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 14, 2009

4:00 p.m.

Skylight Ballroom, Ramada Hotel

444 George Street, Prince George, 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 3:57 p.m.

2. Opening statements by John Les, MLA, Chair

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

4. The Committee adjourned at 7:10 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 14, 2009

Issue No. 7

ISSN 1499-4178

[ Page 183 ]

WEDNESDAY, OCTOBER 14, 2009

The committee met at 3:57 p.m.

[J. Les in the chair.]

J. Les (Chair): I wish everyone a very fine afternoon. I'm John Les, the MLA for Chilliwack and Chair of this standing committee. I'd like to welcome everyone in the audience and thank everyone who will be presenting this afternoon for their participation in this important process.

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

Our committee 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 — in other words, the middle of next month. This year we will hold ten public hearings in different parts of the province. These meetings have been scheduled in conjunction with the ongoing session of the Legislature in Victoria.

Our first hearings were held in Vancouver and Victoria. While in the provincial capital, we also held video conferencing sessions to hear from residents of Courtenay, Cranbrook and Dawson Creek.

In addition to our hearings this morning in Smithers and this afternoon here in Prince George, we'll be travelling, as well, this week to Kamloops, Kelowna and Surrey. We will then have one further session in Victoria next week, video conferencing with three other communities around the province.

Then we will begin drafting our report which, as I said earlier, has to be complete by no later than November 15.

If people have not yet reviewed the Budget 2010 consultation paper, there are copies available here. They are on the information and registration desk at the back of the room.

In addition to the public hearings that this committee is holding, there are a variety of other ways that British Columbians can share their views and ideas with us. We accept written submissions either by letter or e-mail, and for the first time, we're also inviting video or audio files to be sent, which will be fully transcribed by Hansard, along with everyone else's presentations.

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 the committee receives — however it is received, whether it's in on-line form or in writing or via audio or video clip — will be given the same full consideration as any oral presentations that are made here today. The deadline for receiving all presentations is Friday, October 23.

Today we're going to hear from a number of presenters, some of whom are already here. They may each speak for ten minutes, with up to five additional minutes allocated for questions from members of the committee. If time permits, we will also have an open-mike session at the end of the hearing, with five minutes for each presenter.

[1600]

I will now call for the members of the committee to introduce themselves, starting with Bruce.

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

M. Mungall: Michelle Mungall, Nelson-Creston.

B. Routley: Bill Routley, Cowichan Valley.

D. Donaldson (Deputy Chair): Doug Donaldson, MLA for Stikine, to the west of here, and Deputy Chair of the committee.

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

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

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

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

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

J. Les (Chair): And to my immediate left is our Committee Clerk, Kate Ryan-Lloyd. At the table at the back looking after the registration desk is Stephanie Hansen. Providing the services of Hansard to our committee are Michael Baer and Gail Swetlow.

With those formalities out of the way, our first delegation is here. They are with the Prince George Hospice Society — Donalda Carson and Karen Beeson.

Presentations

D. Carson: Thank you for this opportunity.

Hospice palliative care has come a long way in Canada, and British Columbia, since 1987. That's when the Prince George Hospice Society was started. Much has happened in regard to freestanding hospices since 1995, when Rotary Hospice House opened in Prince George.

Around the province there have been numerous developments of hospice palliative care programs and sites.
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Most communities have hospice societies, which provide an enormous amount of support to people at the end of life in hospitals, in long-term care facilities, in people's homes. Most of this support is by volunteers. I would gather that most of you may be familiar with some hospice palliative care services from these societies in the areas you represent.

Some health authorities have developed palliative care units in hospitals. Other areas have developed freestanding hospice houses — there are a few — and some of those have been sustainably funded. Others — not so.

Not all health authorities are financially supportive of community hospice houses. However, the Vernon Hospice House and the Kamloops hospice house each receive $1 million annually in operations from Interior Health.

Per-diem rates have been a factor in hospice houses. We currently charge $30.90 per day to each of our guests, and we understand that this is the going rate in the province. It is actually the lowest rate that's used in long-term care when a person moves into a long-term care facility.

Primary care is a term now becoming popular. Although hospice, I believe, is a perfect example of primary care, we are not included in that factor.

We receive 51 percent of operating funds annually from Northern Health. We were required to expand to ten beds by Northern Health. When we will be operating our new ten-bed home, their increased amount will then only represent 47 percent of our operating budget. This means that we will have to raise $700,000 in our community for operations this year.

Our community is becoming fatigued with fundraising events, campaigns and donor requests. We cannot compete in the same fundraising league as the United Way, the cancer clinic and the three foundations in Prince George. It takes excessive staff, which we do not have, time and energy to raise funds of this size.

Our support from people in the community is enormous, financially as well as spiritually. People are always asking why we are not funded sufficiently by government. We have answers for their needs, but we don't have an answer for this question.

We have met with our MLAs often. John Rustad is no stranger to us. We have spoken and written to past Ministers of Health. The Ministry of Health refers us back to the health authority, which tells us they are over budget and cannot increase our funding. It's a bit of a ping-pong situation that we've been in.

[1605]

Gaming funds are in jeopardy. We stand to lose a significant amount of operating money this year. Through the media, we are becoming aware of the excessive use of health care dollars. We see reports out all the time about that type of thing. This leads us to question if we are receiving appropriate value for our health care funding.

The Prince George Hospice Society appeals to you, the Finance Committee, to respect end-of-life care as an important specialized component of our health care system that provides care at a much lesser cost than an acute care bed.

As a matter of fact, just prior to coming — this is not in your report; I just took a look at it — I took a period of time in the last year in our hospice house. We had 1,412 bed days in that period of time. If those people had been in the hospital, charging out at the cost of a hospital bed — I'm saying $1,500, which I think is not a high value — it would have cost $2.118 million for 1,412 bed days. At Rotary Hospice House, at our cost of $540 a day, the cost would have been $762,480 — a difference of $1.355 million. That's a lot of money.

Getting people out of hospital into the right care at the right time is the most effective way to shorten wait-lists for acute care beds. We ought to be recognized and funded accordingly, as we have identified our need as extremely urgent, in order for us to continue to provide this level of care.

We are also aware that there is a petition in the community right now which came out of our letting members of our society and volunteers know about this committee and suggesting that people provide you with their opinion on how B.C. government should pen the budget, not just saying to them: "We want you to speak for hospice." We are aware that there is a petition going on our behalf by people who believe that that will help us.

Our official position is the presentation that we are doing today. Dr. David Kuhl, palliative care physician in Vancouver — you may have heard of him — in his book, What Dying People Want, states: "Facing death, and the fear and anxiety that arises from it, is part of the human experience." Though much has been done to address the physical pain suffered by those with a terminal illness, western medicine has been slow to understand and alleviate the psychological and spiritual distress that comes with the knowledge of death. He can question medicine better than I.

I leave you with this question: what value has respect, comfort and compassion in life's final journey? This is part of what we provide.

J. Les (Chair): Thank you very much. We have some questions, first of all from Norm.

N. Letnick: Donalda, thank you very much for the presentation. It is great to be here in your community. I am a supporter of hospice as well. I had a friend who passed away, and I was there to help transition him, so I understand clearly what you do, and my hat goes off to you and your whole team of volunteers.

My question has to do with the statement that you made saying that you've become aware of excessive use of health care dollars in other areas. So if you were going to recommend to us to put in our report where we would move money from in the health care system to hospice,
[ Page 185 ]
where would that be from? Where is it excessive — that we can take money away and put it to hospice?

D. Carson: When I talk about excess, I'm meaning the reports. The most recent report was about e-health. It was a media report about the spending that has gone on and some of the potential liability situations that were arising in that area. It's not something that I have a firsthand knowledge about. I'm just speaking to what we see being reported through the media.

N. Letnick: If you do come up with any ideas for that, please let the committee know. That would be great.

D. Carson: Okay. I'll think about that.

J. Thornthwaite: Thank you very much for your presentation. I, too, have seen the benefits of hospice care with my dad a few years ago in Lions Gate Hospital in North Vancouver, so I appreciate what you're saying.

[1610]

My question is twofold. In your comment about the primary care you're saying: "Although hospice is a perfect example of the primary care, we are not included." Perhaps you could explain a little bit more about that. Also, what funding, if any, do you get from the provincial government?

D. Carson: The funding we get from the provincial government comes through Northern Health. Right now it is $675,000. The percentage of our budget is 51 or 52 percent. Our costs to run the Rotary Hospice House at this point are $1.1 million. You can see the amount of money, then, that we have to raise.

We do get about $175,000 — or we did last year — from Gaming. We get about $75,000 annually. Last year we got an extra $100,000 for our capital campaign. We don't believe that that money is secure for this year at this point.

The Northern Health will be increasing their amount to us by $115,000 over the $675,000. That means that we will then have to raise that $700,000, because when we go to ten beds, we are increasing our budget to $1.4 million. We are going from two staff members on a shift to three. We are not doubling our staff, but we are increasing from two to three. Right now we have an RN and a care aide on each shift, and our increase will be to add an LPN to that component.

J. Thornthwaite: Did you have a comment about the primary care question I had?

D. Carson: Oh, sorry. Yes. I don't know a lot about primary care, but I do know that there is a primary care program operating in Prince George, and I have made contact a few times with people who have a position in that program, asking about involvement with hospice. It just hasn't gone anywhere. I'm not sure what's happening — what they are building or what they're doing.

D. Donaldson (Deputy Chair): Thank you again for the presentation. My home is in Hazelton, and I am well aware of the good hospice work that is done in that community as well.

I have two questions, and I'll just wrap them up into one. First of all, on the "gaming funds are in jeopardy, and we stand to lose a significant amount of operating money this year." You mentioned the $75,000. Have you not heard from the provincial government whether that is going to be forthcoming this year, in a letter or whatever?

D. Carson: No.

D. Donaldson (Deputy Chair): And how much would that be for next year as well? Do you know whether that gaming funding will be there for next year?

The second part of the question was: if you aren't able to raise the $700,000 that you referred to on the first page of the presentation, then what will that mean for the facility and the beds you are talking about?

D. Carson: I don't have an answer. All I can think is that we have to raise it. We've been having to raise money. I've been there 15 years, and we've been having to do that. We successfully did it every year except one, when we were $200,000 short. We went public with that information, and the community came to our aid. I don't think that that could be respected a second time, but I think I would be making presentations to whomever in government would listen.

If we thought that we weren't going to make it, we would be able to have some support from our financial institution. However, we've recently learned of a complication with that. Because we received $600,000 from B.C. Housing for our capital campaign, that then meant that our financial institution was not number one to be repaid. We had a line of credit of $500,000 with Integris Credit Union, and now it's only $75,000 because B.C. Housing has to take priority if we run into financial difficulties.

K. Beeson: I was just going to say that our cushion is gone. We don't even have that to fall back on now, so we're very concerned.

[1615]

D. Carson: We still have $300,000 to raise to meet our target for the ten-bed facility. We had to raise $2.2 million, and we raised $1.9 million. This afternoon, for two hours before coming here, we raised $850. We right now have a two-day fundraising from one to three and five to seven — open tours and open house. We've got pictures of all the furnishings and all the equipment that we purchased, and
[ Page 186 ]
we're asking people to make a donation of the dollar cost of these different things.

It's a bit of a quiet afternoon. We hope the evening sessions will be better.

D. Donaldson (Deputy Chair): And the gaming grant question I asked?

D. Carson: We received $100,000 last year from gaming, and we let them know that we'd be asking for that this year, towards the campaign. I did phone and inquire. When there was news in the media and there was an association meeting in the community here about gaming, I called and spoke to an appropriate person and asked if it would still be appropriate for us to apply for the $100,000, and I was told not to. Since then, I've decided to apply anyway, because it seems like things could change, and if we don't have our application in, we wouldn't be able to do it in the future.

We get $60,000 a year through bingo. At the community association level of non-profits and gaming there's a rumour that that may not be good this year — that we may not be able to continue to receive those funds.

We also apply and receive $15,000 a year for our rainbows program, which is a children's grief support program. We're hoping to get that, but the information we have, which is not adequate, is that it's all up for discussion. That would be $175,000 that we were expecting to have this year.

J. Les (Chair): Any further questions?

B. Ralston: Perhaps you can just clarify this for me. You're saying that Northern Health encouraged and asked you to expand to ten beds yet did not provide the additional increase in operating money to run an expanded facility. Is that what you're saying?

D. Carson: They gave an increase but not an adequate increase. We had to agree to it in order to get an agreement for service with them, even though we've been in business for 12 years.

J. Les (Chair): Okay. That is about a wrap in terms of time. I think I speak for all members of the committee where I'd like to say that I really appreciate the work that you do. So thank you, on behalf of all of us.

Next we will hear from, on behalf of the city of Prince George, Murry Krause.

M. Krause: Good afternoon. Just jump in?

J. Les (Chair): Ready whenever you are, Murry.

M. Krause: Just for reference, and you may already have that in the information you have. I'm the chair of the finance and audit committee for the city of Prince George, so I've been asked to do this presentation this afternoon.

I am going to read my presentation, if that's okay and it isn't too tedious for you. A lot of people have gone to a lot of effort to produce this, so I want to honour that.

Good afternoon, Mr. Les and committee members. On behalf of the citizens of Prince George, I would like to welcome you to our city and thank you for the opportunity to make this presentation to the Select Standing Committee on Finance and Government Services. I would like to compliment the province of British Columbia for its commitment to sound fiscal management and the continuation of its triple-A credit rating.

The city of Prince George greatly appreciates B.C.'s investment in public infrastructure projects, which is expected to create jobs and increase confidence and stability. As we retool for recovery, the city of Prince George is especially thankful for the $7.5 million provincial and $7.5 million federal contributions to the Boundary Road connector projects. We remain hopeful that we will receive positive announcements on our remaining three funding priorities: the Fourth Avenue streetscape improvement, the storm sewer main rehabilitation and the advanced fibre optic network projects.

We're also very appreciative of the province's commitment to locating a wood innovation and design centre in Prince George. We look forward to seeing this project move forward and being a key component in our efforts to revitalize our downtown.

[1620]

Mr. Chair, this afternoon I would like to present comments on four issues related to infrastructure funding programs for the standing committee's consideration. Joint federal-provincial-local government infrastructure programs have been very beneficial to municipal governments, which on their own have insufficient resources to fund required investment and reinvestment.

These infrastructure programs are most beneficial when:

(1) The program criteria address municipal priorities and are flexible. Recent programs' criteria have favoured projects that result in new infrastructure or whose expenditures are incremental to current planned expenditures. This can result in municipalities increasing their assets and diverting limited resources from needed asset reinvestment.

The Building Canada fund communities component provides funding for municipal facilities such as sports, culture or tourism. Municipalities have other facilities for which they need infrastructure funding — example, with administrative buildings. Providing infrastructure funding for these facilities would also contribute to strong and prosperous communities.

Our recommendation is to contribute to municipal asset investment and reinvestment by tailoring investment program criteria to local government priorities.
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(2) The approval processes and timelines are reasonable. Local governments are often given very short timelines to apply for infrastructure programs. The added step of environmental review related to federal portions of infrastructure funds can be problematic.

Recent good examples of environmental review timelines have occurred for funding which has been delivered through Transport Canada and locally through the Northern Development Initiative Trust. Our recommendation is to encourage the federal government to review the Transport Canada–NDI Trust–managed environmental review process and to consider requiring other federal ministries to adopt similar processes.

