2009 Legislative Session: First Session, 39th Parliament


SELECT STANDING COMMITTEE ON
FINANCE AND
GOVERNMENT SERVICES


MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

Wednesday, October 7, 2009


8:30 a.m.


Douglas Fir Committee Room


Parliament Buildings, Victoria, B.C.


Present: John Les, MLA (Chair); Doug Donaldson, MLA (Deputy Chair); Norm Letnick, MLA; Don McRae, MLA; Michelle Mungall, MLA; Bruce Ralston, MLA; Bill Routley, MLA; John Rustad, MLA; Jane Thornthwaite, MLA; John van Dongen, MLA


1. The Chair called the Committee to order at 8:31 a.m.


2. Opening statements by John Les, MLA, Chair.


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


4. The Committee recessed from 10:09 to 10:17 a.m.

5. The Committee adjourned at 12:06 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


Wednesday, October 7, 2009


Issue No. 4

ISSN 1499-4178

[ Page 91 ]

WEDNESDAY, OCTOBER 7, 2009


The committee met at 8:31 a.m.

[J. Les in the chair.]


J. Les (Chair): Good morning, everyone. My name is John Les. I'm the Chair of this committee, and my home riding is in Chilliwack. I'd like to welcome everybody this morning, especially those in the audience. Thank you all for taking the time to participate in this important process.


Every year, in preparation for the next year's budget, the Minister of Finance releases a budget consultation paper by September 15, and that was done again this year. The consultation paper presents a current fiscal forecast. It also identifies key issues that need to be addressed in the next budget. The paper provides a focus for the consultations of this committee and includes information on how members of the public may provide their views on budget priorities.


The Select Standing Committee on Finance and Government Services is the parliamentary committee which is responsible to conduct public consultations on the forthcoming provincial budget. Our committee is required to report back to the Legislative Assembly no later than November 15 of this year.


This year we will hold ten public hearings in different parts of the province. These hearings have been scheduled in conjunction with the demands of the ongoing fall session of the Legislature.


This is our second public hearing this year. The first was held in Vancouver last week, Monday. On Friday of this week, while we're here in the provincial capital, we have also scheduled video conferencing sessions to hear from the residents of Courtenay, Cranbrook and Dawson Creek, the first time that we have tried this method of consultation. In mid-October we will be travelling to Smithers, Prince George, Kamloops, Kelowna and Surrey. Then we will begin our work of drafting our report, which must be completed no later than, as I said, November 15.


If you've not yet received or reviewed the budget 2010 consultation paper, we've brought copies along with us. They are available at the information table at the back of the room.


In addition to public hearings, it's important to know that there are a variety of other ways that British Columbians can share their ideas with us. We accept written submissions by letter or by e-mail, and for the first time, we are also inviting video or audio files. Further information on how you may participate using one of these methods is available on our website at www.leg.bc.ca/budgetconsultations.


Any public input that the committee receives, however expressed — whether on line, in writing or via audio or video clip — is given the same full consideration as any oral presentations that would be made at a public hearing. Our deadline to receive written or electronic submissions is Friday, October 23.


Today we're going to hear from a number of presenters who may speak for ten minutes, with up to five additional minutes allotted for members' questions. Time permitting, we may also have time for an open-mike session near the end of the hearing this morning, which will conclude at 12 noon.


I'll now ask other members of the Finance Committee to introduce themselves, starting with Michelle.


M. Mungall: Michelle Mungall, the MLA for Nelson-Creston.


B. Ralston: Bruce Ralston, MLA for Surrey-Whalley.


D. Donaldson (Deputy Chair): Doug Donaldson, MLA for Stikine.


J. Rustad: John Rustad, MLA for Nechako Lakes.


J. van Dongen: John van Dongen, MLA for Abbotsford-South.


J. Thornthwaite: Jane Thornthwaite, MLA, North Vancouver–Seymour.


D. McRae: Don McRae, MLA, Comox Valley.


N. Letnick: Norm Letnick, MLA, Kelowna–Lake Country.


J. Les (Chair): We also have a number of staff with us today. To my immediate left is Craig James, the Clerk to the committee today. Also with us in the back of the room is Stephanie Hansen, who is staffing the registration desk. Behind the glass behind me are the staff of Hansard Services, Polly Vaughan and Gail Swetlow, who are recording and preparing the written transcript of this meeting.


With those formalities out of the way, I'd now like to call on our first presenter, Peter Sandmark of MediaNet. Peter, go ahead.


[0835]

Presentations


P. Sandmark: Good morning, and thank you very much. I'd like to thank the whole committee for this opportunity to make a presentation.


My name is Peter Sandmark. I'm the executive director of MediaNet. I also teach at the University of Victoria, a history and art class on the economy of art and culture. For the past two years I was a board member and representative of the Pacific region of a national association, the
[ Page 92 ]
Independent Media Arts Alliance, which groups together over 80 centres — independent film, video, new media, production, distribution, exhibition, festivals — representing over 12,000 Canadian artists. I've included a list of the Pacific members of the region, which includes one group from the Yukon and, we estimate, represents about 1,500 artists.


I'm here today principally to urge you to restore funding to the B.C. Arts Council to its last year's level and to restore the gaming grant cuts. I can right away say off the top that we look at arts and culture as a vital service, so looking at the plan, the document from the Finance Committee, I think it has to be considered in those terms.


Let me talk a bit about MediaNet. It's a non-profit video production centre in Victoria, founded in 1981. It currently has three staff and about 184 members. Membership is open to the general public, so members come and go. We've served hundreds and hundreds of members over the year, probably thousands over the years.


We provide members with access to video cameras and video editing on computers. We give workshops that help to train people in how to use the equipment and provide organized screenings of independent films and videos. We have a screening tonight, here in Victoria, of short environmental documentaries.


This past year 185 short videos were produced, and many of our members' films have been shown in festivals around the world, including in France at the Clermont-Ferrand International Short Film Festival; Basel, Switzerland; Australia; London; New York; Seattle at the Northwest Film Forum; Toronto; Edmonton; St. John's, Newfoundland at the International Women's Film and Video Festival; and of course festivals here in Victoria — the Victoria Film Festival, Antimatter, ROMP Dance Film Festival.


We've shown our members' works on TV — on Shaw TV, the community channel here — as well as screening works in venues around town with our art partners such as the Art Gallery of Greater Victoria, Open Space, the Community Arts Council of Greater Victoria, even at the Belfry Theatre, among other venues.


A quarter of our funding is self-generated from membership fees, equipment rentals, workshop registration and admissions from screenings, and the rest comes from municipal, provincial and federal funding sources. Canada Council for the Arts is our principal funder, supplying a bit over a third of our $150,000 annual budget.


The cuts to the B.C. Arts Council have already forced us to lay off a part-time technician, who was putting himself through university working at MediaNet. We just simply couldn't keep him on, as much as he is talented and was very helpful in providing technical support at our centre.


We also receive a $20,000-a-year gaming grant from their direct access program. We are in the second year of a three-year agreement. When we heard that the gaming grants were cut, we had to look at our budget very carefully. There was no way around it: we would have had to close for three months and lay off the staff. Now we're lucky that the government reversed that decision, and we're one of the lucky organizations that is on a three-year agreement, so we are able to keep open and continue serving the Victoria independent video scene.


But what would have happened if the gaming cuts had not been reversed speaks directly to what I want to say today, which is the impact of arts cuts. We would have had to lay off our staff. Maybe they would have come back — they certainly said they were interested in it — but in the meantime they'd have to look for another job or go on unemployment.


The point here is that when you have cutbacks like we're facing now, you will lose people from the arts organizations, and we will lose their experience and their know-how. The arts and culture sector is a knowledge industry sector. It's the know-how that's the most important thing.


In other words, these cuts, if they're carried through — and I hope you will consider reversing them — will cause severe damage to the arts infrastructure in B.C.


What is the arts infrastructure? It's not just theatres with seats. It's not just an empty gallery with walls. It's the human resources that are key, and we're talking about people with years of experience and knowledge. I've been working since 1982 in the arts field, either as an arts administrator or teaching or making films.


[0840]

A lot of the people have immense knowledge and experience. When you lose key people like that — and they have to make a living, and they'll go to another province or they’ll go to another country — it takes a long time to build back up what you've cut back in a moment of difficult financial times. I understand that, but I know that in Ontario our colleagues there have told us it's taken them ten years to build back up what they lost due to the cuts they faced under the Harris government years ago.


I want to point out a few studies that underline the importance of the arts as a sector. The United Kingdom's Policy Study Institutes' seminal study in 1988, The Economic Importance of the Arts in Britain, established something for the first time there — that the arts sector is a significant and growing sector in its own right, employing some 500,000 people. By 1997 the creative industry sector had become recognized by organizations such as the European Commission, the World Bank and national and local governments in the United Kingdom and was seen as a major force in the fast-changing global economy.


In 2001 the report Creative Industries Mapping Document suggested that the revenues generated by the creative industries had grown to about $112 billion and that exports contributed $10 billion to the balance of
[ Page 93 ]
trade — they estimated 5 percent of the gross domestic product, and employing 1.3 million people.


The 1997 report Use or Ornament: The Social Impact of Participation in Arts Programs produced a major change in recognition of the cultural sector's contribution to social development. This seminal study provided a clear picture of the potential social benefits of the arts and for the first time brought issues fully to the attention of policy-makers in Europe and the arts-funding agencies, providing the earliest authoritative evidence of the impact of socially relevant arts practice. This study showed that the arts make a valuable contribution to social policy objectives.


As for direct economic impact, these studies have shown that the arts and cultural sectors serve as a main source of content for the cultural industries. We see that here in B.C. with our film and television industries. Our centre, MediaNet, is typical of a lot of the media arts centres across the country which serve as stepping stones for people to move into the film and television industry. This has been recognized by Heritage Canada as well, and that's why they boosted funding for media centres through the Canada Council's programs.


In Canada the three levels of government, according to the latest stats we have, invest approximately $7.4 billion in the arts and culture sector which, in turn, contributes about $40 billion to the gross domestic product — about 3.8 percent. According to the 2006 census, there are 140,000 artists across Canada. Those are people who declare art as their principal activity, so they're not just cultural workers. That's more than the number of Canadians directly employed in the automotive industry.


The census reports, also, that the broader cultural sector has about 609,000 workers and comprises 3.3 percent of the overall labour force. This is double the level of employment in the forestry sector in Canada — 300,000 — and more than double the level of employment in Canadian banks.


The government of British Columbia's own study shows $1.36 return to the government for every dollar spent on arts funding. So cutting back will actually lose the government money.


I would dare argue that, following some Keynesian economic theory, it would be wise to borrow in a time of recession to keep the infrastructure functioning. It would probably cost the government less in the long run than undergoing cuts and then having to try and build the arts and culture sector back up.


I want to say that I support the colleagues at Music B.C. and their comments last Monday. I noted, among other comments, the B.C. Business Council believing that "returning to operating deficits is the right decision given the extent and swiftness of the global economic downturn."


We note, also, in the Ministry of Tourism, Culture and the Arts' annual service plan the goal of "cultural-rich communities that contribute to making B.C. the best place on earth to live, work and play," and also, the objective 2.2 that states that "British Columbia's arts, culture and creative sectors are diverse, dynamic and growing." Well, this simply won't be true if you carry through with the cuts to gaming and to the Arts Council of British Columbia.


I'm sure you're familiar with the creative cities concept in the book by Richard Florida. Anyone know of it? I'd be happy to give my copy to the Clerk as a support material to my presentation. I'll gladly go out and get another copy. This is worth every penny.


[0845]

Basically, his thesis is that cities that score high, that have a vibrant arts and culture sector, also show population growth and economic growth. He has a very interesting thing called the Bohemian index, and the cities that score high on the Bohemian index draw high-tech industries and high-tech workers and show economic growth. This is a study done throughout the States. Since then he has also come up with a version for Canada.


I couldn't help but notice an article last week that B.C. must attract bright people. "Vancouver Business Conference Told We Have to Develop High-Tech Jobs." You have the answer here. Develop the arts and culture sector. Why? Because it makes it a better place to live, and it draws the kind of workers you want to draw in terms of the high-tech industry.


Of course, tourism. My last note here is that tourism, we know, often is based around culture. People go to Paris just for the Louvre. People go to Barcelona to see Picasso's museum. They go to London for the British Museum. We know that people come here for the Royal B.C. Museum.


I just want to conclude by urging you to change course and restore the funding to the B.C. Arts Council, and the gaming funds, to last year's levels. Thank you very much, and I'll be happy to answer any questions.


J. Les (Chair): Thank you, Peter. We have time for a few questions, starting with Jane and then Doug.


J. Thornthwaite: Specifically, is the funding that you're saying you have had cut the direct gaming access grant, the $20,000?


P. Sandmark: The gaming grants were all cut — right? — to non-profits, and then they restored only those that were on three-year agreements. So a lot of groups were not on three-year agreements — many, many.


J. Thornthwaite: My question to you, then, is…. You did get all your funding this year, and you will next year, because it is a three-year…. So you have not actually received any cuts to your program this year.

[ Page 94 ]

P. Sandmark: That's correct.


D. Donaldson (Deputy Chair): Thanks very much for your presentation — very informative and some well-made points.


I was wondering if you could expand on an aspect of it that I've read up on but that I'm sure you're more familiar with, and that is that creative and innovative people are attracted to an area not by the taxation level or lack of it but by more of a quality of life. That includes the artistic environment that they're able to access in a community as well as the natural physical environment.


That's more of the determining factor in attracting the innovators that we all seek to attract to the province. Can you expand on that?


P. Sandmark: Yes, that's precisely one of the findings of the studies that Richard Florida has done. Areas that did offer tax incentives didn't necessarily do as well. It was places that had….


It's no accident that Silicon Valley is near San Francisco. A lot of the people were drawn to the culture. There's also Austin, which is another. It's a very small city, 600,000 people, but it has an extremely vibrant cultural scene and a growing high-tech industry in the area.


I think the thing is that with high-tech industries, it doesn't really matter…. It doesn't have to be located next to a river or a natural resource, necessarily — right? They can locate anywhere. The people who work there want to locate somewhere where it's great to live, so it's the quality of life that's the draw.


I'm leaving this with you so you can check out his tables.


J. Les (Chair): The final question is to John van Dongen.


J. van Dongen: Thanks, Peter, for the presentation.


Just a quick question. What funding did you get last year from the B.C. Arts Council for MediaNet, and what was the change?


P. Sandmark: We had $12,000 last year. We had been told to expect about $5,000 this year, so it's a $7,000 cut. It's not a lot, but it was enough to take away a salary. We just couldn't afford the salary anymore.


J. Les (Chair): Thank you, and with that, we're out of time for your presentation, Peter. We appreciate you coming this morning and starting us off today.


Our next presenter is Dr. Gordon Sleivert with the Canadian Sport Centre Pacific.


Good morning.


G. Sleivert: First of all, thanks for squeezing me in this morning. I think I took a cancellation spot. We were wait-listed to present, so I really appreciate being able to address the committee this morning.


As you know, my name is Gordon Sleivert. I'm the vice-president of the Canadian Sport Centre Pacific. We're a not-for-profit society that has operations across the province, funded both provincially and federally. We're also a member of the B.C. Sport Alliance, along with the B.C. Network of Pacific Sport Centres.


[0850]

The B.C. Sport Alliance is a group of organizations that represent sport in British Columbia. So I'm here today on behalf of the Canadian Sport Centre Pacific, but I want to make clear that we're part of a larger group, the B.C. Sport Alliance, that's looking at the future of sport in British Columbia and Canada as well.


A little bit about myself, just to give you some context. I've been working in sport for about 20 years. I have a PhD in exercise physiology and started off as an academic working in the university system. I worked in New Zealand for seven years at the University of Otago. I ran the human performance centre there, and I worked with their Commonwealth Games and Olympic programs over the course of that time.


I moved back to eastern Canada as a prof at University of New Brunswick, and about five or six years ago I followed, I guess, my passion and jumped into working in sport in British Columbia full-time as the vice-president of sports performance.


I've been lucky enough to witness and participate in high-performance sport in a variety of perspectives, also as a parent. I'm sure many of you are parents and have had kids involved in amateur sport and organized sport. I coach, I work on local sport associations, and I see the benefit of sport through our kids.


I think the last five years have been unprecedented in terms of the support that our sports system has received in British Columbia. I think my timing was perfect in coming back to B.C. and working in an environment that supported our athletes and our coaches.


Of course, the 2010 Olympic Games — love them or hate them — are doing a lot for this province. As someone who works in the sports sector, I think that they have really been a catalyst to invest in sport and invest in our communities, and there are many, many ancillary benefits that I believe that people of British Columbia are receiving as a result of those games.


But I'm not really here to talk about the 2010 Olympic Games. I'm here to talk about the high-performance stream of sport. There is a discussion going on in British Columbia, and we've been trying to act as a catalyst to that discussion. Do medals matter? Does investing in high-performance sport, in our amateur sport system, investing in the young athletes and coaches that represent British Columbia and Canada matter to the wider society?


I'm going to make the argument today — and I think there's good evidence to back this up — that indeed it
[ Page 95 ]
does, and I'll give you a number of examples. Firstly, let me just give you a few statistics, though, about British Columbia and our success in sport. 


