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

Thursday, September 23, 2010

9 a.m.

Fernie Salon

Prestige Rocky Mountain Resort, Cranbrook, B.C.

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

1. The Chair called the Committee to order at 9:03 a.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 11:35 a.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Thursday, September 23, 2010

Issue No. 25

ISSN 1499-4178

[ Page 717 ]

THURSDAY, SEPTEMBER 23, 2010

The committee met at 9:03 a.m.

[J. Les in the chair.]

J. Les (Chair): Good morning, everyone. Welcome to Cranbrook, for those of us who are not from here. Today is September 23, the first full day of fall, for anybody who cares. I'm John Les, the MLA for Chilliwack, and I chair this parliamentary committee. I'd like to welcome everyone here this morning and thank you for taking the time to participate in this important process.

Each year in preparation for the oncoming year's budget, the Minister of Finance releases a budget consultation paper by September 15, as he did again this year, that presents a current fiscal forecast and identifies the key issues that need to be addressed in the next budget. The paper provides a focus for the consultations of this committee, and 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 in the room here today.

The Committee on Finance and Government Services is the parliamentary committee which is responsible for conducting public consultations on the forthcoming budget. Our committee is required to report back to the Legislative Assembly no later than November 15 of this year. We will be holding 14 public hearings altogether in each region of the province. We've also scheduled three video conferencing sessions to hear from residents of the more rural communities around the province.

This year we've so far been in Vancouver, Surrey, Lake Country, Penticton and Kamloops. Today we're in Cranbrook and Castlegar, and tomorrow we'll be in Victoria.

In addition to public hearings, there are a variety of other ways that the public can share their ideas with us. We accept written submissions by letter or e-mail and also video and audio files. Further information on all of this can be found on the committees website.

Committee members carefully consider all the public input that we receive, whether it's an oral presentation or otherwise, as I just described. The deadline, however, to receive submissions is Friday, October 15.

At today's meeting each presenter may speak for about ten minutes with up to five additional minutes allowed for questions from members of the committee. Time permitting, we may also have an open-mike session near the end of the hearing, with five minutes allocated for each presentation.

[0905]

Today's meeting is a public meeting, which will be recorded and transcribed by Hansard Services. A copy of the transcript along with minutes of the meeting will be printed and made available on the committees website. In addition to the meeting transcript, a live audio webcast of this meeting is also produced and 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'll now ask the members of the committee to introduce themselves.

B. Routley: Bill Routley, MLA for the Cowichan Valley.

B. Ralston: Bruce Ralston, Surrey-Whalley.

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

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

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

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

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

J. Les (Chair): As well, joining us today is our Clerk, to my immediate right, Susan Sourial. She's also accompanied by Byron Plant, who's looking after registrations at the back of the room. And from Hansard Services staff, we have Michael Baer and Jean Medland, who are here to record and prepare the written transcript of this meeting.

With those formalities out of the way, I'd like to call on our first presenter today, who is Judie Blakley.

Good morning.

Presentations

J. Blakley: Good morning. Nice of you to come on our first day of fall and our first frost day here, which is a good thing, because it's going to snow soon, and we can ski.

J. Les (Chair): We all have our priorities, don't we?

J. Blakley: Welcome to Cranbrook and the East Kootenays. I don't have a long presentation today. I saw that you were coming into our region, and I thought I would come out and say just a few words about how I think the government is doing.

I'm an average citizen who cares about the political process; I'm not just an average citizen. I'm guessing that you hear mostly criticism, and although I wouldn't want government members to get too complacent, I want you to know that many of us around here are, overall, quite happy with what the provincial government has done.
[ Page 718 ]

You've lowered our income taxes. I'm sure you've heard a lot about HST. Frankly, most of the world has a value-added sales tax, and if you need a sales tax, a value-added one is smarter than what we had.

Rather than get rid of the HST, I'd rather you lower our personal income taxes and corporate income taxes. That's what you've done in the past. Thank you. Keep on lowering them.

Your government has been good for our economy here in the East Kootenays. Our mining industry in the Elk Valley has been hiring and is now up to 3,000 employees at an average salary of $100,000 a year.

I remember what it was like when the NDP were in government. Mining companies left this province, including lots of mining people from around here. We know coal prices are a big factor but so are things like taxes and better regulatory processes. Keep that up, because mining around here is an important key to our future.