(3) The project completion deadlines are reasonable. Recent infrastructure programs have required that funded projects be constructed with short time frames. Major facility projects may take up to two years to design and up to two years to construct. Given these design-build time frames, quick project completion deadlines can prevent municipalities from accessing much-needed funding.

Our recommendation is to develop and implement long-term programs for municipal facility development.

(4) The new programs are compatible with previous programs. Although their funding is appreciated, new infrastructure programs often set new directions and are short-lived. This creates a moving target for municipal infrastructure planning that is difficult to manage.

It creates uncertainty regarding the funding of core functions and increases administrative effort and cost. Good examples of continuity in funding are the federal gas tax and the provincial infrastructure study grant programs.

Our recommendation is to continue successful funding programs, and when new programs are created, construct them to be compatible with previous programs.

Now for my closing remarks. Last year we raised concern regarding the impact of carbon tax on local governments. We want to thank the province for addressing those concerns with a rebate program that drives the objective of reducing greenhouse gas emissions.

We understand that there's a need to collaborate as levels of government to find ways to reach our climate change goals. This collaborative approach may save money in the long run.

We appreciate the province's effort to have all ministries carbon-neutral by next year. Combined with the city of Prince George's commitment to being carbon-neutral by 2012, we may be able to explore efforts to achieve these goals through such initiatives as our proposed district energy system, which we continue to review for the downtown. This system would allow us to move away from our reliance on fossil fuels, and we would be pleased to work with the various ministries in Prince George to take advantage of this shift towards green energy.

This concludes my presentation. The city of Prince George thanks you for the opportunity to provide our comments and looks forward to continuing to work with the province to address these issues.

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

J. Rustad: Thank you, Murry, for the presentation.

With regards to recommendation No. 1: "Contribute to municipal assets investment and reinvestment by tailoring infrastructure programs criteria to local government priorities." I know that in the case of Prince George, you obviously have a lot of internal crews in place that do a lot of the maintenance. Are you talking about maintenance of facilities?

If that is the case, the point of the criteria that we have with a lot of the projects and dollars is that it goes out to competitive bid, as opposed to being sole-sourced in-house. I'm just wondering how that would work for a municipality like Prince George.

[1625]

M. Krause: Well, I guess, of course, the gist of that recommendation — hopefully, I've grasped your question — is really to make sure that…. As municipal governors, I think we very often know best what is needed for our communities. I guess it's just making sure that when consideration is given to new funding programs and we do submit proposals, we do see those as our priorities.

We're certainly trying to follow through with the recommendation of our MLAs that we come with very focused requests rather than a basket of requests. So in the city of Prince George we've tried to stay very focused on what we think our needs are and try to cover a variety of needs within the community.

J. Rustad: If I may just follow up on that. What I was driving at, though, is that you may have contracts with your various employees that have a scope of practice in terms of what work can be done. If there was a program that was designed to be able to support those kinds of projects and if there was a requirement that it goes out to contract, how would you be able to manage that particular conflict between, say, a union contract versus the need to be able to go out to competitive bid?

M. Krause: You know that we have contracts with our employees, and I think that we want to make sure we have a stable workforce. That's always the commitment of local government — making sure that we have a stable workforce that's in place for when we need it.

Discussions about finding others to do that work — I think that's a grander discussion, not that we're not up for having it. I think it would mean, though, that we would have to have that discussion with our city manager and the rest of council.

J. Les (Chair): Anybody else have questions?
[ Page 188 ]

N. Letnick: Thank you again for the presentation. In your presentation you used the word "collaboration" or "collaborate." One of the themes we've been hearing through these sessions is that a lot of the school districts would like to have more resources. We've been hearing how some are trying to collaborate with other levels of government.

Are you doing that here? Are you working along with school districts or the health authorities, for example, to try to find those collaborations which will save the taxpayers some dollars?

M. Krause: We certainly are. We know that we can't do it alone. I think that we have really strong working relationships with the school board, and certainly with Northern Health as well. Again, we realize that it's a partnership and that that's where we're going to achieve the goals we need for the community.

N. Letnick: Do you have any specific examples that we can share, through our report, with the rest of province?

M. Krause: Well, we certainly have worked very closely with the school district on school district lands — working between our development office and with the school district on proposals they're making for the use of those lands. We feel that it's important to do that collaboration. We certainly have done that.

We are working very closely with Northern Health on some downtown health projects. It's critical that we would be looking, as has been seen in many municipalities, at what the municipality can offer as part of any project.

I think what's being seen in other communities is: can the municipality provide the land for significant projects? So if we're looking at health centres or housing or any other projects of that nature, it is that we could come to the table with a contribution to the cost of the projects as well.

D. Donaldson (Deputy Chair): Hi, Murry. Thanks for your presentation. I've got a specific question on it and then a question that's not covered in it.

On the approval processes and timelines point. There was a delay in getting some of the grant money out that led to the loss of this construction season, especially in our northern communities, where we have to get on things right away. I'm wondering if that impacted work that Prince George had slated for this past season.

The second question is unrelated to that. It's around duties and responsibilities that many cities are left with. It's especially to do with social service deliveries. I know you have great knowledge in that field, and I wanted to get some of your statements and comments on how recent cuts in that area have impacted what the city has been able to do.

M. Krause: Certainly, the delay created some angst, as you might imagine, and wondering if the projects were going to proceed. I think that when decisions are made in Victoria, the climate in the rest of the province does need to be taken into consideration. As was raised in my presentation, very often short timelines do create that angst and wondering if we're going to be able to complete the project on time, especially if we get late approvals.

Again, it's always collaborating, and it's always communicating so that the angst either doesn't exist and/or that there's some negotiation on completion dates. On that side, that would probably be the approach. It's always about communication. It's always about understanding what's going to happen next.

[1630]

In terms of social service, I think there's a changing expectation of communities and government. Certainly, in my time on council I've seen a change from where it was just seen as either a provincial or a federal responsibility. I think more and more communities are looking forward to, as I just said: is there a contribution they can make to any of these major projects?

We have seen the development of some services in Prince George. I guess, of course, we want to see that continue. In terms of shelter beds and supportive housing and some of those, we have made some progress. We just hope that continues.

J. Les (Chair): Thank you very much, Murry. We appreciate your presentation.

Next we will hear from Tim McEwan at Initiatives Prince George.

T. McEwan: Thank you very much, Mr. Chair. Committee members, I'll just provide a brief overview of my remarks. You'll have a full copy distributed to you.

Initiatives Prince George Development Corp. is pleased to provide a brief submission today to the Finance Committee in advance of the provincial budget next May 2. By way of background, Initiatives Prince George is the economic development authority for the city of Prince George and surrounding region.

Despite trying times, Prince George has been remarkably resilient in the face of the worst economic recession since 1981-82. It is true that our unemployment rate has doubled, from about 6 percent this time last year to 12 percent since our corporation appeared before this committee last year. However, this is a far cry from the recessions of about a decade ago, 1981-82, when our unemployment rate approached 20 percent.

A number of things have come together in Prince George over the last couple of decades to underpin and diversify our local economy. The advent of the University of Northern British Columbia is one. The agglomeration of the health care services into Prince George is another.
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Broadening our retail service hub to the point where we have most big-box stores here in Prince George is another.

The service and supply industries that have traditionally underpinned the forest sector have moved beyond that sector into mining, oil and gas and other businesses beyond our region. The addition of infrastructure to Prince George to build it as a multimodal hub is a recent addition. That's beginning to pay off dividends as well.

Still, despite a number of things that have happened over the last couple of decades, the job of diversifying our local economy is not done. In the forthcoming decade, a decade which we have called repeatedly the northern decade, we must continue to layer on hard and soft infrastructure that will at once diversify our economic base and unleash the staggering economic potential of northern British Columbia for the economic benefit of all British Columbians.

I want to walk through a few points in my presentation — a few policy, infrastructure and education initiatives and priorities. I want to begin with the harmonized sales tax.

Initiatives Prince George, the economic development authority for Prince George, in B.C.'s export heartland, 100 percent supports this initiative of the government of British Columbia. Since the announcement there's been considerable debate about the introduction of the HST. Much of it has been grounded in the political hay of the tax rather than the public policy merits of the measure. The HST is a competitive game-changer from the northern, export-oriented resource and manufacturing sector economy's perspective.

Moving to an HST will reduce the marginal effective tax rate on business investment from 26.4 percent to 15.7 percent once it is fully implemented, or a reduction overall of 41 percentage points. With the 15.7 percent rate, British Columbia will now be more competitive than Alberta on this important all-in measure of business tax inputs. B.C. will also lead the Canadian average, which stands at 16.1 percent; the United States average, which is 34.4 percent; and the OECD average of 21.9 percent.

There are many compelling reasons why the HST makes sense. I won't go through all of them here today. But to our organization, taking any steps which improve the competitive underpinnings of our export-oriented resource economy is sound governance. It's sound public policy, and it will make an on-the-ground difference in our resource-based export economy.

[1635]

The second point I wanted to key on here today is the environmental assessment process. Initiatives Prince George has heard from many resource development proponents that the current duplicate of federal and provincial environmental assessment processes serve to stymie much-needed investment and job creation in northern British Columbia.

The issue is that the federal process replicates, sometimes repeatedly, the top-notch provincial environmental assessment process. This adds uncertainty to the cost of land-based resource businesses, ultimately to the detriment of tax revenue and well-paid, family-supporting jobs for British Columbians.

We encourage the standing committee to recommend that provincial and federal authorities conclude an arrangement that would see an end to the duplication of federal and provincial environmental assessment processes.

I want to take a moment to talk about the Boundary Road connector project in my dual capacity as president and CEO of Initiatives Prince George Development Corp., and as chair of the air logistics park task force. Initiatives Prince George is very pleased with the recent announcement of the 6.6-kilometre Boundary Road arterial connector, which will join Highway 16 east with Highway 97 south through the new air logistics park lands to the west of the airport. We want to express our appreciation of the government of British Columbia for getting this project to yes.

Parenthetically, I'd like to note that a couple of weeks back we had a 20-member delegation from China, from all over China. They were involved in freight-forwarding logistics. There were air carriers. There were resource industry investors. All these interests found the multimodal offerings that we have here in Prince George quite compelling. Having this kind of infrastructure in place will only serve to make the offering even more compelling to investment and job creation as we move forward.

I'd like to touch on the Cariboo connector four-laning project. Over the past few years the government of British Columbia has committed over $200 million to four-laning Highway 97, which runs from Prince George south to Cache Creek. This is a very important initiative to enhance the movement of goods, people and services, and to improve the overall competitiveness and connectivity of Prince George and northern British Columbia.

Initiatives Prince George is very pleased with the recent progress on the Cariboo connector four-laning initiative. I drove it a few weeks back and was very pleased to see about ten to 12 projects underway. We would encourage the standing committee to recommend continued acceleration of the Cariboo connector four-laning program and to establish a firm timeline for completion of the entire 463-kilometre length by 2015 or 2020.

I'd like to touch on the Pine Pass. The Pine Pass runs from here north to Dawson Creek. This is a very important stretch of road for our diversification efforts moving forward. Through the Pine Pass there are a number of hairpin turns and low rail overheads, which stymie the ability of mining service and supply industries to move their equipment and machinery up to the Peace to take advantage of some of the service and supply opportunities that the gas fields provide.
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A recent study by the Northern Development Initiatives Trust has identified that with only a 0.7 percent capture of the business that is currently going to Alberta, we can pay for those improvements that are needed. They are in the order of $130 million. Our diversification efforts here in Prince George are highly dependent upon reaching into the Peace to capture some of that gas activity, moving forward.

Broadband connectivity is another point I want to briefly touch upon. There are many areas in northern British Columbia where we still don't have cell phone coverage, despite government efforts to close the digital divide. There are also places where broadband coverage is not existent.

The other issue that we have in terms of connectivity is fibre redundancy. We have a line that runs south from here to Vancouver. We could certainly benefit in Prince George, as an emerging hub, from a redundant fibre line that would run from here through Peace River and over to Edmonton, Alberta, so that if the main line is severed, there's backup.

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This is an opportunity that will allow us, if we have that redundancy in place, to attract many high-wage, high-tech ventures, particularly data centres and the like. We'd encourage the standing committee to have a serious look at making a recommendation for fibre redundancy.

Lastly, I want to touch on engineering in and for northern British Columbia. Modelled on the successful northern medical program, efforts are underway to secure engineering, in both civil and mechanical engineering, at the University of Northern British Columbia. I would encourage the Standing Committee on Finance and Government Services to make engineering in and for northern British Columbia a top priority in its recommendations for the forthcoming provincial budget.

When we look at the success of the northern medical program, it's quite clear that if we train in the north, we retain in the north. Moving forward, the labour market complexion of northern British Columbia is going to necessitate everything we can do to train highly skilled professionals here in the north.

I want to thank the standing committee for their time today. I'll leave it at that, and I'll open myself up to any questions that you may have on the brief presentation we've had today.

J. Les (Chair): Thank you, Tim. The first question is to Michelle.

M. Mungall: Thanks very much for your presentation today. Obviously, as the economic development corporation for the city of Prince George, I imagine that you also represent restaurants, small business, tourism. These are groups that have come to us and have spoken to MLAs all across the province in opposition to the HST, and I dare say that they're not making political hay. They have some legitimate concerns.

So acknowledging that those groups are a part of your economic development in this city, can you please comment on why that would be political hay — that they are opposed to the HST?

T. McEwan: My comments with respect to political hay were directly aimed at those who suggest or who otherwise don't support the proposition that in an export economy this measure will make a big difference. It will. It will also make a difference for restaurants and food service industries and the very industries that you mentioned. You simply can't go to a restaurant if you don't have a job.

In this part of the province the export-oriented economy has been under some considerable challenges. This tax measure is something that's long overdue. It's something which in my previous roles, whether I was with the Business Council of British Columbia or when I was executive director of the B.C. Progress Board, we did extensive analysis on.

This is a game-changer in terms of the productivity and competitiveness of our province. It takes us from being an also-ran to being a leader in terms of our overall competitiveness and attractiveness to businesses, based on reducing that marginal effective tax rate on business inputs by 41 percent.

J. Rustad: Thank you for your presentation, Tim. With regards to mining and the environmental assessment, I'm just wondering…. I agree. That's something that we would all love to see happen.

You're tasked with diversification. Obviously, mining has an enormous potential for our area. Within 250 to 300 kilometres from Prince George there are four mines that are currently in the environmental process, or close to being in the environmental process, that could create about 6,500 direct and indirect jobs throughout our area.

I'm just wondering. What other things do we need to be looking at to help encourage the mining industry to be able to get mines through and also to encourage additional exploration to find other potential deposits?

T. McEwan: I guess I'd touch on three things. The first is the environmental assessment process. The second is the Highway 37 power line. The federal government has come to the table with $130 million of the $404 million. Certainly, it's my hope that the province will be there to underwrite some of the additional costs on that. There is, prospectively, $15 billion worth of potential mine development along that corridor.

In terms of the things we can do to move that forward, environmental assessment harmonization is one. Power line in place is another. The third, I would say, in the
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wake of the reconciliation and recognition act, is that I think what we need to do in terms of first nations relations is to work very deliberately, one-on-one with first nations, as many companies are already doing when they go to earn their social licence, and deepen our relationships and redouble our efforts in that whole realm as well.