At the recent Beijing Olympic Games, British Columbia athletes took home 39 percent of Canada's medals. That's an overdelivery in terms of the population of British Columbia, and I think that's largely in part to the investment that the province has made in sport. The recent 2009 Canada Games had our best performance ever — second in flag points, with 142 medals: 57 gold, 42 silver and 43 bronze.


This is the next generation of our high-performance athletes coming through the system. These are kids and coaches that are active in sport and in the community. Leading up to the 2010 games coming up this February, Canadian athletes, B.C. athletes are at the forefront, have racked up numerous podium finishes. We are well placed to have the best winter games performance ever observed in this country.


I've been to four Olympic Games as support staff, as a physiologist. Most recently I was at the Beijing Olympics, where I was with the Canadian swimming team. In Athens I was there as the Canadian Olympic Committee's exercise physiologist.


I worked with a local group of athletes here in Victoria. Ryan Cochrane, many of you might know, won a bronze medal in the 1,500-metre freestyle swimming event at the Beijing Olympics. I was lucky enough, I think, to be at poolside to watch the culmination of what I call a sport ecosystem at work in British Columbia. I watched Ryan succeed.


To those of you that were able to watch it on television, you see the performance. To someone that works in the system, you see the ecosystem at work. You see the coaching staff. You see the community that's behind Ryan Cochrane. You see the club that he swims with, the young kids that look up to him. You see the innovation in technology that went into some of those swim performances.


[0855]

And you see the glow of that medal after he won it in the Olympic Games and the shine of that medal and the impact that that on the community, both in Victoria but I think in the wider community in British Columbia and Canada.


So do medals matter? We think that the answer is yes. I'd ask you to check out the website medalsmatter.ca. There are a number of videos on there with a number of significant British Columbians providing their perspective on: do medals matter?


Why do medals matter? Well, first of all, medals inspire participation in sport.


It's an interesting little side story. I was at a provincial softball championship this year with my daughter, and one of her friends' little sisters came up and gave me a clock. It was before I was heading off to the world swimming championships this year, and the clock had all the little different Olympic symbols around the clock.


This was a young girl that was eight years old. Her mother told me that she was so inspired by the Olympics that she'd joined the local swim club and had purchased this clock at a class auction at the end of the year. She gave it to me, asking if I would be able to get her a souvenir from the world swim championships from her hero, Julia Wilkinson, who is a phenomenal role model and a phenomenal swimmer.


So I brought this young woman a swim cap back that was signed by Julia Wilkinson "to Emily." She's framed that, she's hung it on her wall, and she continues to be involved in swimming — a good example of how medal or Olympic-type performance can inspire young kids to stay active.


After Kyle Shewfelt won gold in Athens, Gymnastics B.C. saw a spike of 20 percent in registration. Between Salt Lake City Olympics in 2002 and Torino in 2006, Speedskating B.C. saw an increase in participation of 55 percent, largely attributed to Canada's huge medal haul in speed skating and, in particular, to Cindy Klassen's personal performance. In the months following Carol Huynh's gold medal in Beijing, Wrestling B.C. saw a jump in registration of nearly 20 percent.


I could go on with other statistics, but there's great evidence that suggests that investing in our high-performance athletes stimulates participation in sport and physical activity. Invest now in our sport performance system, or pay later in our health system. I think that case has been made and needs to continue to be made, and I'm making that case to you.


The community pride that evolves from high-performance sport is another intangible benefit to our society. I don't know if anybody went to the Team Canada–U.S.A. game on Monday night at Save-On-Foods arena. The spirit in that facility and the spirit that emanated through the community was phenomenal. The opportunity to host that event was leveraged through a women-in-sport day that was presented in Victoria.


Minor hockey girls being able to meet and greet the team. An Esso Fun Day, I think it was, for minor hockey. A number of peripheral benefits spin off from that type of event.


The economic benefits from sport are huge. The sport economy nationally contributes about 1 percent of our gross domestic product. In pursuing medals, we're pursuing research, technology and innovation through sports science, and we're leveraging funds into the province from sources that would not normally come in.


For example, we've set up the sport innovation chair. With the help of the provincial government, we've endowed a leading-edge endowment fund chair in sport technology at Camosun College. Through that partnership with ourselves, we've leveraged a $2.5 million research grant through the Natural Sciences and
[ Page 96 ]
Engineering Research Council — able to pursue sport technology that can then be transferred over to the health sector, to demanding occupations, to other areas.


This is inextricably linked with post-secondary education — training of highly qualified personnel through masters and PhD programs, engineers and applied trades and technologies.


Branding B.C. as a leader in the world in sport excellence obviously has many, many benefits for our economy. With that in mind, I'd respectfully ask the Finance Committee to consider the following contributions to sport in the province. Overall, there has been a massive and comprehensive investment in the sports system in B.C. What we're seeking is a robust and stable annual budget going forward.


[0900]

Within this, a world-class, high-performance system can be maintained; Canada can be a leading sport nation and inspire youth across our country to participate in sport; and be established as a centre to host sporting events — best place in our country for high-performance sport — and invest in a comprehensive plan for future research and development in sport technology and innovation in collaboration with B.C.'s post-secondary institutions.


For the next fiscal year we would like the province to consider implementing a three-part program.


A commitment towards cost-sharing a strong, high-performance sport budget for B.C.'s integrated performance system in partnership with the federal government, essentially matching funds. In addition, we would appreciate your influence on the direction of the B.C. gaming funds that are being maintained to ensure an increase in funding for coaching at the sport club level. Quality coaching in the community is a huge investment in our youth and, certainly, in the future of high-performance sport.


Number 2, a 2010 games legacy plan, funded by an endowment to develop a provincewide sport academy system to deliver the promise of 2010. We've had, I believe, about $600 million invested in infrastructure around the Olympic Games. We need funding to sustain programs going forward so that the children of 2010 continue to be active and evolve in our sport system.


Finally, investment in an innovation program focused on further developing closer linkages with higher education and the capacity of the sport system to drive research, development and innovation.


Sport supports the health of our communities, and it supports our economy. As a sector we recognize the difficult financial challenges that the province faces moving us out of the current recession, and we look forward to working with our partners in the provincial government to ensure that B.C. athletes continue to lead the way, both in Canada and the world. Thank you for your time.


J. Les (Chair): Thank you very much. 


N. Letnick: Thank you for your presentation, Dr. Sleivert. You said that fuelling the sport economy nationally contributes over 1 percent of the GDP. Are we talking about amateur sport — 1 percent? Or are we talking all sport in the country?


G. Sleivert: By and large, the bulk of that is through amateur sport.


N. Letnick: Amateur sport. So that doesn't include all our professional hockey teams or the rest of it?


G. Sleivert: Correct.


N. Letnick: Okay. And in your work have you ever put together some kind of paper, a research report, that talks about where we are now, where you would like us to be, how much it would cost to get there and some measurable deliverables that you can provide the committee with?


G. Sleivert: Yeah. Repeatedly, I guess. There are a number of papers that have been written, both provincially and federally, that do specify where we are now, where we are going, where we would like to go, how much that would cost — that sort of thing. The B.C. Sport Alliance, which we're a member of, has actually developed a paper that I believe will be forthcoming with respect to that.


N. Letnick: To the committee?


G. Sleivert: Yes.


N. Letnick: Good.


D. Donaldson (Deputy Chair): Thank you for the presentation. I just have to tell you that I'm from Hazelton in the northwest, the town of 350 that produced Canada's first gold-medal winner in Beijing, Carol Huynh.


G. Sleivert: Carol, yeah. That's right. It's quite a story.


D. Donaldson (Deputy Chair): So I concur with you that medals do matter. The ripple effect, not just from our community but throughout the north and northwest, was pretty incredible. We're facing a type 2 diabetes epidemic, so not only on our youth but the hope that she instilled in the communities was pretty incredible.


Her high school coach, Joe Sullivan, was instrumental in her winning that medal. He was commenting on the school sports grant of $130,000 that was recently eliminated and how important that was to creating the
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infrastructure that helped Carol become all she could become.


I was hoping that you could comment on the importance of that investment in the infrastructure at the grass-roots community level — infrastructure in tournaments that that money can provide and support.


G. Sleivert: Happy to comment on that. Obviously, school sports and grass-roots sport development and investment at the grass-roots level is the future of high-performance sport, and we need a broad foundation to capture as many kids as we possibly can into the sport system.


I certainly know that in the north, for example, the provincial government funded, by and large, the Northern Sport Centre, the Charles Jago Centre, at UNBC. Through programs that are being operated out of facilities like that and through the sports schools programs — that's where we actually capture the hearts and souls of our future athletes.


[0905]

Carol ultimately was a very, very talented young athlete that was supported by excellent coaching when she got into the sport. That inspired her to go further, to go to university and be part of the education system through the scholarship opportunities at the university. But she never lost that link with her original coach.


I think we can't forget that the pathway to high performance starts at the regional and club level. It starts at the schools. To continue to invest in the education system and our coaching system at the grassroots level…. We have to continue that investment. Otherwise the stuff that we do at the top end really doesn't matter because we won't have anybody to work with.


J. Les (Chair): With that, I thank you for your presentation.


G. Sleivert: Thanks for your time. I appreciate that.


J. Les (Chair): Our next presenter is Paul Scrivener on behalf of the Community Arts Council of Greater Victoria.


P. Scrivener: Thank you very much for having us here. Beside me is my president, Colin MacLock. Excuse me. I have had a bad cold, and you'll hear it in the voice.


We've given you a few notes. If you have time later on, it's something to look over. Our organization is the Community Arts Council of Greater Victoria. I'm their executive director for the last ten years. My background is philosophy and art history at UVic and some degrees at Ryerson in film and photography. I've been a volunteer with the Arts Council for 20 years, with Arts Calendar with Erika Kurth. At that time I think we maybe had 80 or 90 members. Right now we have over a thousand members, and we have around a hundred guilds and societies and other art groups with us.


My main concern right now is that we lost all of our gaming funding. In the last two years we received $40,000. Gaming has been our largest funder. This year we received zero. We're also distressed over the fact that we'll be losing 40 percent of our B.C. Arts Council money.


We've been very proud in the past that our biggest funder, of course, has been the B.C. government. Since then the CRD has come on board with a pretty good sum. However, finding out we're losing 60 to 70 percent is devastating both to our programs and services that we offer and to our operations and staff. So we're in a serious position that we found out about just a month ago.


We represent the four municipalities — Oak Bay, Esquimalt, Victoria and Saanich — as well as the other members in the CRD. Through a wonderful website, our CACGV website, we communicate with the rest of B.C. and Canada.


Our programming is inclusive. It's accessible. It's based on equities and cultural diversity — the wonderful mandate for our arts council within the B.C. Arts Council. It's quite a good one, and we've been very good at following it. We help a lot of new people that come into the city. We're the first arts centre they come to, and we tell them to join the sculptors guild, join the embroiderers guild — all sorts of societies and guilds that also use our facility and get to showcase their art and artists.


We're a hub in this city. We act as a catalyst, and we help other non-profits with ideas, resources and venues. We're part of the Victoria Lifelong Learning centre, Vital Signs, Volunteer Victoria, Together for Quality of Life and the Victoria Foundation.


[0910]

Our small centre is in Sussex Place. We got it through bonus density ten years ago, and we've really made it into quite a wonderful little centre. It's full of yogurt and bacteria, and we're really proud of it. We have stellar board members. Erika Kurth, who's a doctorate, is internationally known and Canada-wide. We have Pat Martin Bates, another stellar board member, who is well recognized. These people are professionals. They've achieved the top of their game, and yet they'll sit on our boards, and they'll give input to the community.


We really foster, from a grass-roots area, people going into ProArts. I don't think people recognize the position we've had for ten years — between a rock and a hard place. ProArts get 80 percent of the funding. They're wonderful. We support them. We put their activities and events on our web, and we let people know who come in and out of our door, which is open five days a week, ten to five. We give out all the information on ProArts, what people should do.


The other side is the rec centres. We tell people about the rec centres in their neighbourhood and the com-
[ Page 98 ]
munity centres in the neighbourhood and how to participate in the arts and take a weaving course or a clay course, etc.


So we've been a good organization that feeds both the top end and the needs of each individual municipality. Our board members are from all four municipalities, and they go back to the municipalities and tell them what's going on with other municipalities and what's going on in the city.


We've been embedded with the media. We get good coverage from the Times Colonist and Focus and Boulevard and the smaller professional papers and media outlets. We get the New VI and CHEK TV. They make phone calls to us. "Paul, what's going on?" To Alexis Celona here, my arts administrator: "What's going on? What's happening?" They also call our president.


We're a good advocate for all the arts. We're not simply having expertise in one small area and just honing into it. We're the Boy Scouts and the Girl Guides of the arts community, and from it we've had people like Atom Egoyan. I think we've had a chap…. I went to Mount Doug, well, a few years after him. What is it? The Cedar Hill Rec Centre now. His name is David Foster. He was a member.


There are numerous members of excellence who started with the Community Arts Council of Greater Victoria. It is 40 years old. We had a wonderful celebration. We had events with ProArts up at the art gallery honouring Pat Martin Bates. We had a book by Pat Boley. We had funding from our partners in creative development for $40,000 to write a book on a stellar artist. We had the wonderful events up at UVic for Erika Kurth, who's done tremendous things for the opera and the symphony and the conservatory and still is a board member of ours.


We transcend the politics and the economics of what we do in daily life. What we do is we've got people from all sorts of backgrounds and ideologies to realize the essence of arts. I'm sure each one of you in here, in your family or in your own being, does an artistic activity. It makes a healthier, more vibrant community.


I hope that you'll find that it's essential to support art on the level that we operate. But we've been quite traumatized recently. It's been a bit of a tsunami. We do have a non-profit number. We do have different ways of trying to generate some money, but this has been a little bit too much too soon without knowing about it.


I'd like to just quickly — if I have time — name the programs that we have and we'll have to cut. We've got our communications network, and it's probably our biggest program. We put out what everybody in this city does. So whatever guilds and societies, whatever ProArts do, it goes out to over 900 members and to the media.


[0915]

Our curatorial program. I have 40 exhibitions at the art gallery that we have — unheard of. One little art gallery — 40 exhibitions in a year. Besides that, we have art at the artists' corner at the library. For 15 years we've put art there. When you come in on the airplanes, if you see a peace mural there or you see different art up, it's the Community Arts Council that put it up.


We don't have funding to put it up. I go out in my car and put it up with a volunteer. This is professional art by indigenous artists and real stellar art. It makes us proud to be part of enlivening this city for tourists, for businessmen, politicians — anyone coming in on an airplane. What they see is Community Arts Council's art.


If you go to the McPherson theatre right now, the art that's there — we put it up. We curated it. We don't get funding from the airport and a lot from the McPherson, from different places. We've depended on funding from the B.C. Arts Council and, for a lot of these programs, from the Gaming Commission for these satellite galleries.


We don't have a vehicle to go and put precious art worth hundreds of thousands or thousands of dollars in these places. We put it in our cars, and we do it anyway.


We've got a media arts program. It's new and innovative. You talked to Peter Sandmark here, and MediaNet has been wonderful in working with us. We put it out to the community. It's new, and it's innovative for young people.


Our literary arts program. In that we've had from children in grade 6 doing haiku to professionals. We're working with Linda Rogers, the poet laureate. We've got all sorts of wonderful poets and authors.


We've worked with the children, I guess, with disabilities but also with the learning agencies and that, for people learning English and whatnot. They come and they stand up at a mike and read their first poem. They might be 30 or 40 years old.


We give recognition, merit, self-esteem to all sorts of people. And there's no agenda. There are no attachments. There's nothing you have to do other than a willingness to improve your being and your spirit. So we're a wonderful showcase for a tremendous amount of activity in Victoria.


Also, we've got a B.C. women's website — our administrator Alexis Celona made it — 150 women of B.C. who have contributed to the visual arts. If you go there on our website, Community Arts Council did that.


We had looked for the needs and necessities of making this wonderful province of ours and this incredible city of ours even better, and we're looking after the little person and the person that's shy and timid and needs a break. They come to us, and our doors are open, and we find places for them.


We don't have "no" as an answer. If we can't do something, we find out, through our own resources and our own networks, who can help these people. We have 20 or 30 people a day that will come in to our place under the Attorney General's building that are looking for and
[ Page 99 ]
needing some sort of connectivity in this city. There are tourists, but also a tremendous amount of new people have come here, a lot of Asia-Pacific people, and we're a resource for them.


You know, UVic students go to ProArt to a large extent, but there a lot of people who don't fit into the ProArt. They're not able. They don't have the education and that to get the union wages, etc.


We're a great asset to this community and actually feel flabbergasted and extremely disappointed that we've lost our gaming funding. We really have worked hard, and we've given them a big bang for a buck. It's just really distressing.


We'll continue to work and that, but obviously, we're facing job cuts. There are only two staff for this whole facility — Alexis Celona and myself — and we've worked hard because we believe in it. We've got lots of volunteers. We'll have a LOOK show at the Bay Centre, and we have 240 individual artists that come and participate in that. They all buy from Monk, and they go to Opus or Island Blue.


All of the artists that we support spend money in this city. They all eat and drink in this city, maybe not at the high-class restaurants. But they're going to the pizzerias and here and there, and they're having a good time of it.