Our forest industry is struggling, but at least Tembec is operating its three mills. Thank you for helping Tembec with its electricity purchase agreement at the pulp mill. I understand that they might not be operating without that extra revenue. Thanks for the work you are doing to build new markets in China. I understand Tembec is seriously considering going on the next trade mission to China.

Opposition members don't want to hear this, but the provincial government has invested tens of millions of dollars in the Cranbrook area. I can remember what our hospital here was like in the '90s, and I can tell you that it is much better today. My husband had two surgeries this year, and I speak from personal experience.

Your government was criticized for getting rid of the little health councils in every town, but since 2002 we have seen a tremendous improvement in service, especially in the number of specialists who are now available to us at the regional hospital here in Cranbrook. The $33 million you spent here has helped a lot.

Our college — another $30 million there — is also much strengthened. So many of our families now have kids who stay here, live at home and take the first two or years to a university degree.

My daughter graduated from the nursing program at the College of the Rockies four years ago and was able to do her first three semesters in Cranbrook. She's currently doing a master's in nursing program, nurse practitioner program, and it's the basics that she learned in her home community that gave her a great start. It has kept a lot of our kids close to home and saved lots of money for our families that used to have their kids live in Calgary, Vancouver, Victoria, Lethbridge, etc.

[0910]

All you have to do is look around this city and compare it to where we were at ten years ago to see the positive difference. We have new highways and many new passing lanes, an expanded airport, new seniors homes, an expanded college and hospital, a beautiful Spirit Square, our wonderful Rails to Trails project between Cranbrook and Kimberley, and a new waste treatment facility being constructed right now. We need you to get re-elected so that you can keep these investments in our communities going.

I have two cautions. One is the drastic cuts to the arts and culture. In Cranbrook we are celebrating 35 years for our Symphony of the Kootenays. Professional musicians from Edmonton, Calgary, Nelson, Kamloops, Penticton, etc. perform several programs each year. Local music students often have an opportunity to perform with the symphony. Our youth and high school music program benefit greatly from being a part of this. To keep costs down, local citizens billet the musicians. I have billeted musicians for eight years.

For some history, the bingo halls were closed in the 2007-08 season, and we were assured by officials at that time that this would not adversely affect our future share of the local gaming revenue. And indeed, for that season we were awarded the amount of revenue that we had come to rely on to keep our organization viable.

Fast-forward to 2009. We were informed that there would now be an application process in place to access gaming funds. This was a complete departure from the information we were originally given justifying the rationale for local closure and would completely change the dynamic of how we would be able to access the non-gaming funds — essentially going from an assured portion of local gaming funds in which all participating organizations had an opportunity to benefit, or volunteer in, to a screened application process where no guarantees of funding would be forthcoming.

This was now marketed as direct-access funding whereby the government determined the recipients, dollar amounts and time period but with no guarantees. The impact of the devastating financial cuts by the provincial government and reduction of funds to the British Columbia Arts Council this season have left us all reeling.

Example. In 2008-2009 our grant support was $11,000. In 2010-11 the same grant was reduced to $2,750, a reduction of $8,250.

More worrisome still is the reality that the direct-access grant gaming funds funding cycle will be complete this year. Try as we may, we have been unable to get confirmation from officials that this will be renewed. This is an untenable situation for the orchestra and compromises our board's ability to plan concerts while trying to remain fiscally responsible. Every arts organization needs the support of their government to maintain sustainability.

I'm a member of several organizations with older people in them. Between FoodSafe requirements and the 18-page on-line process for obtaining a gaming licence, many community organizations have problems even selling jam or jelly or raffle tickets on a quilt. Your
[ Page 719 ]
grandmother's pickles are becoming extinct because the process has become so complicated, not because she doesn't make them anymore.

Just as an aside, I really need a bumper sticker that says: "I want to ski Jumbo before I'm too old."

That's all I really have to say. I'm just an ordinary citizen. I'm basically happy with the government. I know you don't hear this very much, so I figured I should come out and say it. Thank you for your time.

J. Les (Chair): Thank you, Judie. I think I have at least one question, one from Michelle.

M. Mungall: Judie, I was listening to your presentation. And thanks, by the way, for coming out this morning. You start off saying you'd like to see some income tax cuts as well as corporate tax cuts, but then you're also concerned about the cutbacks in funding for the arts. How do you reconcile the two? They're not entirely separate.

