2010 Legislative Session: Second Session, 39th Parliament

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

Tuesday, September 21, 2010

2 p.m.

Banquet Room, Aspen Grove Golf Club

Lake Country, 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; Jane Thornthwaite, MLA; John van Dongen, MLA

Unavoidably Absent: John Rustad, MLA

1. The Chair called the Committee to order at 1:59 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 4:56 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

Tuesday, September 21, 2010

Issue No. 22

ISSN 1499-4178

[ Page 629 ]

TUESDAY, SEPTEMBER 21, 2010

The committee met at 1:59 p.m.

[J. Les in the chair.]

J. Les (Chair): Good afternoon, everyone. My name is John Les. I'm the MLA for Chilliwack and the Chair of this legislative committee. I'd like to welcome everyone who is here already this afternoon and thank you for the time you take to be involved in this important process.

Each year in preparation for the upcoming budget — in other words, we're now talking about the budget for 2011-2012 — the Minister of Finance releases a budget consultation paper by September 15, which was just last week. The budget consultation paper presents a current fiscal forecast. It identifies key issues that need to be addressed in the next budget.

The paper also provides a focus for the consultations of this committee. It includes information on how members of the public may provide their views on budget priorities. Copies of the consultation paper are available on the information table at the back of the room, if you'd like to help yourself to one.

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Our committee is the parliamentary committee which is responsible for conducting public consultations on the forthcoming provincial budget. The committee is required to report to the Legislative Assembly no later than November 15. This year we are holding 14 public hearings in each region of the province. We have also scheduled three video conferencing sessions to hear from residents of rural communities living in more remote areas — the second time that we've tried this method of consultation. This week we are meeting in Lake Country, Penticton, Kamloops, Cranbrook and Castlegar, and last week we were in Vancouver and Surrey.

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

Committee members carefully consider all of the public input that we receive, whether it's oral, made here today; on an on-line survey form; a submission in writing; or an audio or video clip. Our deadline to receive submissions is Friday, October 15.

At today's meeting each speaker may present for about ten minutes, with up to five additional minutes allocated for questions from committee members. Time permitting, we may also have an open-mike session near the end of the hearing, with five minutes allocated for each presentation. Today's meeting is a public meeting. It'll be recorded and transcribed by Hansard Services. A copy of the transcript, along with minutes of the meeting, will be printed and will be made available on the website at www.leg.bc.ca.

In addition to the meeting transcript, a live audio webcast of this meeting is also produced and is also available on the committees website to enable interested listeners to hear the proceedings as they occur. An archived copy of the audio broadcast will also be retained on the committees website.

I will now ask the other members of the Finance Committee to introduce themselves, starting to my left with Bill Routley.

B. Routley: Bill Routley, Cowichan Valley MLA.

B. Ralston: Bruce Ralston. I'm the MLA for Surrey-Whalley.

D. Donaldson (Deputy Chair): Doug Donaldson. I'm Deputy Chair and MLA for Stikine up in the northwest part of the province.

I should mention that Michelle Mungall, who's the MLA for Nelson-Creston, is on her way. She's helping people on a roadside breakdown right now. So she's driving, but she'll be here shortly.

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

J. Les (Chair): Needs no further introduction.

D. McRae: I'm Don McRae, the MLA for the Comox Valley.

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

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

J. Les (Chair): In terms of staff, we're also joined today by our Committee Clerk, Susan Sourial, sitting immediately to my right. And also with us are Byron Plant, who is staffing the registration desk, as well as Hansard Services staff Michael Baer and Jean Medland, who will be recording and preparing the written transcript of this meeting.

With those formalities out of the way, I'd like to call our first witness, and that would be from the UBC Students Union Okanagan — Amanda Lepholtz and Kirk Chavarie.

Please proceed.
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Presentations

K. Chavarie: Good afternoon, everyone. Before beginning today, I would like to acknowledge the Okanagan people, whose traditional territory I'm on and on whose territory our members live and learn.

My name is Kirk Chavarie, and I'm the external coordinator for the UBC Students Union Okanagan, Local 3 of the Canadian Federation of Students. I'm also a second-year visual arts student studying at UBC Okanagan.

A. Lepholtz: My name's Amanda Lepholtz. I am the internal coordinator on the UBC Students Union Okanagan, Local 3 of the Canadian Federation of Students, and I'm a second-year student studying in the faculty of arts.

K. Chavarie: We'd like to begin by thanking the committee for hearing our presentation today and note our appreciation for the opportunity to participate in this process.

Our students union represents over 7,000 undergraduate and graduate students at the University of British Columbia. All of these students study in Kelowna. We exist to advocate for our members to provide services that assist in making students' lives easier and to offer extracurricular experiences that improve the university experience.

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A. Lepholtz: Additionally, our constitution directs that the students union mandate is to advocate for a system of post-secondary education which is accessible to all, of high quality and one which is rationally planned. It is on that point that we address the Finance Committee today.

In recent years students' share of the cost of public post-secondary education in B.C. has increased, yet public funding for student financial assistance has been reduced. Our members have prioritized seeking government measures to reduce student debt. Our presentation today focuses on five key priorities for our members. These priorities are to see the B.C. government commit to:

Recommendation 1. Reduce tuition fees to 2001 levels.

The first priority for all of B.C.'s colleges and universities is to reduce tuition fees. To start, reduce tuition fees to 2001 levels. This would have the most impact of any recommendations we can give. This would impact low- and middle-income earners the most but, at the core, change and reduce the largest barrier to a fully accessible post-secondary system today.

B.C.'s post-secondary system has, through the past decade, undergone a radical transformation. Since 2001 tuition fees have on average doubled across the province, and here at the UBCO campus they have more than tripled. This is a massive increase and cannot be adequately explained by supposed inflationary pressures created by the 1996-2001 tuition freeze.

The decline in government funding to universities and colleges continues to fuel pressure to increase tuition fees. In comparison to other provinces, B.C. went from having tuition fees 30 percent below the national average to now surpassing the average by 7 percent. In that past eight years we have set the record among provinces for the highest rate of increase in tuition fees.

There is ample evidence that financial barriers are the most significant obstacle to many citizens achieving entry into colleges and universities. For this reason, we recommend that tuition fees in B.C. be reduced to 2001 levels.

K. Chavarie: Recommendation 2. Restore per-student funding to 2001 levels, accounting for inflation, and index future funding levels on inflation.

Across the system per-student funding has declined by 15 percent in the past eight years, and every year that this underfunding is not addressed, the funding gap worsens. Despite British Columbia's stated goal of creating a world-class system of post-secondary education where a culture of excellence prevails, at UBC the British Columbia government has been remiss in its obligations to adequately fund provincial post-secondary education institutions.

Under pressure from students and faculty, the B.C. government has recently begun to make up for earlier funding cuts, but progress has not been fast enough. Between 2001 and 2006 the budget of the Ministry of Advanced Education increased only 9.6 percent — less than the rate of inflation, which was at 12.9 percent. This was over the same time period as well.

Moreover, this increase has done nothing to address the decline in B.C.'s per-student funding, which has fallen every year since 2001. Total spending by the Ministry of Advanced Education actually declined in 2008 by at least $9.6 million. This funding policy is either out of step with the stated goal of creating a culture of excellence, or it fails to recognize the reality of inflation. It needs to be addressed.

A. Lepholtz: Recommendation 3. Eliminate the interest charged on B.C. student loans.

I would like to now turn to the issue of student debt. At an average of $27,000 upon graduation from a four-year program, B.C. has the highest student debt in Canada outside the Maritime provinces. It is important to note that this figure only includes public student loan debt, and according to Statistics Canada, that number is in excess of $32,000 when private debt is included.

Members should be aware that following graduation, student loan borrowers pay interest on their public student loans substantially above the government's cost of borrowing. Members may not be aware that nearly every
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province charges a lower interest rate on student loans than B.C.

As you know, students with higher debt levels upon graduation pay more for their education through higher interest rates than those who had to borrow less or nothing at all in order to get an education. A system in which low- and middle-income students are expected to pay more for the same education as those who can afford to pay for it up front is fundamentally inequitable.

By keeping interest rates as high as they are, the government is penalizing those students and their families with the least amount of financial resources. Meanwhile, in terms of the impact on the provincial treasury, the annual cost of even complete elimination of interest on student loans is nearly negligible.

We recommend that government eliminate interest charged on government student loans to ensure that those who can least afford an education no longer have to pay the most.

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K. Chavarie: Recommendation 4. Increase need-based grants.

Not only is B.C.'s rate of interest higher than average; B.C. is last among all provinces in the provision of non-repayable student financial aid at 60 percent below the national average. A report released in October 2008 stated that students in British Columbia received the least amount of non-repayable assistance in the country. Only 12 percent of the student aid in B.C. is not in loan form. B.C. currently trails behind Alberta, Saskatchewan and Ontario, who all designate over 30 percent to non-repayable financial aid.

A study of wealth and assets done by Statistics Canada shows that student debt will increasingly have an influence on the ability of graduates to participate in the economy and enjoy the quality of life experienced by past generations.

If students have difficulty repaying their loan, it is recorded in the student's credit report and likely limits their ability to finance future investments, even when their financial situation improves.

We recommend that the creation of a provincial system of non-repayable upfront grants be implemented.

A. Lepholtz: Recommendation 5. Job creation strategy for students, employment strategies for post-secondary.

With so many students struggling with the cost of living as well as the cost of education, we recommend creating an employment strategy for people who are returning to school and who have student loans. With B.C. having the lowest minimum wage in the country, post-secondary students, like many other groups, struggle over the summer to pay for the already inflated fees as well as the cost of living.

With the new HST putting burdens on the service industry as well, other students who count on jobs within this industry will struggle even more within 2011. We recommend the creation of an employment strategy aimed at the hiring of students on loans.

K. Chavarie: In conclusion, the mandate of our students union is to promote a post-secondary system that is rationally planned, accessible to all and high-end quality. The recommendations made in this presentation are not simply a guide book for creating a more accessible UBC but an important step towards rebuilding the economy of British Columbia.

The B.C. government has focused on rebuilding the economy by turning B.C. into a low-tax jurisdiction in order to attract the corporate investment. In the midst of a worldwide financial crisis, however, this is simply pushing on a string.

A. Lepholtz: In fact, the revenue collected from tuition fees will this year outpace the revenue the B.C. government collects from corporate taxes. This is a symbol of a backward approach to building an economy.

The UBC Students Union is committed to lobbying for an improved post-secondary education system that contributes to a flourishing province for all of British Columbia. Students of UBC would like to see that the Select Standing Committee on Finance and Government Services will choose this year to prioritize and make the investment for an accessible and affordable post-secondary education system.

The recommendations presented today — reducing tuition fees, increasing institutional funding, eliminating student loan interest and offering more non-repayable student aid — are not final solutions to the issues facing our post-secondary system, but they are indeed needed to start.

Former president of UBC Dr. Martha C. Piper once said:

"Universities help shape our civil society by emphasizing the importance of democratic rights and freedoms and by educating global citizens who are politically, culturally and socially aware. Universities also provide solutions through research, discovering knowledge and creating new technologies that can bring hope to millions who may be suffering from poverty, malnutrition or disease. A third contribution by universities is the development of economic opportunities through innovation. A culture of innovation is the backbone of a strong and healthy economy that can withstand even the most catastrophic events."

"I have learned one great truth. The answer for all of our national problems, the answer for all of the problems of the world, comes…to one word. That word is education."

Thank you for your time.

J. Les (Chair): Thank you. I have a couple of questions, first of all from Norm.
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N. Letnick: Thank you for your presentation. It is great to see you again, and really I would say that a lot of the recommendations that you've made are items that we have to continue to work towards. So again, thank you for doing this.

Two question, if I may. The first one is the $27,000 debt load that we're talking about here. Is that for students that are carrying debt or is that for all students? I understand that some students don't carry debt at all — right? — either their parents or jobs or whatever. They pay for their tuition and books and lodgings, so they don't have debt. That's the first question.

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Then the second question is.... With the major expansion that has been going on for a few years right here at UBC Okanagan with engineering, management, nursing, arts and all the hundreds of millions of dollars that are being invested here, which allows you — and our kids — to stay here and not have to go to Vancouver…. Do you know roughly how much money that students are saving by not having to leave this part of the province to get that kind of post-secondary education that they're getting here?

So the $27,000. Is that per student — like all students divided by debt equals 27? Or is that just for…?

K. Chavarie: I think what you're tacking on…. The $27,000 relates to students who are taking out student loans from the beginning of their education to the end. It's on average — I think it's a four-year plan. That's what students are coming out with following their education.

To tack on to your other question. Recently what we've been noticing, specifically at UBC Okanagan, is that there's been a change in population. We're over 7,000 students this year, and one of the biggest things that UBC has been implementing is bringing in more international students. Originally, UBC Okanagan was considered to be a community university. It was actually called UBC Okanagan.

We've seen a change now where it's called UBC — the same as UBC Vancouver — and lots more students from…. It's actually, I think, more average students coming from out-of-province places such as Alberta and Ontario. We're not seeing as many students from the actual community of the Okanagan attending our university.

I just want to kind of keep that in note as well — that we are seeing a big change in the population of students from the actual B.C. area.

N. Letnick: Right. So if you don't have the information today — and I appreciate that — if you wouldn't mind sending it in. I'd really like to know what the answer to the question is.

D. Donaldson (Deputy Chair): Thanks very much for your presentation. Your points are well made, and the recommendations are very worthwhile. Education is a key for the future. I represent a very remote rural area. Without education, the local people aren't going to be able to take control of the local opportunities.

My question to you is on the affordability of post-secondary education. You discussed well the revenue side, where students can make money and how the impact of the HST is having an impact on jobs that students could get in the service industry, for instance, to pay for their education.