[0920]

J. Les (Chair): Paul, you're just about out of time. I do have at least one question, so could we wrap it up?


P. Scrivener: Certainly. Yeah. So I'll just ask you to please take a look at us and give us a chance to continue on with the good work.


J. Les (Chair): Thank you very much.


M. Mungall: Thanks very much, Paul, for your presentation. When you were talking, you talked about the shy and intimidated artist who comes to your grass-roots community organization. I had these visions of Atom Egoyan coming in the door one day, very shy, and not knowing how to connect with the broader community to pursue his passion in the arts. That made me think of what our previous presenter was talking about, about how that grass-roots level is essential as a foundation to building up athletes in sports — high-performance athletes.


I'm hearing the same kind of argument from you — that that grass-roots level of arts is what's essential to building up our high-performance artists, our professional artists, who are world-renowned. You mentioned David Foster as well.


Can you maybe comment on that — about how you've been able to support those artists at that grass-roots level and how that's why funding for groups such as yours is so imperative?


P. Scrivener: Yeah. Well, an example in arts and education right now. We've just had Four Shows Fresh, which was all about recycling and energy and the good things — it was during our B.C. Arts and Culture Week — and Second to None and In the Middle. Those were all school shows. Lily Wallace is a board member on that.


It's called the Youth Group of Seven, and it's based on the Group of Seven — the 100th anniversary right now, this year, of the Group of Seven. That Youth Group of Seven have had shows at our arts council. They have been travelling a bit. We're putting those people into the McPherson theatre in a few months. They've had really good publicity in the paper. We've had them with pages of Focus magazine, etc.


Our board mentors. We give the opportunities. I'm sure Atom…. It was through mentoring in the right place at the right time. But our board…. Now, they're experts in their fields, and we go in and try to hone up and make excellent artists.


J. Les (Chair): Okay. I'm sorry that we've run out of time, but I want to thank you for yours this morning, in presenting to the committee.


P. Scrivener: Thank you. One last comment. If any of you want a good read, it's called The Defiant Imagination: Why Culture Matters, by Max Wyman. It's a wonderful book and very inclusive of government and education.


J. Les (Chair): Thank you.


Is Daniel Biro here? He was to be our next presenter. My understanding is that he's not here. But I believe that Hugh Fraser, Andrew Homzy and Lorae Farrell are here.


A. Homzy: Good morning, men and women of this committee. I thank you very much for my opportunity to speak to you this morning.


My name is Andrew Homzy. I live in Nanaimo, on Protection Island. I'm a musician and a scholar of jazz music. I'm internationally known in my field, and I've worked as an artist in Europe, Scandinavia, the U.S.A. and of course Canada — nationally and provincially.


Today I don't represent any organization other than the community of jazz musicians, which is a very small part of the entire picture of arts in B.C. but a very creative and a very intense and a very passionate part of the arts community in this province.


[0925]

This morning I bring with me two dear friends and colleagues to assist and accompany me: Hugh Fraser and Lorae Farrell. I'll tell you a little bit more about them later. Perhaps we represent that bohemian index that was described by our first speaker this morning, Peter Sandmark.

[ Page 100 ]

I am here to speak against the cuts in funding to the arts. But first of all, I'd like to present some statistics that were assembled by Jer Thorp. He's an artist and educator from Vancouver. A former geneticist, his digital art practice explores the many folded boundaries between science and art, and recently his work has been featured in the New York Times, the Guardian, BusinessWeek and the CBC.


Mr. Thorp has analyzed the proposed budget and discovered that with the new 2009-2010 budget, the arts and culture funding moves from the 57th highest expenditure, at $19½ million, down to less than $3.7 million in funding, becoming then the 100th highest expenditure — in other words, going from 57th place down to 100th place.


This is clearly a significant drop. Not only does art and culture lose a lot of support; it loses much more money in comparison to other programs. With a loss of more than 80 percent, art and culture suffers the second-worst cuts of any area.


Compared to other business areas with similar budgets, this decline is particularly drastic. For example, Asia-Pacific trade and investment falls only 26 percent. Small business, research and competitiveness falls only 21 percent. Tourism, on the other hand, which is overseen by the same ministry as arts and culture, enjoys a rise of 12 percent.


Arts and culture has been singled out for much larger cuts than any other similar government business area. Of course, our question is: why? We are particularly fragile and vulnerable, yet very important to the society at large.


Does the Liberal government consider a thriving arts and culture industry to be part of their plans for the development of this province? Studies which they have referenced in their own documents demonstrate that investments in the arts tend to lead to an increase in the GDP.


These cuts will make British Columbia the worst-funded province for the arts in the entire country, despite the fact that for every dollar — and we've heard this before — the government invests in arts and culture, it receives back some $1.36 in tax revenue as a result of the economic activity generated by these artists.


As a result of these cuts, art galleries will close, theatres and dance companies will be forced to cancel events, books and magazine publishers will scale back, cultural workers will lose their jobs and artists and writers everywhere will find their livelihood threatened more than ever.


Did you know — I'm sure you are aware — that B.C. leads all provinces in the percentage of artists in the labour force? B.C.'s labour force has a higher percentage of artists than any other province in Canada, according to a report funded by the Canada Council for the Arts, the Department of Canadian Heritage and the Ontario Arts Council.


Nine arts occupations have been identified throughout Canada: actors and comedians, artisans and craftspeople, authors and writers, conductors, composers, arrangers, performers, visual artists, producers, directors, choreographers and other related occupations.


B.C. has almost 26,000 artists, representing 1.08 percent of the overall provincial labour force. It is the only province above 1 percent in terms of the number of artists in the labour force and significantly higher than the Canadian average of 0.77 percent. Quebec, incidentally, is second place, with an average of 0.71 percent.


[0930]

I should also say that in B.C. the gap between artists' average earnings and overall labour force earnings is 40 percent. Some sources quote the average artist's earnings as $21,000 and the overall labour force earnings as approximately $35,000.


The total earning of artists is $545 million. This accounts for 0.65 percent of the total earnings in the provincial labour force. While average earnings in the overall provincial labour force increased by 3 percent between the years 1990 and 2005, artists in B.C. found their earnings decreasing by 5 percent over that same period of time. I would say that that situation is probably a lot more critical and worse for musicians in general. As an artist, I am deeply concerned about these cuts and what they mean to the building of cultural capital in the province of B.C. 


B.C. has many resources. They have solid resources such as trees, coal and fish. But B.C. also has intellectual resources: the work of creative people, people with imagination, in activities ranging from science and technology to business and health care and, especially — what we're concerned with today — those who are in entertainment and the arts.


The solid resources have created financial capital, which can be measured easily in dollars and cents. However, the intellectual resources, and especially the contributions of artists, while they can't be easily measured in dollars and cents, can be measured in cultural capital. Cuts in funding to the arts will lead to cultural bankruptcy.


Now I'd like you to meet my friends here. Sitting next to me is Lorae Farrell. She leads a group of B.C. women musicians, a band called Hypatia, based right here in Victoria. Her group addresses the issue of gender imbalance in jazz and improvised music. That group that she has formed allows for growth opportunities and artistic sustainability for those women who have dedicated their lives and talent to this unique North American idiom.


Hugh Fraser is one of the most significant jazz musicians in B.C. He resides in Victoria. He has an international profile as a trombonist, composer, leader and educator. He is wonderfully articulate and passionate about this province and about the music and the
[ Page 101 ]
musicians and the people. He is a communicator. I am honoured that they are here to support me in this presentation. I am very honoured.


In conclusion, I would like to make reference to some words that were expressed by a great jazz composer by the name of Charles Mingus. Charles Mingus was a man of love and a man of passion and a man of music, just as these two musicians sitting next to me are. He said it, I think, best of all. Charles Mingus said: "Let my children hear music."


[Musical accompaniment begins.]


Let your children hear music. Let his children hear music. Let her children hear music. Let this province hear music. Let the cities hear music. Let the islands and the coastal communities hear music. Let the mountain regions and the north hear music.


[0935]

Through support coming from the B.C. government, let these people play music. Music for you, music for them, music for our children. Let us all have music.


[Musical accompaniment ends.]


[Applause.]


J. Les (Chair): Thank you very much. You've added a new dimension to public hearings for the Finance Committee. [Laughter.]


Are there any questions of committee members?


I guess we're all bedazzled by your performance.


We do have one.


J. Thornthwaite: So where are you playing next? [Laughter.]


A. Homzy: Well, I will let Lorae speak to that.


L. Farrell: On October 14 at Hermann's Jazz Club the Hypatia Creative Women's Jazz Orchestra is doing a fundraiser for the Canadian Breast Cancer Foundation and the Pamela Lawson Scholarship Fund. She worked with me recently at this law firm out in Sidney which was sponsoring the event, Henley and Walden. She just passed away last month from breast cancer. So we're doing this silent auction benefit concert on October 14.


M. Mungall: I'm not surprised that your next show is a fundraiser. I come from Nelson, and of course in Nelson is a very vibrant arts community. In the arts community you'll find the starving artist who will contribute so much of their work to a fundraiser for things like Gogo Grannies or Grans to Grans that raise funds for the Stephen Lewis Foundation, for the Capitol Theatre…. I mean, the list is really endless.


I think it's important to note how much the arts community contributes in those fundraisers, and when we see the cuts to the arts, is that going to have a ripple effect? We're not going to have artists who bolster up our community and our other community groups with those fundraisers.


L. Farrell: Well, yes, exactly. I mean, at this point I'm trying to earn a living doing jazz. I'm having to do contract work at law firms to support my jazz habit. My ability to sort of keep contributing to the community is really becoming hindered because of the arts funding, obviously. But Hugh, actually, could probably address that issue.


J. Les (Chair): Okay. Well, thank you very much for your presentation this morning. We appreciate it.


Our next presenters are with the Greater Victoria Chamber of Commerce — John Juricic and Shannon Renault.


J. Juricic: Good morning. My name is John Juricic. I am the chair of the Greater Victoria Chamber of Commerce. Beside me is Shannon Renault, the chamber's manager of policy development and communications with the Greater Victoria Chamber of Commerce. On behalf of the chamber, we would like to thank you for this opportunity to contribute to the budgeting process for 2010.


The Greater Victoria Chamber of Commerce is the oldest business organization in the capital region and one of the largest chambers in British Columbia. We are accredited with distinction by the Canadian Chamber of Commerce. As the voice of business for the region, we represent over 1,500 business members — businesses that represent more than 22,000 employees.


We are pleased to present you with budget priorities on behalf of our membership. Our presentation today will focus on the economic impact of the harmonized sales tax and tax recommendations to mitigate those impacts in areas related to tourism, B.C. Ferries, residential construction and consumers. And now I'll hand it off to, clearly, my better half, Shannon Renault.


[0940]

S. Renault: Good morning. The Greater Victoria Chamber recognizes that the HST is a sound policy move for the overall economy of the province in the long term. The tax will position B.C. as a more competitive place to do business and encourage companies to invest in measures to increase productivity. However, at the same time there are specific areas of concern regarding significant impacts of the HST, most notably to tourism, to B.C. Ferries, to the cost of new homes and to consumers.


We further appreciate that there are limited substantive changes that can be made to the HST in terms of tax
[ Page 102 ]
exemptions under the memorandum of understanding with the federal government. However, this is not to say that there are not other ways that these concerns can be addressed.


Regarding the tourism industry, our chamber is supportive of the work that the Council of Tourism Associations is currently undertaking to bring detailed mitigation strategies to the government. However, we'd like to offer three specific recommendations which we believe will be broadly supported by our tourism partners.


The first is to change the date of self-assessment for tourism contracts for the 2010 calendar year, signed before the HST was announced. It's common practice for tourism operators to sign fixed-price, tax-included contracts for future seasons to allow the inclusion of the tourism product in tour packages.


Packages sold and used after July 31, 2010, will result in the tourism operator remitting 7 percent of its revenue as HST. In an industry that has had a very trying year and narrow profit margins, this will result in significant fiscal harm and preclude profitable operations by some businesses. A change in the transition rules allowing that fixed-price contracts in the tourism industry not be subject to self-assessment in the 2010 calendar year would help to resolve this issue.


We would like to see an increase in the threshold for the temporary delay in the provision of input tax credits for certain purchases by businesses with taxable sales over $10 million. The proposed threshold of $10 million seems an arbitrary amount, and it is significant for the tourism sector, with their extremely thin profit margins. The change in this threshold to $50 million would match the Stats Canada definition of small business and benefit a number of tourism operators in the province.


Finally, we'd like to have determined in the 2010 budget year, in consultation with Tourism, a stable and long-term funding plan to replace the 2 percent additional hotel room tax. As you know, the HRT, which currently funds destination marketing organizations, has been extended to 2011. But tourism is an industry that relies on long-term strategic planning and needs funding security, controlled regionally, in order to adequately market our destinations. Establishing this surety early in the term is vital for the health of the industry.


B.C. Ferries. The service of B.C. Ferries is a business necessity anywhere off the mainland. Increases in ferry costs directly impact the cost of doing business on Vancouver Island and the Gulf Islands. Those increases will mean either reduced profits to business or increased prices to consumers.


HST will increase the cost of ferry service. Fares themselves are HST-exempt. However, because fares are exempt, B.C. Ferries is unable to claim back their increased HST expenses through input tax credits. That increased cost will put approximately $6 million of upward pressure on ferry fares, based on preliminary calculations from B.C. Ferry Corporation.


In order to neutralize the cost to B.C. Ferries and the increased cost to business and passengers, the Greater Victoria Chamber recommends that the province increase its subsidy to B.C. Ferries to a level matching the increased operational cost pressures to the corporation attributed directly to HST.


Cost of residential housing. The application of HST to the purchase of newly constructed homes adds significantly to the cost of living in B.C. An increased cost of living makes it difficult to attract and retain labour and puts intense upwards pressure on wages.


According to a B.C. Progress Board report and based on the sale of new homes only, if the HST had been introduced in 2002, it would have added $549 million in new taxes to home purchasers. According to CMHC, there has been a 97 percent increase in the cost of new homes in British Columbia since 2002. Using those figures, one can make a rough but reasonable estimate that the HST will add approximately $1 billion in new taxes to home purchasers.


While the chamber understands the overall goal of HST is to be revenue-neutral to government and to spread taxation to a broader base, the residential home purchaser is clearly bearing a disproportionate increase. Again, using figures from CMHC on median prices of new homes in 2008 and applying the HST onto those median prices in various markets in our province — those in my examples are represented by Prince George and Vancouver — we find the following.


[0945]

Once HST is implemented, the cost of new homes will increase by 1.9 percent in rural markets and 3.7 percent in urban markets. After allowing for both the HST and GST rebates, there will be a 27 percent to 59 percent increase in the amount of taxes paid.


In real dollars, the tax increase will range from just over $7,000 in Prince George to more than $26,000 in Vancouver. To support those, you'll find a spreadsheet as an addendum at the end of the presentation.


Note that these cost increases are for the cost of homes only and do not include increased costs in real estate fees, home inspections, legal services associated with a home purchase. Increases of this magnitude will have an inevitable impact on the market. Less people will be able to purchase new homes, which will drive up the cost of resale homes in an already expensive market.


Overall, new home purchasers will have less money available for ancillary purchases related to home ownership. Currently, those run at about $32,000 per household. The decrease in demand for new housing may also slow employment and economic activity in this important sector of the construction industry.


The chamber supports the recommendation of the B.C. home builders association to increase the new
[ Page 103 ]
housing threshold from $400,000 to $600,000 and to index that threshold to the increase in new housing costs to mitigate the impact of HST. However, we also understand that the province of B.C. has only 5 percent wiggle room, if you will, leeway, for tax exemptions, and this recommendation may be difficult to attain given current exemptions.


If adjusting the threshold is not a current option for the government, other tax changes can be exercised. Our chamber offers two recommendations as alternative mitigations to keep home ownership attainable and to support the ongoing economic contribution of the sector. Adopting either would be a bold mitigation step to ensure consumer confidence.


First, reduce the property transfer tax on new home purchases. You'll note by the spreadsheet that a complete elimination of the PTT still leaves a 10 percent to 34 percent tax increase with a threshold set at $400,000. I apologize for that penned mark in your pages there.


Our second recommendation is to adopt the recommendation of the B.C. Progress Board to reform the base for tax treatment of new housing by removing the land component from the taxable base. The land component represents a significant portion of the price to which both HST and PTT are applied. Both of these recommendations fall outside of the 5 percent exemption threshold.


Finally, as concerns consumers, a recently released study by TD Economics notes that the net effect of HST will be a permanent 0.7 percent increase in the consumer price index in British Columbia. Ideally, this impact will be ameliorated in the longer term by increased productivity and wages in the private sector. However, in the short term consumers are most certainly impacted. The greater Victoria chamber recommends that tax relief in the one to two years immediately following implementation should be focused on benefiting consumers and bolstering their confidence.


Finally, in closing, we would like to acknowledge the number of tax revisions the province has made over the last number of years to benefit our provincial economy. Now, at this time of economic fragility, we encourage the government to exercise thoughtful mitigation on those industries that are significantly impacted by the introduction of HST, with the goal of bolstering both consumer and business confidence to sustain our economic growth.