Just to go further, everyone here, regardless of what party they're in, recognizes that when you reduce revenue, you also have to reduce services. That's part of the questionnaire that's been put forward to the public. So I'm just wondering. In your perspective, how do you reconcile that, when you're looking for increased funding over here but less tax over here?

J. Blakley: Well, in our case, a reduction of $8,250 represents about 80 percent of our funding. I don't think that, in most of the budget, people had 80 percent of their funding cut. I think the percentage for arts and culture should be just increased a bit so it's in comparison to the cuts that were taking place percentage-wise with the other programs.

[0915]

J. Thornthwaite: Thank you for your presentation. I have one question, also related to arts and culture. What would you prefer the government do with regard to getting hold of the arts and culture funding — through the B.C. Arts Council, direct-access funds or a combination of both — and why?

J. Blakley: Good question. I think a combination, because I think that gaming funds go up and down. So I think it does make sense, you know.

Arts and culture always falls into that little group that is sort of outside of things that we don't…. You know, we need our hospitals. We need our roads. We need our airports. We know all of that stuff. Arts and culture seems to get chopped because it's not an essential service.

I think probably a combination of both would be….

J. Thornthwaite: Were you receiving Arts Council funding as well, or is this cut here that you're talking about just direct access?

J. Blakley: I think that's just direct access.

J. Rustad: Judie, thank you for coming out this morning, and for your presentation.

You had one little comment here that you wanted to ski Jumbo before you're too old. I've seen a little bit on the Jumbo project, and quite frankly, I think it would be a great addition. I'm just wondering: what do you think that would do for the area in terms of work, in terms of economic opportunity? Do you think that would be a positive? Also, with that, do you think there are any environmental issues?

J. Blakley: There are definitely environmental issues out here in the Kootenays, everywhere you turn. Personally, I think recreation and sport and bringing people in to our area bring jobs to the area. We have a sparse population here, so we need to bring money in to continue growing here.

There are two camps out here. My reference to bumper stickers is that there are a lot of bumper stickers around that say, "Keep Jumbo wild," so I need one that says, "I want to ski Jumbo." I'm just a skier. That's all. I want to use my mountains before I'm too old to ski anymore.

J. Les (Chair): Anyone else? Seeing no further questions, thank you, Judie, for coming this morning. I appreciate it very much.

I'm told that our next scheduled presenter, Andy Cohen, is not yet here, but for the presentation after that, from the College of the Rockies, both people are here — Dianne Teslak and Alex Jensen. If they're ready to go, we're ready for them too.

D. Teslak: Good morning, Mr. Chair, committee members. Thank you for the opportunity to participate in today's prebudget consultation process. The government is to be commended on giving British Columbians a voice in shaping the 2011-12 provincial budget.

Joining me today is the College of the Rockies board chair, Alex Jensen, government-appointed member from Cranbrook.

A. Jensen: Good morning. I wish we had sun out there for you. What can I say?

Before we get started, I'd like to take the opportunity to thank the province for its support of the College of the Rockies through the knowledge infrastructure program, the provincial and federal governments' $12.7 million investment in the expansion and upgrading of our main campus in Cranbrook. Our construction project, which will be completed by early next year, is creating jobs and is leaving a lasting legacy. Thank you for the investment in our college and our communities.

College of the Rockies recognizes and is sensitive to the fiscal challenges currently facing the province. As a
[ Page 720 ]
board chair of one of B.C.'s 11 community colleges…. Its mandate is to prepare a well-educated, highly skilled, job-ready workforce for our region and the province.

Canada is facing a looming skills gap. As the boomers begin to retire, we need to train more workers, including those from traditionally under-represented groups — aboriginals, disabled and immigrants — and arm them with advanced skills training and education for employment.

[0920]

B.C.'s community colleges and College of the Rockies are at the front lines for people in communities affected by the downturn and a slower-than-hoped recovery, and we are the catalyst for economic and social recovery.

D. Teslak: College of the Rockies has seven campuses located throughout southeastern B.C. Our main campus and Gold Creek campus are in Cranbrook, and we have five satellite campuses — in Creston, Golden, Invermere, Kimberly and Fernie. We serve a population of 83,000 people, who are widely dispersed within our large 45,000-square-kilometre region.