On the cost side, you made some good points about accessibility through the tuition increases. Do you have friends or do you have stories of people that you can just expand on and share with us that haven't been able to access the kind of education opportunities they wanted to because of affordability?

A. Lepholtz: Personally, I know that with a lot of students we've seen a change in workload. For the average student, five years ago they were only expected to work about eight hours per week in addition to having their school work on top of that — and enjoying the experience of university as well.

We've seen it actually increase to about 30 hours per week, because tuition fees continue to increase. More students are having to take on loans and having to…. As it continues on with your loan, the interest rates increase on that as well. In the future they're going to feel like that have to pay more, so they're trying really hard to pay them off as soon as possible so that the interest rates don't grow the fees that they're going to have to pay off.

We've definitely seen a change in the workload of hours students are having to put in, especially since the minimum wage is so low in British Columbia, as well, at $8 per hour. Thirty hours a week at $8 per hour doesn't really make enough for a student.

Having to work a lot more, having to take a full course load as well as having to enjoy the university experience almost doesn't even exist anymore, which is sort of taking away from the mandate of how education should be, because it is about experiencing things as well.

J. Les (Chair): Thank you both very much. I actually have several committee members who still have questions, but we're out of time. Fifteen minutes goes by in a hurry, I know.

We have your submission, and thank you for that and being here this afternoon. We need to move on to our next delegation.

Next, we will hear from Tourism Kelowna — Roger Sellick and Brad Sieben. Go ahead whenever you are ready.

R. Sellick: Good afternoon, Mr. Chairman, members of the committee. My name is Roger Sellick. I'm the chairman of Tourism Kelowna, and I'm joined to-
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day by Brad Sieben. Brad is the vice-chair of Tourism Kelowna.

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In looking at your website I noted that the membership of this committee is the same this year as it was last year, so it's not our intention to repeat the presentation that we made last year. We do, however, want to reinforce a couple of points. Essentially, we want to thank the committee for the recommendation that you included in last year's report that the 2 percent additional hotel room tax be extended beyond June 30, 2011. If we have an objective today, it's to have you repeat that in this year's report.

The AHRT in Tourism Kelowna's case constitutes 60 percent of our revenues. Those funds allow us to leverage with grants and co-op advertising and allow us to strategically market the Kelowna brand in markets within Canada where we believe we can increase the visitation to British Columbia by using the Kelowna brand.

We'd just like to give you a little background. Tourism Kelowna is a not-for-profit society. We have 17 directors who are elected from the industry. All sectors of the local industry are represented. The hotel association holds seven of the directors' seats. The majority are held by attractions and other tourism operators. We report to the municipality annually. We are essentially their destination marketing organization. We submit an annual report to the Ministry of Tourism, Culture and the Arts so that they're aware of our business plan and how that business plan is integrated into the Tourism B.C. marketing programs.

I would just like to reiterate what my predecessor last year indicated in terms of summing up the value of the AHRT. Those revenues allow us to develop markets, growing the customer base as opposed to competing with other destinations for the same customers. We believe that this incremental user-pay tax is the appropriate mechanism to generate tourism marketing revenues and that it should be maintained with appropriate accountability measures.

Essentially, that is my presentation in terms of the overall benefit of the AHRT going forward. I'd like to just have Brad make a few comments with respect to the Kelowna brand.

B. Sieben: Mr. Chairman and members of the committee, as Roger alluded to, my name is Brad Sieben. I'm a member of the board of directors of Tourism Kelowna, assuming the role of vice-chair. I'm also the general manager of the Hotel Eldorado here in Kelowna. It's a business that our family owns and operates.

As a stakeholder, I've been able to sort of see where the Kelowna brand has evolved to, and it really has been an evolution. In 2004 the additional hotel room tax was started here in Kelowna, and it's been really a market growth. There have been some markets that were existing, like the Calgarys, the Vancouvers. But there are other markets that weren't really on the radar for a destination.

When you look at it, you look at things like southern Ontario — Toronto. Edmonton, believe it or not, wasn't one as a key market. Certainly, there was a travel pattern in summer months. What Tourism Kelowna has been doing is that we've been working in tandem to support air access and working with the Kelowna International Airport to support initiatives there.

When you look at destinations like Edmonton and Toronto, where you have daily direct flights, those markets have grown exponentially. Certainly, it's that 2 percent hotel tax that allows you to go into those markets and support that.

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When you think of the attributes that Kelowna as a brand has and has been able to put onto both a national and a world stage — the world-class wineries, the fabulous golf, the beaches and the summer weather…. I wish we still had it in September a bit more here. It's this that is the value proposition that Kelowna can put out into the national market and the world.

At the end of the day — this is a Finance Committee — it's bringing back revenue into this region and really B.C. in general. Kelowna's position as a unique market here is drawing business that may have otherwise gone elsewhere. The 2 percent hotel tax allows Tourism Kelowna to put the brand out there, to show Canada and the world what Kelowna has to offer, and as a result, more visitation has been coming. Data shows that visitation has grown even with the ups and downs, and as a result, it's a key economic driver for British Columbia, and for Kelowna specifically.

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

B. Ralston: I remember your presentation last year. It was helpful in understanding the implications of the impact of HST on whether that tax would continue or not, so I'm glad we were able to make that recommendation.

I gather from what you say that this tax continues to have the support of the tourism operators in the benefiting area, and I'm wondering if you can just tell us: how much does the tax raise annually, and what's your sense of the prospective revenue over the next couple of years?

R. Sellick: The legislation requires, as you probably are aware, a five-year renewal, and that involves a vote of the accommodators within the taxation area. The recent renewal was about a year ago, and over 90 percent of the operators were in favour of renewing the tax. It generates about $1.5 million.

D. Donaldson (Deputy Chair): Thanks for your presentation. Good to hear from you again.
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I had a quick question about destination marketing and the role that Tourism B.C. played in that. I'm just curious. We know that a decision was made not to continue with Tourism B.C. — to discontinue the organization. So is that having an impact, or how do you see the destination marketing that Tourism B.C. was doing…? How has that been taken up, and how is it impacting your organization?

B. Sieben: I think within terms of how various destination marketing organizations work on various levels, there's a role for all, and I think from an international basis, when you're marketing B.C. as a whole and the various components in it, there's definitely a market there.

From a Tourism Kelowna standpoint, as a stakeholder, my opinion is that it's best served by a community DMO that realizes the specific attributes that can put it out to the market.

I think Tourism B.C. definitely played a role, and the Ministry of Tourism, Culture and the Arts now plays a role in terms of how that's positioned. Regional DMOs would be the same. But in terms of hitting the specific markets I outlined, Tourism Kelowna is the most effective option for that.

N. Letnick: Thank you again for coming. Part of the Olympic legacy was increased awareness of our brand around the world because of the Olympics. Have you seen any of that? Have you heard your customers say: "Yes, I saw the Olympics, and I'd like to see the Okanagan or the rest of B.C."? Are you getting any of that feedback?

R. Sellick: I think that anecdotally we've all experienced that. I don't think we have specific stats in that area. But anecdotally, we have people, visitors to the community, particularly this year, this summer…. There have been quite a number who've identified the fact that they first became aware of British Columbia as a consequence of the Olympics.

The B.C. brand is a strong brand, but as Brad has mentioned, it is critically important, we believe, that the Kelowna brand, which also has a high recognition quotient in particular markets, is advanced. You have to go beyond just the B.C. brand in that we've found in some areas — particularly golf, wine, skiing — the Kelowna brand actually provides tourism opportunities that don't exist in many other locations in British Columbia.

N. Letnick: This government continues to advocate for open skies and work towards open skies. I can assume that you are also supportive of the initiatives like that.

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B. Sieben: Certainly, I think the more — for lack of a better word — restrictions that are placed on inbound operators and travellers in general, even looking at things like approved-destination status that has finally been achieved with China…. Those are all huge benefits to bring people to the region.

To speak to the Kelowna brand too. Kelowna has become a worldwide brand in itself — certainly, under the umbrella of a B.C. brand. I think the easier it is for visitors to access it, both from air travel — flights, connections…. It's just a benefit for more people to come. The easier it is, the more they will come.

R. Sellick: I'll just make one comment with respect to air access. It's generally known within the industry that when you establish non-stop air service, you actually double the market size. That certainly happened when we achieved non-stop air service into Toronto. So working closely with the airport is very important.

The Kelowna-Edmonton city pair, for instance, increased 400 percent in the first year that we had non-stop air service as opposed to the old routing, which was through Calgary. That's why Tourism Kelowna has focused a lot of its destination marketing efforts in markets where we have non-stop air service, and that's where we've been able to out-compete some of our competitors.

J. Les (Chair): Okay. Seeing no further questions, thank you both for being here today.

Our next presentation comes from Project Literacy Kelowna. Barb Hagan is here.

I'm sorry. I don't have your name, sir, so I'm sure you'll have to introduce yourself.

T. Wilson: My name is Tom Wilson. I'm the president of the board of Project Literacy.

B. Hagan: Mr. Chairman and committee members, thank you very much for allowing us to present this afternoon. We are from Project Literacy Kelowna Society, and we want to share a little bit of our story, our goals, our successes and our concerns.

In 1986 Project Literacy was the first community-based literacy organization to be chartered in British Columbia. Since that time thousands of adults have passed through our doors, many of whom have gone on to find sustainable employment, enrol in post-secondary education.

It was gratifying to hear the students. That's kind of the other spectrum. We're very grass roots, and they're pretty big.

Our clients join apprenticeship programs and, in some cases, leave a life of social assistance that has spanned generations. Our clients also gain a sense of increased self-esteem, confidence that is reflected in the quality of life, not only for them but also for their families and our community. That's a really important point to make.
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Project Literacy has earned a reputation for anticipating the changing face of literacy and for being a vanguard in client-centred program delivery. Over the past five years the need for our services has grown by more than 300 percent, from 150 learners in 2005 to 650 in the past 12 months. With a paid staff of just four, three of whom work on a part-time basis, we train and support a team of 160 volunteer literacy tutors who last year contributed over 80,000 hours, worth in excess of $2 million in-kind to our community.

What is not keeping pace is the funding to meet the escalating need. In fact, our revenue sources have fallen so drastically in the past six months, the future of Project Literacy is in jeopardy. We have already had to implement wait-lists for clients and will need to begin turning people away if additional funding is not secured. Reducing staff and relocating to a smaller, less central location may also be necessary.

Our clients are the most vulnerable in our society. Homelessness, mental health and criminal justice issues, social assistance dependency and severe marginalization are not new conditions for the adults we serve, but often have been multigenerational.

The success of Project Literacy's adult learners, both Canadian and foreign born, is dramatic and reflected in their ability to leave behind a history of chronic low wages, unemployment, poverty and social exclusion. It also influences their children's quality of life and attitudes about the importance and purpose of lifelong learning.

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Alice and Arthur, an aboriginal couple from the Queen Charlottes, were determined to set an example for their three children and break a seemingly endless cycle of low literacy. Not a single family member had ever graduated from high school.

Although Alice battled cancer numerous times, including a brain tumour that resulted in the loss of her ability to read and write, she and Arthur never wavered in their resolve to improve their own literacy skills and to be role models for their children. Often Alice came directly from cancer treatments for lessons. Sadly, Alice lost her battle with cancer and passed away three years ago, but what a legacy she left her children, all three of whom graduated from high school.

A joint 2009 study by the human early learning project and the B.C. Business Council found that unless we do something about the 29 percent of B.C. children who arrive for their first day of kindergarten already behind in their development, we'll effectively forgo 20 percent of the provincial GDP over the next 60 years. Literacy skills aren't just nice things to have; they're essential to our bottom line.

Project Literacy's unique, community-based literacy program is the only one of its kind in Kelowna and the surrounding area. It offers a safe, non-judgmental environment for adult learners who cannot afford to pay for fee-for-service literacy assistance and often are trying to overcome a history of academic failure.

The flexible and positive nature of our one-to-one literacy program and our commitment to an inclusive policy that assesses each individual based strictly on their need for literacy intervention and their ability to participate and benefit from our program fill a need that is often not available in more structured and traditional academic environments.

Many of our clients feel that they do not deserve to go to college or university and would never see themselves in that milieu. Raising their literacy skills and introducing them to successful learning experiences often breaks down their barriers to further education.

Community programs such as the one offered by Project Literacy are better able to engage people in what matters to them, open their eyes to their own capacity to learn and help them gain the self-confidence they need to be able to consider a more formal learning program.

Amanda is a young single mother with two children, aged six and four. She graduated from high school, but she had been told that her literacy skills were completely inadequate for anything beyond a minimum-wage job. When she came to Project Literacy for help, she had been on social assistance for some time. Amanda had always been interested in health care and wanted to study to be a licensed practical nurse. An instructor at the college she applied to told her she would never pass the entrance exam.

We matched Amanda with an experienced volunteer tutor, and six weeks later she wrote the exam and scored 96 percent. Amanda will graduate next April as a fully qualified licensed practical nurse, with a lucrative and promising career ahead of her.

Amanda's confidence and self-esteem have risen so remarkably that she agreed to be interviewed on CBC radio recently so that she could share her story and encourage others not to give up on themselves. She also said that although she's very proud of her own achievement, more than anything she's looking forward to being a role model for her children and providing a positive learning environment for them.

If our community loses the services provided by Project Literacy there will simply be nowhere for people like Amanda to turn. In recent years the majority of our clients were new immigrants who needed English in order to gain employment and integrate into our community. Those numbers have not diminished.

But what we have experienced in the last 12 months is a surge in the number of Canadian-born, English-speaking young people — in particular, young men — who can't read and write or solve math problems beyond a grade 3 level. They want to enter trades and apprenticeship programs in order to support themselves and their families but can't pass basic qualifying exams.
[ Page 636 ]

Some 80 percent of our clients are referred to us by Okanagan College — their trades program — career colleges, employment agencies, the justice system and social service providers. Recent cutbacks in provincial funding to community education gaming grants, the Raise-a-Reader program, service clubs and the Ministry of Education's community adult literacy program have impacted us severely.