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That's another area where there's a sense of lingering uncertainty in some parts of the north. I think if we approach the issue, as many companies are now, as being a fundamental issue of earning social licence, that will make a difference.

J. Thornthwaite: Thank you very much for your presentation. Mine is also related to the environmental assessment process that you commented on. We did have a few other presenters that also indicated the need for preventing or alleviating duplication. Do you have a preference for either the federal or provincial guidelines that, if you had a choice, you would choose?

T. McEwan: My assessment of it over some years is that the provincial process is very good. There are specific timelines, and that's a real plus. There's been a pretty deliberate effort in British Columbia over a period of years — a couple of decades, really — to get the environmental assessment process right.

The federal process — the challenge is that you go into one consultation loop, and you come out of it only to find yourself back in it again and again and again.

Anything that brings the two processes together into really harmonizing to the provincial standard would be beneficial.

B. Ralston: Just on the same topic. Before the election there was an economic conference here, and the Premier had that as, I think, one of his two or three major points. The Tory government has been in power — granted, not a majority government — for a number of years, so obviously this has been on the agenda for a number of years.

Can you explain your sense of what impediments there are to accomplishing this, if this is one of the Premier's highest ostensible goals here in the north?

T. McEwan: Well, Mr. Ralston, you'd have to ask the Premier that, in terms of the day-to-day intergovernmental relations dynamics.

What I can speak to is what I'm hearing from on-the-ground development proponents. What they are saying is that it's not so much the provincial process that's the issue; it's the entrenched federal process where you…. In some senses, it's like Groundhog Day. You do it over and over and over again without a conclusion, a set conclusion that provides certainty to business. It's an intergovernmental relations challenge. The federal government has nine other provinces to deal with, and I'm sure that's part of the dynamic as well.

B. Routley: I'm sure you'll acknowledge that in order to pay for social programs like hospitals and education and other things, the money is going to have to come from somewhere, and you know that particularly anybody in the north knows that money has quit growing on trees. With the pine beetle problem, that's a serious reality here in the north.

I guess my question to you is that if we're going to pay for all of these programs…. By the way, the government — you may or may not have noticed — is busy cutting and slashing those programs. Really the only thing left is consumers, and that's what we're being told the reality is — the consumers.

So have you spent any time at all studying the impact on seniors on fixed income, people that are living, you know, in abject poverty? What are your views on how they're going to deal with the HST?

T. McEwan: Thanks for your question. I've studied those matters over a considerable number of years, in fact. I commend the government over the last number of years for taking a number of people off the tax rolls, to the point where, you know, a lot of people just simply aren't paying tax.

In answer to your question on public services and how you fund them, you fund them through a healthy and vibrant economy. What I've been retailing, since I've been in this position for 18 months and in my previous lives, is that the future of wealth creation in the province of British Columbia is in the northern two-thirds of the province.

So it means unleashing the full potential of the natural gas industry. It means getting on with doing the power line along Highway 37 and unleashing the mineral development potential that's there. There's some $15 billion worth of potential mineral development activity there. That cascades down through the economy to the service and supply sector in a very direct way.

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You mentioned the mountain pine beetle epidemic. Certainly, that's a major challenge that we're faced with here in northern British Columbia.

One of the things that is very exciting to our corporation…. We've formed something called the Northern Bioenergy Partnership, which is 20 small bioenergy firms with seven public agencies, to move forward the public policy, venture capital and research interests in seeing bioenergy developed. So at once we're trying to move forward, from a grass-roots point of view in economic development here, to develop a new value stream for the beleaguered forest industry at the same time as meeting clean, green objectives that we all, as a society, now have some consensus around.
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The other point I want to make here is that health care and costs have gone from…. You know, this is not a challenge of this decade; it's a challenge reaching back 25 years. Health care costs over the last decade — let's just take that — have gone from 34 percent of provincial expenditure to about 44 percent today.

That's the elephant in the room in terms of the challenge that public finance faces if we're going to meet the challenges that are presented by that and the challenges that are presented by an aging population. In two years' time there will be a demographic turnover where those entering the workforce will be outnumbered by those leaving, for the first time in history.

That's going to present some fairly significant challenges for your committee and others like it across the country. How do we address that? I would submit to you this notion that I've been talking about for the last couple of years: a northern decade of economic opportunity for British Columbians — unleashing the full potential of mining, unleashing the full potential of forestry, unleashing the full potential of the gas industry, realizing the tremendous opportunities that we have along the northern corridor for transportation and logistics. Connecting the Pearl River Delta to the Chicago heartland markets is another one.

We have to do these things in order to create and unleash the wealth of the northern part of British Columbia for the economic benefit — and this is very important — of all British Columbians, including seniors, including those who are consuming health care.

J. Les (Chair): And the final question is to Norm.

N. Letnick: Excellent presentation. Thank you. On the natural gas question, the dollar is almost at parity with the American dollar. We have OPEC, which is basically dumping gas because it's a cheap by-product for them. Demand is down, and we have coal-fired plants that are coming on. A lot of our revenues for the province come from natural gas, and we've seen that take a nosedive over the last few months, if not years. Is there any hope for the future?

T. McEwan: The story of the natural gas market is one of cyclicality. It comes up; it comes down. You all know better than I, in terms of public finance, that it has wreaked havoc with the bottom line over the last year.

I think gas prices will come back to maybe…. They won't come back to the $7-, $8- or $9-a-gigajoule level, but they'll certainly come back to the $5, $6 level at a certain point in time. When? I mean, forecasting is a mug's game.

But the important point here — and this is what we're focused on here in northern British Columbia, particularly with my agency — is complementary diversification. We need to focus on value streams that stabilize forestry, that move into the tremendous mine potential of the northwest and that unleash the potential.

I was down in the western U.S. last week and gave a talk about British Columbia's competitiveness and about the northern corridor. Well, other west coast ports are taking note of Prince Rupert and the potential that this corridor presents. We've got to leverage all those opportunities. When we look at British Columbia's export economy, it really is rooted in natural resources. So we have to focus on gas, mines and forestry and moving up the value chain within each one of those. I hope that answers your question.

J. Les (Chair): Thank you very much, Tim. We've run a little bit over time, but there were quite a few questions from committee members, so it's not a problem. Thank you very much for coming this afternoon.

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Our next presenter — from the district of Wells, Island Mountain Arts — is Judy Campbell.

J. Campbell: Thank you very much for the opportunity to speak with you this afternoon. I'm representing the district of Wells and Island Mountain Arts. In case you're from away, the district of Wells is 60 miles east of Quesnel on Highway 26 near Barkerville. It's up in the mountains, and yes, we do have snow.

I want to talk to you today about arts and culture. The community that I come from is very grounded in arts and culture. Cuts to the cultural industries, in my personal opinion and in the opinion of the people of Wells, don't make much economic sense. I'm going to list off a whole range of facts and figures, and I'm sure many of you are aware that the contribution of arts and culture economically to our society is well documented.

The arts and culture sector is a large, labour-intensive, cost-efficient, high-growth industry representing about 2.4 percent of Canada's GDP. According to government of Canada stats, Canadian heritage institutions — including historic sites, art galleries and museums — attracted 35 million visitors in 2006. Not-for-profit performing arts companies attracted another 12.9 million visitors — in B.C. that was about two million visitors — and earned about $1.2 billion.

The arts in Canada is the fourth-largest industry in terms of employment, supporting over 260,000 core jobs. I'm sorry. I don't have any stats specific to B.C., but they're not as easy to round up as the Stats Canada stats are.

The Conference Board of Canada — which, as you probably know, is not known for its sort of warm, fuzzy approach to things — estimates that the real value-added output of the cultural sector industries totalled $46 billion in 2007. Their estimate, taking into account the direct, indirect and induced contributions, is that the economic footprint of the cultural sector is approximately $84.6 billion in Canada, or 7.4 percent of Canada's real GDP, and contributed about 1.1 million jobs. So it's a large sector.
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In 2006 a study done by the then Ministry of Tourism, Sport and the Arts studied over 300 arts organizations that had been receiving grants from the B.C. Arts Council. Their conclusions were pretty interesting. They found that for every dollar spent by those arts organizations, it generated an additional 83 cents to $1 value-added GDP. For every direct job that they created, another 1.3 to 1.5 jobs were created in the economy.

For every dollar that the province invested in those organizations — it was about $9½ million in 2004 — the province received back between $1.05 and $1.36. The local governments received about 23 cents on every one of those dollars invested, and the federal government received about $2½ for every one of those dollars invested.

Looking at this more regionally, a study done in the city of Kamloops — their cultural strategic plan, which was done in 2003 — indicated that the cultural sector in Kamloops contributes about $9.2 million in revenue to Kamloops and accounts for about $7.4 million in purchases of goods and services. Including all the indirect and induced impacts, that's worth about $11 million to Kamloops.

Another study that was done earlier in the Central Okanagan is often looked at as one of the seminal studies in the industry. I don't know if you're familiar with a man named Steven Thorne, who lived in British Columbia for a while. He did a lot of the really good work on the value of arts and culture to the economy. He has several reports out, and I can provide you with references to those if you want them.

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Back in '98 in the Okanagan the cultural sector produced about 1,900 jobs, with a direct impact of $6.67 million. Now, that was before the city of Kelowna made a major investment in the arts and all of the Central Okanagan communities invested into the Okanagan cultural corridor.

The impacts that are now felt in the Okanagan from that major investment would be much larger today. In fact, Kelowna was named a Cultural Capital of Canada, and that has resulted, in Kelowna, in a huge uplift in their cultural industries.

That's all a bunch of statistical stuff. I'm much more interested in small rural communities, because the community that I live in is about 200 people — 250 on a good day. Depending on whether or not you want to count the dogs, it could be even more.

Island Mountain Arts, the group that I'm representing, conducted an economic impact assessment in 1997 and determined that this small community volunteer–based organization contributed over $200,000 annually into the local economy. We defined the local economy for that study to be Wells, Barkerville and Quesnel, because you can imagine that Wells has a very leaky economy. Most of the spending is in Quesnel, so we took that as the economy.

That's small, but in our little neck of the woods that's a significant contribution. They also were responsible for creating 11.7 person-years of employment — again, a very significant contribution to a small, remote, rural community. These impacts have only increased over time.

The activities of Island Mountain Arts form a large part of the economy of Wells, and Wells is the support community for the province's most important, most significant and largest historic site. Barkerville certainly could not function without Wells being a thriving community as well. That's where all of our staff lives, essentially. It provides a huge number of services to visitors who visit Barkerville, so Wells is a very key component of Barkerville's product.

By the way, Island Mountain Arts, which has been around for over 32 years, is a very successful group but has been severely impacted by the recent cuts by the direct access gaming people, particularly in the way that the cuts happened with no ability for the organization to plan for the fact that there would be upcoming cuts.

In small northern communities we see that the impacts of the cuts to community-based organizations can be devastating. Not only do these groups supply services and opportunities that city dwellers take for granted, but they do it on a shoestring.

The per-capita investment of the province in arts and culture is not equitable across the province. For instance, in 2001 the average per-capita spending across the province as a whole was $3.72, but in the Fraser–Fort George regional district it was only $1.86 per capita, and in the Cariboo regional district it was only 92 cents per capita.

Now, I know that the B.C. Arts Council has struggled with this and has made some attempts to rectify this situation, but still, parity does not exist. We don't receive the same per-capita funding as people, say, in the Lower Mainland. Cutting program funds to arts and culture — and, worse yet, direct access gaming funds for these groups — marginalizes an already underserved group even more.

I don't want to gloss over, either, the link of tourism to the cultural industries. Tourism in the north depends a lot on the cultural product. We've got Barkerville, 'Ksan. Numerous cultural tourism products are based here in the north.

In the north tourism is a growing economic driver. It certainly is not the largest one. In my community it is. In Wells-Barkerville tourism is our primary industry, and that product is built on cultural tourism.

Even in this very poor economic climate it's interesting that Barkerville's attendance in 2009 was down a mere 1 percent; 800 people is what we were down this year. For Island Mountain Arts, as well, attendance in its programs was relatively flat with last year, as well as its earned revenues. So community tourism can be a bit of an insulator, for small communities in particular, from tough economic times.
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The Premier wants us to double tourism revenues by 2011, but we won't be able to do that if you shoot the legs out from underneath the cultural tourism product.

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I kind of think that cuts to arts and culture…. Certainly, the service plan of the Ministry of Tourism, Culture and the Arts indicates that there will be even more cuts to arts and culture in the two next upcoming fiscals. I think it's a bit like shooting yourself in the foot.

I think that arts and culture are things that you would want to support in times of recession. If you look around the country and, in fact, the world, you will find that lots of jurisdictions are doing that.

For one thing, you can capitalize on the huge amount of unpaid labour that that sector contributes. In fact, it's the largest sector of all the not-for-profit sectors. It contributes the highest amount of volunteer labour. That's a direct input to our GDP that we never ever measure.

The recent arts and culture cuts have been portrayed as an either-or situation. I really think that this is a false dichotomy, and I think the people of British Columbia understand that that's a false dichotomy. It's not an either-or situation. It's people working together to find creative solutions.

Investing in the arts, as I've indicated…. If you get a 36-cent return on every dollar you invest, that's a pretty good investment in this day and age. I don't think you can do much better than that.

I know that the government's between a rock and a hard place. We're all going to be looking for creative solutions, but if you don't support the development of creativity, you're not going to have the resources to find those creative solutions. Supporting the arts and culture is exactly how we as a society develop our creative approaches and innovation, so please restore arts and culture funding in the next two fiscals to at least 2008-2009 levels.

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

Are there any questions from anyone?

D. Donaldson (Deputy Chair): Hi, Judy. Thanks for the presentation. Lots of good facts and figures there but also, rightfully, the place of arts in the community and the glue that holds the community together.

I had two quick questions for you. I'm very interested in the average per-capita spending figures from earlier, in the year 2001. I'd like to know if you would be able to point out why that is — the more rural areas not having as much per-capita spending. And then my other question is the direct impact of the recent cuts to the organization that you represent and what that might mean next year, as well, on the ground in your community.

J. Campbell: Doug, I'll leave this with you. This is a study that Island Mountain Arts did with the help of Service Canada. It was a labour market partnership study. I happened to be the consultant on it before my current life. It's called Beyond Hope? The Northern Cultural Sector in Crisis.

Basically, I looked at B.C. Arts Council program funding and other provincial funding. I also did this on the federal level. Then I basically added what went into the two regional districts, divided it by the population and compared that to what the average spending per capita was. Very simple methodology. There are probably holes in it, but it gives you a very quick-and-dirty look at what's going on.

The disparity at that time was so amazing that even if there were a few loopholes in the stats because you were combining different population areas, there's still a disparity out there.

The why of it is…. At the time I wrote this study, there was an interesting quote on the Ministry of Tourism, Sport and the Arts website. I can't remember the exact quote, but it was something like: "The arts are essentially an urban venture that is disseminated to rural areas." I believe that that was very much the philosophy — that art does not happen in rural areas; culture does not happen…. You know, if it's going to be good, creative, innovative and leading-edge art, then it's going to be in the city.