Each year the College of the Rockies serves approximately 2,500 full-time-equivalent students through face-to-face and on-line instruction. Last year we issued more than 1,000 credentials, and I'm thrilled to say that this fall we are offering our very first College of the Rockies degree, the bachelor of business administration in sustainable business practices.

College of the Rockies' exceptional faculty and staff are dedicated to our students' success, and I'm proud to say that over the past ten years, without exception, we have delivered exceptional programs and services to our students while meeting or exceeding the educational targets given to us by government within the budget.

As a community college, we offer our students education and training that is high-quality, job-ready, personable, affordable and close to home — all very important attributes, given today's economy.

This year our enrolment is up 10 percent over 2009, which was up 10 percent over 2008, which was up over 2007. In fact, our enrolment has increased every year for the past five years. We again have wait-lists this fall and have had to turn students away in many of our programs, including our health and trades areas.

We have seen an increase in demand from secondary school graduates as well as from displaced workers requiring training and retraining, as have colleges across B.C. and Canada. As more and more British Columbians turn to their community colleges for training and retraining, B.C.'s colleges face physical and financial capacity challenges that limit our ability to serve our communities.

In College of the Rockies' particular case, due to limited financial capacity, we have historically had to be innovative, adaptable and nimble in order to meet the education and training needs of the people in our communities.

Some of the innovative things we have done and continue to do exceptionally well include rotating health programs between regional campuses and bringing these programs to area residents who cannot, for numerous reasons, come to Cranbrook for training; partnering with businesses to tailor programs with them to meet their training needs, including Tembec Industries, Elk Valley mines and the Interior Health Authority; and partnering with other post-secondary institutions, such as Selkirk College and the University of Victoria, to deliver joint and collaborative programs.

In addition to providing high-quality, job-ready training, College of the Rockies is an engine of provincial economic growth. College of the Rockies' service area economy receives $134 million in income each year due to the activities of the college and the cumulative effects of our current and past students. This figure amounts to 4.3 percent of total annual income in our regional economy.

We are a major regional employer. In 2009 College of the Rockies employed 250 full- and part-time employees and 590 non-regular employees. College of the Rockies and all B.C. colleges are truly educational, social and economic engines in our communities and are critical to the province as it moves into economic recovery and prepares for the looming skills gap.

There are two major shifts happening in Canada. (1) The first baby boomers will turn 65 in 2011, and many more will follow in rapid succession year after year, and (2) there are simply not enough skilled workers ready to replace the vast numbers poised to retire. We need to grow our workforce to combat the looming skills shortage.

As the primary providers of advanced skills and education, B.C.'s colleges will play a major role in combating the large future skills gap. At a time when investment in skills/trades training should be on the rise, the system faced a $6.5 million reduction in funding in 2010-11 and is facing a potential further reduction of $8.5 million in 2011-12.

College of the Rockies continually aligns our programs to respond to the advanced skills and education needs of our communities. We can and do provide the type of advanced skills and education training necessary for employment, but we need continued investment by government to do so.

As more people turn to colleges, we face increasing pressures on our capacity, both financially and physically. Continued investment in B.C.'s colleges is absolutely necessary to ensure that we have the workforce in place to meet the challenges of the future.

[0925]

However, B.C.'s colleges ourselves are in a difficult financial position. The restraint on base funding, the re-
[ Page 721 ]
duction in funding to support skills/trades training and the reduction of annual capital allowance by 75 percent have meant that B.C. colleges have had to undertake extraordinary measures to continue to meet the range of programs and services our students require.

As well, changes in government administrative and accounting policies that limit the use of surplus funds that College of the Rockies creates through our entrepreneurial activities, which are not government funded, restricts our ability to respond quickly and effectively to the changing requirements of our students. The most glaring example of this is the government's recent decision to move all taxpayer-supported entities to public sector accounting standards, which will pose significant challenges for B.C.'s colleges.

One challenge is that public sector accounting standards do not permit the deferral of government grants issued specifically for the procurement of capital assets. The timing delay between the recognition of revenue and the depreciation expense of the assets will result in very significant non-cash annual deficits. Under our current mandate, which prohibits annual deficits, we will be required to reduce programs and services to cover these non-cash deficits which result solely from accounting entries.