[1440]

In January 2007, at the opening of the Summit on Learners and Literacy, Premier Gordon Campbell said: "Reading is the key to opportunity for every child, family and community in B.C. Unfortunately, too many British Columbians lack the reading skills…to succeed."

Mr. Campbell emphasized that the social and economic importance of encouraging adults to engage in continuous learning throughout their working lives is undisputed. Better-educated individuals earn higher wages, have greater earnings growth over their lifetimes and experience less unemployment. Better-educated nations have higher long-run economic growth and higher standards of living.

We, and by that I mean you as members of the Legislative Assembly and all of us at Project Literacy, have created this environment of hope and expectation in our community that says we believe in the fundamental right of every citizen to acquire the essential literacy skills that will enable them to become contributing members of our society; to leave a life — and in some cases generations — of reliance on social assistance; to secure meaningful, sustainable employment; to participate in ongoing education and training opportunities; and for new immigrants, the ability to fully integrate into our community.

More than one million adult British Columbians do not have the skills necessary to read a newspaper or fill out a job application. Literacy is one of the pillars upon which our society stands. Without a healthy, literate population, every aspect of life in our communities is affected: poverty, homelessness, crime, employment and mental and emotional well-being.

I encourage you to do everything in your power to ensure that the goal Premier Campbell set for all of us, to make British Columbia the most literate jurisdiction in North America, is not abandoned now when the need has never been greater.

Our recommendation? Literacy skills are critical in a time of investing in our future. Creating opportunities for better jobs and a more highly skilled workforce are part of that future in every basic way. We recommend that funding for the small community-based agency, such as Project Literacy, be maintained. As a stand-alone literacy organization, not part of a larger institution, we deliver essential literacy skills in a cost-efficient manner, and we ask that worth to be acknowledged through adequate funds.

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

N. Letnick: Thank you both for coming and all of you for coming regarding Project Literacy. Obviously, it's a very important goal that we increase literacy in the province. Your work is very much appreciated and, of course, all the work of the board and the volunteers — couldn't do without it.

The number that struck me that I have the questions on is the 80 percent number. You said 80 percent of your clients are referred to you by Okanagan College. Do they provide you with any funding to go with that long list of clients that they want…?

B. Hagan: No, but they wrote us a really nice letter of recommendation. But no, they don't.

B. Ralston: You mentioned what you refer to as recent cutbacks in provincial funding, and then you set out four areas, I believe: community education, gaming grants, the Raise-a-Reader program, service clubs — I think I would exclude that as a government responsibility — and the Ministry of Education's community adult literacy program.

So just to give us a better idea about this, can you explain what you were receiving from each of those sources prior to the cutbacks and what you now receive? Perhaps you can give us an overall idea of your budget and how that has impacted your budget and the ability of your organization and your volunteers to deliver this service which you spoke, and rightly, so proudly of.

B. Hagan: I'll be pleased to. I did include a budget in the package that I've given you. In terms of the gaming, they cut our funding by 50 percent this year from $40,000 to $20,000. Community education programs were cut across the board, and I might add that the service clubs impact us because they were also cut by 50 percent. We realize a lot of our funding and support from the Rotary clubs and Kiwanis, so their losing 50 percent of their funding already has had an impact on what we are going to receive from those communities.

[1445]

The Raise-a-Reader program. Two years ago the government matched dollar for dollar everything that was raised in each B.C. community. So two years ago through our efforts to raise money on a matching process, we realized about $67,000. Last year they cut that back to a lump sum donation of $500,000 to be distributed to all the participating Raise-a-Reader cities in the province, and last year we realized about $15,000 from the government for a total of $35,000 from the Raise-a-Reader program.

From the Ministry of Education…. They closed the door on new applications, and I could see what was coming over the next couple of years. I had hoped to make
[ Page 637 ]
an application for funding under the community adult literacy program, but because we hadn't already received funding, they weren't accepting our application. So we couldn't even get in the door.

J. van Dongen: Thank you, Barb, for a very good presentation. You made a couple of statements here that are very significant — bottom of page 3. You said that there's been a surge in the last 12 months of young men who couldn't, you know, write or solve math problems beyond a grade 3 level.

B. Hagan: Right.

J. van Dongen: Then you talked on the next page about how a million people in British Columbia can't read a newspaper or fill out a job application. Those are very concerning statements. I wonder if you could expand a little bit on how you arrived at those observations. What does it say about our education system?

B. Hagan: The statistic of one million comes from the province of British Columbia, as a matter of fact — a statement made by Premier Campbell a couple of years ago. In terms of our seeing a surge in young people, what we are finding is instead of…. Two or three years ago a young man could walk down the street with a tool belt on and pretty well get a job. They couldn't hold the job because they didn't have the skills, the essential literacy skills, to hang onto it.

The climate is not so healthy right now for all sectors of employment. So what we're finding is that people who maybe graduated from high school 15, ten, eight years ago are now in their mid- to late-20s. They're marrying; they're having children. What they're finding is they can't support families on minimum-wage jobs. They are either being referred to us by social service agencies, primarily now by employment agencies and, as I said, the Okanagan trades program. So we're just seeing this whole great crowd of young people, and not just young men either.

I talked about Amanda. She's another example of a mid-20s trying to get her life on track and not having…. It's probably not so much not having the skills as not giving herself credit for having the skills and needing just that bit of a boost to get her going.

J. van Dongen: But I think the question is: are we not identifying these basic education issues in our K-to-12 system? Are we not identifying these deficiencies, or are we not approaching it properly in the K-to-12 system? Certainly, this shouldn't be happening.

B. Hagan: I think maybe it might be a combination of the two. Certainly, when we speak to people — and many of our referrals come from school district 23 — not the children, of course, but their parents, and mostly new immigrants…. What we're hearing from young people is that…. Well, those that don't drop out themselves, because that's their choice. But other young people are moving through the system.

There isn't the funding to get the help in the classroom that there used to be. We're looking at classroom sizes of sometimes 30 young people. That's a lot for one teacher to handle. So people, young people, are getting lost in the system. They're being pushed through it.

Many of the people we serve have high school diplomas, but they're still reading and writing at a grade 3 level.

J. Les (Chair): Okay, we're going to have to leave it there because we're out of time. Thank you both for coming this afternoon. We appreciate your presentation.

The next presentation is on behalf of the Vernon Public Art Gallery. I believe we have Sigrid-Ann Thors and Dauna Grant here — and also Pamela Resch. There you go. Who says I can't improvise?

Away you go.

[1450]

D. Grant: Well, thank you very much for the opportunity to come in and talk to you today and talk to you a little bit about some of the challenges that are facing art organizations throughout B.C. but in North Okanagan specifically.

My name is Dauna Grant, and I'm the executive director for the Vernon Public Art Gallery. With me today I've brought the former director of the Public Art Gallery, Pamela Burns Resch. She is now the executive director for the performing arts centre, so she's got some background. Also, Sigrid-Ann Thors. She's on our board of directors, and she has a long history of being involved with the arts in B.C. as well as nationally.

I'll turn it over to Sigrid-Ann.

S. Thors: Thanks very much, and thank you folks for hearing us. Hopefully, you'll understand that we're not here to shoot the messenger, but we do hope that you will take back our message to those people who are going to have an effect on the future decisions that are made financially for our province.

Because this is the Finance Committee, we are sticking strictly to the financial needs and won't dwell on the other aspects, the greater contributions that the arts make to our lives.

There are 25,600 individuals employed in the B.C. workforce. They make salaries from $16,000 to $28,000 a year. Government workers make salaries in the $65,000 range. They work for far less than any other sector, and yet they have the highest education level of any sector. There are many other jobs that many of them hold to help pay for their bills.
[ Page 638 ]

It was interesting that about 15 years ago, we costed a study and came out and said that musicians earn $35,000. At that time, I knew that musicians did not earn $35,000, so I went through the report. In that report, they had also added not only what they made as a musician but also what they made working at McDonald's or whatever other job they had as well as what their parents or their family had given them to assist them to make up that full $35,000.

One of the things we must consider is that their money is left in the community because they can't afford to go anywhere else. They can't travel for holidays. How many of you would stay home in your own community for your holiday? I think most of you — I'm saying most — will travel outside. They haven't funds to invest in stocks or anything else. Their money stays right here.

I managed two orchestras that sit in university towns. I had to keep a suit at each theatre that they performed in because the players didn't always have the ability to get their suits cleaned or to mend them if they were to take them to a tailor to have them properly mended, if that was the case, if it needed that. I also realized that many of them did not have the funds to buy extra socks, so I carried black socks in my container all the time so that they could put them on for their performances.

Funding for organizations is needed for operations and infrastructure, neither of which is generally available. If an employee takes ill or the roof springs a leak, you're out of luck.

Arts funding has been steadily eroded. Announcements are made about cuts after seasons have been developed and contracts signed, creating chaos in the sector. The Okanagan Symphony at the present time is dealing with that very real problem.

It is disingenuous to give us back some of that funding but tell us that we must produce festivals. The performing arts theatre and the art gallery, of which I am a member, in both cases, of their boards….

We have to remain focused on what we are doing with the theatre and with the gallery. We do not have time to put together an application for festivals, and we certainly do not have time to go about getting the volunteers which will be required for such a festival. We need them in our own institutions.

[1455]

Many of the organizations are run by a small staff with many volunteers. Their energy is needed for their organization to continue. Festivals simply drain that energy. I might also point out that these same employees and artists, many of whom are self-employed, are not able to get pension support, medical, dental or employment insurance.

Within the community, many arts groups work with others in the community, such as school boards, family resource centres and teen services — which have also had their budgets trimmed and so cannot pay for buses, etc., and certainly not for tickets. Once again, these programs assist others but take preparation time and careful execution. We wouldn't dare lose a student in the theatre, let me tell you. Operational funding is necessary to continue this support to the community.

Do not isolate us. We are not a frill. Use the arts as a draw for tourism, as a panacea for health care, as a support for family and social welfare problems, and thus as a requirement in our education system.

Stable funding would be a strength — without huge application forms. Your best value for your buck will come from the arts and culture sector. Don't destroy that opportunity. Thank you.

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

J. Thornthwaite: Thank you very much for your presentation. Can you let me know what the sources are, where you get your…? Obviously, you get funding from government, but what percentage would you get from, say, ticket sales for your services that you provide?

S. Thors: A basic premise is a third, a third, a third — a third for government, a third for sponsorships and fundraising, and a third from tickets and other.

D. Grant: And it varies per art organization. For the Vernon Public Art Gallery, our admission is by donation, so we don't have ticket sales to ours. We rely on other sources for generating revenue. That would be government sources, sponsorships and fundraisers.

J. Thornthwaite: Because I notice here that the B.C. Arts Council has given you a consistent amount of funding over the years — in fact, very stable. I'm just wondering how you're leveraging that from other sources.

D. Grant: Can you clarify what exactly you're asking?

J. Thornthwaite: You said sponsorship and ticket sales and government. So if the government has been providing you with a consistent amount of money, are you leveraging that funding from other sources as well?

D. Grant: Yes, we are. The challenge is the level and the uncertainty of what we're going to be getting and the expectations for what we do with that money. We're required to provide professional staff that have a certain level of education, but the salaries that we are able to offer are not on par with what we need to look at.

S. Thors: Are minimal.

D. Grant: Yeah. And we're looking at booking contracts three years in advance, for the performing arts as
[ Page 639 ]
well as for the art gallery. It's very challenging not knowing where we're going to be at, how much we're going to be getting — to enter into these contracts not knowing if we're going to be able to fulfil them and follow through with them.

We're required to maintain professional standards, so pay CARFAC fees — stuff like that — to the different artists for the talks and things that they provide and for displaying their art. Without that stable core funding, we can't provide those services. It winds up being a Catch-22. Those CARFAC fees help to support the artists throughout the country, so it's part of the core funding that we need.

The recommendation that we want to put forth is that the government really look at — as opposed to festival funding, project funding — the core funding, that it is looked at and looked at being raised. Project funding is great. It's fun to do projects. But core funding is mandatory for the organizations to continue to be healthy and provide the service to their communities.

D. Donaldson (Deputy Chair): Thanks for the presentation. I appreciate the extensive work that gets done with the minimal amount of funding that is provided.

[1500]

Could you briefly describe the impacts, specifically, that the cutbacks have had with the art gallery and performing arts in Vernon?

Also, another point. If you can provide a brief written submission of your presentation, that would be helpful for the committee as well.

S. Thors: All right. We can do that, yes.

D. Grant: Part of it for us is the uncertainty. We happen to be one of the lucky ones that were on a three-year cycle for the gaming funds. On that we're still not sure. We'll be finding out next year how that's going to impact us. We're not certain, in that area, what the impact is going to be.

Again, with the B.C. Arts Council, the funds…. Yes, they've been consistent, but very consistently low. They don't provide us with the funds that we need to be able to do what the expectations are in relation to the funds that we're receiving. There has been a push for that to increase, but it has maintained at the same level, where the need is much greater.

J. Les (Chair): Okay, seeing no further questions, a closing comment.

S. Thors: I would like to just say that the theatre is probably one of the best-run theatres in Canada, without…. We have been asked to attend conferences, literally across the country, to go through how we handle things.

Yet we are still a bit stressed, I think we could say, about meeting all the requirements that people now expect of our theatre. We can't pay as much for the performers who come in because we still need to pay for all of the other requirements like transportation, housing and what have you that go along with that. It makes it very difficult. We are in a position now where we're starting to replace infrastructure, and that takes a lot of funding as well.