Well, I think so many areas, including your area of Hazelton and Smithers, have proven that wrong. That quote is no longer on the website. I believe that the B.C. Arts Council works very hard now to try to make sure that they are geographically a lot more equitable than they were.

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I think, though, that if you still look at the makeup of the board of the B.C. Arts Council, they're struggling with finding rural representation. I believe you'd still see it's quite skewed towards urban areas.

That was the first question. Second question was….

D. Donaldson (Deputy Chair): The impacts.

J. Campbell: The impacts. Well, Island Mountain Arts has been getting direct access game money since time began, just about. I'm old enough to remember when that all started. I do remember that when that all started, we were sold on the idea of gaming in communities, on the idea that it was to go to charities. As we know, there's been a lot of stuff published just recently that that has been eroded over time. The amount that goes to charities now is a lot less.

In IMA's particular situation, they receive about 13 percent of their budget. This was taken away on August 27, after all the summer programming was finished. No warning to "plan for tough times this summer; cut back your programming." Obviously, their budget was spent. So they're struggling.
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Island Mountain is a very resilient organization. They will, of course, get through this, with a lot of help from our municipality and others, I'm sure.

There was another point, but it flew out of my head.

J. Les (Chair): Well, with that, I think we're out of time, Judy. I appreciate you coming this afternoon and sharing your presentation with us.

Our next presentation is from the College of New Caledonia — John Bowman, et al.

J. Bowman: Good afternoon. My name is John Bowman. I'm the president of the College of New Caledonia. With me this afternoon is Bruce Sutherland, chair of the board of governors for CNC.

First of all, we'd like to thank the committee for coming to Prince George. We appreciate the opportunity to share with you our thoughts regarding the 2010-11 budget and government funding and policy for the post-secondary education system.

During the next few minutes we'd like to do basically three things: (1) highlight some of the important roles that our institution and other regional colleges play in economic and community development across the province; (2) we want to acknowledge the provincial government's increased funding support in 2009 for our institution and for the college system as a whole; and (3) we'd like to offer just a couple of recommendations for your consideration.

We intend to keep our remarks brief in order to leave as much time as possible for your questions and discussion of the points that we raise.

I'm going to turn it over to Bruce now.

B. Sutherland: Good afternoon. I'd just like to highlight a few important roles of our colleges in British Columbia.

CNC and British Columbia's ten other regional colleges educate and prepare the workforce of today and tomorrow. We train people to work as nurses, educators, welders, builders, business people and technologists, and for literally hundreds of other occupations.

With campuses in more than 50 communities, B.C.'s colleges support students to meet their learning and career goals, from trades and technical to university transfer and applied degrees. Colleges support and strengthen every B.C. community by providing job-ready graduates and valuable, affordable access to higher education and skills training close to home.

Colleges develop and offer programs that reflect and anticipate changing social, economic and labour market realities. In business, health care, trades and technology, B.C. colleges connect with employers and policy-makers to provide the programs and career opportunities our citizens need now and in the future. In fact, our colleges are the largest provider of highly skilled, job-ready graduates for employers in British Columbia.

Colleges play a key role in the economic strength of the province by providing communities with a well-educated, highly skilled workforce. Currently 42 percent of the skills shortages occurring across all sectors are in occupations that require a college education.

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Colleges are also quick to react to emerging needs in the labour market and are already preparing skilled workers to help power the province's economic recovery. In fact, this year more than 300,000 students are enrolled in B.C.'s colleges, gaining the credentials and skills that employers want.

Graduates from B.C. colleges are healthier, experience higher employment rates, earn more every year and pay more taxes than those without a college education or training. A recent independent study of colleges' economic impact showed that for every tax dollar invested in these institutions, British Columbians realized a $3.80 return on their investment. Colleges and their past graduates contribute $7.7 billion to the provincial economy. That makes our college system one of the best investments we can make, one that pays dividends in healthier and more prosperous citizens in communities across the province.

By adapting to the needs of local communities, B.C. colleges continue to be at the forefront of the economic recovery. The development of grass-roots programs to effectively meet the needs of the new and changing workforce ensures that B.C.'s colleges will be a strong catalyst for the province's economic recovery.

The speed and timing of the economic recovery of the province will depend upon all regions having a well-educated and highly skilled workforce. Our college is working closely with industry, communities and regions in addressing labour market requirements in the central Interior and across the north, in partnership with UNBC, Northwest Community College and Northern Lights College.

The College of New Caledonia and our sister colleges recognize the difficult economic circumstances facing the province and the significant challenges the government has faced in producing a restated budget for 2009. The government has made some difficult budget decisions, and the College of New Caledonia appreciates the commitment the government continues to demonstrate to post-secondary education in B.C.

J. Bowman: The College of New Caledonia this year is celebrating its 40th anniversary, and 2009 has already been a banner year for our institution. In fact, I would call it a great and memorable year.

In April the provincial and federal governments announced funding for CNC under the knowledge infrastructure program, that funding totalling nearly $30 million for the construction of a new technical education
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centre here in Prince George at a cost of $19.6 million and for the completion of the phase 2 expansion of our campus in Quesnel, the North Cariboo Community Campus, at a cost of $9.8 million. These new and expanded facilities will greatly enhance CNC's capacity to deliver high-priority programming in trades and technical fields.

Also, for the 2009-10 fiscal year the operating grant funding provided to CNC by the Ministry of Advanced Education increased by a total of $1.6 million, or 5.8 percent. And the funding received from the Industry Training Authority has been increased by over three-quarters of a million dollars — $764,000, or 18 percent — to enable us to offer additional apprenticeship and trades foundations classes across the college region.

So year over year, CNC has benefited from an increase in provincial funding support totalling approximately $2.4 million. I want to assure you that these additional resources have been greatly needed and are being put to very good use.

This year we have experienced a dramatic increase in application levels for most programming areas. In September at our Prince George campus we recorded over an 11 percent increase in student head-count enrolments. In 2009-10 CNC's full-time-equivalent enrolments for the year will grow, we estimate, by at least 12 percent to 15 percent and will exceed 4,000 FTEs across all campuses for the first time in our history.

We want to note that while there have been some provincial funding reductions in certain areas — and, certainly, most significantly for us, the reduction in annual capital allowance funds for building maintenance and small facilities projects will have a significant impact — the overall base operating fund level set in February has been preserved in the September budget update.

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We are very happy that the provincial government has recognized the importance of continuing to provide stable investment in the base operations of colleges in the current year. We do recognize the constraints that the government faces, given the economic downturn.

Over the next year we at CNC look forward to working closely with local and provincial stakeholders to ensure that the important education and training role we play in this region continues to be recognized and that the necessary programs and services are available to residents in the central Interior and the north of the province.

We'd like to conclude with a couple of recommendations.

Firstly, we urge and recommend maintaining the investment in provincial colleges for 2010-11 and beyond. It's going to be critical for the province, as Bruce has described, to have a highly skilled workforce to meet both current and future labour market needs. We therefore urge this committee and the provincial government to continue to preserve and enhance funding provided to B.C. colleges in the 2010-11 budget. Any reductions to colleges' funding will have a negative impact on access to programs and services and on our ability to support the economic recovery.

Secondly, we would like to recommend that a review of the provincial government's tuition limit policy be completed by March 1, 2010, in order that it may allow for greater equity across the province among and within types of institutions and by program types.

The extent to which smaller rural institutions such as ours are heavily dependent upon provincial funding for a majority of our operating revenues should also be reflected in a revised tuition limit policy. For example, provincial funding from the Ministry of Advanced Education and the ITA accounted for fully 72 percent of CNC's total revenues in the 2008-09 fiscal year.

That compares to only 66 percent for Okanagan College, 57 percent for Kwantlen Polytechnic University and 54 percent for UNBC. Those institutions are much less dependent upon provincial revenues than is our institution and the other rural colleges.

The proportions of total revenue that the four institutions I've mentioned derive from student tuition and fees were 16 percent for CNC, 23 percent, 27 percent and 21 percent respectively for other institutions. These numbers are important because they will predict the relative financial challenges that we will experience and that the other institutions will experience from these two largest categories of revenues: provincial funding and student fees. If they don't increase, our ability to offset annual cost increases that we invariably will experience will be impaired.

Thank you for your time and attention. We'd be pleased to try to answer any questions that you may have on any of the points that we've raised.

J. Les (Chair): Thank you very much. We have a number of questions — five or six, by the looks of it. So we'll dig right in and try to be brief, if possible.

D. McRae: Two very short questions, Chair, if I may.

First of all, the question I have is: do you have any studies that show a percentage of grads from your college system that stay within this region?

J. Bowman: We do know that when you train, for example, nurses from the north, they stay in the north. We have, I think, 80 percent of the nurses, for example, who've been trained at CNC and UNBC who have remained in the north. They're working in Northern Health and the facilities.

Other examples. Certainly, we know from the trades enrolment we have that apprenticeships and people who are being trained in our trades foundation programs are staying in the north. They're already employed in the
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north. We know, for example, that in our new medical lab technology program, the majority of those enrollees are from the north. We expect them to stay in the north and take up positions with Northern Health.

It's really on a sector-by-sector and program-by-program basis that we can answer that question.

D. McRae: If I may, I have my quick second question. The other question I had is: could you describe the relationship that your college has with UNBC? I guess there'd be some competition for quality students.

J. Bowman: Actually, it's a bit of a popular myth that the colleges and UNBC are competing for students. When you look at the different types of programs that we offer, there is actually relatively little overlap in our programming. Eighty percent of the college's activity is in the non–university credit area, and about 20 percent is in university and academic programming currently.

The majority of students who transfer from CNC go to UNBC, so we think the relationship with the university is complementary. We're working on a number of new joint programming initiatives with the university and the other northern colleges. We think the opportunity to expand and diversify programming across the north can best be achieved through collaboration, not through competition.

J. van Dongen: Don asked my question about the transfers. Thanks.

J. Les (Chair): All right.

N. Letnick: You're talking about tuition limit policy. Are you asking for the ability to increase tuition fees?

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J. Bowman: No. What we're proposing is a more rational approach to limiting tuition. We're not proposing that tuition be deregulated entirely, but right now our institution has among the lowest tuition rates in the province — among the lowest of the rural colleges.

Some institutions, our sister colleges, may be charging as much as 25 or 30 percent more for a given course or program than we are able to charge. We're not proposing to increase, necessarily, to that level, but we think a more rational policy would consider, as I've said, the relative proportions of revenue that is provided by the province versus tuition, because it widely varies by institution, and also on a program-by-program basis.

For example, in the area of trades, if CNC were just to increase our tuition rates for trades programs to the provincial average of all institutions that provide trades training, that would provide our institution with a huge boost in terms of our financial sustainability.

We have grown the trades program at CNC over the past five years by more than 100 percent. We're offering double the number of apprenticeship and trades foundation seats. The tuition rates have been essentially frozen during that time. We don't feel it's equitable that the 2 percent limit is basically holding us back from being able to support our program to the same extent as, for example, Okanagan College or Camosun, who are our sister colleges. Their tuition rates are substantially higher — in the order of 15 to 20 percent higher — than our rates for trades programs.

N. Letnick: I guess I didn't understand. I asked you if you wanted the tuition fees increased, and you said no, but everything you've said is telling me yes.

J. Bowman: Well, we would like a more rational policy that would enable us to adjust some of our tuition. We're not proposing complete deregularization. We're not proposing across-the-board increases to tuition. That, I think, is a simplistic approach to managing that issue. We would like to see a policy that reflects the differences amongst institutions and amongst programs. It's not a case where one size will fit all. Right now we have a one-size-fits-all policy in terms of limiting tuition.

M. Mungall: I also had that tuition question, but I have another one as well that I'll ask.

First, let me just say that the enrolment numbers you gave are incredible and conflict with some of the projections that are in the budget currently for enrolments, which are that enrolments are going to stay the same over the next three years and not have these incredible increases. This is really important information to have in our deliberations.

But my question isn't about that. It's actually about the HST and MSP increases, particularly in MSP but also the increases in HST on certain items. How is that going to be impacting your budgets? I'll leave it at that.

J. Bowman: We've estimated that the impact of the MSP increase for the current fiscal year will be in the order of $30,000 to our budget, so it's significant.

With respect to the HST, we haven't looked at it on a college-by-college or institution-by-institution basis. But I understand that it has been looked at from a systemwide perspective and that it was estimated that it might represent something in the order of $50 million for the entire post-secondary system. We're about 2 percent of that. We could be looking at something in the order of a $100,000 impact on our budget.

D. Donaldson (Deputy Chair): Thanks for the presentation — some excellent figures in here, and perspectives.

Just a quick question. You point out that you're getting an increase, generally, from the Ministry of Advanced
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Ed of around 6 percent. Yet your enrolment is up over 11 percent. So there seems to be at least a 5 percent deficit there as far as…. If your operating costs relate to your enrolment, which I believe they must, then you are in a situation where you're falling behind consistently.

I'm wondering: is that where you hope the increase in tuition fees will cover? And if so, then — given the fact around the 42 percent of jobs being important from the training that people can get at college — what implications does that have on access when government grants to students are being cut as well — about who can access education?

J. Bowman: There are a number of parts to your question there. I guess the first response is that there isn't…. The 11 percent tuition is greater than the 6 percent funding increase, but we had some capacity that has been used up, some basically vacant seats in some of our programs that have been occupied. Those seats didn't require additional costs in order to support.

[1730]

We generally experience, as a result of contractual requirements and other cost pressures, inflation in our budget of about 2 percent annually. Each year we need to find in our budget approximately a million dollars to offset those costs, just to provide the status quo levels of programming.

We don't propose to, I guess for lack of a better term, make up any shortfall in the budget entirely through a tuition increase. That would not be feasible. We would be looking at something in the order of a 20 percent tuition increase if we had a million-dollar budget shortfall. Our tuition revenues are approximately $5.5 million annually.

That's not the complete solution. We just think a more rational approach is to look at where each institution's tuition is currently, relative to the sector and the region, and within the province to try to establish greater equity. Because a simple percentage limit increase is just perpetuating the problem. Those who are charging higher tuitions will continue to grow by, in real dollars, a higher number, and our institution will make up less of that funding shortfall through tuition, assuming that we have one in the future.

I'm not sure if that got at any of your question, but I'd be happy to try again if you want to zero in on some of it.

J. Les (Chair): You'll have to try again another day, because we're out of time for today. Thank you both very much for your presentation — a lot of very positive information there.

Our next presenters are from the Northern Development Initiative Trust. We have Janine North, and the same Bruce Sutherland is back. He got up, turned around and came back.

B. Sutherland: Yep, different hat.

Good afternoon. As you heard, my name is Bruce Sutherland. I'm chair of the Northern Development Initiative Trust. With me today is Janine North, our CEO — chief executive officer. Thanks for coming to Prince George.

We'd like to tell you about a success story, of Northern Development Initiative Trust, and how it will continue to have a major economic impact over 70 percent of this great province.

Northern British Columbia will soon celebrate five years of investments by the Northern Development Initiative Trust to help each of its communities reach their economic potential. In five short years 40 communities, nine regional districts and 38 first nations communities have collectively seen 451 projects successfully funded by Northern Development.

The return on the B.C. government's initial investment of $185 million will soon top 28 percent. Over $43 million in capital has been invested into communities and businesses from Lytton north to Fort Nelson and from Valemount west to the Queen Charlotte Islands.

