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, November 5, 2008

9 a.m.

Douglas Fir Committee Room

Parliament Buildings, Victoria, B.C.

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

Unavoidably Absent: John Horgan, MLA

1. The Chair called the Committee to order at 9:08 a.m.

2. The Committee discussed the earlier invitation to the Minister of Finance to provide a financial update to the Committee.

3. Resolved, that the Committee meet in-camera to prepare its draft report to the House. (John Rustad, MLA)

4. The Committee met in-camera from 9:31 a.m. to 3:54 p.m.

5. The Committee adjourned to the call of the Chair at 3:54 p.m.

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, November 5, 2008

Issue No. 90

ISSN 1499-4178

[ Page 2215 ]

WEDNESDAY, NOVEMBER 5, 2008

The committee met at 9:08 a.m.

[R. Hawes in the chair.]

R. Hawes (Chair): The first item on the agenda is…. We have "Preparation of the draft report," but I think the first one we should deal with is the motion that was made at the last meeting regarding asking the Finance Minister to come and talk to us. If everyone is in agreement, we'll put that on the agenda as the first item.

Everyone is in agreement with that? Okay.

B. Ralston (Deputy Chair): Looking forward to hearing from him.

Provincial Fiscal Forecast Update

R. Hawes (Chair): In accordance with the way the motion was worded, it directed the Chair to make the request of the Finance Minister, which I did. The answer that I got back was that he was going to try to rearrange his schedule. He has attempted to do so, and being unable to….

He is, I know, right now extremely tied up working on the drafting of legislation, etc., for some of the things that were in the ten-point presentation the Premier made on the 22nd of October, which of course includes legislation for the tax reduction — a piece of legislation that we trust everyone on both sides of the House is going to support.

Instead, what he did was sent…. I do have a copy, and everyone has a copy there of the PowerPoint presentation he made on October 22 that indicated that there is a great deal of volatility in the market, that things have been on the downswing, which I think is not a surprise for anyone who reads a newspaper of any kind.

[0910]

At that time he did not present hard numbers, because that will be in the quarterly update that will be and is due sometime near the end of November. And as he said, the schedule for releasing that information and the work that is done on it isn't contingent on the timetable set by this committee. It is set by government and the Finance Ministry and the very substantive number of staff that work on the budget preparation documents.

They are working on the quarterly update, which will be the end of November. This does show — and I don't know if people want to go through these slides one by one — that the pace of housing starts in the United States is falling; the credit risk has hit record highs, on the second slide; consumer confidence declines in B.C. and Canada — obviously, that's not news to anyone; the EI beneficiaries are starting to increase; B.C. wood manufacturing shipments are continuing in a downward trend; lumber prices are in decline; retail sales growth is slowing; the housing market is in decline; natural gas prices have been falling; and the value of the Canadian dollar has been falling. All of that information is, I think, not news to anyone, again, as I say, that reads a newspaper.

I guess, and I'm not sure…. The intent of the original motion as put forward by the Deputy Chair, Mr. Ralston…. I think it's pretty clear that what the Finance Minister said on October 22 was that the government continues to be ahead of the budget as laid out originally. So when we started the year and they had laid out what they projected, we are ahead of that. We are behind what was in the forecast for September 22, and that would be, again….

It shouldn't be a surprise to anyone because I think the Finance Minister has also been quoted publicly as saying that things are changing — not monthly, not weekly, not daily, but rather hourly. That's how volatile the markets have been over the past month, and I think every one of us knows that.

I'm not sure what we have to gain by going much further with this other than just accepting the documents that he has sent over.

B. Ralston (Deputy Chair): Well, I think it's to be regretted that the Finance Minister hasn't availed himself of this opportunity to come before the committee and explain the wide disparities in his public statements about projected government revenue. This is a perfect opportunity to do so.

I, frankly, am willing to arrange my schedule to have the committee meet whenever it's convenient to the Finance Minister. But if he is in Victoria drafting legislation, I find it a little bit disappointing that he wouldn't find 15 minutes to meet with the committee, which is making recommendations for the preparation of the very budget that I presume he will — assuming no cabinet shuffle — bring forward in the spring. So that's the first thing.