J. Les (Chair): I found one more question, from Bruce.

B. Ralston: Earlier — I think you were here — we had a presentation from the tourism organization here in Kelowna. Part of the marketing that's done, the Kelowna brand that was spoken of — does that have an arts aspect to it as well?

S. Thors: Very seldom does it contain an arts aspect. Quite often what it contains is golfing and the wine industry, definitely in the Okanagan; skiing and things that people get excited about. And we do not have the capability….

B. Ralston: It's hard to believe they don't get excited about the theatre, though.

S. Thors: It's interesting that with our dance program the people who used to go to Vancouver to see the dance programs now have transferred their tickets to the Vernon theatre. They will do that, but we are not really a large part of any promotion.

J. Les (Chair): Okay. Thank you all very much for coming this afternoon. I very much appreciate your telling us your perspective.

Our next presentation is on behalf of the city of Kelowna. Here to present are Paul Macklem and Graeme James. Good afternoon.

P. Macklem: Good afternoon. Thank you, Mr. Chair and committee members, for being here today. Mayor Shepherd and the members of city council thank you for the opportunity to make this most brief presentation to you today. To my left is Coun. Graeme James, representing our city council, and I am Paul Macklem, general manager of corporate sustainability with the city of Kelowna.

City council understands the financial pressures and constraints the province is under, a situation that we in local government certainly share. Council, in a parallel process, is meeting with our three local MLAs — Messrs. Letnick, Thomson and Stewart — to discuss more targeted city of Kelowna needs. The requests put forward today are for the most part provincewide or regional in nature.
[ Page 640 ]

The first item that you'll see relates to incentive programs for local governance in the broader community relative to the development of climate change initiatives. These are just examples: green buildings, solar and other alternative energy initiatives, vehicle fleet replacements with hybrid and/or electrical solutions, and multipurpose pathways.

[1505]

The gist of this whole issue is, first of all, that we know that the province of British Columbia is really an early adopter with respect to all of the kinds of initiatives that we are talking about here. The city of Kelowna tries to be an early adopter as well. We know that communities struggle with the kinds of financial returns on adopting green initiatives. They're not always there early in the process, so it doesn't necessarily pay. But it is good business to begin that move towards adopting something that will eventually result in better payoffs.

We are looking to the province of British Columbia to create programs or incentives that would help local governments like ours and others to become more early adopters and be in concert with you on doing whatever we can to mitigate climate change.

The second item is the maintenance and enhancement of the provincial share of transit funding. The city of Kelowna has been very active with respect to transit. We introduced recently the bus rapid transit system. That seems to be working very well so far. Kelowna has always been a progressive and willing partner with respect to transit, but we're looking at transit more broadly based as well. We believe that it's critical within the province of British Columbia, for sure, for us all to be heavily into the transit game. This is simply a request.

Number one is to maintain transit's share of funding because, of course, we are expanding our transit system and spending taxpayer dollars in a very significant way to change our mode split so that more people are riding transit. What we would like to do is to ensure, when we go pretty far out in the funding game, that that isn't pulled out from underneath us in any way. We would be happy with enhancement of transit as well. However, we think that we're progressing on a fairly quick path, and things are going well from that perspective.

Thirdly, continuation of integrated policing. Policing is a continual struggle for many municipalities with respect to the costs of policing. As we all know, there is a new RCMP contract being negotiated, the results of which we won't find out for some time now. However, we just received recent notice that minor pay increases and pension adjustments for the RCMP will impact our budget to the tune of about a million dollars in 2011, with no opportunity to phase that in. A $1 million hit is about 1 percent of taxation for us, and that will not buy us one new RCMP member.

It not only puts city council under the gun, but it also puts our RCMP superintendent under the gun in his requests to expand any of the policing service for the city. It is a difficult thing.

With the integrated policing, on a bit of a different path, the province did create the Combined Forces Special Enforcement Units that address organized crime. There are 16 members that have been placed within the city of Kelowna serving the whole region. That came with a $53 million commitment, and there is no commitment to go beyond that $53 million. We know that will run out next year.

We are concerned not only from a policing perspective; 16 people were located into Kelowna. To have them here for two years and then pull them out would seem to be not the most fair thing to do. Also, it doesn't provide a long period of time to determine how successful that kind of program is. Two years or so for these kinds of units to establish themselves isn't a very long time. We would like to see that commitment to funding of the integrated policing continue.

Next is direct funding for water improvements to meet health authority standards. Councillor James would like to speak to that.

[1510]

G. James: I represent the city on the Kelowna Joint Water Committee. I also represent the regional district on the Okanagan Basin Water Board. The new regulations coming out from Interior Health….

It is estimated that the cost, just for the city of Kelowna — and we have five water purveyors here — just to bring them off some of the boil-water notices is going to be $60 million. To bring them up just to Canadian drinking water standards, it's estimated that over $200 million will be spent in Kelowna, and over $600 million up and down the valley. As you can imagine, that's a very big hardship on our taxpayers.

Water affects every aspect of our life, and that's why we're looking towards direct funding for water improvements. We're looking at direct funding — not in a pool — because it's going to be the upcoming cost to the municipalities in the future. We want to be able to direct that funding just for water improvements.

The water — it's a basic need here in Kelowna. It affects everything. It affects agriculture, the economy. It just is everywhere, and it affects everybody in B.C. That's why we're looking for that direct funding. We don't want it in a pot. We want it directly looked at — water improvements.

P. Macklem: The history of water purveyors in the city of Kelowna certainly is one with…. There are many purveyors and, being the agricultural base that it was, a lot of conflicting needs within the Kelowna area for agricultural versus domestic use. This has resulted in a problematic approach with having non-integrated systems. Although we'd like to get there — because they are
[ Page 641 ]
all citizens of the city of Kelowna, although many aren't in our water utility — it has become problematic to all be on the same page relative to the service levels that are being provided.

For us to get there, it becomes difficult for any of us to integrate water purveyors that don't have the wherewithal financially to be able to manage their systems over the long run. It is difficult to put that on the backs of the current payers, who have the financial wherewithal at this point. We certainly are looking for some help to be able to eventually integrate all of the water purveyors into one.

Next is restoration of funding for arts and culture groups in the province. I know you've heard lots about that here today and probably other days. I'm sure other councils in other communities are saying the same thing. What's happening is that arts and cultural groups are coming to the city saying: "We've lost our funding. We're hoping that you'll make it up." That becomes one more difficult decision that our council has to face when they have a lot of other pressures on them. We are hoping that that can be moved off their plate, where it hasn't been before.

Finally, I know you've heard from our Kelowna tourism group, and we're here to support the need for a tourism centre in Kelowna. Today we have a fairly modest tourism centre that is located not in the best geographical location.

We know that tourism is very near and dear to the hearts of all British Columbians, and it is a huge economic generator. We believe that the creation of tourism facilities in other communities has been helped along the way by the provincial government. We would heartily join in that request to have the province help us out in some way to put a new facility in place.

That's our local pitch. All the others, I think, are a bit more broad-based. We thank you for the opportunity to present today.

J. Les (Chair): Thanks. I've got some questions from Bruce to start.

B. Ralston: I recall being struck a few years ago by a presentation to this committee by the Kelowna Chamber of Commerce that said that their number one priority was fighting organized crime in the region, which is not something that one ordinarily associates with the Okanagan. Understandably, city councils are reluctant to give such a problem a great deal of publicity, for obvious reasons.

[1515]

You mentioned this Combined Forces Special Enforcement Unit that is located in Kelowna. The funding, you said, is running out. Surely there are some ongoing negotiations with, I would expect, the Minister of Solicitor General and Public Safety. Are you able to advise where they're at or what tentative commitments may have been offered to deal with what is, I understand, a serious problem here?

P. Macklem: While that is an excellent question, I have no information that I could provide you from anything that I've learned at this point.

J. Les (Chair): Can I maybe just further illuminate that and maybe encourage you to undertake a further submission to the federal government. The $53 million had its roots in a certain federal election campaign — a commitment to 2,000 police officers to be provided across the country. That manifested itself here in $53 million in one-time funding. So a little bit of work with your federal representatives might not be a bad thing either.

D. McRae: You mentioned about the five purveyors of water you have in the city of Kelowna, and you're working to integrate the supply part of it.

I guess my question was: were you asking for dollars to work on a study to integrate, or is it working on dollars that basically provide high-level safety concerns for each of the individual water supplies?

G. James: We're looking at direct funding for the water purveyors. The city of Kelowna is in a unique position where the irrigation districts cannot apply for government funding, so they've come to us and asked that we support them in their funding requests.

The city of Kelowna has…. Every one has a different source of water. One of the areas that has huge agricultural deliveries is just unable to afford the upgrades needed to bring their irrigation district just out of the boil water notice factor. That's why we're looking at funding directly for water where it doesn't come out of the big pot for the city, where we have to spread it out on everything else, like sewer improvements and what not.

Some of our irrigation districts are bigger than a lot of the communities within British Columbia. Black Mountain irrigation district is probably one of the bigger ones. It services a lot of customers. They're well run, but the funding just isn't there right now.

J. Les (Chair): A final question from Michelle.

M. Mungall: Just as the question comes to me, my lunch comes. Sorry. I had to stop and rescue two people, who turned out to be my constituents, on the highway from their smoking car. As it turned out, they're on their way to the Kelowna Hospital for a procedure, so I had to make sure they got to the hospital on time. That meant being a bit late and missing lunch here.

J. Les (Chair): But you might have gained two votes.
[ Page 642 ]

M. Mungall: I already had them.

My question, actually, is also on the water issue. That's actually a similar issue that people in my constituency are facing, although on a bit of a smaller scale. I'm just wondering if there have been any dollars committed at the federal level for water infrastructure improvement. The reason I'm asking is that often the provincial and federal do matching on infrastructure projects, and infrastructure has been a long issue in the Federation of Canadian Municipalities in terms of advocacy. So I was just wondering that.

I actually had a second question. You mentioned that other municipalities have been getting provincial funding in terms of a tourism centre. I'm just wondering if you have any more data on that — anything specific.

G. James: I'll just answer the irrigation one. I'm not aware of any federal funding directly related to water. The infrastructure is spread out in a number of areas. Because we're the city and the irrigation districts cannot apply for that funding, they're looking to us. We're supporting them. We've got a memorandum of understanding to work together on these issues, and we're looking for direct funding. I'm not aware of any federal funding available.

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

M. Mungall: My other question?

J. Les (Chair): Well, we're sort of out of time, but anyway….

P. Macklem: I don't have any recent experience. I know we've looked back and seen some evidence of it, but I don't have a recent experience to cite you.

[1520]

J. Les (Chair): Just while we have a couple of representatives here from Kelowna, Norm would like to make a quick comment or a statement.

N. Letnick: I just have the unfortunate news to tell you that a strong Kelowna citizen and advocate for our city, Sindi Hawkins, has passed away today. Please bring our condolences back to the council and everyone in the city of Kelowna.

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

Our next presentation is from the Okanagan Mainline Real Estate Board — Howard Neufeld and Janice Myers. Good afternoon.

H. Neufeld: Good afternoon. Thank you, Mr. Chair and distinguished members of the committee, for the opportunity to present the recommendations of the Okanagan Mainline Real Estate Board and B.C. Real Estate Association. Your time and commitment to the consultation process is appreciated.

This is Janice Myers. She's the executive officer of the Okanagan Mainline Real Estate Board. I'm Howard Neufeld, a practising realtor in the North Okanagan. I'm a director on the Okanagan Mainline Real Estate Board, and I hold the portfolio of provincial political action. I'm also a member of the B.C. Real Estate Association Government Relations Committee.

The B.C. Real Estate Association represents 12 member real estate boards in the province. We have more than 18,000 realtors across B.C. The Okanagan Mainline — as of today, we have 1,181 members. Our board's geographic area extends from Revelstoke to Peachland, includes the communities of Salmon Arm — we actually go up to Sorrento — Vernon, Kelowna, West Kelowna, as well as smaller communities in between.

I'm pleased to present the association's recommendations to improve housing affordability, which is fully supported by Okanagan Mainline Real Estate. Realtors share the concerns of elected officials about affordability of housing in this province. In many communities within our real estate board area, high housing prices are impacting those seeking attainable housing — such as transferring RCMP members, local school teachers and the local restaurant manager. Housing is essential for everyone.

Unfortunately, British Columbia faces the highest housing costs in Canada. Provincial taxes that apply to shelter — namely, the property transfer tax and harmonized sales tax — place an unfair burden on homebuyers. The B.C. Real Estate Association's recommendations are intended to ensure a fair approach for homebuyers, now and in the future.

First, we recommend that the 1 percent property transfer tax threshold be increased from $200,000 to $525,000. The structure of the property transfer tax — PTT — hasn't changed since the tax was introduced in 1987, but the housing market definitely has. In 1987 the average home price was about $102,000, and the 2 percent portion of the tax was expected to apply to only 5 percent of sales. In 2009 the average price of a home in British Columbia was nearly $466,000, and the 2 percent portion applied to 86 percent of homes sold.

Homeowners in B.C. deserve a fresh start, and this recommendation is a good beginning. If the 1 percent threshold had been $525,000 in 2009, about 75 percent of homebuyers would have paid less tax. The financial impact of this recommendation on the government is relatively minor. In 2009 revenue would have decreased by $165 million, or about 1 percent of taxation revenue.

On the other hand, lower revenue from the property transfer tax may be eased by the increased number of British Columbians who may be able to enter the
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housing market as a result of the lower tax burden or by homeowners with more money to spend on products and services related to their home purchase.

During the period between 2006 and 2008 it's estimated that a total of $46,400 in ancillary spending was generated by the average housing transaction in Canada. These figures are from the 2009 study Economic Impacts of Home Sales and Purchases on boards' MLS systems in Canada and the provinces, by Altus Group economic consulting.