Beyond this capital working in communities, a further $11 million has been committed from the trust and $30 million from the federal government. That is almost $84 million — 52 percent loans and 48 percent grants — that will attract a total of over $443 million in capital investment in the region.

You can say wow anytime. It's really good. I'm always wanting to go like this — wow — myself.

Not only that, but our current capital balance is $179 million, including $18 million in loans receivable, which is very close to the starting balance of $185 million. This is a sustainable fund that is progressively investing more in the region and less in the market over time.

Without the Northern Development Initiative Trust as a catalyst, $40 million would not have been attracted from the federal government, business and foundations for direct delivery in the region. This was a result of the trust's strong reputation and highly efficient and effective administration, at a very low overhead of less than 1 percent. Nowhere else can any level of government deliver programs at such a low administrative cost.

The delivery of $30 million in community adjustment funds, which will result in over 1,500 jobs, is the first time in Canada that the federal government has directly contracted program delivery outside a federal entity or provincial government.

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J. North: I'll take you through our programs, and you'll be able to see the results of a few of them in the brochure that you have in your folders.

The northern B.C. business advantage program, with its two business programs, has committed $5.3 million into training at 11 manufacturing businesses. They, in turn, are creating 607 new jobs and spending $47 million
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in capital investment. This program was launched just over a year ago.

In addition, through our partnership program with the Business Development Bank of Canada, 42 businesses are receiving consulting expertise to increase their competitiveness and profitability in areas of strategic market coaching, operational projects, export development, business planning, and health and safety systems development.

Over $286,000 has been committed from the competitiveness consulting program to cost-share valuable consulting expertise for these manufacturing companies, who are the base to grow our economy and jobs in the north. Northern Development has also invested $9.4 million and over 11 percent of its funding into 66 community and business ventures directly led or funded by first nations.

We have seven community funding programs, and I'll talk about the economic investments into this region from them. The economic development infrastructure program totals 85 projects, with $39 million committed across 25 communities, seven regional districts and three first nations. It directly invests in the construction of infrastructure that diversifies the economy. This includes three airport expansions, completion of the Haida Heritage Centre, the Williams Lake–Cariboo discovery centre and the Terrace Sportsplex, rural high-speed Internet in remote areas on the north coast, amongst many other projects.

And 49 grants of up to $20,000 each have been invested in feasibility studies that demonstrate a strong business case for an infrastructure project that will diversify and provide direct measurable benefits to the local economy or marketing programs that will increase revenues within the region.

In total, $1.7 million has benefited over 23 communities and supported federal and provincial funding for projects including the northwest transmission line, Building Canada infrastructure projects, the Dawson Creek performing arts centre, Gold Country tourism geocaching program and a business case for improvements along Highway 97 from Quesnel to Dawson Creek.

I'll just mention that business case. This is a business case that we did to determine what level of return could be anticipated by making a $135 million investment in increasing the clearance or getting rid of the barriers that two bridges and nine rail overpasses provide on the road from Quesnel up to Dawson Creek.

At this point, a lot of large commercial loads are low-bedded through Alberta to avoid those low underpasses going up through the Pine Pass. This study showed that the cost benefit to pay off that $135 million investment would be capturing only 0.7 percent of the business that's currently done by Alberta companies in the B.C. oil and gas and forest industries — 0.7 percent. It's a very low capture rate that has to be brought back to B.C.

We did the economic business case and contracted that out, and the Ministry of Transportation did the technical work on: what would be the most cost-effective technical fix to those issues? It's a great opportunity around partnership and making decisions around business cases as opposed to, perhaps, the safety issues on our highways. We've seen our area highways experience a 30 percent increase in truck traffic over the last few years.

Industry attraction is another program that we have. There, five grants totalling $67,000 have been provided to four communities to plan and implement targeted industry attraction programs. From Terrace's efforts to attract the polysilicon industry to Dawson Creek preparing a business case for wind turbine manufacturing, northern communities feel more in control of their destinies with this funding program.

This is one of the programs where the board has delegated approval of these particular grants to the CEO — myself. So if a community comes forward and says, "We have up to $20,000 that we want to spend on getting the right consulting expertise to help us with our business case to attract this industry that's expressed interest in our community," we can immediately approve that, get that community rolling and get them the help they need.

[1740]

We provide investment attraction, statistics and profiles for each community, and we can help the communities in other ways besides this funding.

We also pay an annual dividend of $35,000 to each of the municipalities and regional districts to ensure stable economic development funding and to support collaborative economic development projects. When we first started the trust and did a poll of what communities spend on economic development funding across this 70 percent of the province, it was $3.1 million. In the Okanagan the communities and the regional districts there spend over $10 million annually on economic development. So we could see that the baseline was very low.

There was a need to augment what funding there was. Communities have used it collaboratively. An example would be that the three incorporated communities on Haida Gwaii, the Haida council and the regional district put their resources together, and they formed the Misty Isles Economic Development Society.

Over the past two years 39 communities in six regional districts have received $2.5 million in funding through that program. Communities have examined everything from tax structure and its role in business attraction to collaborating in increasing the economic development staff capacity, as well as introducing new local business retention programs, and that funding is at their discretion. We just ask that they report at the end of the year what they achieved with that and that it's incremental to what they originally spent in about 2007, when we started the program.
[ Page 200 ]

Each municipality, regional district or first nation is also eligible to apply annually on a first-come, first-served basis to a $405,000 fund which provides $7,500 grants to assist the community to hire a four-month grant writer to apply for funding to any source to meet any of the community's or non-profit groups' needs in that community. This program has the highest return on investment of any of our programs, and we track all of our results for five years on every project.

The $661,000 in grant writer funding over the last two years has employed 89 grant writers in 30 communities, four rural areas and 28 first nations communities. This year there were 28 first nations communities that received this funding and 26 incorporated communities and regional districts.

Actually, in the first year of the program we tracked over $9 million in grants that were received as a direct result of this program. The grant writers were hired, they were trained, they went out and researched the needs of the communities and wrote those grant applications. We track their success and their ratios compared to what they're writing. It varies by community, but it's a very high return.

We provide funding research support and web-based training seminars at no cost. So far, over 840 grant writers have been trained across the north. Six weeks ago we put up a web-based grant writer training seminar. It takes 42 minutes to go through. It's available 24-7 on the front page of our website. We've tracked 445 people through that — clicking onto that, going through that program — in the last six weeks. It shows you that there's a hunger and a desire to learn how to write good grant applications to anywhere that funding is available. We call it shaking the money tree.

Community halls and recreation facilities are the lifeblood of any rural community and host the weddings, training events, small conferences and fundraisers that generate revenue for non-profit groups and the hospitality and service sectors across rural B.C.

Across 30 communities Northern Development has funded a total of $3.5 million in grants and loans to maintain and expand these facilities and their vital role in the rural economy. This is one of the best ways that we can help those very small rural communities. A grant of up to $30,000 is provided to any existing facility of this sort across the north.

We've also found that, without a local community foundation, there are few opportunities to invest intergenerational wealth to benefit the social needs of rural communities and help them to help themselves. From a baseline of only four community foundations across 70 percent of the province in our area, Northern Development has supported the development of 14 more — new community foundations with up to $50,000 in matching grants.

A total of $791,000 from Northern Development has matched over a million fundraised in those communities to ensure that a local community foundation is not only started, but that it becomes a perpetual source of funding to deliver program grants to non-profit groups that make such a difference in the quality of life in our communities.

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The results of the government's investment and belief that you could make decisions in the north for the north with a regional structure of business and local government working together has been successful. Whether you measure the huge amount of Northern Development capital invested in the economy on a sustainable basis, new capital investment drawn to our region or the more than 3,000 permanent jobs that have been created over the past five years, this regional economic development trust is having a vastly positive impact.

With 75 percent of our projects in communities smaller than 5,000 people and the innovative grant writer support programs, central and northern B.C. are able to access more funding than ever before possible.

This trust acts as a catalyst to bring communities together with one voice and vision for economic investments across this region. An example of that is how all of these communities have supported the work of a vision paper for the Outlook 2020 Summit of the B.C. Business Council. I sit of the board of governors to that. That paper was co-authored by Tim McEwan of Initiatives Prince George and myself and portrays a vision for moving the economy forward across northern B.C.

The pride of making decisions in the north for the north and the efficiency of a merit-based funding process is a success story across Canada that B.C. should take immense pride in. Our board has met with the Rural Alberta's fund, which is a spend-down fund of $100 million. They absolutely peppered our board and our staff with questions on how ours was set up.

We've made our business systems available to the other trusts in B.C. We've also, just today, received an inquiry from the federal government's western diversification to come and take a look at our trust manager software that was developed to manage our programs. We're really pleased with that and think that all of you should be congratulated on the leadership the government has had. We appreciate the participation of MLAs from across northern B.C. on our regional advisory committees.

J. Les (Chair): Thank you. We have a few questions — one from John van Dongen.

J. van Dongen: Well, it's very interesting to hear the story of your trust and to see the diverse range of economic development activities and services, to the extent that there may be a few programs that I think people from Abbotsford would like to apply to.

Having said that, I'm very curious. As we've gone into the global recession and working on recovery, what has
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changed in terms of focus and activity or demand on your programs? I'm very curious in where there's been any repositioning of priorities and programs.

J. North: Well, I'll just start with the trust focus. We always carry three years in cash short-term bonds to anticipate and deal with three years' spending flow. So we were in the wonderful position, as we saw the global downturn hit, of not having to liquidate any of our asset portfolios that were in equities. Although we had an impact that was less than the B.C. pension or the Canada Pension fund, we've come up remarkably this year. So we're pleased with how the trust has performed.

In terms of our programs, we've seen greater access to our feasibility studies as communities try to prepare for the funds that move forth this year, both from the provincial and federal governments. They can use our funding to help prepare that engineering study, that business case that can position them for success with Build Canada, Towns for Tomorrow and many of the other programs. That's been very positive.

We've seen a strong response to the grant writer program, also because of those economic initiatives that moved forth from both levels of government on an expedited basis this year. And we are exploring how to continually invest more of the trust's funds working in the regional economy, as opposed to staying in an investment portfolio.

We need to keep our loan-to-grant ratio in the neighbourhood of at least 50-50 and tending towards, hopefully, 60 percent loans and about 40 percent grants, to keep the sustainability over the long term. We will be exploring more of those loans, and we have had a very successful experience with delivering loans to business for the federal government.

[1750]

D. Donaldson (Deputy Chair): Thanks for the presentation. I'm very familiar, after ten years on the village of Hazelton council, with the impressive work that NDI does and the hard work that you and the staff undertake. The 1 percent overhead is pretty impressive, so congratulations on that.

I have a couple of questions related to the actual balance of $185 million. Of course, from my perspective, if it was more, we could do more — right?

Two questions on that. As far as the investment of those moneys to generate some of the revenues that we see here, just your comments on the ethical, responsible investment. Sometimes the rate of return might not be as high when you invest with an organization like the Municipal Finance Authority, but it's a responsible thing to do.

As far as the ethical investment…. The principles of fairness and equity and non-exploitation — I believe those would be the principles that NDI would support. Are those the kinds of principles that you look at when you're looking at investment of that capital?

Secondly, would you have recommendations for us about how to grow that capital? A lot of the money goes into economic development infrastructure. So somehow capturing a portion of who benefits from that infrastructure — you know, industry that uses that infrastructure — whether it's a per-tonnage haul fee that you could put back into the fund to grow it into more than $185 million so we'd benefit further…. So just two questions on the increase in that $185 million.

J. North: I'll try and frame the answers. Our investments are as per the Trustee Act. We have a very balanced, conservative portfolio of roughly 50 percent equity, 50 percent fixed-income funds. We have explored and challenged our advisers to ensure that we are investing ethically and looking at the parameters that they work with — the 27 different organizations that play a part in our portfolio. It's a very diverse portfolio.

We don't invest with the Municipal Finance Authority because we believe that we need to achieve a rate of return of about 6½ percent. That means taking some level of risk on the equity side in the long term, as long as we keep those three years of cash reserves to stabilize us through any market fluctuation. The MFA has not been returning that amount, and we need to grow slightly more than inflation — although it did see us, certainly, have more fluctuation last year and higher upturn this year than if we'd stayed with MFA, where we were in the first few months.

In terms of growing the trust, we see some opportunities. If we're very successful at delivering for funding at 1 percent overhead and have the endorsement of the federal government doing that with their programs, I would think that any government that's exploring new programming on a regional basis may want to look at what its own staff delivery model was and whether it may pay to contract it at 1 percent or less to ourselves. That's one area of growing.

Certainly, we believe that a resource revenue stream is very important to the rural economy, and that is another avenue that can be explored in the longer term. We believe there's a need for things like joint venture financing between resource businesses in the north and first nations. We'd be delighted to have further discussions about that and what that might look like and how we might contribute to such a fund.

We are constantly looking for opportunities to increase that funding pipeline to northern B.C. We've had discussions with corporations that are looking at benefiting northern communities as they bring projects to the north of a massive scale.

Those are the sorts of opportunities we will continue to explore. You wouldn't have that if you hadn't set up this entity.
[ Page 202 ]

We appreciate your interest. We know that this is a tough time in the provincial budget but look forward to a rosier provincial picture in a few years and perhaps having that discussion on how we can participate and help you deliver benefits to central and northern communities.

J. Les (Chair): I have time for two more quick questions and two more quick answers, not that I'm not interested in hearing all about it.

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D. McRae: I think you should be very proud of the work you've done. I know you have set a benchmark for the province that is going to be very hard for all the other ones to reach but great to strive for. I'm from Vancouver Island, and we have the ICE-T down there. I know they do amazing work as well, but congratulations to both of you.

More of a comment, actually. I was just going to say that I'm really pleased to see the support you've done for grant writing. I know that with many communities, they struggle with having the facilities and the staff to do it. Grant writing is really an art, and those who can do it well are things we need in our society. It's not really a question, I guess, but just a thank-you for doing the work you've done.

J. North: We've offered our webinar to the island coastal initiative trust, if they want to post it on their website or if they want to customize it. We always share our resources with anywhere else that would like to take advantage of them.

B. Ralston: Critics of this kind of venture — I'm not one of them — would say that the kind of lending you do is better left to commercial banks and credit unions. I note that 52 percent of your capital is in loans. I'm just wondering what the payback rate on your loans is. Are there any defaults or not?

J. North: We have no defaults. We loan to communities at zero percent interest — and non-profit groups and first nations. We find that that helps them take advantage of provincial and federal funding programs. Often it's really tough for a community to come up with 33 percent of their own participation in Building Canada or 20 percent for Towns for Tomorrow.

We've helped communities in a five-year loan at zero interest be able to access other funding. The program we did for the federal government was also at zero percent, unless the company was involved in the softwood lumber agreement. Then it was at prime plus 1.5 percent.

We do have one loan in our portfolio, in terms of an airport expansion, that did carry a modest interest rate, but it was very patient capital lending. We will tend to move in and work with communities to access programs, but we are not trying to be a bank.

J. Les (Chair): Thank you very much for a very compelling story. Good work.

It's now roughly six o'clock. I believe we have four registered presenters left to go, so that means we're going to be right on the button from here on out. No time for running over.

The chamber of commerce first. On behalf of the chamber, Adele Yakemchuk and Sherry Sethen.