J. Les (Chair): Thank you very much for your presentation. I have questions from Norm and Bruce. 


N. Letnick: Thank you for your presentation. Just a couple of points of clarification for me before I ask the question. You say that we should change the threshold — a recommended change of threshold — from $400,000 to $600,000. How did you come up with $600,000?


S. Renault: For some of those industry-specific recommendations we've consulted with the industry professionals. So $600,000 was considered a more market-suitable median new housing price in British Columbia; $400,000 fits the bill in Ontario, so it makes sense there. But just sliding that figure over to B.C. doesn't match our market conditions, and the home builders association has recommended that $600,000 fits our market picture much better.


[0950]

N. Letnick: Are you saying that the median house price in B.C. is $600,000?


S. Renault: I'm not saying the median home price; the median new home price. If you'll take a look at the chart on the last page, you can see that the median prices in British Columbia, across a selection of market locations, are listed. That price is net GST.


The point of the matter is that the majority of housing in the province is in urban centres — Vancouver, Victoria, Kelowna — and in those centres house prices are significantly higher.


If you take a look across the first chart, you will notice that the amount of tax increase with the $400,000 threshold is quite significant — on the far right — ranging from $7,000 to $26,000. Raising that threshold to $600,000 still allows for additional tax revenue, but it decreases the burden substantially on the home purchaser.


N. Letnick: Okay. Thank you for that clarification.


On the last page you talk about two options to mitigate the impact if we can't — because of the 5 percent…. Do you have any numbers to give us as far as what the total impact to the treasury would be if we reduced the property transfer tax or if we removed the land component? And do you have any suggestions as to where the government would get the money or finance those losses in revenues?


S. Renault: I don't have the figure as to the complete impact on the treasury for the PTT recommendation. However, what I can show you — on the last columns of the chart — is that even with maintaining the $400,000 threshold and completely doing away with the property transfer tax, you're still experiencing an increase in taxation of 10 percent to 34 percent from this particular sector of tax collection.


I realize that that's not a direct answer to your question, because you're talking about the overall treasury. However, I would suggest that having such a disproportionate tax increase on this particular sector — which will impact on consumers for years and years and years, because it goes into their mortgage — is perhaps something that needs to be considered, notwithstanding some overall impacts.

[ Page 104 ]

N. Letnick: If you do….


J. Les (Chair): Hold it. Hold it. I've been very patient.


Bruce.


B. Ralston: So have I.


I'm looking at your suggestion to increase the threshold for the temporary delay. As I recall, the agreement suggests a delay of up to five years.


S. Renault: That's correct.


B. Ralston: I'm wondering why you selected the threshold of $50 million. Is there any study that you base that on?


S. Renault: The reason why we went to $50 million is because of a couple of things. So $50 million is actually used as a definition from the federal government, through Stats Canada and the way that they take a look at small business and large business. That's the figure that's actually used by the federal government in terms of defining larger business. So it would seem that since the HST is, frankly, a federal taxation policy, it would make sense to be congruent with that figure, for one thing.


Secondly, moving from $10 million to $50 million would allow for some ITC inputs to a number of the larger tourism operators in the province, who currently, as you know, have a litany of challenges against their industry. The fact that they cannot claim ITCs is just like a final nail.


So we believe that doing that move — from $10 million to $50 million — and at least allowing some tax mitigation for some of our iconic tourism locations would be a small, helpful step for the industry.


J. Les (Chair): You didn't have a follow-up question?


Thank you both for your presentation this morning. We appreciate you participating in this process.


J. Juricic: Thank you for the opportunity.


J. Les (Chair): The next presentation is by the Professional Arts Alliance of Greater Victoria — Mitchell Krieger and Michael Shamata.


M. Krieger: Good morning, everybody. My name is Mitchell Krieger. I'm the executive director of the Victoria Symphony, and I'm here with my colleague Michael Shamata, who is the artistic director of the Belfry Theatre.


We're speaking directly for our colleagues in the Professional Arts Alliance of Victoria and indirectly for thousands of artists and art workers that work so hard to make the cities and towns of British Columbia culturally rich.


[0955]

We are here to implore the government to reconsider the series of actions that threaten the viability of this sector, a sector which — make no mistake — more than earns its support from the government and community by giving back culturally, socially and economically on a daily basis.


In fact, throughout this discussion, one statistic is inescapable. For every dollar invested in the arts by the province of British Columbia, $1.36 is returned to the treasury in tax revenue. Where else could the government, or anyone else, get a 36 percent return on investment? For that reason alone, we hope the members here and the ministers of the cabinet will take a breath and realize that they are making a mistake in cutting funding to the arts.


But that's far from the only reason. The loss of this funding will have a deeply negative result in many areas of our communities and lives far beyond the arts community.


Here are some of the things that will happen if the funding is not restored. First, jobs, many jobs, will be lost. In the arts more than 80 percent of expenditures are on personnel. The projected cut of $40 million will result in at least $32 million lost directly in jobs within the arts. That's over 1,200 jobs based on the annual average wage of an arts worker in the province.


These will be joined by losses of jobs in restaurants, hotels, retail stores, parking facilities and other businesses. Many hundreds, if not thousands, of families will then have less to put into the economy, and tax revenues will fall further.


In education, both arts programs in schools and programs offered by arts organizations are threatened by these cuts. Students involved in the arts have better grades, lower dropout rates, higher empathy and tolerance towards other racial groups and higher scores in creative thinking, expression of ideas and risk-taking in learning.


Young people involved in the arts are much less likely to become involved in gangs or drugs. An overwhelming majority of parents want arts to be part of their children's lives.


Then there are social benefits. Involvement in the arts is healthful. Seniors involved in the arts have significantly lower rates of doctor visits and need for medication. Active people, the kind who participate in and attend the arts, perform better at work with increased productivity, less absenteeism and fewer on-the-job accidents.


The arts build community pride and social cohesion. If any of you witnessed the crowds all over Victoria during the Fringe Festival, or at the opening of the Pacific Opera Victoria's season last Thursday, or on Granville Street in Vancouver Monday night, when the Vancouver International Film Festival had crowds on one side of the street and the Vancouver Symphony on the other, or, of course, the 40,000 people gathered around the Inner
[ Page 105 ]
Harbour and on the lawn in front of this building for the 20th Victoria Symphony Splash in August, you could not have missed the great creative and positive energy that was there.


Then there is the creative economy. The seminal work of sociologist Richard Florida has demonstrated that creative communities thrive economically. Communities that have a vibrant arts scene attract successful entrepreneurs and workers, and as the creative economy grows, they attract big business.


The future of British Columbia's economy could be as the creative capital of Western Canada, but to accomplish that we must have the kinds of cities that will be inviting to those kinds of leaders.


Then there is the loss of stability in the arts. Most funders, including the British Columbia Arts Council and other branches of the government, tell arts organizations that they must work for stability in financial planning and execution. These cuts undermine years of effort on the part of both the province and its grantees to accomplish such stability.


As I've said before, up to $1.36 comes into the B.C. treasury in taxes for each dollar invested in the arts. This statistic comes from a report commissioned by the Ministry of Tourism and Cultural Affairs in 2006. We are part of the solution for the downturn in the economy. I'll say that again. We are part of the solution. Cutting funding to the arts will only make the province's financial problems worse.


This is clearly recognized by many other provinces in Canada and the Canadian and U.S. federal governments. Some of them are, in fact, increasing funding, recognizing the power of the arts as a spur to the economy. On this fact alone, cuts to the arts don't make sense.


[1000]

Make no mistake. The grants to the arts from the B.C. Arts Council and the Gaming Commission are not gifts or largesse. We earn every penny and return great value to the people and government of British Columbia. This money does not go into a shareholder's pocket. It goes out into the community.


The people of British Columbia deserve the restoration of an investment that has proven its value again and again. Please restore the full funding — both the gaming and the B.C. Arts Council — for the arts for the current fiscal year and for coming fiscal years. You will not regret such a decision.


I thank you, and now I ask you to give your attention to my colleague Michael Shamata.


M. Shamata: The great Canadian painter A.Y. Jackson, speaking of his exceptional colleague Lawren Harris, said: "He believed that a country which ignored the arts left no record of itself worth preserving."


With creativity, imagination and innovation, the artists of British Columbia have been building a remarkable record of the vibrant life of this province, to be built upon for years to come. Despite the fact that historically, every province in this country except Newfoundland has spent more per capita on the arts than British Columbia, the arts in British Columbia have been thriving.


Some of the most original and meaningful pieces of theatre, dance, music, opera and visual art have been created in British Columbia in the past ten to 15 years. Work from this province has toured nationally and internationally. British Columbians can take enormous pride in the vitality of the province's artistic life and the calibre of the work produced here.


Our government, working on behalf of the citizens of this province, has a responsibility to protect the conditions that allow this work to thrive. This work will not thrive if the recently announced cuts are allowed to stand.


The societies we value in history are the societies that have valued the artist. Art is the signature of civilizations. The respected B.C. critic and journalist Max Wyman once said, "Engagement with art, with the product of someone else's imagination, can change your life, often for the better, and sometimes profoundly."


The Vancouver Opera, Pacific Opera Victoria, Electric Company Theatre, Theatre Replacement, the PuSh Festival, the Playhouse Theatre Co., the Belfry Theatre, Theatre SKAM, Ballet B.C., Ballet Victoria, the Vancouver Symphony, the Victoria Symphony, the Art Gallery of Greater Victoria — to name but a few of the exceptional arts organizations in this province — have all fed the souls and enriched and nourished the inner lives of our local audiences. In addition, many of these organizations have played to audiences across the country and, in many cases, beyond our nation's borders.


We cannot, as a civilized society, regard ourselves as being enlightened without the arts. And what of our young people — the future of this province? Do they not deserve the opportunity to be touched by the arts, to explore new ideas, to understand the world from different perspectives, to start to discover what it is to be human?


Almost all of the arts organizations in British Columbia engage in meaningful ways with the youth of this province. At the Belfry, our program for high school students elicits incredible responses, such as: "A very important and enlightening experience for me." "It opened my eyes to a world I didn't know." "It taught me the art of patience and true collaboration." "It enhanced my critical thinking."


Isn't this positive? Isn't this what we want for our society? Shouldn't we be ensuring that the arts continue to enhance the lives of our young people and everyone in our province?


The vibrant, unique, cutting-edge, high-quality theatre, dance, music, opera and visual arts organizations in British Columbia have grown incrementally through
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years of careful stewardship by experienced and dedicated staff members; through participation of some of the country's most talented artists; through the support of enlightened, interested and excited audiences; and through the investments made by the governments that the people of this province have elected.


What has taken years to establish is being profoundly threatened with the stroke of a pen. We are seeing the artistic equivalent of clearcutting, slashing without thinking, killing off the fully grown, as well as the new growth just beginning to take root. Let us be very clear. What is killed off today will not come back in five or ten years when another political party decides to reinstate funding to the arts.


[1005]

It takes much longer for a wound to heal than it does to inflict. Damage done by the current rounds of cuts will have a long and lasting effect on the arts in British Columbia and on our reputation beyond our borders.


We are proud of the physical magnificence of our province. We have every reason to be equally proud of our culture. Let the nourishment of art be the signature of British Columbia, not the decimation of art. Allow our artists to continue to build the record of this province. 


Life is short. Art is long. On behalf of the arts in British Columbia, we urge the committee to recommend that the government restore the B.C. Arts Council funding through the Ministry of Tourism, Culture and the Arts to its 2008 level and that the government honour the memo of agreement that committed 33 1/3 percent of B.C.'s gaming profits to charities of this province, including arts, culture and heritage.


Art is not a matter of life and death. It is much more important than that. All of our masterpieces have not yet been created.


D. Donaldson (Deputy Chair): Thank you very much for your eloquent presentation, both of you.


I have a question for Mitchell. It has to do with the human capital. I find it disturbing that we separate that, the human capital versus the economic capital, or that we can only judge the human capital in our society by its value to the economic capital. 


My question is along those lines. Anecdotally we know how important participation and engagement are in our society. It's the glue that holds us together and creates everything around us. You mention participation in the arts and then how that relates to people's engagement and performance in other aspects of their life. You actually touched on worklife.


Having talked about it anecdotally, we know that. Are there some studies that you can provide to this committee — maybe not today, but at a later date so we can take them into consideration — that focus on that angle?


M. Krieger: Yes, there are some studies that do demonstrate all of these effects. I myself was very impressed hearing about extensive studies about the elderly, about the effect on their health that engagement in the arts brought. This was done very, very rigorously by a wonderful doctor in Washington, D.C.


Yes, we can provide some of the statistical backup for this. Absolutely.


J. Les (Chair): Any further questions by committee members? Seeing none, I'd like to thank you both for your presentation this morning. Thank you for coming.


Our next presenters are from Canada's Research-Based Pharmaceutical Companies. They've just arrived. I would suggest we take a five-minute recess.


The committee recessed from 10:09 a.m. to 10:17 a.m.

[J. Les in the chair.]


J. Les (Chair): Okay, we're going to get started again. We're going to carry on with our presentations from Canada's Research-Based Pharmaceutical Companies — Sharon Dean, Leslie Foord and Shiera Stuart. Good morning.


S. Dean: Thank you, hon. Chair and committee members. It's a pleasure to be here today. I'm Sharon Dean. These are my colleagues, Leslie Foord and Shiera Stuart. We are members of the B.C. regional committee for Canada's Research-Based Pharmaceutical Companies, also known as Rx&D.


I work directly for Rx&D as the B.C. director for provincial affairs. Leslie is with AstraZeneca Canada, and Shiera is with Bayer.


Let me begin by providing a short background of Rx&D. Rx&D is a national association of the pharmaceutical research community representing over 18,000 men and women who work for close to 50 research-based pharmaceutical companies in Canada.


Rx&D companies are leading investors in private sector science and technology–based research and development in Canada, particularly in a priority area identified by this government, health and life sciences. In 2008 Rx&D members invested $1.3 billion on scientific research and development in Canada.


Shiera, Leslie and I are based in British Columbia, and we are part of a large community of individuals from our industry who work and live in this province.


The vision of Rx&D and our member companies is to advocate for policies that will bring the best innovative medicines and vaccines to Canadians in a timely and appropriate manner, improve Canada's global competitiveness and make Canada a world leader in attracting pharmaceutical and biotechnology investments, which are key components of the knowledge-based economy.

[ Page 107 ]

We commend the B.C. government for again reaching out to the public to seek comments and suggestions in preparation of the 2010 budget. This is our association's fourth consecutive submission to the Select Standing Committee on Finance and Government Services, and it is an honour to be able to participate again.


This follows in the tradition of the Conversation on Health that also engaged the people of British Columbia to share their thoughts on the sustainability of the B.C. health care system. Rx&D contributed to that public consultation process as well.


Rx&D also is fully committed to support the implementation of the 12 recommendations made by the B.C. Pharmaceutical Task Force, which were endorsed by this government.


Hon. Chair and committee members, we are committed to playing a positive role in meeting the economic challenges of government of British Columbia, and we firmly believe that our presentation today is a further testament to our commitment to this belief.


I will now turn it over to my colleague Leslie Foord to explain why we wanted to present to you today.


L. Foord: I would also like to thank the committee for taking the time to consult with groups like ours, to share ideas and recommend solutions.


[1020]

In this time of economic uncertainly, here's what we do know: patent cliff savings — $143 million in savings. This is a figure that was presented to this committee last year on the savings that have been brought to the Pharmacare program in the previous five years for medicines going off patent.


As you know, our industry is built on the promise of innovation and new discoveries, but as those discoveries reach the end of their patent protection, there are additional savings through the form of generic formulizations that drug programs benefit from.


The nature of our industry is that there is an ever-changing dynamic of new products coming onto the market while others are losing their exclusivity. We note that this dynamic has not been mentioned in any of the Ministry of Health's plans. In fact, when it comes to pharmaceutical services division's budget, there is only mention of cost of new drugs and increasing utilization.


But $143 million in savings over the past several years is an important number to remember, as it is a likely contributor to the fact that overall, the B.C. Pharmacare budget showed a modest 4 percent annualized growth over the period of 2002 to 2007 and a reduced 3 percent annualized growth forecasted for the next five years of 2008 to 2012. Indeed, the B.C. Pharmacare drug budget is projected to decline to a low of 1.1 in 2012.


Our industry is currently heading into a period where a number of the so-called blockbuster medications will lose their patents. We presented this information to you, which is also referred to as the patent cliff, last year.


This leads us to our second important number that you need to remember — $271 million.


Again, what we do know. Generic pricing is high in B.C. Based on current pricing of generics in B.C. at 50 percent of brand, the projected five-year savings are estimated at $271 million.


In 2008 an interim agreement with pharmacy mandated that new generic products are to be priced at 50 percent of brand. This is a good start, although there are savings missed by not applying this model to the thousands of products that went off patent prior to 2009. New estimates of savings from the patent cliff are closer to $414 million.


The contribution of generics to the budget resulting from planned expiration of several blockbuster drugs is estimated to increase from 33 percent to 52 percent in the next five years. This represents significant opportunity to generate savings that would permit government to reinvest portions of the existing Pharmacare budget in innovative new medicines that have among the highest return on investment in the health care system and is an efficient use of taxpayer dollars. This would support the sustainability of the health care system with no negative impacts on patient outcome, innovation and economic development.