The second thing is that when the Legislature reconvenes, some of the bills that will be before the House will be money bills. In other words, they will talk about government spending. In order for the Legislature to be fully apprised and aware of what the state of the forecast and government revenues are, before spending money, I think it's an important priority.

It would be wrong, I think, for the government to come to the Legislature, propose spending bills without being fully advised by the Minister of Finance as to what the state of the projected revenue for the province is. That appears to be what the Minister of Finance is proposing, because he's refusing to come before this committee. He's refusing to advance the date of the quarterly report, which will come out after our very brief legislative session of five days is finished.
[ Page 2216 ]

I think it's perhaps indicative of the arrogant and out-of-touch approach that this government takes. This is a further indication from the Minister of Finance this morning that he has the same attitude towards the public and the public's right to know that his leader, the Premier of the province, does.

[0915]

R. Hawes (Chair): From the chair, I would say that I had hoped that this committee could continue in a bit more of a non-partisan manner. But when we start getting into the kinds of statements that the member just made, of course then we descend to partisanship. I just don't think that's where we want to go with this committee.

I feel bad for that member — that his leader put forward an economic plan based on numbers that everyone that I know of knew couldn't possibly continue because of the volatility in the market. So I feel bad that her economic plan is so far out of touch, but I don't think that can be blamed on the Finance Minister. I think she needs to look internally, as do her members, and I think attempts to fob this off on the Finance Minister are kind of feeble.

So I would rather just get on with what our job is. The Finance Minister will be tabling a complete economic update near the end of November, as has always been scheduled, as has been the tradition for many years. There is a time that these things are done, and that's the way he's following it.

He would have been here today, except his schedule couldn't be rearranged. He has nothing to hide. The information that he would have provided here today is identical to the information that he gave on October 22, and you have the PowerPoints. So with that, I hope we can just end it and move on.

R. Austin: I just wanted to make one comment. When you say that the Finance Minister is going to give us an update after the House sits for its five days and after we're supposed to have completed this work, as is the tradition and as is set in legislation….

But I think in the discussion that we had in Vancouver when we put forward the motion and all agreed on that motion…. These are very extraordinary times. So all we're saying — and I would agree with my colleague Bruce — is that under these very extraordinary times….

I mean, who would have thought six weeks ago that the election that we saw last night in the United States would have been so dramatically changed by the economic upheaval? As the United States is our main trading partner, we are obviously going to be extremely affected by this. I think that under the extraordinary circumstances and the fact that we are willing to set aside another time, at the convenience of the Finance Minister….

He's obviously a very busy person. He's got a huge ministry and a huge responsibility. I understand that. But surely we could find 15 minutes or 20 minutes at his convenience for us to convene and just have an update, even if it's in camera, so that we know where we're going forward and not putting forward ideas which, frankly, would hold no water. Maybe he's going to be able to say: "Well, these are great ideas, but I can't do any of them, not because some of them aren't good ideas. But we simply are not in a financial position to do it."

So I would hope that we can maybe, through you, Mr. Chair, speak to the Finance Minister and put forward the notion that at some other time, where we're scheduled to meet several times in the next ten days…. At some point maybe we could rearrange one of those meetings so that we could actually meet with the Minister of Finance so he could give us an update.

That's what I have to say.

R. Hawes (Chair): Before I go to Mr. Rustad, the meetings are scheduled for future days. We must have our report finished by the 15th of November. As we all know, the research staff are already struggling because of the extra week that was added on because of the federal election. It has put tremendous time pressure on the staff that's going to be helping put this together.

Every day that we delay is a tremendous burden on them. Frankly, I have great fears that we will finish within the statutory time unless we get on with this. With that comment, I would caution members to keep in mind the deadlines that we face.

J. Rustad: I just want to make a brief comment with regards to this. I mean, I appreciate the need and the desire of the opposition to have the Finance Minister come in person to be able to do an update. This economic update compiled with the information that we already know and that, from my perspective, it's pretty obvious to all of us should be able to allow us to be able to move forward in terms of making some recommendations that are reasonable and that can fit within the budget….