At a time when we need to be as nimble and adaptable as possible, policies like this inhibit our ability to respond quickly and efficiently and do what we do best: educate B.C.'s workforce. We call on government to make the necessary changes so that we can work more effectively with what we have available.

B.C.'s colleges play a vital role in providing advanced skills and education for B.C.'s economy. In order to continue to do so effectively, we ask government to fund its colleges accordingly. Government needs to provide B.C.'s colleges with sustainable operating bases.

In 2011-12 there needs to be an increase to accommodate for inflation and other contractual and statutory increases to operating expenses. Government needs to address the administrative and accounting policy issues that are negatively impacting operations and our college's ability to provide the education programs and services required by students.

Government needs to reduce administrative barriers and provide greater flexibility so that colleges are able to respond to the emerging needs of our communities and be less dependent on government funding. Government needs to restore the annual capital allowance to pre-2009 levels. Government needs to make a new funding commitment to support increased access and success for aboriginal, immigrant and disabled students. Government needs to examine alternate ways of delivering and managing trades training.

In conclusion, I would like to emphasize that College of the Rockies is the primary provider of advanced skills and education for employment in the East and Central Kootenays. Investing in our college is vital to the future economic health of our region.

College of the Rockies is a great investment. We return $3.90 to the provincial economy for every dollar of taxpayer financial support we receive.

College of the Rockies is committed to working with our communities to further the economic health of our region and the province by providing programs and services that result in advanced skills and education for employment. We need the province, the Select Standing Committee on Finance and the 2011-12 budget to help us do this for the betterment of all British Columbians.

Thank you for your time, and we'd be pleased to answer any questions you may have.

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

I have a number of questions, starting with Michelle.

M. Mungall: Thank you very much for coming in this morning.

As you know, I'm the MLA for your Creston campus, and I recently met with Nick Rubidge and talked extensively about a lot of the issues. You didn't specifically mention the general accounting practices, but I talked a lot with him about that, in terms of the administrative constraints.

Congratulations, by the way, on the sustainable business practices program. I was talking to a young man from Ontario, actually, who was just enrolling in that program over the summer. He was really looking forward to it.

I'm just going to one of your points. I'm wondering if you can elaborate a little bit more on the fourth one, a new funding commitment to support increased access and success for aboriginal, immigrant and disabled students. Do you have anything more specific you could possibly point to as a successful best practice that should be implemented?

D. Teslak: Last spring we developed a program, in partnership with the Ktunaxa Nation locally, where we designed a program and took adult basic education learning to the communities.

[0930]

Through some funding that they were able to access, we were able to send College of the Rockies faculty to their communities and teach them in their home communities, where they have a comfort level and aren't faced with the barriers they may be faced with in coming into the college. We found that program to be highly successful.

The funding that the Ktunaxa had access to will dry up, so we hope that we'll be able to access some funding provincially to support that kind of a program in the future.
[ Page 722 ]

D. McRae: Thank you very much for coming. Two questions, if I may. First of all, what percentage of high school students transition to post-secondary education in the region? I know it was a concern in the Okanagan when we were there. Do you have those sorts of stats available?

D. Teslak: I don't have those stats, I'm sorry. I don't have that information with me. We know that it is increasing.

We have developed a position, in partnership with the government as well as the school districts over the last couple of years. We had a position, what we called the transition coordinator, who worked closely with the school districts and with the college to transition people into post-secondary education.

The funding for that has ended, but the college has made a commitment, in partnership now with school district 5 and the Elk Valley mines, to continue with that position. We found that that had a tremendous impact on the number of high school graduates we were seeing.

D. McRae: Perfect. The other question I had was…. I had an opportunity recently to go to North Island College in my riding. They had done some amazing work with on-line learning using technology and big-screen TVs and such, and they developed it pretty independently of any other ministry or institution. It kind of saddened me that they were actually working sort of in a bubble and not sharing their opportunities.

I was wondering: do you guys have good communication between the other colleges of like? And if someone has a great idea, is there the ability to share it with each other, to get some mutual benefit?