Again, what we do know. Innovative medicines save lives. Limiting access to innovative medication costs government money.


In 2003 the B.C. Ministry of Health introduced a new policy, therapeutic substitution, with the intent to reduce costs by $42 million with minimal impact on patients. The policy was designed to reduce costs by only covering the least expensive product within a class of medications called proton pump inhibitors. The policy was designed based on the assumption that all proton pump inhibitors, regardless of chemical makeup, were the same.


This year, in April of 2009, a study published in a peer-reviewed journal analyzed the true cost outcome of this policy. The study concluded that this limiting medication access policy resulted in additional costs of $43.5 million, with significant impact on patient health.


Again, what we do know. Stakeholder involvement is important to the process. We commend the government for appointing a pharmaceutical task force in 2007 and for the government acceptance of all 12 recommendations made by this task force. We applaud you for looking for new and innovative ways to relieve the strain on the health care system.


I will now turn it over to my colleague Shiera Stuart to explore areas that we don't know.


[1025]

S. Stuart: Here's what we don't know. We don't know why savings through the patent cliff and the genericiza-
[ Page 108 ]
tion of drugs have not yet been shown in the Health budget. We don't know why generic pricing is not the same in B.C. as it is in other provinces. We don't know why the B.C. task force recommendations have not been implemented yet. We don't why access to innovative medicines has not yet improved in B.C. and we don't know why the issue of siloed budgets has not yet been addressed.


That's what we don't know. But let's move forward and talk about the next steps, so we can work together. Rx&D is committed to working with the government. Each year for the past several years we have made the recommendation to this committee that the Ministry of Health meet with our individual companies to better learn not only about the products we have coming to market but also to understand which ones will be coming off patent.


By more in-depth dialogue and information-sharing, we strongly believe that the government will benefit from the business exchange and help provide for greater certainty in future budget preparations. We have been collaborative on the Conversation on Health, the B.C. task force and various multi-stakeholder meetings with government.


We'd like to see a transparent process where we can compare apples to apples and not apples to oranges, in an effort to highlight where possible cost savings could occur.


Enhanced interaction with our industry was a key recommendation of the 2008 B.C. Pharmaceutical Task Force. We are committed to supporting the full implementation of those recommendations and are willing to increase the interaction and collaboration that has already begun.


We also want to take this opportunity to clarify with this committee that the implementation of the Pharmaceutical Task Force report is not a cost driver for the Ministry of Health. In fact, if it's properly executed, the task force recommendations should provide additional savings for the taxpayers and more efficient use of taxpayer dollars, while improving health outcomes for British Columbia patients.


In summary, Rx&D has a strong desire to work with government. We have, hopefully, made this clear through our feedback to the Conversation on Health and through the presentation Rx&D made to the B.C. Pharmaceutical Task Force and numerous other presentations to government committees.


As contributing stakeholders that participate in both the health care and the economic agenda for the province, Rx&D member companies look towards partnerships and collaborations that focus on improving patient health outcomes and enhancing the knowledge-based economy.


Our request today is that the B.C. government consider the budget-savings opportunity we have shared with you. And we ask that Pharmacare reform and modernize the very restrictive policies it maintains with regards to new, innovative medicines. We need to work together to develop programs that will improve patient health outcomes, manage chronic diseases more efficiently and support a sustainable health care system.


The budget savings found through pursuing better prices for generic drugs can be used to reinvest into new, innovative medicines. Prescription drugs have one of the best returns on investment in B.C.'s health care system, as was mentioned earlier in our presentation.


To conclude, B.C. Pharmacare drug expenditures can be managed within the current budget targets. Generics will contribute an increasing portion of the budget and increased savings from the patent cliff should provide the resources to allow access to innovative therapies for patients.


We strongly believe that creating a sustainable vision for the future of health care can be found in new partnerships, new thinking and a new collaborative approach. We hope that you find our submission discussion a guide to some of those solutions.


Thank you very much for your time, and if we do have time, we'd be pleased to answer any additional questions you may have.


J. Les (Chair): Thank you. Yes, we do have some time. Bruce is first.


B. Ralston: Thanks very much for the presentation. I just wanted to clarify the way in which you've expressed the thought about the contributions of generics to the budget. You say on page 4: "This represents a significant opportunity to generate savings." Is the suggestion that the price that the Pharmacare plan pays for generic drugs be reduced? Is that price reduction being negotiated? Is that what you're saying there?


S. Stuart: I can take that. B.C. has a different generic policy than some of the other provinces right now. When it first came into play, that 50 percent of generics coming in only applied to new generics coming in. It didn't grandfather back or go back to any of the other generics that are currently on the market, that are at a high cost — anywhere from 70 to 80 percent.


Where a lot of other provinces go back and actually allow all the generics to be at 50 percent — at the minimum that they can come in at, and some even lower — in B.C. they have not looked backwards. That only started in 2009, so there are a lot of cost savings if you look back at all the other generics that are currently listed that are not nearly at 50 percent. They're more at 70 or 75 percent of brand price.


[1030]

B. Ralston: I understand that you don't represent the generic drug manufacturers, of course.

[ Page 109 ]

S. Stuart: No.


B. Ralston: So what you're suggesting is that Pharmacare negotiate with people who are, in effect, your competitors to pay them less. Is that correct?


S. Stuart: That's correct. There is currently something happening with the B.C. Pharmacy Association — the BCPhA — with government and the generic companies already, looking at ways to improve better access. We at Rx&D, with the brand companies, believe that there are still further savings to be had.


S. Dean: I think I'd also like to clarify that generics aren't necessarily competitors. We're a patent and research–based pharmaceutical company. The drugs that are on the formulary are single entities, and they are single source, so they're based in patent. Generic drugs are after the patent is finished.


B. Ralston: I understand that. Thank you.


J. Thornthwaite: I'm just wondering if you could comment on the April, 2009, study that concluded that the limiting medication access policy resulted in not only increased costs but what the impact was on patient health.


L. Foord: I can take that question. Yes, in terms of the study, the impact on patient health in terms of them having to switch medication from being on a stable medication when this policy was introduced…. Going back to their physician, switching medications and having complications with new medications that were prescribed to them by their physician via the policy and their symptoms of chronic cough, painful swallowing, chest pains, indigestion, heartburn — all those symptoms — coming back until they got back on their proper medication that they were originally on….


J. Thornthwaite: Can I have a follow-up?


J. Les (Chair): Sure.


J. Thornthwaite: Your point is: because of the switch, the actual ingredients of the drugs are not exactly the same, and that's why you're having this. That's the effect on patient health. That's what you're saying.


L. Foord: Absolutely. We always talk about the right drug for the right patient at the right time, and one-size-fits-all policy does not fall into that.


D. McRae: I like the concept of the patent cliff and the savings that it would provide. However, does it take into account the potential — and I hope there is the potential — of new and innovative drugs coming on line? Is it balanced, or is this projected savings including those new drugs that may come on line in the next several years?


S. Stuart: I don't have all the data and figures in front of me, but what we know is that the blockbuster drugs of the old days are not the blockbuster drugs of the new days. Pharmaceutical companies are actually going more into specific types of drugs for certain patient populations — some more orphan drugs, if you will, more biotech drugs.


The days of the big statins or cardiovascular drugs that are in the hundreds and hundreds of millions of dollars are not in the future. The kinds of drugs that are going off patent now…. There really isn't anything in the pipeline that's even going to match the ones that are currently coming off.


Does that answer your question?


D. McRae: Yes. Thank you.


J. Les (Chair): Any further questions? Seeing none, I'd to thank all three of you for your presentation this morning.


The next presentation is from the Association for Mineral Exploration in British Columbia, and that would be Gavin Dirom and Byng Giraud. We're ready when you are.


G. Dirom: It's a pleasure to be here and present this submission to the committee on Finance. We appreciate it, on behalf of the Association for Mineral Exploration. My colleague here is Byng Giraud. My name is Gavin Dirom. I'm the president and CEO.


I'll apologize. The deck that we passed around is quite lengthy, and my caveat is I won't be speaking every detailed sentence in there or every word.


With that, it's important to recognize that the Association for Mineral Exploration was established in 1912 and represents a very diverse group, a diverse membership — from small business to geologists, engineers and so forth — recognizing that we do have some big business aspects to it. But certainly, we do represent small business — the little guy, as it were — in terms of the prospecting and the junior exploration industry here in B.C.


[1035]

Just to clarify. We do differ from the miners. Essentially, they're producing. We'd like to think that we're the ones that find it, and the miners, of course, mine it.


With that, I just want to emphasize some highlights here. Obviously, we've had a terrific last few years in our sector. There's been an increase in exploration — upwards of $370 million spent last year. On the mining side, we produce over $8 billion in gross revenues into this province. In fact, over the last 150 years, the miners
[ Page 110 ]
have produced over $400 billion worth of wealth from a very small area of land here in B.C. — less than 50,000 hectares. So I think it's very important to emphasize the economic engine that exploration and mining represents here in B.C.


Specifically in Vancouver and B.C. alone we have over 1,200 mineral exploration and mining companies. We are considered a centre of excellence in the world, in fact, with respect to our companies headquartered here in B.C.


The mineral exploration and mining sector, including the multiplier effect, represents about 85,000 jobs here in the province, of which thousands are high-paying union jobs — very safe jobs, I'd add, because of the union factor and the fact that government unions and industry came together many years ago and created one of the safest industries here in B.C., which is very important. This sector also generates $500 million in tax revenue for this province annually.


Two other key factors on this slide are that $6 billion is raised here in Vancouver for exploration, not just in B.C. but around the world. But most importantly, there is a huge opportunity here in British Columbia. We have almost half of the new mine projects proposed in Canada actually here in British Columbia, and that represents about $10 billion to upwards of $15 billion of investment opportunity if, indeed, we can get responsible projects permitted and up and running.


If we turn now to our recommendations slide, there are four key areas that we'd like to propose today. I'd like to emphasize the fact that, essentially, we don't believe we're asking for significant moneys at this time, given the fact that we're in a recession and given the fact that we have a large deficit.


What we'd like to propose here today is that, in addition to the core base budget for the Ministry of Energy, Mines and Petroleum Resources, the government consider redirecting fees that the mineral titles branch receives from industry, which can be in the order of $10 million to up to $17 million annually, into some core areas which we think would produce greater revenues for this government — specifically, Geoscience B.C. The direct ask for that, going forward, is $5 million annually. This is a world-class organization that was established here back in 2005.


Item 2 is the B.C. geological survey. Now, this represents the public interest in our georesources, in our understanding of the potential and the public's database and access to geological information and mineral resources. That would be upwards of a $2.5 million ask.


Importantly linked to that is the request that the government consider reinstating the prospector's grant, which would, on the ground, promote work done by folks that can truly make the discoveries. Often it's not the large companies making the discoveries. In fact, it's the juniors, the prospectors and so forth that are on the ground, that have the technical expertise and the initiative to hang in there and make these discoveries over the years.


The third item is redirecting these fees back into ministry operations, specifically into permitting, into the mineral titles branch itself and into a reclamation fund. I just want to re-emphasize the permitting aspect. If indeed we can more effectively and efficiently move projects through the process here in Canada and, obviously, in British Columbia, I think there's a huge opportunity there in terms of wealth creation.


[1040]

We would like to restate that the flow-through share tax credit be made permanent. It's not just onerous on behalf of industry to consistently advocate for this to be made permanent, but I think also within the government it's probably — over the many, many years — seen as a bit of an effort that's not necessarily required because every year it gets approved. Perhaps we can go ahead and make it permanent once and for all.


Generally speaking, we are supportive of the HST. We have a few slides on that, which we'll just leave as handouts and take questions on if you wish.


Finally, it's not necessarily a government or a budgeting issue. But the efficiency between the federal and provincial regulators, as I pointed out, is very important to us.


As I mentioned earlier, $370 million in exploration in 2008. That number is likely going to decrease drastically going forward, so there's an opportunity now to provide incentives. This is our key ask today for the government to consider. These mineral title branch fees, upwards of $10 million, could be redirected. Right now there's a huge opportunity there to consider that.


Specifically, this is analogous to the hunting and fishing licences. It's analogous to the hotel tax that, indeed, moneys are redirected or redistributed back into the industry in order to create further revenues. So it's a positive feedback and will enhance the sector, thereby enhance our competitiveness and increase the multiplier effect, and so forth.


Importantly, as well as that, our sector is working through all parts of British Columbia — in rural British Columbia and, of course, in the urban areas as well. In areas where the province has been affected by the pine beetle and the forestry downturn, our sector can play a key role in bringing those areas back to prosperity.


On the return-on-investment question, it's important for this committee to realize that one dollar invested in geoscience equates to approximately $5 in exploration, which equates to approximately $100 in mining development opportunity.


If we go to the pie chart, this is a simple breakout of our request here today. If we assume a potential of $10 million, you see that we have an ask of 50 percent of that towards Geoscience B.C.; 25 percent of that figure
[ Page 111 ]
towards the survey; and the remaining 20 percent to the ministry operations and 5 percent for public outreach, which would be tied to the Explore for More British Columbia initiative and such things.


Essentially, the "why now" question. In Canada and British Columbia, with mineral reserves declining, we have not permitted a large metal mine here in British Columbia for many years. In the national interest, not to mention provincial interest, it's key that we maintain our mineral reserves for many strategic reasons. To re-emphasize again, permitting is awfully inefficient, and we need to work with the federal government especially on that number.


The Mineral Titles Online certainly was a world-class system when introduced, but it requires modernization. Geoscience B.C. similarly — it's world-class and envied around the world. However, it will wind down come 2011 without a new injection of funds. There's no consistent funding mechanism. The survey itself is losing expertise and is unable to do survey work, and we risk losing a world-class database.


In terms of the flow-through share tax credit, again this is a tax credit that's been in place now for many years both provincially and federally, and it's re-extended annually. So the ask here is that it be made permanent. This would likely have to be in conjunction with the federal government as well, but it's something that's fairly redundant. I think it's clearly non-partisan. Both governments, at the federal level and provincially, are supportive of the tax credit and have been for many years.


If you move to the slide, "Why permanent," just one thing I want to draw your attention to there. For each dollar of lost tax revenue with respect to this credit, approximately $2.50 of new investment is created, so there's an argument for return on investment.


As I mentioned earlier, I'm not going to spend too much time on HST, just to emphasize that we are supportive. We do have a handout on this as well. So we can skip that one.


[1045]

Again, it's not necessarily a budget item, but having one project in this province reviewed by one process is very important. There's billions of dollars at stake here, huge opportunities for rural communities to take advantage of — aboriginal communities and so forth — and it's a crying shame, in fact, that we're not moving fast enough on this.


We are supportive of having this province work with the federal government to have legislative reform that essentially enables the respective governments to accept project reviews as equivalent. We welcome the support of this province in making that happen.


Overall, AME believes the B.C. budget impacts that we're proposing here are quite small. Again, we're just asking for, essentially, status quo on the ministry budget. We are requesting that the government consider redirecting fees that we pay back into the sector to support further exploration and potential new mine development. Ultimately, that is in the public interest and is creating revenue here.


Again, just to emphasize that the tax credit is fairly onerous in terms of every year looking at it again and every year saying, "Yes, let's maintain it," so let's make that permanent.


Finally, again just to emphasize, our sector contributes to billions of dollars worth of wealth. As I mentioned earlier, it's over $400 billion in the last 150 years. What we're requesting here is for $10 million to be redistributed back into the sector, maintaining the existing budget for energy and mines. We believe we can grow a huge multiplier effect, given that opportunity.


Thank you, and I'll take questions.


J. Les (Chair): Thank you very much.


D. Donaldson (Deputy Chair): Thanks very much for your presentation. I should say that before I became an elected official, I became a member of the AMEBC. I don't know if that's a conflict here, but if it is, I'll let my membership lapse, unfortunately. I appreciate the work you do, and I have many friends who work in exploration in the northwest, so I know the work that you do.


My question is around the ministry operations. I'm always amazed that MEMPR is the ministry that's responsible for generating the bulk of the revenue in the province, and yet it doesn't seem to be as well staffed as it could be to reflect those revenues. I'd have to look at your proposal around putting the revenue from mineral titles back in and look at, perhaps, other ways that we could fund the ministry operations better.


Just your perspective on what you hear back from your members around whether there are delays because of staffing issues and also around first nations consultation and the impact not having enough focus on that has on your membership.


G. Dirom: Indeed. We are hearing from our members that we are losing time and that things are not as efficient as they could be. They're certainly effective, and the public service here in Energy and Mines is highly skilled and expert in what they do.


Are there enough of them? Arguably, not. Are they able to work with the federal government, particularly on these issues and permitting and finding efficiencies? That's a challenge, indeed. If we can look at that as a committee here, and within government, that would be much appreciated.


J. Thornthwaite: Thank you very much. I actually have two questions, if I'm allowed, that I'll ask.

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Just getting back to your comment about equalizing the jurisdictions as far as regulations, are you talking mostly about environmental regulations?


G. Dirom: Yes, particularly the Canadian Environmental Assessment Act and its ability to be equivalent with the B.C. Environmental Assessment Act.