Our second recommendation also relates to the property transfer tax. The 1 percent threshold should be indexed using Statistics Canada's new housing price index, with adjustments made annually. The threshold isn't indexed now, so it remains the same however home prices rise.

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That means B.C. homebuyers pay an increasingly unfair amount of PTT per transaction every year. Indexing will ensure that the tax has the same impact on current and future homeowners.

While the indexation would result in less taxation revenue, the provincial government would be able to anticipate and account for this in financial projections.

Our final recommendation applies to the harmonized sales tax. The provincial HST new-home rebate threshold should also be indexed using the new housing price index with adjustments made annually. Experience with the property transfer tax provides an excellent case study for what will happen to the HST new-home rebate threshold if it is not indexed.

The current HST rebate is available at 71.43 percent of the provincial portion of the HST to a maximum of $26,250. The rationale behind this structure was that most buyers, about 75 percent, of new homes would pay no more tax once the HST was implemented. However, unless the threshold is indexed, as new-home prices rise over time, a higher proportion of buyers will have to pay HST on new homes and the amount of HST paid will increase as average home prices rise.

We estimate that new-home prices in communities around B.C. will exceed the maximum rebate threshold by 2025 unless this recommendation is adopted. By acting now to index the HST new-home rebate threshold, elected officials have an opportunity to resolve a problem before it starts. This will save future homebuyers of new homes from an unfair tax burden.

We believe that fair shelter taxes and a thriving economy will help citizens throughout B.C. enjoy an enviable quality of life. Real estate is a well-recognized economic indicator. More than 85,000 homes were sold through the Multiple Listing Service in 2009. From analysis conducted in 2007 data, every 100 residential sales on the Multiple Listing Service generates nearly $4.2 million in economic output, including taxes, and nearly $1.3 million in household income.

A recent study conducted by the U.S. national real estate association, NAR, indicates that home ownership also contributes to stable housing, boosts the educational performance of children, induces higher participation in civic and volunteer activities, improves health care outcomes, lowers crime rates and lessens welfare dependency. Home ownership is part of the foundation of a healthy community and a thriving province.

This concludes our presentation. Please review the Real Estate Association written submission that we presented for further details on our recommendations, and thanks for listening.

J. Les (Chair): Thank you.

D. McRae: Two questions for you — one following the other, I guess. First of all, what would be the average sale price of a property, like a single family home, in the region? Do you have a ballpark price range you work from? I know obviously it's always going to change.

H. Neufeld: It's up and down. In Vernon we're at $406,000. Kelowna is about $35,000 higher, I think.

J. Myers: We're just about $505,000 in last month's statistics, I believe.

D. McRae: From that, what percent of property sales do you think would be considered a new-home build and over the $525,000 HST threshold? Do you have a rough idea of a percentage there?

J. Myers: I would have to say that a lot of new home construction is not placed on the Multiple Listing Service, so we're not privy to all of that information. But a lot of it falls well over $525,000.

I believe there was a survey done, but I'm sorry, I don't have the figures at my fingertips.

D. McRae: If you ever provide those details, I'd like to see them.

J. Myers: Okay. We can find out that information for you.

H. Neufeld: We can get them to you.

N. Letnick: Thank you coming, Janice and Howard. I appreciate you being here today.

When I was on city council, city of Kelowna, we commissioned a report, by Coriolis Consulting, to deal with density bumping and how the actual density bump ends up supporting the landowner and doesn't get transferred over to the homeowner.

So when you ask about reducing the property transfer tax, the question that comes to my mind is that report.
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Will any reduction in property transfer tax actually end up in the homeowner's pocket, or will it work its way back to the landowner, just like the density bump?

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If you have any economic analysis, land economist analysis, that would show that a reduction in property transfer tax would actually find its way to the homeowner as opposed to the landowner gobbling it up…. Because the housing is selling at full market value no matter what the costs are — right? It's selling at market, so if the market is stronger, it'll sell higher.

I think we would also really appreciate having that information at some point in your future.

J. Myers: That would certainly apply, I think, to new construction again. But as properties resell over and over again, remember that each and every homebuyer is paying that property transfer tax. So the second and third and fourth and fifth time that a property is changing hands…. Each time the homebuyer is paying that. So they would get…. If there was a reduction, they would directly benefit in those subsequent transactions.

N. Letnick: Good point.

D. Donaldson (Deputy Chair): Thanks for the presentation. One of the advantages of having people like yourselves come is that we get to find out what the news is on the ground around the province.

My question to you would be…. It's important, because the housing market drives some of the revenues in the province for sure. Have you seen impacts of the HST on how housing sales have been going in the valley here since July? What do you see?

H. Neufeld: I don't know if the HST has directly affected…. But it's definitely increased everybody's cost. Even if I sell you a home that's 25 years old, the HST affects the bottom line as far as the realtor fees, the home inspection fees, the legal fees and so on. That's all got bumped now by 7 percent, and it's $1,200 or $1,500 on the average house. And that's for a used house. So it does affect it. But affected sales? I'm going to say probably not.

J. Myers: I would add a little bit to that. In the Shuswap area, which is primarily dependent on recreation buyers, they did see a very strong impact, they felt, contributing to the HST. Most of that would be related to the Alberta buyers, who, when they heard "HST," went: "We're going to back off." Anecdotally at least, that's what many of our members have been telling us. "There's a new tax in B.C., and we're not going to be coming for a while" — until they understand it.

So that definitely had an impact, and it was one more thing that consumers have to deal with. They're dealing with all sorts of messages out there in the media that affect their confidence. HST…. There was a little bit of confusion about what it was going to apply to. They thought it applied to all housing, and now that is starting to be straightened out as they become more educated. They understand that primarily it hits new-home sales, but for resales, it is affecting commissions, lawyer fees, home inspection fees — those types of things.

The average transaction goes up, HST-wise, in terms of residential resale, anywhere from $1,300 to $1,500 based on our $525,000 basic average home price.

J. Les (Chair): I have a developer in my community who's advertising, in fact, that his costs are down 3½ percent as a result of the HST.

J. Myers: His input costs?

J. Les (Chair): Yes.

J. Myers: Yes. We are hoping that that will start to happen in the marketplace. Many of them are saying that most of their supplies were purchased prior to July 1, so they can't afford to reduce it yet, but hopefully that will happen.

J. Les (Chair): Final question from Bruce.

B. Ralston: On page 3 you say that the average price of a new home in the Kelowna area is $751,000. You estimate that the HST that would be paid would be just under $64,000, and the maximum rebate is $26,250. So I calculated it out that just under $38,000 could be saved if a person chose to wait, assuming prices stayed the same, until after next September and make some assumptions about what the result of the referendum might be.

Are you seeing any people that are beginning to make that calculation in the market?

J. Myers: I don't think that we can comment on that yet, no.

J. Les (Chair): Okay, thank you both very much. Keep on selling.

H. Neufeld: You bet. If you get bored tonight, we've got lots of reading material for you.

J. Les (Chair): Our next presentation is from Ballet Kelowna — Alison Moore.

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A. Moore: Thank you for this opportunity to address the Select Standing Committee on Finance and Government Services. My name is Alison Moore, and I'm the development manager for Ballet Kelowna. I hope
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that my presentation will assist you in developing your recommendations regarding the provincial budget and fiscal policy for the coming year.

When Ballet Kelowna was first proposed in 2002, many scoffed, saying: "It can't be done." Indeed, building a professional ballet company in a community of 100,000 was a tough sell. But you can't say "can't" to passionate, committed and visionary leaders, and today this made-in-Kelowna ballet company is gaining national attention from funders, the dance world and media for being a unique and innovative company, financially sound and artistically rich in its signature inno-classical style, commissioning new ballets while still honouring the classics.

Our mission is to inspire, educate and entertain through the energy and artistry of ballet. By capturing the entertainment interests of the entire family, Ballet Kelowna enhances the image of ballet, making the art form more inviting, fun and personally meaningful.

Since its inception Ballet Kelowna, under the artistic direction of David LaHay, a nationally renowned dancer, teacher and choreographer, produces two full-length programs in the spring and fall each year. In keeping with its mission to invest in the future of dance, Ballet Kelowna has invited seven choreographers, three from British Columbia, to create new work with the company and has mounted world premieres by these artists.

Likewise, knowing that our past provides a legacy that informs the future, David has reconstructed and remounted master works of Canadian choreographers, enticing Paula Citron from the Globe and Mail to come to B.C. to view these works — because she had never, in her three-decade career, ever seen them — and to comment that Ballet Kelowna's young dancers did these works proud.

We've been recognized by the mayor of Kelowna as the premier cultural ambassador for the city and were named B.C. Touring Artist of the Year by the B.C. Touring Council.

Last year we toured to 34 communities throughout British Columbia, presenting more than 50 public performances and educational outreach programs. We've performed for more than 14,500 people, including 1,960 school children through our ArtStarts in Schools program. An estimated 25 percent of our audiences are youth.

The value of this cultural arts experience is best conveyed in the words of our own audiences. Amber from McBride, B.C., just e-mailed me yesterday and said: "I really enjoy Ballet Kelowna and the fact that you travel around various places in B.C. I'm nowhere near Kelowna, so I always watch for your dates and locations. This year you're coming to Valemount, and I'm thrilled, since that means me and my friends are only an hour away."

From Pink Punk Princess, in response to our program presented in the 12 schools last spring: "Hi. These are some kids that watched you at Ashcroft Elementary School, and we just wanted to tell you that we really appreciated you coming to our school" — three exclamation points.

From Prince Rupert, where we toured to the northwest coast communities for the very first time last spring: "Saw Ballet Kelowna perform last night. It was absolutely wonderful. It was such a diverse show, something for everyone, and for the kids to be able to see an outstanding" — all caps — "performance like that was really incredible and inspiring. I hope we'll see you here again."

Finally, from one of our community partners who we invite to bring special needs children to any and all of our performances, with their caregivers:

"Just wanted to pass on Lauren's comments, age eight, who went with her mother to her first dance performance. Her favourite dance was the 'Bench and Autumn Scenes.' She thought the twirling and lifting of the dancers was 'thrilling.' Coolest of all, she wants to take a dance class. This is a little girl with a lot of trauma and fear about interacting with other kids. She had the biggest smile on her face when she told me how she loved it. So thanks for making a difference in a child's life.

"Alison Nadeau, MSW, RSW

"Salmon Arm"

We cannot perform, produce and tour without funds from the provincial government. We cannot have this kind of impact without provincial support.

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All of this was achieved for a provincial investment of only $20,000 in a direct-access gaming grant, now zero — without the opportunity for cultural arts organizations like Ballet Kelowna, which do not specifically address youth, to apply for — and a maximum grant from the B.C. Arts Council in a project grant of $20,000, now only $6,000.

This funding was leveraged in its year for it to create a $551,000 budget for the 2009-10 performance year. Additional funding from corporate sponsors followed this provincial lead.

What is the result of the recent cuts? Ballet Kelowna's board and artistic director are deservedly proud of sustaining the company with balanced budgets and strong fiscal management practices that ensured we have never had a deficit. To maintain this stellar fiscal record, our budget went from $531,000 to $441,000 for the 2010-11 performance year.

We have cut the dancers' contracts and have furloughed all paid staffs for at least two weeks. We've reduced our touring from 34 communities to 26 communities, and we've projected to reach only 12,000 people in the 2010-11 year, a reduction of 18 percent. We have cut every conceivable expenditure possible, and we are still managing an exemplary and artistically excellent company — but at a price.

It is extremely frustrating, as I know you've all heard, before you begin your season that a critical funding that you receive at a critical time is not forthcoming, plunging an
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organization into crisis, which takes its toll in human resources — and then to learn, after stripping an organization to its bones, that there will be more funding forthcoming for things like Spirit Festivals only six months away.

Responsible, well-managed organizations, like ours, that are flexible enough to manage through challenging economic times cannot respond to short-term opportunities, because to do so creates more crisis management and may stretch that already strapped organization to the breaking point.

This profile of Ballet Kelowna is just one example of the many amazing cultural arts organizations throughout the Okanagan Valley and the province that are providing rich educational and valuable experiences to our citizens and to your constituents, and are doing so with the finesse that we bring to all of our productions and in keeping with the famous slogan that you all know: the show must go on.

My recommendation is for the government of B.C. to listen to you, its Standing Committee on Finance, and respect the recommendations you proffered last year. Last year the committee reproduced the recommendations made to the committee by the B.C. Arts Council — specifically, providing an appropriated budget, as per our act, plus BC150 cultural earnings to the Arts Council. The use of the appropriated budget carries significant meaning to the arts and cultural community, as it signals that the arts and culture are an important part of the main budgeting process.

This remains true with the direct-access gaming grants completely eliminated for organizations such as Ballet Kelowna, even though we deliver programs to youth and we work with youth.

The second recommendation is even more important: restore the budgets for both the B.C. Arts Council and the arts and cultural community component of the community gaming grants program to at least the '08-09 levels.

Finally, develop and announce a long-term strategy to strengthen the support of the arts and cultural community of British Columbia as the province works its way out of its current fiscal crisis.

At the same time, many private donors…. If you ask me to tell me about my budget, I can show you the numbers. You don't have to ask me that question, but I did figure it out when you asked somebody else, so I'm prepared. But at the same time, many private donors have reduced their support of all not-for-profits, only compounding the financial issues facing most arts organizations, and that's truly the case for us.

I quote from my colleague Tracie Ward, executive director of the Rotary Centre for the Arts.

"The greatest impact has not been the cuts themselves; it's been the uncertainty of funding levels and the lack of future provincial commitment to the arts.

