got an open mike. Is there anyone who would like to make an open-mike presentation? Hearing no one, we will adjourn the meeting.

We're going to reconvene this afternoon in Prince George, so any of you who happen to be in Prince George this afternoon, you would be welcome to attend.

The committee adjourned at 10:12 a.m.

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