J. Thornthwaite: Like right now, because there are competing interests? Is that what you're saying?


G. Dirom: What happens right now is duplication of effort. There's a lot of overlap, and the timelines aren't synchronized.


J. Thornthwaite: But you're suggesting here that the federal government should have the same power as B.C. Are you saying you would prefer that the federal government's regulations take over ours or that ours be accepted by the federal government?


G. Dirom: The latter — that B.C. regulations be accepted by the federal government.


J. Thornthwaite: And are our regulations, from an environmental perspective, from your perspective, more favourable to your industry than the federal government? Is that what you're saying as well?


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G. Dirom: No, I don't believe it's about effectiveness or stringency and so forth. It's about how efficiently the sector is being regulated. B.C., in our association's opinion, is more efficient with the regulations, and equally as effective.


J. Thornthwaite: Okay. Thank you.


J. Les (Chair): Okay. That's three questions, I believe, already.


M. Mungall: Thanks for your presentation. I just wanted to get a little bit of clarification on some numbers. I heard you say that every dollar invested in geosciences equals five dollars in mining exploration, which will generate $100 in mining development. Did I hear that correctly?


G. Dirom: Yes.


M. Mungall: Okay, great. Do you know, though, for every dollar invested in geoscience, the amount that's coming back in tax revenue?


G. Dirom: In tax revenue?


M. Mungall: So the government would invest a dollar in geoscience. What are we getting back? Have you ever been able to calculate that?


G. Dirom: I don't have the exact figure, unless….


B. Giraud: Broadly speaking, the industry generates about $500 million in taxation revenue for the province on an annual basis. What specifically Geoscience generates is an extrapolation, because Geoscience is the government's data. It's the public data, and then the private sector will come along and make use of that. On the money that they spend, that's where that tax revenue will be generated. The actual immediate tax revenue that results from the money in geoscience is difficult to show. We don't know whether they were looking because of our geoscience or because of something else they found.


But what we do know is when we track the mineral titles fees, which the government is collecting, how those rise and fall — those fees come from people staking claims, that sort of thing. Those numbers have risen and fallen, and generally, those fees have been much higher than the money you've invested in Geoscience B.C. or the survey.


J. Les (Chair): Okay. We're out of time for this segment. I want to thank you both for coming this morning. I appreciate your input.


Our next presenter is Jennifer Charlesworth, and she's with the Federation of Community Social Services of British Columbia.


Whenever you're ready, Jennifer.


J. Charlesworth: All right. Thank you very much, Mr. Chairman and committee members, for the opportunity to present to you. I've come here the last couple of years since I began my tenure with the Federation of Community Social Services and have appreciated the quality of the questions that you've asked, so I'm looking forward to today's conversation.


I'm the executive director of the Federation of Community Social Services. Some of you may have known us the Federation of Child and Family Services of B.C. We changed our name in May to reflect the diversity of membership that we now hold.


Today what I'd like to do is to provide you with a very brief introduction into the federation and its members and affiliates, and the work that is done by those members. I'll then speak to five issues that I ask you to consider as you're working on your presentation to government and then propose four concrete actions. Given that we've only got a short time together, I will be submitting a detailed written submission as well.


The federation began as the Child and Family Services Federation in 1982. That brings us to 27 years of delivering services to the agencies that work on behalf of com-
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munities for children, youth and families. As I said, we changed our name in May, and we are more encompassing now of the diversity of organizations that provide everything from food security programs to community living services. We have 120 member organizations that range in size from tiny, one-paid-person, $60,000 operations to $27 million operations with hundreds and hundreds of staff and volunteers.


Recently we forged a creative partnership with a CEOs network which is comprised of 76 agencies that work on behalf of community living services, primarily, for both children and adults. Between us there are 200 organizations, 15,000 employees, 8,000 volunteer FTEs and about $800 million of community investment. I say that word with great care, because in fact that's an important frame to carry with this: that there are investments in communities and community well-being.


Now, largely, that money comes from federal, provincial and municipal governments, but also about 25 percent comes from community contributions, fee-for-service and social enterprises. This is quite a creative group of organizations and agencies that are trying to figure out how to do the best things they can on behalf of community, and obviously, that leverages government's investment.


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Most importantly, those supports translate into millions of service delivery hours to hundreds of thousands of individuals in our community.


A Pollara research study said that 67 percent of our population are touched by and gain access to community support services. So they deliver a stunning array of services, as I suggested, from infant development programs for children born with developmental challenges to seniors mental health care, from community food banks to mental health services and residential programs for troubled young people.


I want to apprise you of several things that I'd really like you to pay attention to as you provide your wise counsel to government. I want to acknowledge the fiscally difficult times and socially difficult times that we're in and to indicate our collective willingness to work with the Legislature and with government ministries on how we move forward from here.


The social development ministries didn't receive the same cuts as some of their sister ministries, and I think that's a good sign. However, I want to push this a little bit, because although there weren't overt cuts to the social development side of things, there are, in fact, cuts that are being made in the community-based services. I think it's important to think about that from a variety of different perspectives.


First of all, in any economic downturn you have an increased demand for community social services. There are people that are more vulnerable by virtue of the economic circumstances. We're seeing an increase in demand, and we're documenting that with our member organizations.


We're also seeing that many of those organizations that receive philanthropic funding and community donations have had that portion of their income cut significantly because the philanthropics are simply not able, at this point, to honour their commitments to those organizations. The funding has been reduced substantially in many cases. Our organization is one of those.


We're also seeing a reduction in the capacity of individuals in the community to either provide fee-for-service or to offer their community donations. So we have what's, in effect, a perfect storm — increased demand, decreased revenues and government now moving in and, in a difficult time, considering cuts or other measures.


I also want to say that I've presented here before, indicating the efficiency of the organization and the operational sustainability challenges. These were before we had the perfect storm situation. So the lean years have translated into many organizations being currently not sustainable. The cuts and budget reductions that are now starting to be made will further exacerbate that.


The second point I wanted to raise is that discretionary is not the same as unnecessary. A lot of comments have been made about discretionary funding needing to be cut, and that translates into a lot of the contracts that are being administered by government out into the community.


I ask whether a school meal program for children who are vulnerable is a discretionary — i.e., frill — program. I ask whether a mental health program that is supporting young people in dealing with early-onset schizophrenia is a frill program. There are many other things like that that I don't believe you would want to characterize as discretionary — i.e., expendable.


I think that's an important consideration as we move forward — being mindful of the term "discretionary." I think that when you start to see it in your own communities — Chilliwack Community Services, Abbotsford Community Services, lake and district council community services…. You know these organizations in your own communities.


The third comment is that cuts appear to be uncoordinated. For example, the service plans in many ministries talk about collaboration. They've embraced that at the community level, so you have many programs that are in fact receiving funding from four or five different sources.


A health authority removes their funding of 25 percent; the remaining four partners are unable to sustain or augment that amount; the whole thing collapses. So for the sake of a $20,000 reduction, you now have a $110,000 loss of service because these are not sustainable. What that suggests is the importance of thinking very carefully about the social impact of any kind of reductions or shifts in service.


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The other thing I'd like to say is that social services are much more than income assistance. I'm sure you're quite aware of that. One of the things we noticed is that in the previous year there was the three-legged stool — health, education and social services — considered together, because they are intertwined. If you don't have strong social care, then you have increased demand in acute care or in the higher-end health care services.


What we've noticed is that comments are being made that it is health and education. "Are we going to preserve health and education?" is the question that is asked in the budget documents. I would suggest that needs to be considered as health, education and social services, and how are we going to invest wisely in those so that whatever public dollar is expended is actually achieving the desired results?


The fifth point that I wanted to make is the HST impact. This is a potential winner in that right now the rebate level that is set for the non-profit and charitable sector is being proposed at around 52 to 57 percent, and that will have a net negative impact on that sector.


The analysis in Ontario and the Atlantic provinces says that it will need to be between 82 and 90 percent rebate in order to have a neutral impact. We're certainly not opposing the HST, but for goodness' sake, let's make sure that we have that rebate level right for that sector in order to not have a negative impact.


So the concrete actions. At this point I'm not saying: "Okay. You need to invest this many million or billion, or whatever." What I am saying is: "Let's think carefully about the process."


One thing that's important is to sustain the investment in social services as part of the three-legged stool of health, education and social care. This is not the time to cut. We've got to have people that are ready, willing and able to participate in the labour market. We have to have people that are able to be resilient in these times, and that means that they will need some support at the community level.


Collaborative community-based approaches to addressing the fiscal challenges. We've offered, and in fact the Ministry of Children and Family Development has accepted our offer, to work with them to try and figure out what are the creative things we can do at the community level in order to deal with the fiscal challenges, deal with the increased demand and also to figure out how we get the best value for money. We can't afford to dismantle the infrastructure at the community level, so let's put our heads together and figure out how to do that.


The third point is that we think very strongly that a social impact analysis should be required of any significant reduction or cut in services. That would prevent some of the challenges that you've been facing as a legislature recently in terms of some of the cuts being proposed and then having to do an about-face on them. If there's a social impact analysis, you can say:"Is this the right place to cut?"


Finally, the HST rebate level — a thorough analysis being done to ensure that there is a neutral impact on the social care, charitable, non-profit sector. That would be between 82 and 90 percent rebate level, which is comparable to what will be in place in Ontario and what is in place in the Atlantic provinces.


So those are the four points — the concrete actions. I look forward to any of your comments and questions.


J. Les (Chair): Thank you very much.


Does anyone have any questions?


D. Donaldson (Deputy Chair): Thanks for your presentation. Very informative. It especially resonates with me — the resilience you talk about. Resilient individuals create resilient communities, and that's a savings in the long run as far as how we get through economic downturns and other major challenges facing us.


My question to you is a little off that topic. It's around the 15,000 employees that are part of the organizations that you represent. I come from the non-profit sector, earlier in my career here, and I know many of those non-profits.


To retain employees you have to offer certain benefits. Sometimes that benefit includes health premium coverage. My question is: with the increase in the MSP premiums that are slated for the upcoming year, what kind of impact are you hearing back from your community organizations that that will have on their already impacted budgets?


J. Charlesworth: Yes. Great question, and we'll be addressing that in the written submission too. It's very important. I think it is going to affect in two ways.


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One is, as you say, organizations that have that as a benefit are facing an additional cost to their organizations, as I mentioned. And we've done this analysis in collaboration with government. We've done joint reports on the operational sustainability of organizations, and before this perfect storm that we're in, they were in a fragile state. So any of these little things that might appear relatively small on the bottom line could have a significant impact. 


That is one area. The other thing that's important to consider is that the average wage of the people that are working in our sector is $18 an hour. This is with post-secondary degrees. They've got $18 an hour. So as you can appreciate, if they are self-funding their MSP premiums, that is yet another kick. 


I'm not saying that we've got to be looking at a variety of different sources for revenues, but again, let's think about the impact analysis behind that and also see what kind of redress or what kind of creative approaches
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would be necessary. Definitely, there will be an impact, and the agencies have started to take a look at what they're going to need to do and what the financial implications are going to be. 


Also, as I say, we have a fragile labour market anyway. Although there is unemployment, the people that are unemployed are not ones with post-secondary degrees in child and youth care, social work and mental health nursing. We have a skills shortage already, and we don't want to be pushing people out the door with the straws that break the camel's back.


J. van Dongen: Thanks for your presentation. Just a question: do you have, within your umbrella organization, working with your agencies…? Do you at any point in time do an exercise of priority setting and look internally at what might not be as important today as it was five or ten years ago and take those to government? Do you do anything like that?


I think, as you say, if you start out with a notion that you have a fixed amount of money, how do we best deploy that to get value for money and get the services that are really the most important? Do you do that sort of thing?


J. Charlesworth: We do it not as a provincial body in terms of setting provincial priorities, but we do do those. We facilitate those conversations at the local, community and regional levels. In fact, the kinds of decisions that we might suggest, being Victoria-centric, won't apply to Hazelton, for example, or won't apply to the North Peace.


What we have done, though, is developed a number of what we call sector tables or regional tables that are taking a look at: what are the things that are working well, and what are some areas where, perhaps, we could consider redistributing the resources from there into other areas? As an organization, we support a series of research called applied promising practices, which is basically identifying those areas that have the greatest promise to deliver the greatest good.


I think your point is an excellent one, which is why I say that we're up for the challenge in working collaboratively. But if decisions are made without the input at the community level, errors will be made.


J. Les (Chair): Thank you, Jennifer. That's all the time we have this morning. I appreciate you coming and giving us your insights.


Our next presenters are the Open Space Arts Society: Helen Marzolf.


H. Marzolf: Thanks for this opportunity to chat with you about the provincial government budget. Open Space is part of the network of Canada's acclaimed artist-run centres — organizations created for and by artists. I use the term "artist" generically. Open Space, as is the case with most artist-run centres, hosts artists of all disciplines.


A lot of the content in my presentation this morning will be familiar to you. I'm sure you've heard from many arts organizations, and it'll be anecdotal rather than statistical. I'd like to start, though, with a short game of Trivial Pursuit, if you don't mind.


I wonder if any of you would be able to name the well-known animator and editorial cartoonist who presented his work at Open Space in 1986. Was it Brian Gable, the editorial cartoonist for the Globe and Mail? Was it Matt Groening, the creator of The Simpsons, or Cordell Barker, creator of Runaway, an acclaimed Canadian animated film? Any takers?


M. Mungall: My excuse for not knowing is that I was eight years old.


H. Marzolf: Good point.


J. Les (Chair): I was nine.


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H. Marzolf: Who guessed Matt Groening? It was.


Where in Victoria did Liona Boyd present concerts in 1974 and 1975? At Beacon Hill Park, the Empress or Open Space?


A Voice: Open Space.


H. Marzolf: Open Space, of course. So self-interested.


Where in Canada did transit buses first feature art? In Toronto, Victoria or Vancouver? It was Victoria, actually, and it was through a program sponsored by Open Space. I'm going to come back to this distant history later in my presentation.


Open Space Arts Society was founded in 1972, an artist-run centre supporting projects by professional artists of diverse generations, cultures and communities. It's a registered charity that has owned its facility since 1975. We present exhibitions, screenings, workshops, readings — just about anything you could imagine in the arts.


In 2008-09 our annual budget was $310,000. It has a board of eight volunteers, the majority of whom are artists. Last year volunteers contributed the equivalent of $53,000 to Open Space operations and programming.


But Open Space isn't the only artist-run centre in Victoria. Xchanges Gallery and Studios on Government Street are even older than Open Space. The Fifty/Fifty Arts Collective on Douglas Street has been around for six years, unfunded. The Ministry of Casual Living is located in a neighbourhood in Fernwood. I think it's important, when you think about the budget for the
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province, that artist-run organizations are taken into account.


What do artist-run centres want from the provincial budget? We'd like the government of B.C. to reinstate the gaming revenue to charitable organizations. We'd like to see a restoration of all direct-access funding for 2009-10. We'd like to see revenues to the B.C. Arts Council reinstated, and we'd like to see their arm's-length status honoured. We'd further like it if you could organize a stimulus package for the arts.


Artist-run centres contribute economically. Countless studies have talked about the arts as a front-line stimulus engine even when the economy is not in crisis. Artists transform marginal urban spaces into thriving neighbourhoods. Artists and their projects generate direct and indirect spending. Artists contribute to tourism revenue. Artists employ people, directly and indirectly. Arts organizations generate tax revenues to the province in excess of the funding allocated. I can only wish that my paltry investments could return the same percentage.


I like to think of some of the economies of the arts as being invisible. There are many economic impact studies for the arts, including one commissioned by the province in 2006. Most analyses of economic impact of the arts focus on projections of return investment based on multipliers. I'm not convinced that the benchmarks and multipliers adequately represent the economies of the arts where I work. Here they are complicated and resistant to measure. In that sense, it's not cost-effective to really capture what the true impact of these small organizations all over our province might be.


Open Space operates close to ground level — artists at the beginning of their careers, artists that create work that's located outside the mainstream, artists that have to make work with very little in the way of resources. The transactions are small and plentiful and have asymmetrical impact relative to the amount of financial exchange.


The arts communities, at least the part where I work, deal in microaccounts. The direct access funding in the B.C. arts councils are tiny, tiny budget lines in the provincial budget, but losing this funding is devastating for vast networks of artists who rely on small grants, an artist fee once or twice a year and payments for services — maybe designing a poster, helping with a website, photographing a performance, building a shipping crate.


The cuts destabilize our communities and, unless they are reversed, will drive the creative class out of the province. Artists work. They create plays, art objects, installations, performances and literature. They also build studios, pay taxes, pay for hospitality and pay for printing services. 


Every so often they're remunerated for their work, but that never covers the cost of production. It's more like a token. I'm lucky enough to be paid for my work as an arts administrator, but a lot of my research — and, in fact, this presentation — was done on volunteer time.


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Typically, artists have other part-time jobs to cover basic expenses. One of our board members, David Gifford, is an artist, a sculptor, a beekeeper, a professional magician — the Great Giffoni — a sessional lecturer, a dad and a contractor.


In fact, most professional artists diversify in order to carry on with their careers and their practices. They're adaptive workers and excellent troubleshooters. I'd say most artists are small businesses. I don't think anyone has studied how these independent operators contribute to the community economically and in all other ways.