Go right ahead whenever you're ready.

A. Yakemchuk: Ladies and gentlemen, I want to thank you for your time today and for the process of input that has been established.

My name is Adele Yakemchuk, and I'm currently the president of the chamber of commerce for Prince George. With me tonight is my executive director, Sherry Sethen.

You will notice that the first eight pages of our document are in recognition and acknowledgment of approximately $3.8 billion that the provincial government has invested in our community through infrastructure, transportation, education, health and special projects. We want to thank you for that investment in our future. It means a lot, and it has really helped our community and our area grow and maintain what we have over this difficult time.

I'd like you to refer to page 9 for the start of the actual recommendations. Expediting this process, I will skip a few things, so if I miss anything, please ask questions later.

There is a wealth of information in the business community. Entrepreneurship, by its very necessity, requires one to think outside the box, to look at arriving at specified goals from all angles.

Many may think that business is interested in the bottom line, but any successful entrepreneur will tell you that the social structure and amenities that are available to their employees play an important role in whether the organization is able to attract the quality employees needed to make their businesses succeed.

To the extent of our recommendations, we are not so much about the expenditure of more dollars as we are about staying the course of the committed products and putting in policies or revised policies to minimize the negative impacts of the business so that businesses can do what they do best.

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There are always obstacles, but the government must do whatever it can to mitigate the effect and the number of occurrences. Again, I want to reiterate that we're not asking for more money. We just want you to stay the course with what you've already said you would like to put forward to us.

Don't set up obstacles by creating unnecessary policies. Where policies are required, consult with the businesses
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to analyze the overall effect of those policies and the best way to accomplish the overriding goal for all of us — to make our lives, our future, our province the best it can be.

As business is enabled to grow, so will the economic security of our province. In essence, we must work smarter and find more innovative ways to do more with what is available. The recommendations the chamber has put forth are not expenses but rather investments with a significant mid- to long-term return.

Whoever is empowering the forward movement today, mainstream small business is still a driving force and the best partner the government can have to turn things around. Entrepreneurship has no boundaries.

The Prince George Chamber of Commerce not only recognizes the challenges that British Columbia faces as a result of the global economy, but as an area dependent on exports of our natural resources, our members are experiencing it firsthand. I know that the introductory remarks prefacing the procedure for making the presentations to the Standing Committee on Finance state that revenues for natural revenues, which are the backbone of our economy, have fallen approximately $1 billion this year alone.

The Prince George Chamber of Commerce is a strong supporter of a balanced budget. The government is forecasting that B.C. will no longer be able to return to a balanced budget until 2013-2014. While we recognize that this balanced budget will not be possible for the coming year, we strongly encourage the government to examine its deficit funding policy and adjust as needed so that B.C. can return to its balanced budget as soon as possible. Aim for a balanced budget within the next three years.

The B.C. government has been criticized for its caution in not providing stimulus initiatives as quickly as some of our neighbours. Some of this is due to the election taking place at that time. Whether this was planned or coincidental, there is some good news in the result of this delay. Because of the timing, there is a less costly solution. For instance, B.C. has only spent $2 billion, while Alberta, our neighbour, has spent in excess of $9 billion on stimulus packages.

There are signs that we are hitting the bottom, and in some sectors we are seeing a slight turnaround. For the third month in a row there has been a growth in jobs, and the unemployment rate has fallen by 0.3 percent, though some of the decline is due to people who are no longer eligible, going back to school or out of the job market. We are seeing the signs that the construction industry is turning around, as is the real estate sector.

The Prince George Chamber of Commerce has identified some prime examples and suggestions where we can continue to work together to strengthen our odds for success, even in these challenging times. We need to build on where we are right now. It is imperative to our 900-plus members of the chamber that the committed projects, such as the following below, will continue.

One would be the electrification along Highway 37. Mining will play a major role in the turnaround of northern B.C. and of B.C. in general. Not only does mining support some of the highest-paying jobs, it also contributes billions of dollars to the economics of the province through royalties and taxes. The secondary supply businesses are also impacted strongly. A strong mining industry in B.C. means more employment, which means more stability, both financially and psychologically, for the entire province.

One of the largest expenditures for and greenhouse gas contributors to the development of mining companies is the cost of providing diesel-generated electricity. The chamber recommends that the government act on its announcement to build the northwest transmission line from Terrace to Dease Lake. We also recommend that the government work with businesses to examine all policies that impact business, with a goal of doing away with unnecessary rules and regulations that are stumbling blocks for economic development and growth while continuing to exercise its environmental stewardship.

The northern cancer clinic. The plans for the cancer clinic for the north must continue. The arguments for this project have been made and endorsed at all levels. It would be irresponsible to either slow down the completion of the project or to abandon the good work that has already been completed. The chamber recommends that the government ensure that the construction of the promised facility begins on schedule and is completed as quickly as possible.

The Boundary Road project is needed to complete the plans for making the Prince George Airport the air cargo centre for all traffic accessing the northern gateway to Asia.

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As markets and relationships with our neighbours to the south become more challenging, we must develop alternative trading partners. The chamber recommends that the government on all levels stay the course on this fundamental piece of the puzzle for the economic recovery of the province. We also recommend that this priority be reinforced by including the Boundary Road as part of the transportation corridor policy.

Four-laning Highways 16 and 97. Prince George is at the intersection of the Fraser River and the Nechako River. Throughout history it has been seen as a hub for transportation moving into and out of the north. Though river traffic is no longer the mode of transportation, we are still the hub for all of the cargo that moves via land. It is because of this that the work has begun. Four-laning portions of Highway 16 and 97 must be completed.

The chamber recommends that the government move forward the scheduled completion of the Cariboo connector
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as well as develop a plan for improving the conditions for transportation of goods on Highway 16. All bridges along these main arteries, from all directions, must have clearance of at least 18 feet.

J. Les (Chair): Could I maybe suggest that we take the rest of your report as read so that we have a little time left for questions, if that's agreeable to you?

A. Yakemchuk: Absolutely.

B. Ralston: I have one question with three parts. First, we heard earlier from the hospice society, and all members of the committee expressed admiration for the work that they've done. They said that they are facing a funding shortfall in their operating side of $700,000 this year, and they're going to have to resort to public fundraising to do that. Does the chamber of commerce support that, and can you perhaps explain why it isn't included in the lengthy list of expenditures on health care that you referenced earlier?

Secondly, your position on the HST. You don't mention it at all, which I find surprising. And thirdly, in years gone by, you've expressed support for provincial funding for a child care program, which I thought was quite innovative and perceptive of a chamber of commerce to come forward with that. That doesn't appear to be in your presentation this year. Can you explain why not?

A. Yakemchuk: I'm going to defer to you because I'm trying to remember the questions.

S. Sethen: Sure.

We'll start with the last one first. The child care program was very, very important and continues to be very important to us. We do feel that this has been recognized at the provincial level, and though we did not name it in particular in our presentation, we trust that the plans that are already in place for that program will continue.

With regards to the hospice society, you will notice that we have mentioned charities and non-profits and have made a couple of suggestions under that, suggesting that the original intent of gaming moneys and lotteries be returned to the use of charities. Some of this would help the hospice society as well.

Prince George Hospice Society is one of the only hospice societies in the province that does not have a set budget. We certainly do support it, as we have supported their efforts in the past.

The first one? I'm sorry.

B. Ralston: HST.

S. Sethen: I'm going to defer that back to Adele.

A. Yakemchuk: HST has been a hot topic for our chamber. In the end, we are supportive of HST and, I believe, with the B.C. chamber coming out and saying that. We have been supportive of it since 2001, when it was first brought forward to our chamber of commerce at the AGM.

At this point we believe it's a go-forward scenario, and no comment was needed.

S. Sethen: If I might just add one thing to that. We appreciate the fact that there is flexibility and that we are still allowed to work with the final formula, if you will, of how that is going to come down and what part business will play in it. Some of the questions that we were really concerned about have been answered, such as the fact that there will not be HST applied to the fuels, either at the gas station or the heating fuels. That was a big issue.

The other one that we still think has to be worked on by the government…. We did not step into that arena, because we believe it is being covered by the hotel and hospitality industry. That is how it's going to affect them. We recognize that there have to be some adjustments made in that line.

N. Letnick: You state in your presentation that you're looking for a three-year balanced budget on the part of the provincial government. Could you describe to us…? It doesn't have to be now. It could be later, in written form, if you like.

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With the infrastructure asks that you have in this presentation and the impact that we're looking at — the strong Canadian dollar relative to the American dollar, natural gas prices going down — what program expenditures would you like us to cut or in what areas do you want us to increase revenues to come up with this balanced budget in three years?

S. Sethen: I believe that with regards to most of the dollars that we have put into the first eight pages, those are already committed dollars, and we trust that they will move forward. In our latter part we have not asked for any additional dollars.

N. Letnick: I'm saying that from a provincewide perspective, you are asking us to find a way to come up with a balanced budget in three years. So from a provincewide perspective, what do we take out in expenditures or how do we get more money to get that balanced budget that you're asking for?

S. Sethen: Well, I think that if I knew that, I might be in your seat instead of mine.

J. Les (Chair): Good answer.
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The next question is from Michelle, and then we'll have to cut it off.

M. Mungall: I noticed here in your presentation you talk about homelessness. Of course, it being the provincial Homelessness Action Week, I think that's very timely.

You talk about developing a plan in conjunction with municipal governments. I think that's a very interesting way that a lot of community groups are going around the country, actually.

But I don't see any mention of the provincial government getting back into the business of building sufficient, affordable housing units to meet the demand in the social housing component of our housing market. Is that something that you would like to see the provincial government do as well?

S. Sethen: I believe that to get started on that program, first of all, what you would have to do is take an inventory of the assets that are in place now and try to come up with a realistic number of the actual people that are homeless. I just heard on the radio today that the number that is reported out there is the seen homeless, if you will, as opposed to the hidden homeless — the ones that maybe live on your couch for a couple of days and go forward.

I believe that when you put a plan in place, working with the municipal government, all of these issues are going to come forward. I would not presume to tell anybody what that plan would look like. We would certainly be happy to work with whomever came forward to form a plan.

Homelessness is an issue that our country is judged on. Homelessness is an issue that society is judged on. The chamber of commerce believes that we will be judged as a society of business people, as well, on what we do for our homeless.

Yes, the provincial government should be involved in it, but so should other levels of government as well.

J. Les (Chair): Thank you both very much. Thank you for helping me manage the time.

The next presenter, Stan Mitchell.

Now you're up, and no kidding.

S. Mitchell: Good evening, and thank you for allowing me this time. I'm a chartered accountant here in Prince George, and I'm here representing the chartered accountants society of British Columbia, with some comments for your consideration.

Our firm here, KPMG, in Prince George has been here since 1957. I was born and raised in Prince George, and I've been involved in the accounting profession for, probably, the last 24 years. I've seen a lot of changes over the last two decades in the economic aspects around Prince George and the surrounding area.

We've gone from becoming a lumber town, a mill town, to one that has a number of secondary industries, primarily as a result of the increases in education, health care. We're a transportation hub for the entire northern region, and the importance that we contribute to the provincial economy can't be overstated, with the amount of the funding that goes into the coffers out of this area.

As I'm sure you're aware, we're still very much tied to the forest industry. We have seen the booms and busts, of course, of the recession. In some ways, we've been hit harder than others because of our reliance on the forest industry.

We've seen a lot of good-paying jobs close down, either temporarily or permanently, as employers have shut down. Between January and August of this year the average unemployment rate has increased in the Cariboo regional development area here, which we would come into, to 12.1 percent from 7.1 percent the same time last year.

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Our building permits are down. Incorporations, tourism are down, and about the only things that seem to be up right now are the consumer and business bankruptcies, unfortunately.

But we're turning the corner. Government policy, I think, is going to have a lot to say on what's happening. One of the things that we're seeing — some may say surprisingly, but I think it's going to be a tremendous driver here — is the capital investment that's shown under the B.C. major projects industry list.

There is about $6 billion in this area that is either ready to go, going or on hold. A lot of the on-holds are the mining, and we're hopeful that once the commodity prices continue to creep up, then a lot of these mines will be on a go.

A lot of the things that the government is doing to assist that, such as the electrification that we're looking at…. Although it's a little bit out of our region, it's going to have a tremendous impact. Those are the types of things that are critical. It's a huge, upfront investment, but I think the payback is that it will more than pay for itself in the short term.

Many businesses in the Prince George area, as with most other people in the province, were caught off guard by the announcement of the HST coming in. Because we're so forest-oriented, to a large extent, or manufacturing-oriented, again to a large extent, this announcement was quite significant and, I think, fairly favourable for a lot of the forest industries. There's a study out there that says that the HST will save forest companies in B.C. about $140 million a year just in the costs that they no longer have to absorb as part of their overall infrastructure cost.

We at the chartered accountants believe that the HST will assist in economic recovery over the short term and ensure that we remain competitive in the long term. The HST is not a cure-all for everything, but it will, hopefully,
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be something that gives that little bit of extra stimulus to move along.

On a longer-term aspect, it's going to be critical to have that competitive advantage and to be able to attract and hold business. I can't remember the numbers, but just the impact that this will go over on our overall tax investment rate…. Particularly with our neighbours to the east of us in Alberta, we really have to do what we can to hold onto people. Not paying the various different taxes makes a significant impact.

By eliminating the PST, the government took an important step in streamlining the B.C. tax regime. I guess if there's one message we would like to get out from that aspect, it is to keep it simple.

I primarily work in the tax side of things. Maybe I shouldn't be saying this, because that's what pays my bills for a lot, but the more complicated it gets, it's usually because there have been different "except for" rules and triple negatives and double negatives — when it does and when it doesn't apply, exemptions in certain circumstances.

That's what really tends to add to the complexity, which adds to the general administrative costs from the provincial level and adds to the compliance costs of the various different businesses. Now, with one tax to worry about, it should be a substantial reduction in a lot of the different costs.

It's almost daily that I get a question from a client or a colleague in my office about: "Well, does PST apply to this? Does it apply to this and not this?" Then the same thing may come up for GST. So to have a consistent program and a consistent simple thing with not a lot of different exemptions are very important.

One of the other things is, again, that there are concerns over the various different sectors. We've heard particularly that the hotel and food industry is one that's going to have a significant impact because they are now going to be exposed to the tax when they previously weren't, although at the same time, they're going to be able to pick up some inputs that they previously weren't when they paid the PST.

Again, if these areas are going to be addressed, then I would suggest that not so much be done by exemptions that further complicate things. That'll just add to the confusion or the complexity that, hopefully, we're getting rid of here.

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The change to the HST has also created some challenges for our public sector entities in this area, such as the school boards, hospitals, universities. These organizations currently receive a rebate equal to varying amounts on the GST that they pay. Now they're going to be in a situation where they are going to be subjected to PST, or the component of the PST that will be in the HST, and accordingly, their costs will be increasing.

From what I understand, the government has indicated that this type of an increase in costs — because it certainly will be a direct increase in costs to deliver these services by these extremely important and necessary components — will be handled through increases in their funding, as opposed to exemptions.

Again, we are hopeful that that can come out earlier rather than sooner, as to how that's going to be impacted, so that it allows them to not only carry out their short-term budget planning but the longer-term budget planning and to know what that impact is going to have on them.