It's very unfortunate that the opposition sit in such economic darkness that they require some light to be shone, rather than being able to use their own common sense with regards to what the economic update and the economic situation is.

I hope this debate ends quickly here, so that we can get on to doing the real work that we need to do, which is to come forward with some recommendations for a report.

[0920]

D. Thorne: Well, I need to put on record that I agree with my colleagues. But just to comment, you know —
[ Page 2217 ]
and I appreciate what the Chair is saying, that he hoped we would continue in a non-partisan, friendly way…. But it's interesting how quickly members are able to move into that other mode and perform as I would have expected as a new person on the committee in our discussions.

I just want to say that the Chair did comment that these kinds of figures are changing virtually by the hour. In which case, I would say, that gives impetus to having an update. I won't say on a daily basis but certainly halfway through the procedure we're in right now, where we are making recommendations for the budget.

I mean, it makes me think, as a new member of the committee — and surely the public would think the same thing — that all of the work we do is really not paid that much attention to in the end, that it's almost futile for people to come out and make recommendations, because very few of those recommendations actually will see the light of day in the budget. Not only will the public feel futile, perhaps, if we're working with information that is extremely outdated, according to the Chair — even worse than I had thought — but I feel sitting here as a member….

Chair, just referring back to how you said that this kind of information is changing almost by the hour — I mean that it's worse than by the day — and that these figures are from October 22, which as we know is almost two weeks backwards. I feel as if we're sitting here and doing a job. As well, I feel that my time is being spent in a futile way if in fact we're just operating in a vacuum, and the reason for that is because what we do is not really that important anyway.

I would feel that over one of those meetings that we have scheduled for Victoria, the Finance Minister could pop in for ten or 15 minutes for a quick update. I would feel that my time was being spent on a committee that the government and the minister felt was important enough to do that.

R. Hawes (Chair): Just for the member's edification, I'm sure we could get a copy of — whether it be the Financial Times, the Times Colonist, the Vancouver Sun…. In the financial pages the information that you would seek from the Finance Minister is in there every day. The indicators on where the economy is going are in every financial newspaper that I have seen for years. That's what the Finance Minister would be able to tell us.

The world outside is changing. We know that. He's not going to provide a financial update on the province until the statutory time. It's not ready. Why would it be? He doesn't report out to us. He reports out to the public, and he will be making a financial report close to the end of November. That's when the quarterly update will be publicly announced. That's when the figures will be put together. He's not going to, today, do an interim…. I can tell you that that's not going to happen.

The numbers that are in the slides that were presented on October 22 upon which he said that we are living in volatile times are the ones that are available in every newspaper that's out there. So I would suggest that members who are confused about where we're going simply refer to those.

D. Hayer: First of all, I was in the United States at the end of August. I can tell you that everybody was saying: "Obama is going to win." So there was no surprise to me hearing last night's results, because that's what most people said in the United States. I'm just going to put that, because apparently some members didn't know that Obama was going to win or not. It seemed that way.

On the other hand, take a look at this economic update here. That is fairly detailed.

I also understand the opposition leader wants to spend $2 billion on housing, all of which is money we don't have. Everybody knows. All the commentators and all the TV and radio programs have said that, you know, the surplus is getting smaller and smaller, and that what we think it is today might not be the same two or three months from now, depending on how the economy goes because the prices are changing.

Look at the dollar. It was down to 77 cents. It was up to 89 cents yesterday. Now it's 86 cents. Every day is very fluid.

[0925]

I think when we look at the opposition trying to make a mockery out of this committee by making some of the comments…. I think we should be realistic. We should understand what's happening in the economy. There's no way whatever, even if the Finance Minister comes here, that those figures would be realistic two months from now or three months from now, because the economy is changing so quickly. So I think we have to respect that.

On the other hand, we listened to British Columbians. We went around the province. We have the e-mails, the letters, the faxes and other information they sent to us, and we should analyze it. We should make recommendations, as we made in the past. Which do you think would be feasible or not? Then the Finance Minister will take a look at if they work or not, depending on what the circumstances are, what the budget constraints are next year when the budget is introduced in February.