Arts organizations manage in a fiscally responsible way. The cuts were sudden and have undermined the planning cycles and programs of many cultural organizations that are committed to building capacity.


Open Space began to set aside a facility reserve fund in 2007 so that our programming would never be compromised if there was some big problem with our building — our aging building. We were beginning to think long term, and we were beginning to be fairly optimistic in our plans until August.


This year we thought we'd be able to capture a federal matching grant to carry out some much-needed work on our facility, but the losses this year and the compounded cuts next year have undermined our competitiveness, which in real terms…. It's a potential revenue that actually serves the well-being of the trades.


The loss of arts funding has implications far beyond the community, and I'm sure this situation at Open Space is echoed in hundreds of organizations across B.C.


The funding cuts have been even more distressing, I think, for fledgling organizations that rely on project funding. The essential services they offer are about to disappear.


I like to think of the arts community as infrastructure. We don't often use "the arts" and "infrastructure" in the same sentence. Typically, we think of infrastructure as streets, utilities, hospitals, schools and government services. Art operates exactly like highways: a social good that everyone profits from but a good that's hard to finance.


Of course, the automotive and oil industries are the largest benefactors of our tax-based investment in highways, and we can't really disrupt that. Art, on the other hand, gives back to its investors economically, educationally, culturally, socially in terms of health and in many other ways.


A society also needs a cultural sector, as previous presenters have pointed out, as the research and development sector for society as a whole. Art behaves in such polyvalent ways. Its actions and effects are so pervasive we don't often recognize what an important, tensile pres-
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ence it adds. I would argue that the arts and artist-run centres are important even for those who don't directly use them.


People in B.C. like to know there's an active arts community. They like to know that their community can harbour something on the wild side, something that's different, unexpected, perhaps not fully understood. And I want to take a minute on this aspect of "not fully understood" for a minute, because I think it's important.


The most common criticism of Open Space programming is that people say they don't understand it. Contemporary art is demanding. This isn't new to me. I've been working with contemporary art for about 30 years. I still fret about this. It sort of bothers me that people aren't susceptible to it. But a friend of mine explained that confusion isn't necessarily a bad thing, and confusion is really important to who we are. It encourages us to find answers, to phrase questions, to create hypotheses….


B. Ralston: This is good news for us.


H. Marzolf: Why?


B. Ralston: On confusion; that's all. I'm making a joke.


H. Marzolf: I hope I'm not being confusing.


B. Ralston: I'm thinking more of our situation on occasion — more particularly, the government's.


H. Marzolf: I think the cognitive workout offered by contemporary art is another underestimated aspect of the kind of everyday active engagement with the world that we really need. The kind of open-ended speculation sparked by the arts makes for communities where obstacles and problems can be overcome.


Over the years I've had extraordinarily insightful conversations with non-specialist audience members or people that come into an exhibition of contemporary art and they don't know what to say. But eventually, they start phrasing these questions, and then they have these insights that are so incredible. They really feed my practice as well.


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That's an important thing in a democracy — to be able to have that opportunity. It creates optimism, faith in your neighbours and a sense of possibility. 


Art doesn't always have to take the form of a commodity or a monument. Some of the most effective works are temporal, fleeting and ephemeral. All of us have probably been inspired by something we catch through the corner of our eye.


Cutting the arts and other helping organizations during an economic downturn is counterintuitive and deepens the social fallout of misery and cynicism. But back to the arts as infrastructure.


The arts and cultural organizations deliver individualized public education. Open Space is a venue on several levels. We offer workshops, artist talks and professional development for artists. Invariably, people learn from the arts. In addition to being places that encourage critical thinking, innovation and experimentation, artist-run centres are a source of entry-level workplace experience, transferable to other occupations and workplaces. 


Eighty percent of the people that we employ at Open Space are under 30, and most have just completed or recently are completing their studies. Cultural organizations invest their funding in mentoring, teaching and coaching new employees, volunteers and people trying out their first contract work.


Arts centres encourage lifelong learning. Art tells us about the lives of others. Last Friday night a Beijing artist, Jiang Jie, presented an artist talk at Open Space. She doesn't speak English, but her husband, the poet Xi Chuan, who is the Orion visiting artist at the University of Victoria, translated for her.


Now, there were 47 people in this dark room looking at images — great images — of her work. They all agreed that it was a great talk, even though none of them could understand what she was saying. They liked listening to Mandarin, and one of the people that were there said: "As I listened and waited for the translation, I realized how much we take the fluidity of communication for granted." I think it's important to remember that cultural diplomacy is a recognized outcome of investing in the arts. 


To close, I return to Open Space programming with Liona Boyd and Matt Groening. Their visits to Victoria may or may not have had a huge impact on their careers, but it was one of the ways they became known. These artists do not step onto the world stage all of a sudden, fully formed. Many pay their dues through a series of small organizations that provide opportunities for them to refine their skills, build networks and hear response to what they're doing.


We must fund places for the up-and-coming, the emerging artist, and also for those who want to try something new. I might also add that there are committed and astute art audiences that find it exciting to see new talent rather than buy a ticket for the tried and true.


As I watched Peter Morin, our artist in residence this summer, struggle with the Tahltan language — he's learning it as an adult — I thought about how very difficult it is to rebuild culture after it's been destroyed. Art is important for itself. It's lasting and essential, and it needs investment. Please reinstate the funding to the B.C. Arts Council, honour its arm's-length status, and reinstate the gaming funding to the charitable organizations.

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J. Les (Chair): Thank you for your presentation. You have used up all the time, so we won't have time for questions. But that's okay. A very good presentation.


The next presenters are from the Camosun College Student Society and University of Victoria Students Society: Matteus Clement and Veronica Harrison.


V. Harrison: Hi everyone, and thanks so much for having us here today. My name is Veronica Harrison, and I'm the chairperson of the University of Victoria Students Society, which is local 44 of the Canadian Federation of Students, at UVic. We represent about 17,000 undergrads with the UVSS — that's the University of Victoria Students Society.


M. Clement: My name is Matteus Clement. I'm the external executive for Camosun College. We represent about 8,000 students between the two campuses that we have, or local 75 of the Canadian Federation of Students. We'd just like to thank the committee for having this time with us so we could express our concerns. In the presentation after us, we're going to hear from our provincial organization, the Canadian Federation of Students B.C.


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The priorities established here were set by students of UVic, Camosun and 16 other member student unions across the province. They were set as priorities for students in B.C. in response to the pressure of student debt, which is becoming too great for students to manage. 


The recommendations that we would like to see are to roll back tuition fees back to 2001 levels, restore per-student funding to 2001 levels, establish a provincial student grant program and eliminate the interest charged on B.C. student loans.


Rather than go into the technical data that we have discussed by the representatives of CFS-BC, we'd like to explain the impacts that the B.C. government's policies have on student debt on our campuses and outline for you how a three-year plan in the upcoming budget to implement these priorities of students will benefit our members and the broader community.


V. Harrison: In 2001, despite tuition fees at UVic being amongst the lowest in the country — at the time, B.C. had the second-lowest tuition fees across Canada — the University of Victoria Students Society still had to operate a food bank for students that were unable to afford the cost of both education and food. However, at that time the UVSS was able to operate the food bank on an entirely volunteer basis and by donation.


Since the establishment of our food bank, we've been tracking data on its usage. In 2001, 73 percent of users were undergraduate students, and 27 percent were graduate students. An overwhelming majority of graduate students were parents, while half of undergraduate students were also parents.


However, following the deregulation of tuition fees by the B.C. government in 2002, we not only experienced a substantial increase in the number of students using the food bank, but we also experienced usage from new demographics.


Today, with tuition fees double what they were in 2001, 83 percent of users are undergraduate students, which is up from 73 percent, and 17 percent are graduate students, which is actually down from 27 percent. The percentage of people that use our food bank for just themselves and not dependents has increased dramatically. It's been 26 percent for undergraduates, as well as 71 percent for graduates. So the majority of people using the food bank are no longer just parents.


Since 2001 the annual expenditure by the UVSS on its food bank has grown from under $4,000 to over $10,000. That's a 262 percent increase.


M. Clement: At Camosun, as well, we've seen a large increase in our food bank usage. We currently spend $500 on our food bank and $400 worth of Thrifty's food cards for perishable items for people to purchase. Even with those contributions of $900 a month, we still run out at the end of the month, and people are in more need than ever. The use has definitely gone up since last year.


The high cost of housing, tuition and food — there's little left for the emergency funding that we usually put in place. Just last week we actually had to provide assistance for a mother of three who had to rent a van, and then she was out of food money for her move. These kinds of crises are becoming more and more common, where people have to choose between electricity or food, moving or food.


V. Harrison: In 2004 UVic, SFU and UBC conducted a study of the impact of tuition fee deregulation on their students. I'll read out some stats that the study found.


Some 64 percent of survey participants had accumulated debt, with an average debt load of approximately $15,000; 63 percent had accumulated private debt, with 25 percent having accumulated bank loans or credit card debt, and 29 percent of survey participants were taking fewer courses to cope with those expenses.


In addition to taking courses and finding summer employment, 55 percent were working throughout their academic year, 67 percent said that working had caused their grades to suffer, and 59 percent said that working had extended their degree completion time, while 32 percent responded that if tuition fees increase further, they would possibly have to quit their studies temporarily. An additional 12 percent actually responded that they would possibly have to quit their studies for good.


Since that study was published, tuition fees have increased more than 10 percent at UVic. Youth employment has increased to a record high as a result of the
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economic downturn, and funding for non-repayable student aid has declined to the point that B.C. is more than 60 percent below the national average.


As a result, students in greater Victoria are paying more for their education than ever before, and they're going further into debt. All of this comes at a time when consumer debt threatens the economic growth of our province.


M. Clement: While students are paying more for their education, we're coming back with less and less opportunity available to us. While overall operating funding has increased over the last eight years, it has not kept pace with inflation or enrolment growth. This actually translates to a deficit in funding.


At Camosun we have seen budget challenges in recent years that are causing the college to struggle to provide quality education with the resources provided. Camosun has not had a new academic building built in 15 years. This year we have actually increased our FTE, full-time equivalent, count by 10 percent. That means more students inside of already cramped spaces.


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V. Harrison: At UVic provincial cutbacks last year resulted in a $4.2 million cutback from the operating grant. So that was a 2.6 percent reduction. This meant that faculty positions were no longer filled, and courses were no longer offered. UVic believes that this will likely affect students' completion times.


The combined impact of high tuition fees and high student debt and declining per-student funding should be of major concern to this government, especially given the economic and social benefits for providing broad access to post-secondary education.


UVic and Camosun are first-class institutions, renowned for many of their programs, including law, education, environmental studies, culinary arts, the trades and just so much more. These programs produce graduates at the top of their fields who contribute to the economic and social development of communities throughout the entire province.


The contributions of a well-educated and skilled workforce far outweigh any obstacles of providing universal access to post-secondary institutions across the province.


M. Clement: The 2010 B.C. budget will be the first of four budgets introduced under this government in this term. It is an opportunity to chart a course towards a stronger and more economically and socially diverse British Columbia by investing aggressively in the education and training of British Columbia. 


Our hope is that our four recommendations will be reflected in the three-year plan laid out in the 2010 B.C. budget, sending a strong message that British Columbia will become the leader in knowledge- and skill-based economy. Thank you very much for your time.


J. Les (Chair): Thank you both very much. A couple of questions. First of all, Norm.


N. Letnick: Thank you very much. For the last ten years I was a business professor at Okanagan College. It was a wonderful — actually, the best — part of my life, I think. As far as careers go, it's just amazing.


Let me repeat that. It was the best part of my life. So anyway, thank you for participating and for leading your fellow students. 


Would you be able to provide the committee some statistical information, like how we compare in B.C. compared to other OECD countries in the areas of tuition fees, student debt load and student completion time? If that is information is available to you as an organization, it would be nice to have that.


V. Harrison: We don't have those statistics on us right now, but that is something we can definitely provide. And we do know that countries that have weathered the economic recession that is happening are countries that have invested in post-secondary and have had equal access to students to attend post-secondary education.


M. Mungall: A couple of things. First, I really think that it was great that you brought up the food bank usage. As someone who has run a food bank myself, I just want to highlight for my colleagues who might not know that when you have an increase in individuals, not families, going to the food bank, that is a sure indication of an increase in poverty of a particular demographic — yours being students. With that, breaking it off demographically, it's very key in noting the increase in student poverty. 


In response to Norm's question, you brought up that some of the countries that have weathered the economic downturn have a lot of students in post-secondary education. They're able to access it. It's affordable and so on and so forth.


Maybe you could comment a little bit further, because as I'm doing more research on labour market development in an economic downturn, people who lose jobs tend to go to post-secondary education to get training and prepare for a new economy that is going to be emerging out of that economic downturn. That's the systemic or the historical pattern.


So here we are. We find ourselves at another point in history where we have an economic downturn. It seems to be the right time to be investing more into post-secondary education as we prepare for the new economy that's going to be coming out.

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V. Harrison: I can comment a little bit and see if Matteus wants to follow up.


Like I said, I don't have specific stats, but we can get more of that later on. You're right in a lot of your comments. We know that a lot of people are choosing to go back to school right now with this recession, whether it be as an undergraduate or a graduate, and they're accumulating a lot of debt.


So while we see people going back, they're going to be coming back into the workforce with a lot a debt. While it's great that they're retraining, a lot of them are going to be suffering when they come out. We know that with debt, you often have a lot of mental health issues as well as having to cut back in a lot of other areas of your life. So it's a difficult situation right now.


Did you want to follow up?


M. Clement: As an example, last year I was listening to the radio, and I heard that recently Germany had been surpassed by China in its GDP. Germany had been bumped down to fourth, and China had been put up to third. 


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That was a really interesting insight as to how that can happen. A country that is 30 times larger in its population and exponentially larger in its size and resources — how was Germany able to keep third spot in the GDP? Their education system is amazing, and you look at what their economy is based on: it's based on trades, engineering and post-secondary education.


Unless we plan to strip-mine the whole province in resources, we need to start looking at post-secondary as a tangible resource, and it needs to be invested in, in the future. To weather those economic times, the more well-educated countries are making better with what they have. To what my grandfather once told me.... He said: "You can take away everything from someone, but you can't take away what's way in here." And more well-educated people will know how to weather the times better than non-educated people.


J. Rustad: Thank you very much for your presentation. There's no question that education plays a critical role. It's one of the reasons why we undertook one of the most massive expansions in post-secondary education that any government has done.


I have a question for you, though. Your concern about student debt and debt levels is legitimate. That's a big concern, also the desire for more resources in the education system. You know, during the '90s we saw many programs strangled because they didn't have the resources that they needed, and we've seen some changes in that. However, I do know that there's a desire, particularly around trades and the other things, to get some more funding allocated.


My question to you is: given the challenges that we are facing as a government, where we would we find the additional resources? Would you recommend that we look at taxes and increasing taxes to be able to put additional resources into post-secondary education? Or would you recommend that we increase the tax burden on our children by increasing deficit spending to increase funding for post-secondary education?


V. Harrison: I'll start off and let Matteus follow up. I think we need to look at education as an investment. Studies after studies have shown that investing in post-secondary students and students coming out into the workforce has an increase in the economy. Obviously, that's a large focus right now, the economy. So I think we really need to focus on post-secondary education and funding to institutions as an investment. 


Institutions are underfunded right now, and right now students are being downloaded on those fees. We're looking for increased per-student funding back to the levels that were in 2001.


The idea of quality of education comes up a lot, and we think that the quality of education means equal access. So higher tuition fees mean there's more work. It means that there's more debt for students, and they're less likely to be able to complete their degree. I really think we need to approach it as the idea that this is an investment into the entire economy.


M. Clement: If I interpret the question correctly, you're asking: "Should we put ourselves more in deficit for a better future?" I think that myself as a student and Veronica as a student are doing that right now on a personal level. And the government could perhaps take an initiative to do the same, to invest in our future.


I'm a realist, and I look at it from a financial viewpoint. I think it's really easy to see that people who go in for post-secondary education, who get a better degree, get a higher-paying job and therefore pay more taxes. So while, unfortunately, you may not see that return in the next four-year term, definitely within the next eight years, let's say, we will see that return, whoever may be in government at that time. The investment is there, and the taxes will return to pay and offset that funding.


J. Les (Chair): No one else? I thank you both very much for coming today.


V. Harrison: Thanks so much for your time.


J. Les (Chair): And our next presenters are the Canadian Federation of Students, B.C. office: Shamus Reid.


S. Reid: Thank you. I hope most of my work was done for me just in the last 15 minutes.


It's nice to see some new faces around the table. My name is Shamus Reid. I'm the chairperson of the
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Canadian Federation of Students, British Columbia. And the CFS-BC, as you heard from the last presenters, is British Columbia's provincial student organization, representing 18 students' unions, with a collective membership of 150,000 university and college students studying at all levels of post-secondary education in this province. 


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Our mandate is to advocate for a high-quality, publicly funded and accessible post-secondary education system in British Columbia. In recent years, as students' share of the cost of post-secondary education in B.C. has increased and public funding for student financial aid has been reduced, our members have prioritized seeking government measures to reduce student debt.