D. Teslak: Right. The College of the Rockies executive team meets regularly with the teams at Okanagan College and Selkirk College. We have developed some processes whereby we're looking at working collaboratively to offer second-year science programs, for instance, where our numbers at each of our institutions are quite low in those program areas. If we work collaboratively and use video conferencing and those sort of electronic capabilities, we feel that we can reduce the number of those sections that have to be cancelled simply due to low enrolment.

D. McRae: Fair enough. Thank you very much.

J. Rustad: Thank you very much for your presentation. We heard from the first witness today about the expansion of mining and the importance, of course, of mining to the region here. I'm just wondering: what kind of educational programs do you offer around mining? How do you engage with the mining community? Have you been able to plug in First Nations in terms of some training opportunities, creating some employment opportunities within the mining sector? Is it part of that partnership?

I guess the last part of that is up in the northwest of the province. The college there has a very innovative program where they have actually set up a mining camp. They bring in people, particularly First Nations. They introduce them to what life is like in terms of exploration, and those types of things. I'm wondering how engaged you are with the mining community and what type of activities you may have associated particularly with First Nations.

D. Teslak: We work very closely in partnership with the mines in the Elk Valley. Our Fernie campus offers quite a lot of training — forklift training, those kinds of things — when the mines require that for their employees.

Also, this year, starting in January, I believe, we will be offering an electrical foundation-level program in conjunction with the Fernie high school, who will host us. That was in response to the desire of the mines to have that kind of training closer to where their people are.

We also work with the Elk Valley mines, with our welding program, to meet their specific needs — the type of welding program that their workers would need to go through.

We're currently in the process of building an aboriginal gathering place. Thank you again, government, for the funding to do that. Our hope is that we will build that facility with as many students as we can. We'll use it as a practicum opportunity for our students.

[0935]

We're engaged in that process with the Ktunaxa Nation, and we hope to have some opportunities for aboriginal students to enter into trades programs, to get experience in building that facility.

B. Ralston: Thanks very much. Your comments about the public sector accounting standards are ones that I've been following. There was a throne speech commitment to consider removing universities and colleges from the government reporting entity. I'm wondering what your proposed solution would be. It seems to me you have to follow an accounting standard, so I'm wondering what the solution would be there.

Secondly, you say that the government needs to restore the annual capital allowance to pre-2009 levels. Can you explain what the level was? How much was the reduction in dollars, and what is your preferred target?

D. Teslak: Our annual capital allowance pre-2009 was about $860,000. This year we are reduced to $214,000, so it was a 75 percent reduction. We have $214,000 now to maintain our facilities and to do minor renovations. With our seven campuses, as you can imagine, that is a huge challenge.

What happens, then, is that we're using some of our base-funded operating dollars to support those kinds of things where we don't want our deferred maintenance
[ Page 723 ]
to get out of control. I don't think that's advisable, in terms of keeping the assets maintained.

I think part of the solution to the accounting standards issue is…. Currently the mandate for colleges is no annual deficits, and annual deficits are calculated including non-cash items such as depreciation, whereas the school districts are allowed to back out. For us they're non-cash expenses before determining what their annual net income or loss is for the year.

I think maybe treatment more similar to what the school districts have would solve part of the problem.

D. Donaldson (Deputy Chair): Thanks for the presentation. Much of what you present rings true for where I come from, up in the northwest part of B.C., in the college system there as well. That's where my question is going to head.

I'm curious. The college where I live has something called Essential Skills for Work program, for workers in the workplace. It really is a program that enables people to start their post-secondary training. I was told by students and instructors that those people on social assistance cannot access the program without losing their social assistance, which creates access problems.

I'm curious as to whether you've seen that kind of barrier in the college that you work for and whether you have some suggestions around flexibility in that system that would allow more access for those people who have a lot of barriers to accessing the post-secondary system.

D. Teslak: I think, certainly, we are affected by the same issue where students will be cut off from their social assistance, possibly, if they enter into training. You know, the biggest group that we have in our communities that we see as having access and barriers to education are the aboriginal population. Again, I think our new model, where we're taking education to their communities, is breaking down some of those barriers.

J. van Dongen: Thank you, Alex and Dianne, for a great presentation. I have two questions. They're related. They're both about trades training.

You said that there was a reduction of $6½ million in funding in 2010-11 and that you expect something like another $8½ million in reduction in 2011-12. Could you expand upon that? Tell the committee where that funding comes from and how it relates to the demand for those programs, the need for those programs.