B. Ralston (Deputy Chair): Well, first of all, we all agreed last time that the Finance Minister come, so….

R. Hawes (Chair): Excuse me. Just for clarification, and then a point of order. Well, I can't make a point of order, sitting in the chair. We agreed that the Chair would ask the Finance Minister if he could attend.
[ Page 2218 ]

B. Ralston (Deputy Chair): Correct. That's absolutely right.

R. Hawes (Chair): That happened. We didn't agree that he would come. So I just want to make that absolutely clear.

B. Ralston (Deputy Chair): We agreed that he would be invited. That was a unanimous motion. So for members on the other side to say that it wouldn't make any difference if he came is obviously a change in position from a week ago.

The second thing is that this is not an invitation to the Minister of Finance to come and retell electronic newspaper clippings. What it was, was to reconcile his public statements about the impact of the financial downturn upon projected government revenue. He has said very contradictory things.

Obviously, everyone understands that there will be some impact on government revenue, but what he has said is that there was a precipitous, major decline — billions of dollars — in projected government revenue. It's that change that I had hoped he would be able to come before the committee and address.

It's not a question of newspaper clippings and everyone knows what's happening in the economy. I think that is to either deliberately misconstrue what is being said or not understand what is being said. It's regrettable that the minister is not prepared or not able to do that, because that would be of assistance not only to the committee but to the public.

R. Hawes (Chair): John Yap — and hopefully, we can wrap this up and move on.

J. Yap: I think we need to remind ourselves of the task that we have, which is to listen to British Columbians, and we've done that. We've travelled the province and received lots and lots of input — thousands of submissions, written and e-mail, and presentations to the committee directly.

The fact that economic conditions have changed, are changing, continue to change, doesn't impact the valuable input that we have received as a committee from British Columbians. Our task is to take that and synthesize it and come up with, out of all of that input, recommendations to put forward through the Legislature to government for consideration in putting the budget for 2009 together.

I think enough has been said of the fact that we do live in very changing economic times. The indicators are clear. I appreciate the update that we have a copy of, which the Finance Minister presented previously, and it reminds us, as you look at the trends here, that clearly the trends are not in the right direction. They are downward; they are negative. These trends are there. We all know that. In that context we should work to put together this report, as we're required to.

I think we've spent enough time debating whether or not we should have the Minister of Finance come here to answer questions. I don't think that's really necessary. It's plain that we know what the context is of the trends that are happening in the economy. We've received this copy, again, of the update. With this, we should move on.

[0930]

If the opposition members feel that there's another purpose here, well…. We have to remind everyone that if the Leader of the Opposition, in her address to the province, chooses to base her economic plan on numbers that are available out there, based on their own forecasts and, as the Chair says, looking internally — clearly, the presumptions are that spending can be increased, as the opposition suggests they would if they were in government — then one of two things has to happen. Either taxes have to be increased, or a deficit has to be incurred. If that's the uncomfortable position that opposition feels they're in, well, that's too bad.

For now, Chair and members of the committee, I suggest that we focus on the task at hand, which is to work on this report which we have to issue within ten days.

R. Hawes (Chair): The Finance Minister — again, regrettably — was not able to attend today. His schedule wouldn't permit it. He has sent the documents that we've seen.

I suggest at this point…. There's no point in hashing this over further. We should just move on, and with the concurrence of members, I'd like to entertain a motion to move in camera so we can begin considering the task we have.

Motion approved.

The committee continued in camera from 9:31 a.m. to 3:54 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): We are now on the public record.

We've rescheduled our meeting. The meeting for tomorrow will be moved, now, to Monday at 10 a.m. In the interim, the vice-Chair and I will get together, go through the outstanding recommendations on which we want to see some wording changes or we don't have agreement. We'll see where we do get agreement, and then on any that are outstanding on Monday, they will come back for a vote again in the in-camera session.

With that, we have a motion to adjourn, and we are adjourned.

The committee adjourned at 3:54 p.m.

[ Return to: Finance and Government Services Committee Home Page ]

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

Copyright © 2008: British Columbia Hansard Services, Victoria, British Columbia, Canada