Our presentation today focuses on the four key priorities that you heard from the last presentation for the government's three-year plan that have been determined by our members this year. Just to reiterate, these priorities are: to see the B.C. government commit to progressively reducing tuition fees to 2001 levels, restoring operating funding to universities and colleges to 2001 levels, establishing an upfront and need-based provincial student grants program and eliminating interest on student loans.


To support our recommendations, you'll see that we've provided a handout to the committee with data we feel is important to highlight. The CFS-BC will be providing the committee with additional information in our written submission, but I think the data before you pretty well encapsulates the current position of B.C.'s university and college system. I'd like to go through that now for this presentation.


As you can see from the first graph there — on slide 1 with the three graphs — B.C.'s university tuition fees have increased from an average of $2,527 in 2001-2002 to an average of $5,040 per year last year. In just two years B.C.'s tuition fees went from 30 percent below the national average to surpassing the national average, and now they stand at 7 percent above that average.


In the last eight years B.C. students have experienced the steepest tuition fee increases of any province. The Statistics Canada youth in transition survey, released in 2002 when Canada's average tuition fees were 32 percent below where they are today, found that 70 percent of high school students who didn't pursue post-secondary education after graduation cited financial reasons as their reason for not doing so.


Four years after that study was released, B.C.'s average student debt was calculated at about $27,000 upon graduation from a four-year program — the highest student debt in Canada outside of the Maritimes. That number only accounts for public student loans, and Statistics Canada has actually estimated that when accounting for private debt, average student debt upon graduation in Canada is likely closer to about $32,000.


It's clear, then, that there are two detrimental effects to B.C.'s tuition fee increases:


(1) Fees are a barrier to participation for families from low-income backgrounds at a time when most new jobs require some form of post-secondary education — so at a time when we need more students in the system and more British Columbians accessing post-secondary education.


(2) For many of those who are still able to access education, fees have caused student debt to skyrocket to higher than ever before, and I want to emphasize that — that at no time has student debt been as high as it is today, at a time when consumer debt has been identified as a major economic problem.


Tuition fees are a flat tax for a public service that is key to B.C.'s economic growth and the success of our citizenry. They are a flat tax that disproportionately impacts low- and middle-income families. The B.C. government must begin to reduce this tax so that low- and middle-income families have more equal access to what is a core public service.


Reducing tuition fees, though, is just one key component of a larger strategy to ensure broad access to post-secondary education in British Columbia. Studies show that the combination of reducing tuition fees and investing in upfront grants significantly enhances access to post-secondary education.


This is why I'd like to turn to the second graph there, the bar graph, and call your attention to that — and call your attention, really, to a particular contradiction that B.C. students have experienced in terms of the application of provincial government policy.


In discussing tuition fees, this government has routinely cited B.C.'s status as being roughly in the middle of the pack amongst provinces as the appropriate place to be. So as you can see from the first graph, even though we're 7 percent above the national average, we're roughly in the middle in terms of the tuition fee rates across the country.


Yet, as you can see when it comes to the provision of non-repayable financial aid, not only is B.C. not in the middle of the pack; it is dead last amongst the provinces — 60 percent below the national average.


Moreover, the provinces with comparable tuition fees to our own — Alberta, Saskatchewan and Ontario — all provide financial aid of which approximately one-third is non-repayable. You can see that in the graph there. As you can see, B.C. provides less than 12 percent.


Quebec, with the lowest tuition fees in the country, provides over 40 percent of its financial aid in non-repayable form; Newfoundland and Labrador, with the second-lowest tuition fees, provides 25 percent; and Manitoba, with the third-lowest tuition fees in the country, provides nearly 50 percent as non-repayable.


In short, there really is an extreme disconnect in provincial government policy on tuition fees and on finan-
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cial aid — a disconnect that, as you've heard, has caused student debt and, really, student poverty on a number of campuses to skyrocket.


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The last thing that I want to emphasize on this second graph is that the graph illustrates where we stood before this summer's $17 million cut to the budget of StudentAid B.C.


The discussion of financial aid, though, isn't complete with just an acknowledgment of the need to increase non-repayable aid in this province. It's also important to look at how non-repayable aid is provided.


In B.C. the loan reduction program accounts for the bulk of non-repayable financial aid. It's a flawed program, though, because it does not provide the assistance upfront. Instead, a student's loan is reduced at year-end, meaning that she or he lacks the ability to budget for the year knowing all available income sources, which is particularly important for those students who are forced to borrow significantly.


In contrast, the federal government, after hearing from members of the Canadian Federation of Students across Canada, recently established Canada's first national system of upfront student grants, which took effect this fall. We think that the B.C. government has a real opportunity here to maximize student aid in British Columbia by establishing its own grants program to complement the new federal program.


And continuing on the subject of financial aid, I'd like to move to the third graph in the handout on interest here. As you can see, when interest is taken into account, those who are forced to borrow to finance their education actually end up paying more than those who can afford to pay upfront.


To us, I think that's fundamentally unfair. Moreover, it would not take substantial funding to rectify this unfairness. Previous government estimates have put annual revenue from interest on student loans at about $30 million to $40 million. The government should immediately begin providing interest-free loans to student borrowers as the Newfoundland and Labrador government recently has.


I'd like to turn the page to the fourth graph here, on provincial funding. The fourth graph illustrates where B.C. stands in terms of real per-student funding relative to the year 2001. Inflation and enrolment increases have caused real per-student funding to decline by 15 percent over the last eight years. Each year that that funding remains below that inflationary line creates a greater funding gap, and you can see that funding gap in the graph.


The B.C. government's 2008 budget figures illustrating this budget gap show a projected collective college deficit of $30 million by 2010-11. That's $30 million in cuts that the college system is going to have to make. As a result of the funding gap, many institutions are facing difficult choices and making difficult decisions.


You've heard some of those choices from the previous presenters in terms of the greater Victoria area. At SFU a lack of tutorials and instructors has reduced the quality of education and caused many students to have to prolong their degrees. Needed faculty and staff hirings at UBC Okanagan were cut back 58 percent and 61 percent, respectively, in 2008 as a result of budget cuts in that year. Numerous courses and programs have been cut back or eliminated at the College of New Caledonia, and the list goes on at each institution.


The cutbacks at universities and colleges should also be put in the context of B.C.'s record-high tuition fees. According to the most recent figures from the Canadian Association of University Teachers, tuition fees made up 39.7 percent of the funding for B.C.'s universities as of the year 2007. That's the third-highest share in Canada and an increase of about 50 percent since 1997. Students who are experiencing these cutbacks at their institution are truly paying more and getting less.


And finally, still on the question of funding, I'd like to turn to the last graph, on tax rates. This is a snapshot of projected B.C. government revenue in 2011-12. The government's recent budget update pegged this year's revenues and resulting deficit as the worst in the next three years, improving over the subsequent two years. Yet despite the projected improvement in our economic outlook, revenue from corporate income tax as a result of successive corporate income tax cuts would continue to decline in each of those three years, to be outpaced by the post-secondary education tax in 2011-12.


The mere fact that those two numbers are even close should be cause for concern. The corporate sector benefits substantially from the post-secondary education system. In fact, a very recent study found the annual economic impact of the University of British Columbia to be $10 billion — a 10-to-1 return on public investment. A similar study of the College of the North Atlantic by the government of Newfoundland and Labrador found an estimated 11.5-to-1 return on the investment of provincial funding at that institution.


Yet despite the massive economic returns, families, regardless of their income, are being forced to pay ever-increasing tuition fees to make up for government revenues lost as a result of tax cuts.


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The corporate sector will always benefit from a well-funded public post-secondary education system. An accessible post-secondary education system with lower tuition fees, with student grants, with non-predatory student loans and with more robust public funding will increase incomes, diversify the economy and continue to benefit the corporate sector even further.


In exchange, the corporate sector should pay its share into the education system through fair taxes. Of course, before someone raises the personal benefit of
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post-secondary education, let me also emphasize that students recognize that benefit as well.


We believe it is not a question of whether students pay for their education, but a question of when students pay for their education. Those with higher incomes as a result of post-secondary education should pay their share in progressive income taxes when they can afford to.


Such a system would ensure that those who start out from a low-income background are not shut out of the post-secondary education system but rather have the opportunity to reach their full potential and then contribute back to British Columbia to their full potential. That is how, I think, many of you — perhaps even most of you — around this table got to where you are.


Our hope is that you would recognize the tremendous sacrifice in terms of financial hardship and personal debt that students of this generation are forced to take on, and start to give back to today's students the same level of opportunity that many of you around this table had.


Thank you very much for your time, and I do look forward to your questions.


M. Mungall: Thanks, Shamus. I started to think about my own student debt there for a second. Going to student debt.... I wanted to talk a little bit about something that you highlighted about how consumer debt is a very big concern for the economy. Has there ever been an analysis of what student debt...?


I am immediately picturing professionals and tradespeople graduating and then having immediately less disposable income that goes into other things in our communities, like the PACs — parent advisory councils — like charities, just being a consumer and keeping our small businesses alive. There is so much that is lost when someone is paying an exorbitant amount of debt load — in my immediate thinking. So I'm wondering if there's been any analysis around that.


S. Reid: Yeah, absolutely. There are plenty of studies, and we'll certainly cite them in our broader budget recommendations when we do our submission. One thing that I do want to highlight is that consumer debt is now no longer an economic driver. It has actually become a drag on the economy. Economists have been noting that as a result of the world recession.


When we look at consumer debt, one of the major drivers of that is that we in British Columbia are now graduating 22-year-olds who have already a $30,000 debt on average. Many have even more significant debt than that. That's just starting out in the world — not a lot of job experience, just the education at this point.


Then there are all sorts of other things that result in taking on debt. Some studies where student debt actually increased significantly before it did in B.C. and across Canada have been done in New Zealand, which in the '90s saw a substantial increase in student debt.


They actually have been able to relate the student debt that young graduates are taking on there with declining birth rates, with inability to get into the housing market and take on mortgages, with generally not starting families, not doing all those things that help contribute to the economy and contribute to our growth. That is a real concern, in addition to some of the personal impacts that consumer debt has in terms of people's mental health and so on.


I think it should be of major concern that we recognize that debt is a problem. If we're forcing our young people to start out with such significant levels of student debt — that they're only going to have to pile onto and take on more credit card debt as they go along — well, that's going to be a real problem for our province.


N. Letnick: So many questions, so little time. Just one.... Good presentation.


You said you're objecting to the fact that we're "paying more and getting less." Maybe in your written submission you would comment on the expansions to the university and college systems over the last eight years. You would talk about not only the physical expansions but the new universities. You might also want to talk about doubling the amount of med school spaces and nursing spaces.


I would like you to think about looking at that statement about getting less. We might be paying more, but maybe you were getting a little more as well.


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S. Reid: There's no denying that there have been expansions. We have never denied that there have been expansions, but to deny that there have been cutbacks is another thing altogether. The fact is that many programs have been cut back. For those students who have been impacted by those cutbacks, they are now paying 40 percent of the cost of their education, up 50 percent from 1997, and yet are experiencing fewer tutorials, are experiencing larger class sizes, perhaps are experiencing classes being cut or particular programs being cut.


I don't think that it is all rosy across the entire system. We do need to recognize that. We need to recognize as well — and I think Veronica pointed this out very well in the previous presentation — that the fact is that for those who are having to carry that student debt and who are having to work full-time in addition to taking courses, that is a decline in quality for those students. The fact is you can't focus on your studies like those who can afford to pay upfront.


I think we need to be thinking about investing in our post-secondary education system so that everybody benefits and then can give back to the province over the course of their lifetime.

[ Page 124 ]

J. Les (Chair): Thank you, Shamus, for your presentation today.


With the committee's indulgence, we have a couple of minutes left. I think we have at least one presenter here. I believe the name is Oriano Belusic. I think we have time to listen to at least that presentation.


The microphone is on. Whenever you're ready, we are.


O. Belusic: Thank you very much for the opportunity to address the government budget committee. I'd like to bring attention to a serious issue facing working-age blind folks in British Columbia. We have some 3,000 to 4,000 working-age blind in B.C. who are well-educated — many with post-secondary degrees from universities, colleges, etc. — who experience an 80 percent unemployment rate.


It's a horrific figure. These people are not leading and participating in the community, social and economic life that most other Canadians take for granted and are participating in. Now, this is mostly due to lack of opportunity, but more importantly and significantly, lack of intensive training in basic blindness skills.


There are, at current, no facilities in British Columbia that offer intensive basic training for a blind individual. These are things like Braille literacy, things like cane mobility — basic life skills and that sort of thing.


Now, rehabilitation does exist through the public funds for persons with mental and physical disabilities, but not so for the blind. We're basically delegated to the charity sector for the most part.


There are solutions to this problem. There are three world-renowned centres in the U.S. — in Colorado, Minnesota and one in Louisiana — that offer intensive basic training to blind folks. Actually, one of our members has just received a grant from the National Federation of the Blind in the U.S. to attend one of these and hopefully bring some of that know-how back here to Canada to share with us.


We have three other people that have recently written requests expressing an interest to attend one of these facilities. We're asking the government to somehow find under $200,000 to help finance these people to attend these life-changing centres, really.


Just to contrast the 80-percent-plus unemployment rate that blind people experience up here, folks that attend these intensive training centres in the U.S. — who come back full of confidence in themselves, with good travel skills — have a 90 percent employment rate. It's a huge, demonstrated improvement.


As a result, our peers across the border do much better than blind folks up here in Canada. I think that's a shame and kind of sad, because I think we have the infrastructure and the will of the people to do a lot better.


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Just in closing, we're asking to start addressing this problem — under a couple of hundred thousand dollars to send three to four people down and hopefully start rectifying this problem. Thank you very much, and I'll take any questions if you have any.


J. Les (Chair): Thank you, Oriano.


Bruce, did you have a question?


B. Ralston: Yes.


Thanks very much for bringing this to the attention of the committee. It's personally something that I was not aware of. You touched on it a bit — about what you describe as essential blindness skills. In this course that you speak of, the nine months of intensive training, what sorts of things would the student there learn over that nine months — just to give us a better idea of what's involved?


O. Belusic: Sure. As I said, our post-secondary institutions do a great job about education here, but what these folks learn are blindness skills, such as how to do things in an alternative way when you're a blind person, everything from how you cook for yourself, how you function with a talking computer, how to use a screen-access software package so you can be productive with Microsoft Word and Excel and use the Internet — tools that are common to all of you.


It teaches people, actually most importantly, very good travel skills — discovery method travel skills — so that, let's say, if you're invited to go to a meeting somewhere, a person need not be scared to go and try to attend and be there, because you can't find a job if you can't get from point A to point B. So the travel skills are absolutely crucial for these people.


There are other things to boost confidence — everything from rock climbing that they participate in to sailing, boating. There are physical activities and, again, Braille reading. I did mention that, but a lot of people here have very poor literacy or Braille reading skills. Unfortunately, you need to know Braille if you're going to be successful at any career or employment opportunity. Hopefully, that helps.


B. Ralston: Thanks very much. That helps.


J. Les (Chair): Thank you very much. We don't have any more time, but as Bruce mentioned, we're pleased that you were able to make it this morning and that we had a little time to hear from you.


Now I'm going to beg the further indulgence of the committee. I understand we have one more presenter. I think it'd be almost unfair if she were sent away after having been so patiently waiting this morning. She is Nicole Strong, with the early intensive behaviour intervention autism program.


N. Strong: Hi. Thank you so much. I know you guys are probably really hungry, so I appreciate it.

[ Page 125 ]

Just to give you a tiny background, EIBI stands for early intensive behaviour intervention. It houses the ABA program, which is 20 hours of intervention for autistic children. Autism affects one in 100 children, as a new study revealed this week. It is the fastest-growing developmental disability, and proper therapy for these children is essential.


EIBI at QA was one of five centres that housed 20-hour-a-week therapies serving 70 children, with hundreds more on the wait-list, and now they have been cut. This means that all parents will have no choice but to access private therapy, which only gives our children seven hours of therapy at inflated rates, and these agencies are not monitored by the government for cost and quality.


Recent news has revealed that the Premier has allocated $20 million of public funds to a new building that will house an autism research centre. This comes at the expense of five already established and renowned EIBI centres that serve a large regional area. Now, $20 million is equivalent to roughly half of the entire autism budget.


So I'd like you to consider the following things. How is it decided that this new centre is necessary when five centres of excellence in autism treatment already exist? Is this not a waste of funds to reinvent a program that already exists and has helped over 600 children? If there is $20 million to spend on a building, why are EIBI programs losing government funding with devastating consequences for our children? Why is QA's EIBI being shut down January 31, when the budget year ends March 2010? Where are these funds going, exactly?


Studies show that EIBI programs for children with ASD will save $2 million per individual in future health care costs. That's a total of $2 billion in savings, and that's a 50-to-1 return, which I think is an amazing investment. It means that my son and countless others can be functional members of society.


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I would ask the budget committee to consider these points. Please don't cut out our children's lifeline to the outside world. We are having a rally today at 12:30 to raise public awareness on this issue, so I will be running.


Thank you so much for giving me a short amount to time to talk.


J. Les (Chair): Thank you very much.


With that, the meeting for today is concluded. We will reconvene on Friday morning at nine o'clock. Thank you all very much. Have a nice lunch.


The committee adjourned at 12:06 p.m.

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