There's no question that the budgeting process will be one of the most difficult in recent memory. Businesses and organizations in both public and private sectors are struggling through the recession. We're coming out the other end, so a lot of what the province does now will be critical. B.C.'s economic performance in 2009 has added that financial pressure, of course, that we're all aware is currently facing the government.

While the demands on government have increased, funding has also gone down. Of course, when the economy slows down, revenue sources slow down, as we've seen, not only from tax revenues but also from royalties that would have been coming out of the Peace area and whatnot.

As a result, it's our belief at the Institute of Chartered Accountants that steps towards bringing in things such as the HST will help to alleviate some of the pressures. They're not going to fix everything, but it is a positive move. For the long-term prospects, it is going to have a little bit of an impact on consumers in the short run, but eventually we're hopeful that this will follow along with the rest of free enterprise across Canada that has brought it in, where eventually those savings will be passed down to the consumers.

I want to just reiterate, in closing, that it's crucial, I think, that you maintain the simplicity. The more you complicate it, the costs are going to go up, which means more money out of the government coffers to administer, more money for the businesses to administer and not be able to put back into their businesses.

With that, I'll conclude my remarks. Fairly briefly, I've kind of summarized my paper. You can read it at your leisure at a later time, but I do know you're pressed for time.

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

D. Donaldson (Deputy Chair): Thank you, Stan, for the presentation. I'll try to be quick with my question.

I understand the argument around the complexities that you present. We've heard that before around how the HST really simplifies things and leads to administrative savings.

My question, though — and something I haven't been able to get an answer on, so maybe you can provide it — is the notion that the HST, the one you present on page 4,
[ Page 207 ]
means more money is available to reinvest in businesses and grow the economy. Specifically in forestry, the experience we had in the northwest was that when one of our major forest companies there, which is now no longer there, made large profits, the profits left the area and went into shareholders' pockets.

As well, when there was money available for reinvestment in technology, that actually resulted in job decreases. For instance, with Canfor, at the largest sawmill in the world — the day they reopened with new technology due to reinvestment, they laid off 30 people.

The tax savings in capital costs that the HST will provide. The correlation between that and jobs isn't clear to me. It's being presented as an accepted truth, or anecdotally.

If you could provide any papers that you've come across or more empirical evidence of that correlation between tax savings and capital costs and between that and job creation, I'd appreciate if you could forward that to the committee.

S. Mitchell: I'll see what I can come up with there.

[1825]

N. Letnick: Thank you, Stan, for your presentation. You spent a lot of time on HST, so just one question on it.

You talked about those people that believe they'll be impacted — restaurant owners, tourism. You didn't talk about the housing industry. We've heard from the Canadian Home Builders Association and UDI as well. Is that a concern in this area of the province also?

S. Mitchell: It is. Probably less in our region than it is in other areas, just because of what the cost of the average house is. That's where a lot of the extra amounts…. What a lot of people don't realize, again, is the component of the PST that was hidden in those costs of the houses previously.

Every 2-by-4, every lighting fixture, every piece of lino that was purchased by the contractor to go in a house would have had the 7 percent tacked on and is now being passed through. Again, I realize it's not going to happen overnight. You turn the clock on 2010, and all of a sudden prices aren't going to drop on everything.

It'll take awhile to work through the system. Again, because of the housing prices here being a little bit lower and us being able to access into the lower limits, it's not as huge an issue. I guess we're hopeful that those savings will ultimately come down through the system.

J. Les (Chair): The final question will have to go to Bruce.

B. Ralston: You mentioned that you hope that the government wouldn't grant exemptions. You're aware that the agreement prohibits exemptions that are greater than 5 percent of the GST tax base. All of those exemptions have already been announced, mostly for motor fuel, gasoline and that sort of thing and a couple of other consumer items.

This is the first part of my question: would you agree that your concern about exemptions is really not going to be satisfied and is simply political puffery that's being floated out there in the public?

The second thing is that your colleague in Smithers this morning spoke about…. You say that there'll be an immediate benefit. Your colleague in Smithers…. This is also in the agreement. The agreement authorizes the province to defer for up to five years for enterprises with revenue greater than $10 million a year input tax credits.

I'm not quite sure how you can say that there'll be an immediate benefit when for large enterprises there's an option for the government which they haven't really pronounced on yet, at least that I'm aware of, when they're going to permit the crediting of input tax credits.

S. Mitchell: I guess to the second part in particular, with any deferral, we're obviously hopeful. Our understanding — as best as what we've seen it; a lot of it goes to how it's been implemented in other provinces across Canada — is that the payback does come fairly quickly.

Even if it doesn't come to tax, an input of a manufacturer or a service provider…. Then to have them mark that up and flow it through again to the consumer, ultimately, is an inefficient tax system. The theory is that you ultimately fall onto the final incidence, but that doesn't happen. Hopefully, that will flow through.

J. Les (Chair): Thank you very much, Stan. We'd love to have you longer, but we're out of time.

Our next presenter is from the Faculty Association of the College of New Caledonia — Jan Mastromatteo.

J. Mastromatteo: Good evening and welcome to Prince George. I am here representing the Faculty Association of the College of New Caledonia. I think the message I am bringing tonight is quite different from the last few speakers that the committee's been listening to.

I'm here to talk about the interests of working people in this region, particularly those that no longer have jobs or who are working at very marginal jobs.

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By way of introduction, I was relieved to find out that Prince George was one of the communities that the committee chose to visit in person. I know other communities were not so lucky and had to make their presentations by video conference. I appreciate that technology can be a real asset in gathering public input, but when it comes to budget-making, I don't think I'm alone when I say that elected representatives need to make a special effort to meet citizens face to face.
[ Page 208 ]

I realize, as well, that many of the government-side members might find those face-to-face encounters very contentious these days, given all the concerns raised about the imposition of the HST. Prince George is no exception in that respect.

What many people find so frustrating about that policy was the utter lack of consultation. I would hope your final report would include some recommendations to the Minister of Finance to vastly improve his accountability and transparency when he contemplates such significant policy as the HST.

That said, I want to use my time with you this evening to talk about the College of New Caledonia. CNC has close to 6,000 full-time and part-time students enrolled at our institution. We operate seven different campuses in the region. We pride ourselves on being very engaged, as a public institution, with strong ties to the community.

CNC is a major employer in the region, and I'm including that number both in terms of public and private employers. We see ourselves as not only a provider of key education and training services in this area but also an important piece within the economic fabric of the region itself.

One of the significant attractions of CNC is that it provides an important pathway for direct-entry students and adult learners, both of whom use our institution as their starting point for post-secondary education. For most of those students the reason for choosing our college is because it makes good economic sense. Staying close to home is a lot cheaper than moving to a major city, like those in the Lower Mainland, to start or complete their post-secondary education.

Our college also has a varied mix of students, both young and old. Our average age is 27. With that kind of mix, our institution needs the capacity to provide many different entry points into post-secondary education. Unfortunately, that capacity has been steadily eroded over the years as funding to our college has been tightly constrained.

In 2008, for example, we lost — along with every other post-secondary institution in this province — 2.6 percent of our provincial operating grant. The cut was made unilaterally and with virtually no notice. Budget letters since then have not restored any of that cut.

What that means at an institutional level is that we are forced to do more with less. In his September 30 report to the college, our president noted the following changes as a result of the September 2009 budget update. He said: "The largest negative impact will be felt in the grant that the college receives to fund the ongoing maintenance and repair of our facilities." According to the president, that grant has been cut $461,993.

As well, the provincial government has cut the funding for our literacy coordinators. They've also cut grants for our aboriginal special projects fund, which helps support a broad range of programs for first nations communities in our region.

The cuts to the maintenance and repair funding are, at the very least, ironic. Over the past five years we've expanded our building infrastructure. We now have more square feet of buildings across the seven different campuses that we operate, but as of the September 1 update, we will have a significantly fewer number of dollars to pay for the maintenance and repair of those public buildings.

The pressure to cut maintenance will come on many fronts. I suspect that cleaning will be one of the first casualties in that crunch. When you consider that we're on the doorstep of a major flu season, one in which there is a real concern about our capacity to deal with a major outbreak of the H1N1, you have to ask yourself if these cuts to operating grants will turn out to be shortsighted and ill-considered.

The loss of programs in areas like literacy and the aboriginal special projects fund are just as troubling, because they fly in the face of the government's — or should I say the Premier's? — stated commitments on both these important initiatives. The Premier pledged to make B.C. the most literate, best-educated jurisdiction in North America. That's a laudable goal. But when you cut support for literacy coordinators, it sure looks like that goal didn't have much substance to it.

You can make a similar argument about the funding for our aboriginal special projects fund. The Premier pledged to create a new relationship, but it seems there's no funding to support that relationship.

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These funding shortfalls send a confusing message to those who are supposed to be key targets for support. I would hope your final report makes recommendations that hold the government more accountable for its commitments and less likely to abandon those commitments without first consulting with citizens about the impact of those changes.

I'm mindful of time, and there are other areas that I want the committee to consider in terms of budget-making for post-secondary institutions, so I'd like to summarize some of the things that need to be included in the 2010 budget.

Affordability is an issue across the entire public post-secondary system. We've burdened students with more debt because we deregulated tuition fees in 2001. That creates an enormous barrier to access at a time when our province needs to be training and educating more post-secondary students, not less.

The skill shortage is real, and post-secondary education is part of the solution, but that won't happen with the current funding commitments. Students need and deserve much more affordable tuitions and far more generous financial aid than is currently the case. You need to address that problem in the 2010 budget.
[ Page 209 ]

The province continues to send very confusing messages to post-secondary institutions by telling them on the one hand that block funding is there to give them latitude to configure programs and courses in ways that make sense at a local level. Then the ministry sends budget letters that detail specific programs that they will fund.

This isn't a debate about which programs the ministry is targeting with its funding letters. It's a comment on whether the provincial government is for or against block funding. If you want to give institutions autonomy over how programs are resourced, then give them the autonomy. If you don't want that to happen, then be very clear about the change in policy.

It would be useful for this committee's report to take a position on this issue and hopefully resolve the underlying confusion. Post-secondary institutions need to be significantly overhauled in terms of the funding formula. Operating grants have not kept pace with inflation. Provincial funding has not kept pace with the demands that we know are there for programs.

It has not closed the gap that exists in the funding of rural versus urban post-secondary institutions. Rather than add band-aids to the problem, the committee's report should seriously consider a recommendation to bring all the stakeholders together to revise and renew the funding formula.

One last point, and it has to do with how and where federal transfer dollars get spent. B.C. has signed labour market and labour market development agreements with the federal government. It means that federal transfers are moving through the Ministry of Advanced Education. The money is designed to help provide education and training, mostly for those who are unemployed or who are making career transitions.

The public post-secondary system, including CNC in this region, is well positioned to deliver most, if not all, of those programs. British Columbians are looking to our system to meet their retraining needs, as evidenced at CNC, where enrolments are up 11.1 percent here at its main campus in Prince George and expected to be up 12 to 15 percent for the entire college this year.

It would make good public policy for this committee to recommend in its report to the Legislature that it strongly supports the use of public post-secondary institutions in the delivery of those programs.

Thanks again for the opportunity to speak to you today. I'd be glad to take any questions.

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

M. Mungall: Thanks very much for your presentation, Jan. You highlighted a theme of accountability and transparency — you're probably aware that this summer the provincial government cut $16 million from student aid — and you also brought up the importance of affordability.

Would you like to see that $16 million in student aid, which was targeted mostly for grants, be reinstated for the 2010 budget?

J. Mastromatteo: Certainly. And I think there was a problem with the grants being back-loaded, in any case. The grants being available at the beginning of an education would also be very helpful to our students.

J. Thornthwaite: When would you suggest, as far as stakeholder involvement for changing the funding formula…? When do you recommend that would occur, and what suggestions can you give to the committee with regards to how to change that funding formula?

J. Mastromatteo: Well, I suppose I'd have a long list. But just to answer that as quickly as possible, the funding formula has been a problem for a couple of decades now. I think we definitely need to look at problems for rural and remote communities. Certainly, here in north central B.C. we have a lot of those.

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We need to provide comprehensive educational programming without the large population that you have in places like the Lower Mainland or the southern Interior in British Columbia. The block funding formula needs to take that into consideration — that we need more dollars per student to fund the same programs because we don't have that population base. I would suggest, as soon as possible, that those kinds of consultations should take place.

J. Les (Chair): Thank you very much, Jan, for coming this evening and for being patient with us. I know we're running a little overtime.

The next presenter is Betty Bryce.

Go ahead.

B. Bryce: Welcome to Prince George.

I'm here this evening to talk to you about the CSIL program, which is the Choice in Supports for Independent Living. This is for any persons that require home care support to stay at home rather than to have to go into a facility.

I have a 79-year-old mother who I moved up to Prince George in February. She was receiving home care support through our local health authority. I was told that the only options I had were to continue on as it was or to have her placed in a facility.

I didn't feel that my mother was ready for a facility, and it was only by accident that I found out about the CSIL program through the old-timers society — attending one of their meetings. This program seemed perfect for my mother, with the support of the family, and I ran into a lot of resistance from the local health authority in trying to get my mother accepted into this program.
[ Page 210 ]

I was told right off the bat that she wasn't a suitable candidate, that the decision on whether a person was accepted or not was solely at the discretion of the health authority. In investigating this, I found out that there aren't any really hard, fast rules on who can get accepted, how they get accepted and the number of hours that you're allocated for this person.

Basically, the CSIL program allows caregivers such as myself to set up a non-profit organization. The health authority would provide funds for us to hire our own people to take care of my mother.

I moved my mother out of a seniors facility where they were supposed to be able to look after themselves, and we moved her into a family home, my daughter's home.

We terminated our relationship with Northern Health as far as having the caregivers come in to look after my mother. It wasn't working. We had to adjust to their schedules, such as my mother being told she had to put her nightie on at seven o'clock at night. She has never got ready for bed at seven o'clock at night in her whole life.

Those were the kinds of challenges that we were having. Her schedule had to adapt to them. Another example was that her bath days were Tuesday and Thursday. A new caregiver came on a Monday and didn't read her care plan and made her take a shower in front of a stranger.

This I find totally unacceptable, and because of it I really pushed to find out more about the CSIL program. One of the things that we came across was a program review that was done in 2008 at the request of the government. I've given you a copy of the report.

It starts off in the introduction saying that "2 percent of B.C.'s almost 31,000 home support clients have opted for self-managed care, but the CSIL program is widely acknowledged as valuable and successful."

People aren't aware of this program, and trying to get accepted into it is very difficult. If you look at page 3 of the report, it says that the home support services, including those delivered through CSIL, are intended to assist the clients to live in their own home, supplement but not replace the care provided by families, provide respite care for the families.

[1845]

The problem with this is that the legislation leaves the health authorities with the total discretion in who's accepted into the program and who isn't. I was told that there was no money in their budget for my mother to be part of the CSIL program. However, they had approximately $12,000 a month to place her in a facility. It didn't make sense to me.

So I pursued this diligently. My application went in, in June. I received word today that my mother has been accepted into the CSIL program and that we will now receive funding, and we can form our society and have caregivers look after her. We have been paying all along out of our own pockets for this because we feel very strongly as a family.

Some of the action areas that came out of this report…. Three things need to be done: "assessment tools and allocation of hours, resources to promote CSIL and support CSIL clients, and the hourly rate for support workers."