"These little grants, such as the $5,000 to do something in a heritage site or a park and the Spirit Festival grants are just window dressing on the problem and do not address the true scale and scope of this issue. The arts need a multi-year funding commitment to maintain our stability and sustainability, and we need prior levels of gaming funding restored and, in fact, increased to the promised one-third of gaming revenues generated."

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It's been clearly documented that the investment in cultural arts activity has a return on investment of more than $1.05 to $1.36, and arts and culture represent $5 billion in B.C.'s gross domestic product and over 80,000 jobs. The vibrant arts and cultural communities that our arts organizations create attract a talented and creative workforce and tourists.

In closing, I quote from Paula Davies in Prince George:

"Dear David:

"You're a magician. You turn hungry artists into a professional company who take the beauty of dance to smaller communities which might not otherwise get the opportunity to experience the fun, the joy, the awe that dance embodies.

"Thank you and the dancers and your board for reminding us all what is noble about humanity."

Our brand position at Ballet Kelowna is "Be moved" because we transform the lives of people in our audiences in ways that are hard to put into words. I hope that the government of B.C. will be moved to find their own nobility and reinvest in the arts by listening to you and adopting your recommendations.

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

N. Letnick: Alison, the arts in B.C. are extremely important to everyone in B.C., including people in this room. Thank you very much for all the work that you do and the work of David LaHay and the members of the board and all the volunteers — and the dancers, of course.

A. Moore: You're welcome, and thank you.

N. Letnick: You quoted to us the recommendations we had from last year. Assuming that we make the same recommendations again this year, could you let us know….

If there was more money coming because of the economic times changing, would you like to see more money coming either through the gaming grant side of things or the B.C. Arts Council side of things, and why one or the other?

A. Moore: I want to speak to the B.C. Arts Council and why it's important to sustain their funding. They've developed a process where they bring experts within the field to help develop criteria and a way of looking at the various applications that come through. It's a tried-and-true process. It's used by arts councils throughout North America, on local, provincial and national levels.

I think that you've hired people. Ideally, the province has appointed people to their arts council that are passionate,
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knowledgable and judicious and will advise you as legislators and the government on the best use of those funds.

However, likewise, we love those direct-access gaming grants because there is a broad-based…. The focus of direct gaming is on the constituents and on how we serve them so that there is a balance in this current funding cycle, from my view, that serves both the art and the people.

J. Les (Chair): Okay.

We have time for one final quick question from Michelle.

M. Mungall: Thanks very much, Alison, for your presentation. Coming from an area with several isolated communities, I know just how wonderful of an opportunity it is for arts organizations such as yourselves that tour the province and bring those opportunities, especially to children in the communities.

On that note, you're a touring organization. So I imagine not only have you faced considerable revenue loss but you're facing increased costs with things like the HST and just general increases in costs that the tourism sector is having to put onto its customers.

With that, have you done an analysis at all of the gap between what you need to spend to do your job and what you're actually getting in revenue?

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A. Moore: I will tell you that I think we were close to properly funded. We properly budget to what we need, and we are an organization that really requires a budget of about $531,000. We reduced our budget by $90,000 to $441,000. Now, that is a very conservative budget. I'm pleased to say that we are beneficiaries of the last round of the arts partners in creative development to the tune of $25,000, which was not budgeted and is a life-saver. We're just hoping that we'll continue to be successful, although that's the last round.

So what do we need? We need to increase our funding from new sources by $90,000 to get back to our levels. That's why we want you to go back to those original levels so that we can all get back to where we really need to be.

That's not an extravagant organization. We are still giving you so much value. What you're getting this year I don't think we can replicate again, because it's taking too much out of the organization. We've asked too much from our dancers — to do what they do and not have a break and not get paid to do what they do, when they're out on the road for six weeks at a time. It's amazing.

Our communities are really lucky that they've got the energy, the stamina, the enthusiasm, the passion. Thank God for David LaHay. I don't know how he does it.

J. Les (Chair): Okay, thank you, Alison.

Our next presentation is from the BrainTrust Canada Association — Doug Rankmore.

D. Rankmore: Chair, committee members, thank you very much for taking your time to hear the submissions today.

I'd like to speak on a proposal that we have in front of the Minister of Health presently. It's the acquired brain injury innovation fund.

Acquired brain injury has a large presentation in our province, but it's not well recognized. It's about the same epidemiology as serious mental illness — about 500 to 700 per 100,000. According to the Center for Disease Control in the U.S., it's the greatest killer under 45, the greatest disabler under 45 and kills more kids under the age of 20 than all other causes combined.

So it's a large problem, and there's very little recognition for it because it isn't gathered in one place. There isn't a psychiatric institution that people with brain injury go to. They're across all — extended care, long-term care and those kinds of things. About ten years ago a report from the ministry estimated that about one in six long-term-care beds was dedicated to acquired brain injury.

In terms of acute care, our health authorities are doing a fantastic job of providing physical rehabilitation, acute medical care. Almost every year they're saving more people who otherwise would have passed away because of their injuries. So we're having more and more people survive brain injury, but the resources to support those people long term aren't developing in the same way that acute care resources are.

One of the other problems is that a lot of the issues relating to brain injury are dispersed across ministries. They're involved in corrections, Housing and Social Development, Ministry of Health and so forth.

So while we're saving more, we're not investing more in terms of long-care support for people. That's costing taxpayers and government significantly more every year.

Just as an example, I'll ask you to envision a triangle. At the top of that triangle, the very small part of it — the band across the top — is acute care. That's the amount of time somebody with a brain injury is in acute care. It's a very small amount of time in terms of the total time that they live with brain injury. If you draw a band just across the top third, that's post-acute rehabilitation — about two years. People get their physical care taken care of, speech and language, that sort of thing. They do a great job at it.

If you envision the bottom of the triangle, that's the rest of people's lives. So they're discharged from hospital, discharged from rehab after about a two-year period, and they live with brain injury the rest of their lives in the community, alone usually.

If you turn that triangle upside down and you have the base at the top now, that's the resource allocation. So in
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acute care almost all the resources go to saving people's lives. All that large base now is what's spent on acute care. The middle is rehabilitation. It gets about the same amount, and long-term community support is now that small apex at the bottom — very little resources.

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When the responsibility for brain injury was transferred to health authorities, $11 million was allocated for long-term support to about 4 percent of the population of British Columbia. That's the number of people that live with brain injury from trauma, anoxia, stroke, those kinds of things.

It's a high cost but not just in terms of health care costs. Data that we have today — very reliable data — shows about 85 percent of the prison population lives with acquired brain injury, and 60 percent of the people living on the streets who are homeless live with acquired brain injury. The vast majority of those got their brain injury prior to becoming homeless. You are seven times more likely to develop schizophrenia or depression if you've had a previous brain injury. So it's also kind of a gateway, a biologic precursor to other disabilities.

It's the highest loss category for any disability-related employment loss. From the data we have, the estimate is about $500 million in British Columbia in lost productivity from brain injury each year, and about $600 million in acute care and medical cost just related to initial injury, not ongoing problems.

The difficulty with this is this is a cross-ministry issue. Ministry of Health has the portfolio simply because when people get injured it comes through Health. But the long-term costs are distributed across ministries.

There is no policy in the province related to long-term support for people with brain injury. There are no cross-ministry tables to discuss the issue, and there is really no data on which to base the issue. We don't collect data on brain injury or on long-term outcome or on service needs. That's simply because each health authority is responsible for their own program, and they have a very small post-acute program.

What we're recommending and requesting is the committee's support for and recommendations around an acquired brain injury innovation fund. I've provided you with a brief on the fund itself, and I will provide the full submission in writing to the committee.

What the fund really looks at is research and development in brain injury. We don't expect from the province in these times — or really in the last 20 years or so, around the difficult kinds of problems that the province faces in terms of where to allocate money — a mass amount of money into any particular area to start out with. What we're asking for is a $2 million annual allocation to develop evidence-based research and treatment. So what we need to look at is how to appopropriately keep people out of the criminal justice system. How do we deal with people who are homeless and get them off the street? That's very specific to brain injury.

Our proposal. There are a variety of areas that we are looking to develop. Some of them are seed and development grants — out with community associations and health authorities in partnership. Some of it is training physicians, occupational therapists and physiotherapists, through their colleges, to recognize and treat brain injury better and to develop new treatment strategies. A significant proportion of that relates to prevention as well: to develop prevention initiatives and promote organizations to undertake that work.

The proposal has been circulated to non-governmental brain injury organizations around the province and has been supported 100 percent. B.C. Brain Injury Association and B.C. Coalition of People with Disabilities have also reviewed it and supported it.

We're very anxious to make an evidence-based case and to do this in a measured and appropriate way, but I really hope that you'll support this proposal and development and brain injury.

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

J. van Dongen: Thanks, Doug, for your presentation. Do the various groups or agencies involved in brain injury collaborate provincially? You just mentioned one or two, but it seems to me…. I have a group that I work with in the Fraser Valley, but I've never heard of your organization.

It seems like we need a more concerted effort to bring together all of the issues. I appreciate the way you laid out the triangle, both sort of life's reality and then the funding side. But is there a collaborative effort? I know that my agency has said that, you know, you are putting a lot of money in to certain neurotrauma programs and research, and you need to put some more money in just supporting the day-to-day living issues for people.

Can you just comment on that — the sort of the degree of collaboration — so that we can get a more concerted program here?

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D. Rankmore: You bet. I've been working in brain injury for about 20 years, and it's been different over that time. Currently this is the attempt at collaboration. I think the agencies are behind this and are looking forward to this to bring them together and to have a common voice and to work with health authorities with a common voice as well.

B. Ralston: Similarly to John, I hadn't heard of your organization before. I notice on the back of the submission that you've been around for 24 years, and you employ 15 staff. I wonder if you'd just take this opportunity to speak very briefly about your organization, just so that we might get a better sense of the organization.
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D. Rankmore: Yeah. We started out as just a voluntary agency. I was actually the first staff hired by the organization. I thought I'd join for about three months, and it's 19 years later, so it's a cause that certainly has captured me.

We provide basic community support services to people with brain injury in the community — whatever it takes to keep them in market housing, and that's a wide variety of services. Some are offered in group in terms of self-esteem, substance use after brain injury, caregiver support — those kinds of groups. But we also work hand-over-hand individually with people in the community.

We work on contracts with CLBC, WorkSafe B.C., ICBC and the Interior Health Authority right now. We also, about eight years ago, undertook injury prevention on a larger scale, and so we've had one national campaign that was very successful. It's www.protectyourhead.com, and it was a large-scale campaign across the country. We actually ended up being named the seventh most creative advertiser in the country. I was overjoyed to beat McDonald's.

When we kind of changed our association to look at that, we took a more leadership role in terms of bringing groups together and bringing this issue forward. So we certainly have met with the Minister of Health and other ministers and look forward to continuing the development.

J. Thornthwaite: Thank you very much for your presentation. I do have a little bit of background because I used to work for G.F. Strong as a nutritionist, and they've got a whole ward dedicated to acquired brain disorders and rehab.

I'm wondering again. The theme of the questions are kind of the same. Assuming that you are connected in some way with sites like G.F. Strong, are you in relationships with all sorts of different areas — assuming that G.F. Strong isn't the only one? You're here from here at Kelowna — right? So I'm just wondering where your services — because obviously you do a lot — filter out in other areas, because I hadn't personally heard of you either. Also, if you've got any relationship with, say, the Heart and Stroke Foundation because of what they do as regards to….

D. Rankmore: Yeah, we certainly have participated with Heart and Stroke around their stroke initiative, but it's a good example in brain injury of kind of what happens in brain injury. Stroke is one form of brain injury. It's no different in terms of outcome than trauma, but it's segmented off because it has a particular medical profile. But somebody who has stroke could have the exact same problems as somebody who fell down a flight of stairs. So we do liaise with them. We have been part of the stroke initiative development. We participated in that, and we do keep up good relations with them.

I'm sorry. The first part of your question — G.F. Strong? G.F. Strong still has a provincial mandate, but it's more of a Lower Mainland service. KGH rehab and Connect Lake Country facility here in Lake Country have taken on a lot more of the acute and post-acute in terms of acquired brain injury — not spinal cord injury — so G.F. Strong has kept the spinal cord injury portfolio as a provincial portfolio. But brain injury from acute care right through rehabilitation is by and large a local initiative in Kelowna.

It's one of the difficulties around coordinating. We certainly have consulted with the Fraser Health Authority, and I certainly have relations with all the ABI coordinators around the province, but it's so idiosyncratic to each health authority that it's very difficult, even for them, to get together and discuss their issues as health authority representatives or to coordinate on data collection or anything like that.

J. Thornthwaite: And where are you getting your funding now?

J. Les (Chair): The final question is from Bill.

J. Thornthwaite: Sorry.

B. Routley: My question…. Well, just a bit of background. I had a son that worked at McDonald House and O'Reilly House in Victoria and certainly conveyed to me some of the concerns of those that had brain injuries.

[1605]

I particularly remember the story about a policeman who was injured. It was quite a traumatic story — what happened to him in losing his family and so many friends over the years.

D. Rankmore: Gerry Breese.

B. Routley: Yeah. The numbers that you gave me were quite alarming: the 85 percent in prisons — do I have that right? — and 65 percent homelessness. Obviously, a tremendous cost to the province, so I certainly can see the justification for what you're saying. But the linkage to…. The results that you're looking for…. Do you have any idea of other studies done in other jurisdictions that may have led to a cost benefit to the jurisdiction? Obviously, if you could reduce those numbers, whether it's in homelessness or, certainly, in prisons…. There are huge costs involved.

D. Rankmore: Yeah. I'm not familiar with existing data on cost reduction. Most of the data is being done in the States right now, and a lot of it is insurance-driven, so it's not data that's routinely kept.