There is no standard I can find that says that the different health authorities are able to dictate how many hours a person is going to receive and what rate that you're going to be able to receive funding for, for those hours.

The maximum number of hours in Prince George is 137. That's a maximum for somebody who is virtually blind, has mobility issues and needs 24-hour care. We can manage on what they're providing, but as she becomes progressively more dependent, we don't have any recourse in order to get these hours changed or get additional funds. It's still a savings to taxpayers to do this.

I would request that the government look into the CSIL program, as we're all aging. This is a huge tax savings to taxpayers, if you can keep people at home for $4,000 a month rather than put them into a facility. We don't need more facilities. We need more access to programs like this for families that want to take care of their disabled children or their aged parents or whatever.

One of the things that came out of this report is that a lot of the health authorities are telling people that there is no avenue for appeal if you're turned down. That's exactly what I was told. When they said that my mother wasn't going to be accepted, I said, "Well, I would like to appeal," and I was told that there is no appeal process. Having phoned Victoria, I found out that there is an appeal process.

If you're not prepared to go the mile and really continue on for something that you believe is important and that's right…. Most people wouldn't pursue it as I have.

I think the government has an opportunity here to get the best value for their health care dollars by opening this program up. Just in Prince George I know there are numerous people that would be very interested in this program rather than putting their parents into a facility.

I guess in the conclusion of the report, which I agree with, it states: "Broadly grouped, the action areas address the dimensions of equity, relevance, developing partnerships, reducing barriers to access and ensuring success. It now remains to prioritize the action areas, a matter only weakly addressed in the reviews, and from there to develop specific responses to address the priorities."

I would really like to see in the next budget the legislation changed. I guess, first off, to perhaps remove the sole authority from the health authorities and make it through the ministry so that it opens it up for people, and that there's a standardizing of how people are assessed — the number of hours and the dollars — so that it's equitable throughout the province.

J. Les (Chair): Thank you very much, Betty. I guess I can relate. I, too, have a 79-year-old mother. These are questions that occupy many of us.
[ Page 211 ]

M. Mungall: Thanks very much, Betty. When you said that your mother had Alzheimer's, I immediately thought of my grandmother, who also has Alzheimer's.

There are two things. One, I want to make sure that I'm hearing you correctly. You want to see better communication of this program, better coordination and better working with people such as yourself in terms of advocating, getting service to the people who need it.

[1850]

Secondly, the Finance Committee can only do so much. We can definitely make the recommendation in terms of how this is a savings to the taxpayer, and this is a worthwhile program. What I'd also suggest, if you haven't already, is to write a letter to the Minister of Health. I will take on the task of making sure he gets a copy of your presentation as well, because I think there are also some other angles that he'll need to look at.

B. Bryce: Well, as we all age…. I know that if you look around the room.... I don't how many of us will want to be in a facility when we're in the same situation. We need to develop the strategies now to deal with us when we're at that point.

N. Letnick: You're absolutely right. We do. As somebody said before: "That's the elephant in the room."

Did you say $4,000 a month?

B. Bryce: That's what they're prepared to allot to us to keep my mother out of the facility.

N. Letnick: And you also said something about: "We need to find an equitable funding formula."

B. Bryce: It's my understanding that throughout the province the health authorities set the number of hours that a client is entitled to, and they also set the dollar figure for those hours. So there isn't equity throughout the province for these people. It depends on the health regions as to what a client is entitled to, and it should be standardized.

If anything, we should be receiving more up north because we don't have access to all the facilities that you would have in the large urban areas.

J. Thornthwaite: Thank you very much for your presentation. You're just the type of person that we like to talk to, and I really appreciate your comments on how we can improve the system as well as save the taxpayers' money.

Basically, what I'm getting out of your presentation is that you support this program. You think it's a great program, but perhaps we're not doing a good enough job of promoting it and allowing it to be available to the people that….

B. Bryce: Quite frankly, it's the best-kept secret in Prince George right now. And that seems to be the same throughout the varying health authorities, if you read the program review that was done in 2008. For some reason it is not being advertised. It's not being discussed or even put forward as an option for people.

J. Thornthwaite: Is that your knowledge about Prince George, or do you know anything about whether it's the best-kept secret in other areas of the province?

B. Bryce: If you read the report that was commissioned, that's what it states in there as well, and I don't know why.

J. Thornthwaite: Okay. Thank you very much.

J. van Dongen: Thanks very much for the presentation. It reminds me of a case of an 11-year-old girl who was drawing a lot of services in my community. We were able to reprogram, by the parents running the system for the service providers, and saved $3,500 a month and got much better service for the child and the family.

I think this program is dependent on family members like yourself that are willing and that demonstrate capability to manage the funds and hire the professional service providers, etc. I think that would be the one caveat to making this program successful. It will not work in every situation.

I appreciate you bringing it forward.

B. Ralston: Just to follow on with what John is saying, I'm looking here in the paper, and it does say: "Clients thus assume the role of an employer with all the associated obligations. CSIL clients are frequently referred to as CSIL employers." I take it that that's more of a metaphor. Your mother isn't actually doing all the work of hiring. You're assisting her in….

B. Bryce: We are. We formed a non-profit organization for the care of my mother. That non-profit organization is actually the employer, and we must do the CPP, WCB and all of that, as you would with an employee anywhere else.

B. Ralston: Your mother is fortunate to have you and the members of your family behind her to do that. I think that kind of reinforces John's point that it is only for those people who have either supportive family or friends or maybe a church — or a religious institution generally — to do that.

B. Bryce: No, it's not for everyone. I agree. It's not for everyone.

J. Les (Chair): Well, thank you for coming this evening. I think we've all learned a little bit from what you've had to say.
[ Page 212 ]

B. Bryce: It's probably a welcome relief from the HST too.

J. Les (Chair): Okay. It's now almost seven o'clock. That ends the scheduled presentations, but it's my understanding that there are at least two people or two groups of people who would like to make a short presentation. This would be the time that they could do that. As I said at the outset of the meeting this afternoon, we will allocate five minutes each to make that presentation.

We will start with Sharel Warrington, Valentine Crawford and Lyn Hall, all from school district 57.

You've probably never felt under so much pressure in your life.

[1855]

S. Warrington: Good evening. Thank you very much for allowing us this opportunity to speak to you, even though it's limited time. We are disappointed, though, that we were not able to address you at the full length of the time, because we have some very important issues that we would like to bring forward.

I'm going to begin. This is Lyn Hall, our chair, and Valentine Crawford, a trustee in school district 57 as well.

Public schools are the single most important place where both learning and public communities can gather and succeed. We believe that public schools and services provided within them are the prime foundation of a free and democratic society. B.C.'s future is built in B.C.'s schools.

However, the cost to deliver educational support and support services has also steadily increased. Inflationary pressures and an expanded mandate, along with the increasingly complex student needs, have placed more and more pressure on today's classrooms and school district budgets.

This past year this board faced a significant deficit of $5.5 million. With only a small surplus to draw from, the board adopted a three-year plan to bring its expenses in line with its anticipated revenues. The board's plan depended on the government's commitment to a three-year, predictable, stable funding process.

The recent action of the government to eliminate the annual facility grant, to increase medical service premiums, the anticipated costs of the harmonized sales tax, carbon offsets, along with additional costs to provide full-day kindergarten will increase our capital and operating budget to an additional $5.1 million dollars.

In answer to the select committee's question, "Should the education budget be protected in the provincial budget?" without a doubt, the answer is yes. Further, in order to protect the education budget at the provincial and the local level, more funding is required. To meet our responsibilities, the board must have funding support that is predictable, provides sustainable planning for all programs and services, supports innovation and creative educational opportunities, addresses inflationary pressures and addresses the challenges of our time.

Our recommendations. Immediately, the government needs to reinstate the annual facility grant. The removal of this grant is having both immediate and long-term consequences and will ultimately impact our operating budget over the next years.

Also, the government needs to provide a funding formula over a three-year cycle that is predictable, sustainable and meets the growing educational needs of our students, our schools and our communities. Investment in education today is an investment in the future. It must be the government's top priority.

J. Les (Chair): Will you take a couple of questions?

S. Warrington: We certainly will.

J. Thornthwaite: Thank you very much for coming. I know we're on a quick time frame here, so I've just got two.

As you know, we've also got health care, which chews up almost 50 percent. So given the fact that we don't have the same revenues that we used to have, that we don't have the same income tax and corporate income tax revenues, etc., that we did have even just a year ago…. Given the fact that things have to…. Everybody, all ministries, are given a reduction. Where and when would you think school districts should be consulted on their input as to how that is going to occur?

S. Warrington: Immediately. But I'm going to allow our chairperson to answer that question.

L. Hall: I think the consultation process is something that we've been talking about for quite some time. If we can use the annual facility grant as an example, I think that consultation prior to the announcement would have been appropriate.

We quite often have our secretary-treasurers attend meetings with ministry staff. That's a pretty good opportunity, I think, for ministry staff to have an opportunity to speak to secretary-treasurers throughout the province.

J. Thornthwaite: What time of the year would that be, that you would want that information?

[1900]

L. Hall: I think it would probably have to be around February-March. That would be a pretty good time of year.

M. Mungall: Thank you very much. So again on the consultation issue, I just wanted to clarify. I've heard from several school districts that they received absolutely no consultation around the annual facility grant.
[ Page 213 ]
So I wanted to ask you the same question. Nothing verbal, nothing in writing — did you get anything at all?

S. Warrington: Nothing.

J. Les (Chair): All right. Thank you very much for coming this evening. I apologize for the brief nature of our getting together.

S. Warrington: We would certainly appreciate it if school districts would be given priority when you set up these meetings, because we have a very vested interest and would have much appreciated the opportunity for a more lengthy presentation. But thank you so much for your time.

J. Les (Chair): Finally, we have four people here from the Quesnel Teachers Association, the Quesnel board of education and the Construction Maintenance and Allied Workers union.

Don't worry about the fact that this is only a five-minute meeting. If you have a presentation or you'd like to submit something afterwards by e-mail or what have you, it will be considered just the same as any other half-hour presentation might accomplish.

Go ahead.

D. Bardua: We've come here today in an unprecedented action of the four partners-in-education group. The president of the Quesnel District Teachers Association, Teri Mooring; Caroline Nielsen, chairperson of the school board of education; and I'm Denice Bardua from the Construction Maintenance and Allied Workers. Theresa Galloway from the Quesnel and district PAC sends regrets.

We're standing here united to fight the impacts that the cuts have on public education in Quesnel. To address those cuts and the immediate impacts they're having on our Quesnel school district is Caroline Nielsen.

C. Nielsen: I'm not going to reiterate everything that you heard from Prince George school district. The story in Quesnel is very similar. I would like to add that we fail to understand the logic in granting tax money to school districts and then taking it away in the form of taxes. That just doesn't make any sense.

The increased costs to our districts are not being covered in increases. I heard a question from here about the annual facility grant and the amount of notice that we had, or any consultation. Actually, our experience was quite the contrary. As late as the end of June we were told: "Don't worry. The annual facility grant money is coming. It's just a timing thing. Go ahead. All systems go." So we did.

We did all of our nice school maintenance over the summer, like we usually do, when there are no students in the school, only to have the rug pulled out from under us at the end of August. That is a huge hit to our district.

The actual impact, proportionately speaking, is considerably larger in small northern districts than it is in large urban districts. Case in point, we have less than 3,700 students and that includes our adult and continuing ed students enrolled in our district. Our hit was nearly $1 million. Vancouver has over 56,000 K-to-12 students and 33,000 adult ed and continuing ed students, and their hit was $10.2 million. It's a little disproportionate, don't you think?

T. Mooring: Okay, so just to wrap it up, what we're asking the standing committee for is for the annual facility grants to be reinstated. We're asking for the other unfunded costs to be funded as well. School districts are suffering. There are many unfunded costs that are crippling the system.

But beyond just giving back what's been taken away or unfunded, school systems need funding in order to meet the government's own legislation. We have Bill 33, legislation that deals with special needs students and class size and composition. Currently, school districts cannot meet those levels in the legislation because of underfunding.

From an investment point of view, we don't see any better investment we can make in our society than in our youth and our children. They are our future leaders, and we believe that they deserve better than what they are currently getting.

[1905]

J. Les (Chair): Quick question? Doug.

D. Donaldson (Deputy Chair): Thank you for your presentation, however brief it was. As John says, anything written that you can submit will definitely be worthwhile. It's impressive to see the three different organizations that you represent coming together in a presentation that shows unity. That's impressive.

I just had a quick question on Bill 33. Maybe you could help me out with it a bit. I was alerted to…. It's around the funding that's required for special needs assistants and that is necessary in order for some of these special needs students to attend a class. When that funding isn't there, does it create a situation where a special needs student may not be able to attend a class?

T. Mooring: Well, you know, in the Quesnel school district that I can speak of, my information is that they're doing their best to share resources. What might happen is that you'll have one special ed assistant in a class who will support more than one child. Sometimes classes are purposely structured that way.

What that means, though, is that you have some classrooms that are fairly heavily loaded with special needs students, which creates quite a heavy workload for the
[ Page 214 ]
teacher — who, then, is not only responsible for the students but also responsible for the special education assistant, because that teacher directs that person as well.

A better investment is to reduce class size and hire more teachers so that the workload can be spread out and students are supported in a much better way. When you have classes loaded up with special needs students — we have some very large situations in Quesnel — teachers can only do so much. It's vital that the legislation is in place. The targets in that legislation need to be met, and they haven't been.

C. Nielsen: I'd like to add to that. In the Quesnel school district we spend more than double on special education of what we receive in extra funding for special ed. If we didn't, we wouldn't be able to provide the service at all.

B. Ralston: I was just quickly reading your presentation, and I wanted to give you an opportunity to comment on the boilers at the Quesnel junior school. You say that the facility has failed a facility audit every year for the last ten years. You earmarked $150,000 in the annual facility grant to replace a boiler that's gone. What's the contingency plan if a boiler fails during the school year? Will students be able to continue occupying this building?

C. Nielsen: That $150,000 wasn't to replace a boiler that is gone. It was the contingency plan. But it was deemed a surplus, so it was taken away.

B. Ralston: So if there's a failure….

C. Nielsen: If there's a failure we will be going hat in hand to the provincial government, saying: "Okay, now it's an emergency situation. You said there'd be emergency money. Where is it?"

J. Thornthwaite: Yeah, I think that the Minister of Education has made that clear, as far as providing for emergency situations.

But that isn't my comment. Just kind of related to the question before: you are saying, then, that in June you were told that all systems were a go? There was no consultation with your secretary-treasurer and the ministry?

C. Nielsen: Our secretary-treasurer repeatedly contacted the ministry to ask where the final payment for the 2008-2009 year was, and because the annual facility grant doesn't follow either the provincial government's fiscal year or the school board's fiscal year — it's kind of in between, so it was really the first payment for the following year — we were told: "Don't worry. It's coming; it's coming." As late as the 29th of June we were told that.

J. Les (Chair): Great. Thank you very much for coming. With that, we are flat out of time. Our staff will have to hustle that much more to get us back on time somehow. Maybe our flight will be a little bit later than we had intended, but that'll be all right.

Thank you all very much. That concludes today's meetings.

The committee adjourned at 7:10 p.m.

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