Certainly, just looking at the numbers and looking at the type of service that we provide or that the as-
[ Page 650 ]
sociation in Chilliwack provides…. I think I provided a case example in there of an individual who was being referred to our service for social recreation while he was being panelled for extended care living. We got him into market housing. We've been supporting him for 17 years or so now, and we've saved the health authority over $800,000 simply by keeping him out of extended care. It's a very simple example. We probably have 200 of those individuals that we've supported long-term.

It's a very effective strategy to act early, to provide primary prevention to keep people from being injured and secondary prevention to keep people from getting into trouble after they've been injured.

J. Les (Chair): All right. Thank you very much, Doug, for coming today.

Our next presentation is on behalf of the Artisan Distillers Guild. Frank Deiter is here. Good afternoon, Frank.

F. Deiter: Good afternoon. My name is Frank Deiter, and I represent the Artisan Distillers Guild in British Columbia. It's an association that has been formed in order to ask the government for some changes in policies. The reason is….

Perhaps I should explain what craft distilling is. Craft distilling is an old art. It has been done in Europe. Just to give you a few numbers, in Germany there are 30,000 distilleries, and in small, little Austria, which is way smaller than Vancouver Island, there are 80,000 distilleries. What these distilleries do is basically an agricultural salvaging program, besides working in general with agricultural products.

This is a very new industry to British Columbia, and the challenge that we are facing is the distribution policies that are in place because of the Liquor Distribution Branch, which of course has a monopoly over the distribution of alcohol in the province.

Now in general, what we are asking the government for…. I would like to point out that according to our calculations it will not cost a cent to the government, so the government will not lose any revenue from what we are proposing. What we are proposing is that the policies that are in place already for the B.C. wine industry be extended to the B.C. craft distilling industry.

[1610]

The Liquor Distribution Branch, which now has a 100 percent monopoly over the distribution, is in itself a good thing. It works absolutely perfectly for, let's say, Molson Canadian and Smirnoff vodka. But if it comes to craft distilling, where a distillery picks up raw materials and produces a little bit, the Liquor Distribution Branch in itself is not really the place that can take on these products and distribute them throughout the province. I don't know whether I explained that properly. It is just too large an operation. It cannot take care of our products.

I would like to demonstrate that, perhaps, in a small example. If we have here a bottle of imported vodka from, let's say, Absolut. The LDB is distributing this product. The contribution to the LDB, let's say, is seven dollars. Now, our product over here — same amount of alcohol. The contribution to the LDB is $22. Now, the question is: why does that have to be?

Of course, those are the regulations that have been put in place a long time ago because it is an ad valorem markup system that the LDB is working for. It works for large volume products very well. It's absolutely perfect. But it does not work for something that we are working with, because we are purchasing small amounts of specific raw materials out in the market.

Due to the fact that we are small, we do not have a volume like a huge alcohol refinery in Ontario, let's say, that produces a million litres of alcohol a day. We are not manufacturers of alcohol. We are manufacturers of aromas, of — how can I say that? — a life experience — like wine, basically. That is one example that I wanted to give you.

Now, another thing is, if I come with a product…. I just got back from Europe. I received, for the third time, a gold medal for best product in a specific category. Let's say it is produced from grape skins that come from a local winery here. You know, absolutely raving reports in Europe. I go to the Liquor Distribution Branch and say: "Listen. This is a nice product. I would like you to sell it." "Well, no, we don't want that."

That makes it very, very difficult for us to distribute the product. If I now say: "Okay, if you don't want to distribute the product, then we'll do it ourselves," then the LDB will say: "No, no. We have a monopoly. It's us that sells it." That makes it very difficult for us.

As a third example, just to really make that clear to everybody, a block and a half away from my distillery in Vernon is a private liquor store. They'd love to sell our products.

I don't know whether everybody of you is involved…. How the LDB works is there are listed products and registered products. All the products that we have are registered. All the products that the Liquor Distribution Branch can sell through their system are listed products. Of the 35 products that we, for instance, have, only five products are distributed through the Liquor Distribution Branch.

Now, the private liquor store would not necessarily like to have a product that is already distributed through the liquor store. They would like to have one of our top products that we have that are not distributed.

If they order that, they cannot order it from us direct. They have to order it through their liquor store. The liquor store gives the order to headquarters in Vancouver. Vancouver gives us the order. We have to physically ship the product to Vancouver, and from there it then comes
[ Page 651 ]
back to Vernon. Today it comes directly back to Vernon. About a year ago it still had to go through Kamloops and then come to Vernon.

[1615]

That is a process that takes between four and 19 weeks. Let's say somebody ordered the product to have a wedding. I think it comes at the right time when the divorce is happening — right?

I brought you a little pamphlet. It's sort of an executive summary that demonstrates what we want; how we lay that out; what it is that we want; why it is that the government should support our idea; and demonstrating that it will not cost any money, because now we are not making any.

Of all the distilleries that are represented through the Artisan Distillers Guild, I think we are the largest. We are in business now for six years. Our contribution in terms of revenue to the Liquor Distribution Branch last year was 0.0018 percent, so we are not really a financial stress point.

I think that basically lays it out. I put that all in an executive summary and would appreciate getting any questions.

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

D. McRae: First of all, thank you very much for coming, Mr. Deiter. How many craft distillers are there in the province at this time?

F. Deiter: We are currently six active distilleries.

D. McRae: And how can you expand on the possibility that we could expand agritourism with this industry's ability to grow?

F. Deiter: You know, the products that we are producing in these small distilleries are geared…. Because it comes from agricultural products, we are usually located around agriculture.

The visitors that we are getting…. I call all of it export, because it's all new money that is coming in. It has largely to do with explaining, educating the people that are on wine tours, going to farms, seeing how products are being produced. They can see at our place, at our places on the Island, as well as here in the Okanagan what we can do with raw material. It has been very clear to us, specifically with the experiences that we have gathered over the last six years, that we have become a destination for tourism — yes, absolutely.

J. van Dongen: Just to be really clear, Frank, as to what you're looking for. I'm looking at your briefing note, page 2, where you say "…necessary changes to LDB distribution and markup policies." The third sentence: "The ability to sell our products direct to the public and other licensees, as well as through stores, and a reduced markup rate." Those are the two things.

Now, maybe the best way to put the question to you is precisely what you're asking for…. Is what you're asking for exactly the same in every respect as both the markup policies and the distribution policies that we have for the B.C. wine industry?

F. Deiter: Yes.

J. van Dongen: Exactly the same.

F. Deiter: It is exactly the same. Whether we will win on all aspects remains to be seen. Will we work together with government in order to ensure that there is absolutely no loss in revenue to the LDB, meaning to the government? Of course.

D. Donaldson (Deputy Chair): Thanks for the presentation. I'm sorry if I missed it during the presentation: who are the six? Can you just give me the names of the six artisan distilleries, and where are they located?

F. Deiter: They are Maple Spirits in Penticton; Spirit West in Penticton, Okanagan Spirits in Vernon; Tyler Schramm in Pemberton, making an organic potato vodka — perfect. There is Merridale cider, and there is Victoria Gin.

J. Thornthwaite: Given that your argument is very compelling — and just from what you said, it sounds like you should be treated the same as the wine industry — what is the response that we're going to get, that you anticipate, that could be any negative we would have to address?

F. Deiter: What the response…? I did not get your question.

J. Thornthwaite: I'm just wondering why this hasn't occurred earlier. Obviously, you've presented….

[1620]

F. Deiter: Well, it's complicated and not complicated. As soon as I…. You know, I think I was the first one that really had a licence and tried to make something work. Right in the beginning, when…. I knew right off the bat.

It's not that I was not aware that I did not have to sell through the LDB. I knew that I had to sell through the LDB. But there was a certain question. It might be that I was dumb or not well informed enough or that I just did not know the question to ask properly.

In my understanding, if somebody has a monopoly, then he has a duty that is attached to it. For instance, I come from Germany, and there is the post. The post
[ Page 652 ]
has the duty to carry your letter. It has the duty to connect you to a phone line. There was no other provider in the country, so they had an absolute monopoly. But they had the duty at the same time.

So what I was considering…. I produce it, then I deliver it to the LDB, and the LDB will distribute that. But I did not know that they can't have their cake and eat it too. I mean, they have a monopoly, yet they are not forced sell your products, which is fine. But then my question says: "Okay, I'll do it myself." Then the response was: "Well, no you can't, because we have a monopoly." That's kind of counterproductive.

J. Les (Chair): All right, Frank. I personally have heard your story before.

I visited Frank's distillery just a few months ago. For those who haven't seen one of these operations, you should visit it. It's not only very interesting, but they also happen to, as Frank has already indicated, turn out world-class products. I think there's certainly an opportunity for us to be helpful.

F. Deiter: Any further questions?

J. Les (Chair): No, that's it, Frank.

F. Deiter: Then I want to make it short. You had a long day, you guys.

J. Les (Chair): We'll ponder over your presentation and see what we can do.

Our next presentation is on behalf of the North Okanagan Youth and Family Services Society, and their presenter is John Belfie.

Go ahead.

J. Belfie: First, I'd like to thank you for providing this opportunity for me to speak to you and to commend you on the time that you're committing to this process and the time that you're being away from your families and your homes. It's admirable. On top of the time you spend in the Legislature, this must be tough for you at times.

J. Les (Chair): It's all with great pleasure.

J. Belfie: Yes? Okay. Well, I'm glad to hear that.

My name's John Belfie. As has been indicated here, I'm the executive director of North Okanagan Youth and Family Services. I have to sort of provide a context for my comments you have in front of you. Essentially, I'm representing my agency, and I'm going to be crossing back and forth to the sector that I represent. In other words, at times I'm using my agency as an example for the issues and problems that my compatriots across the province are experiencing. So I'm generalizing in some cases.

It could be a little confusing. At one point I'm saying: "We are having this problem." In other words, I'm saying: "The province is having a problem."

J. Les (Chair): It's your presentation. You do whatever you like.

J. Belfie: Thanks.

I represent our agency, which is a mid-size community social services agency in the Vernon area. We employ approximately 45 FTEs. We have a cash flow of roughly $3 million, which comes from, primarily, the Ministry of Housing and Social Development but also some from Health and some from the school district and the Ministry of Education.

[1625]

With me today is a compatriot who is going to assist me, should you have questions that I don't have answers for. His name is Dennis Dandeneau, and he represents the Bridge committee's resources in Kelowna.

Our agency is a member of the Federation of Community Social Services. That is in reference to me representing both my agency and other agencies of the same ilk across the province. The federation itself has 123 members and does about $450 million of service, as far as I can figure out. We provide service to children and families across the province, in every corner of the province, and I'm sure in every constituency that's represented around your table today.

That's a lot of money. What's this buying? Well, it buys family support, counselling, education, advocacy, supervision, information, direction. It buys child and youth services, as mentioned above, plus protective interventions and residential services. These services are provided in clients' homes, in schools, in our offices, in our residential facilities and on the streets of British Columbia.

Although office hours are 8:30 to 4:30, Monday to Friday, when a crisis arrives, our staff respond 24-7, 365. Believe me, lots of crises of life-threatening value or considerable actual threat to the safety and security of children arise.

This presentation is designed to encourage you to understand and support and assist our services that we're providing to your constituents.

Why are they so important, these services? Are they just wishy-washy social services things that anybody could do? Well, we make a significant contribution to the social fabric of our community — that's Vernon — and I'm sure my compatriots around the province do the same. We do so by teaching parenting education strategies. Last year our agency provided 50 programs to 410 individuals. For a description of the various topics that we offer throughout the year, you have a brochure in front of you that's called Families Matter, I believe.

We have a teen program that has brought the apprehensions for this cohort of parents to less than 5 percent for teens participating in the service. What that means is that in the past, before this program existed, teens would have kids, they'd get in conflict with their parents on
[ Page 653 ]
parenting issues, they'd move out and things would go awry. They were children parenting children. In many, many cases the children ended up being apprehended by the ministry at great cost. We all know that if these kids don't get back with their natural families, it goes on for their lifetimes.

This program is particularly effective at helping teens to parent properly. As I mentioned, it reduces the amount of apprehensions to almost nil.

We assist families with special needs for children. Rather than have these families put their kids in care, we support them, train them and provide strategies to work with the challenges that arise and present themselves on a daily basis for these kids.

Every day families are referred to us who are in crisis. This crisis could lead to a family breakdown. They're precipitated by conflict, uncontrolled anger, drug abuse and desperation brought upon them by poverty. You've probably seen innumerable articles about child poverty in British Columbia.

[1630]

Our staff are there to support these families through their crises, help them find solutions and protect their children, using the approach which focuses on the inherent strengths of the family. We don't go along and solve all their problems for them, but we show them how to use a variety of support systems and solutions that they can use long after we're out the door and they're on their own again.

We train and support foster parents, who care for the most vulnerable and difficult children in our communities. The cost of every intervention that we make saves a family dissolution, prevents a teen from running away or committing suicide or protects a vulnerable child from abuse. All these costs are preventative. They prevent a crisis. They prevent small problems from becoming large problems.

Down the road, as I mentioned, if kids end up in foster care, if they're abused and they have a history of reaction to abuse, the cost to support them…. You'll notice I said "manage." Once kids have experienced a lot of turnover and strife in their life, a lot of them are not resilient enough to turn the corner, and they end up consuming — you probably know, in your debates in the Legislature and reports that you've read — incredible amounts of financial resources, through Health, through Education, through the ministry for social services and housing and a variety of other ministries, not excluding the Attorney General. This goes on for years.

We're at the front end, trying to help and support these families and prevent the first step in this road. I'm here to tell you how you can help. I'm not sure how much this has been debated as an issue in the Legislature, but this sector is badly in need of stability.

We need a commitment to the long term — I define that as three to five years; that's probably long term these days — in contracting partnership with a stabilized funding plan. Hopefully, the era of drastic cuts is past us.

The contracting ministries I worked with through this last round of restraint are…. Actually, I'd like to say that I commend them. In our valley here the people that I've worked with went out of their way to work with us in partnership to make sure, in our instance, that the $232,000 reduction in our funding had minimal impact on the families that we served. I think we did a pretty good job of that.

There's a constant threat of budgetary reduction, and this impairs our ability to plan and manage in a fiscally responsible manner. This threat also stresses our volunteer boards. If any of you have sat on boards, you know that if the non-profit agency gets into financial trouble and you're sitting on their board, at the end of the day, it can't come back, and you can be responsible. Fortunately, it hasn't happened very often in the province, but it's a constant threat. They're well aware that we have lawyers brief our boards on board responsibilities and how to avoid this, but it's a stress for them.

In order to address these pressures, our agency needs a minimum of $75,000 per year for the foreseeable future. This is money without strings attached. This is money that we need for capital improvements, repair of buildings, operational shortfalls, to purchase IT equipment, to repair our existing equipment.

We are a CARF-accredited agency, which requires that we monitor, keep files, do program evaluations — just a wide range of activities that rely upon our information technology, our computers and local area networks and our abilities. The money would not be used frivolously. That's what we need it for.

[1635]

I can't speak for others, but I would think that on a prorated basis most agencies are in a similar position. You have a document before you that's called Cost Pressures. It chronicles a variety of incidents or agreements — union agreements — a variety of pressures that have come through. Well, you can see a long list of different pressures that have built up over the years.

Certainly, the $75,000 a year I'm asking for our agency on a prorated basis, depending on the size of other agencies, would help us resolve the damage that's been done to our fiscal ability to manage and continue to operate.

Finally — I'm not sure I'm articulating this well — we need some help. I'm not even sure whether this is in the mandate that you have. We started out…. We offer parenting education, and for half of the 50 programs that we offer, we raised the money in the community through a variety of fundraising initiatives.

It's getting harder and harder, and there's an incredible amount of competition. Just watch the morning news, and you'll see 15 walks, three superlotteries for monster homes and golf tournaments galore, and a variety of things. That's in Vancouver, and it's not much dif-
[ Page 654 ]
ferent here in the valley — maybe scaled down because of our size.

I don't know whether it's in the capacity of this committee to make recommendations on policy changes on gaming and fundraising. I'll tell you that I just came out of a meeting with some of my staff, and in some cases, it's a win-lose if we make money in certain categories.

We have a small amount of gaming money that we put toward parenting education, and if we're successful in one area, then we don't get the gaming in the other, and we're back at ground zero again, trying to replace that money. As I said, I don't know whether that particular aspect of operations and fundraising is within the purview of your committee, but I'm making a plea.

I don't have a simple solution for that one. It might involve gaming. It might involve a change to the rules. I'm not sure.

That's essentially my presentation. I would be overjoyed to answer questions if my comments have raised any issues that you'd like to have clarified. And as I said, my compatriot Mr Dandeneau is here to assist me should I not have a simple, ready answer. I know that the last time I came before this committee, somebody asked me a question out of left field that left me cold. I felt really bad about not being able to answer, but I didn't have the information at my fingertips.

J. Les (Chair): Okay. Well, you've used up your entire 15 minutes, but I'll give you one question, from Michelle.

M. Mungall: Actually, you answered it in your presentation. So how about that?

J. Les (Chair): Great. Excellent. Thank you for coming this evening.

Our next presentation is Jennifer Pickering, on behalf of the Alternator Centre for Contemporary Art.

J. Pickering: Thank you very much. The Alternator Centre for Contemporary Art is operated by the Okanagan Artists Alternative Association. We're a charitable organization and a not-for-profit society.

We operate an artist-run centre, which is part of a national network of over 170 centres in Canada. Artist-run centres run parallel to municipal galleries, and we provide accessible cultural activities to all. We provide a forum for the exchange of ideas within the arts community and with the general public, which promotes awareness of contemporary art practices in both urban and rural communities throughout B.C.

My presentation today will briefly outline the benefits of increasing government investment in arts and culture in the 2011 budget from the perspective of artist-run centres. The government currently has two avenues through which they support our sector, including the B.C. Arts Council and B.C. gaming.

[1640]

Reductions from the province in 2010 have had a severe impact on our ability to provide services to our communities and remain competitive on a national level. I will specifically address what our community needs are, why this is important and why it is a sound investment for the province of British Columbia.

Our request is that the government restore gaming money to communities as per the June 17, 1999, memorandum of agreement: "equal to one-third of ongoing government net community gaming revenue." We ask that government gaming money be returned to our communities with multi-year funding to ensure sustainability and accessible programs for all ages.

We also congratulate this government for partially restoring funding to the B.C. Arts Council. However, we ask that this committee once again recommend that funding to the B.C. Arts Council be restored to 2008-2009 levels for the upcoming fiscal year.

In addition, we ask that consultation with the arts and culture community begin towards increasing funding for the 2012 fiscal year. Funding levels were not sufficient in 2008, and they will not meet the needs of our community today or in 2012, so we're asking for discussions.

Why this is important. The loss of operating revenue means that our organizations will struggle to cover core operating costs in 2011. There is little to trim, and the impact will be felt in all areas of artistic production and administration. Our centres have worked hard for over 30 years to build capacity. The small amount of money that we are requesting makes sense to invest now as it ensures that we can maintain our current infrastructure and avoid the lengthy, expensive and uncertain process of rebuilding in the future.

It is well-documented that artists contribute more than government and private donors to arts and culture. Take, for instance, the Federal Cultural Policy Review Committee, appointed by the Liberal government in August of 1980. This report corroborated artists' claims that the major economic subsidization of the arts still came from artists themselves. There are no signs 30 years later that this has changed.

The report emphasized the need to improve the economic status of artists, which it described as deplorable. According to key statistics reports on the arts in Canada — and I'm referring to the May 2005 Hill Strategies — over 40 percent of artists hold a university degree yet earn on average only slightly more than overall labour force workers with only a high school diploma. A typical visual or media artist earns around $10,000 a year or less.

Artist-run centres are dedicated first and foremost to ensuring that artists earn a living wage from their work. Clearly, we have far to go to meet our goals to ensuring
[ Page 655 ]
a living wage, but this is one of the services we are offering to provide on your behalf for only a small increase in funding.

With an investment by the province, such as made during the Olympics, our organization in 2008 paid $96,000 in artist fees to B.C. artists. Now, this is very different than the typical year, where we pay out $20,000 to professional artists.

I'm going to give you a statistic here. Canadian consumers spent $22.8 billion on cultural goods and services in 2003, an amount that is greater than spending on tobacco, alcohol and games of chance combined. An organization such as the Alternator artist-run centre in Kelowna, B.C. ensures that some of the benefits make their way back to the lives of the artists and communities that are responsible for creating them.

Artist-run centres in B.C. struggle to remain competitive nationally and are now faced with the difficult task of convincing our peers across Canada that we can continue as viable institutions. In mid-October we will submit our three-year operating grants for artist-run centres to the Canada Council for the Arts. We will compete nationally for limited funding with over 100 other artist-run centres.

We continue to see organizations in Quebec, Ontario and Manitoba receive a disproportionate amount of federal funding. When we bring this up, we are told by Canada Council representatives that we need to get junior levels of government to step up before this will change. How can we compete without the financial investment of this province?

Our ability to leverage federal dollars to create jobs and support professional artists while engaging our communities in cultural activities is now at risk. This federal money is adjudicated for the next three years, and the damage is going to be long term. Action needs to be taken immediately.

[1645]

What could we do if we had more? What we are offering is to make B.C. a continental leader in arts and culture. We can offer more than a hallmark event, more than Expo and something greater than the Olympics. These are events which eventually fade from cultural memory.

The arts allow us to translate our experiences. They create the opportunity for people to step back and examine their lives through the lens of history, science and technology, philosophy and the many other fields from which artists take their inspiration. Through the arts, individuals and communities are challenged to consider where they have come from, where they are now and where they are heading.

The arts provide ways for all British Columbians and all Canadians to understand what makes us unique and to examine our values as they change from generation to generation. It is through creative expression in music, performance literature, media and visual arts that we then present who we are to the world around us.

With a minimal increase in funding, we will offer arts and culture that is sustained and through which British Columbia can become known for decades. This is a good decision to make because we are proud of the place we live, proud of our artists and proud of our cultural workers. In addition, spinoffs from increasing spending in our sector include the ability to leverage more money from private and federal sources, even internationally.

However, to be successful, this investment has to be sustained so that we can build necessary infrastructure and capacity. If budgeted cuts to B.C. gaming for the next fiscal year are implemented, our organization will face the loss of $34,000 per year. This level of loss is typical of artist-run centres and can be anywhere from a quarter to less of the funding, but it's around a quarter. We're not large organizations.

They directly affect jobs across the province, spending in our communities and ability to access other cultural investments. Without sufficient capacity, we can't access money from private foundations; private donors; and other municipal, provincial or federal programs.

Based on the clear benefits of art and culture in our province and our strong vision for future growth and development, I respectfully request that the Finance Committee recommend the immediate restoration of 100 percent of gaming and B.C. Arts Council money so that these funds can continue to support and enrich communities across British Columbia.

J. Les (Chair): Thank you very much. I have a question from Norm.

N. Letnick: Thank you, Jennifer, and thank you for the work that the Alternator does in the valley. You said that you receive some money from gaming grants?

J. Pickering: Yes.

N. Letnick: Do you also get money from the B.C. Arts Council?

J. Pickering: Yes, we do.

N. Letnick: Okay, so if we do make the recommendations that you ask for and if government sees to implement those recommendations, do you have a preference as to where you would like the new money to come from — from the B.C. Arts Council or from the gaming grants — and why?

J. Pickering: Well, I suppose it's complicated, but I do think that the B.C. Arts Council is currently the best venue through which to have that money given over to communities, because it is a peer-adjudicated system.
[ Page 656 ]
One of the things that have come up recently is the need for an arm's-length organization.

In one of the reports that I referred to in my presentation, one of their key recommendations was also really looking at the importance of arm's length and ensuring that there is the ability to step back a little bit from changing governments and ensure that there is sort of an ability to step back and look at what the needs of the community are and ensure that it's sustainable in the future.

D. Donaldson (Deputy Chair): Thanks for the presentation. There was lots of information in there, and I hope we get a written copy of it.

Just quickly, if I heard you right, you received $34,000 less. That represented about a quarter of your budget. Can you briefly describe the impacts that has had on what you've been able to do in the community?

[1650]

J. Pickering: Yes. In 2008 we had a major year because of the additional funding through the arts legacy. We actually have decreased our programming from 20 exhibitions a year down to four at this point. We are no longer able to bring in artists from outside of the community. At this point we are, for 2011 and 2012, looking at bringing in only one artist from outside of the valley to exhibit in our space.

Having artists from outside the valley is really important, because it provides a way for artists within the valley to get inspiration for their own work and to be able to measure their work against work that's happening both nationally and internationally. It's very important.

It also ensures that we can be competitive again nationally. We are also a Canadian artist-run centre, and we need to be showcasing the best of emerging Canadian artists. Because of our geographic location, we're really invested in supporting the careers of artists in the Okanagan but can't necessarily fill up, at this point, a full year of programming. That's been another impact. It's quite expensive to bring people in.

J. Les (Chair): Thank you very much, Jennifer, for coming this afternoon.

We have five minutes left, and I believe Beth Morton is here and would like to speak to the committee for that period of time.

B. Morton: I'm really shocked…

J. Les (Chair): Don't be shocked.

B. Morton: …that there's nobody else attending and nobody has time to listen to other people's reports. Is this a result that all the volunteers are so pressured? Every one of them said: "Please bring the gaming funds back to our community."

Why is it that in November…? Well, right now it's only — what month is it? — September. You're making a budget for 2011, and organizations that receive gaming funds are also trying to make a budget for 2011, but they don't know until September 2011 how much they're going to get.

How can these volunteers work? Can you please tell the people on the finances that they need to know ahead of time too. You have a volume of people willing to work for nothing, and you're not supporting them.

Actually, not you. This government. And I don't think any other government will make any difference. I'm not going to change my vote to a new PC or NDP.

The government of B.C. is sabotaging the volunteers of this province.

I wanted to say something to Jane, or maybe it was John, or both of you, about leveraging money from the government. One of the best ways is to give it to volunteer organizations. They're great leveragers. They do things for nothing.

Thank you, Norm, for supporting one of the Rotary…. I recall seeing you at the Rotary gala. Thank you for that.

I do want to say to Doug…. You were asking: has it made a difference between tourism…? I don't know. It's changed from Tourism B.C. to tourism under another…. Can you help me there? Do you know what I'm talking about? Okay.

Well, I happen to be a volunteer at the visitor information centre, and we were very pleased that it did not negatively affect our support from Tourism B.C.

[1655]

I was going to ask Norm: how much money does gaming bring to the Central Okanagan? I read that somewhere — $149,000 for the whole…. What is it — $140 million?

N. Letnick: Do you want me to answer the question?

J. Les (Chair): Sure.

B. Morton: How much gaming did a certain area get?

N. Letnick: Beth, I'll give you my card, and I'll send you the answer so that I can give you an idea.

B. Morton: Okay. But it wasn't very much as compared to what money is taken out. Bring it back. The volunteers need it, and they're getting tired. I talk to Rotarians. I talk to the Kelowna….

I'm not an activist in this community at all. I like to bicycle. I like to do stuff like that. But I hear them. They're tired of it. They're tired of the government taking this money that is charity money, and it's not ending up in charities.

J. Les (Chair): Okay, Beth. Thank you very much for your comments this evening.

With that, our hearing this afternoon is concluded. We'll reconvene tomorrow morning in Penticton.

The committee adjourned at 4:56 p.m.

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