D. Teslak: Well, our funding for trades training, as I'm sure you know, comes from the Industry Training Authority. That entity's funding was reduced from the Ministry of Finance. For College of the Rockies, the impact of the $6.5 million cut was between $100,000 and $150,000, so about 7½ percent of our total proposal for funding for the 2010-11 year.

[0940]

The system worked very collaboratively after we were advised of the $6.5 million reduction and determined how the training could be dispersed throughout the province to still meet the needs of all of the communities. That was a collaborative process.

The $8.5 million reduction is a possibility at the moment. Our deans of trades haven't determined yet what impact that will have on College of the Rockies.

For instance, with the cuts that we saw for 2010-11, we had to reduce one intake of heavy-duty mechanics apprenticeship, two carpentry apprenticeship intakes, and we lost some seats in our professional cook–training program. At a time when we need to have skilled workers to step into positions when people are retiring, we're seeing a downsizing.

J. van Dongen: Were there workers that presented themselves that you weren't able to accommodate?

D. Teslak: We have wait-lists in several of our trades programs this year.

J. van Dongen: And the number was $150,000 for…?

D. Teslak: Between $100,000 and $150,000. I don't have the exact….

J. van Dongen: Okay. The second question is again related. You indicated on the last page of your presentation that government should be looking at alternative ways of delivering trades training. I wonder if you could expand on that a little bit and tell me what you're thinking about that.

A. Jensen: My background is that I had a power line–contracting business, so I dealt with the ITA.

I'm actually a little afraid of what's happening to the industry. There's some talk about going from time for apprenticeships to competency. Obviously, it would reduce the cost of training apprentices, but for me, as a former owner of a business, I would be concerned about sending people out into the field that are not properly trained.

I like the time, because it gives everyone an opportunity. I mean, there are always people who are going to excel, but you need to take care of everyone. I think everyone's aware that power line technician is a very dangerous job.

J. van Dongen: I suspect that what you're saying is that experience is part of learning, not just the book learning.

A. Jensen: Correct, especially in that industry.

B. Routley: Actually, my question relates to the skills shortage area. I've been reading the skills shortage in-
[ Page 724 ]
formation or statistics on the government's own website, and it clearly shows that we've already got a crisis when it comes to health care. There are positions, like nursing, that are going four months or more without being filled.

I'm really alarmed today to hear that in the areas of health care and trades that there would be students turned away. That's somehow a breakdown in the system if we're not picking up or focusing energy and money and resources on those areas.

You've kind of identified some numbers in terms of the dollar amount, but could you just clarify for me how much money it would take to deal with these wait-lists and how many people we're talking about?

Again, it's just totally unacceptable to me that we wouldn't be focusing as a province on areas where even major business will clearly…. You know, I've been at conferences where they clearly support more post-secondary education because of the skills shortage crisis. There's something missing here that we could have a report like this at this juncture in time when everyone is aware of the tsunami coming in terms of skills shortages.

D. Teslak: I don't actually have the wait-list numbers with me on how many students are wait-listed in each program. But we do currently have 23 programs that are wait-listed at the college, and a large part of those are in the trades and nursing and practical nursing areas.

[0945]

B. Routley: Well, just as a follow-up on the trades issue, I'm with you that experience…. I happened to work in the forest industry, and I still remember a tradesman who actually completed his fourth year. He was in the highest marks of his degree. He took a half-inch bolt and tried to drive it through a 2-by-6. I was absolutely shocked that somebody with that much knowledge but who clearly hadn't the years of experience would do something…. Not that I haven't made some blunders in my life, but that one really blew me away, because he was the top quartile.

Anyway, the trades training. You talk about delivering alternate ways. Do you currently have any mentoring? Again, from my experience, I've seen where trades are actually mentored. I've always felt that for people that take trades apprenticeship training in school, there ought to be more mentoring out in the field in order to connect people with the actual trades that they're studying. There ought to be some opportunity for them to go out and spend some time being mentored by those that know what they're doing, as part of the educational model.

A. Jensen: Well, in the industry I was in, we did have that. We had what we called trades trainees. They basically gave the individual an opportunity to show their skills and give us a look at the individual. Then after I think it was six or eight months we had to make a decision whether that individual would make a good apprentice.

But the comment that I'd like to make, too, being relatively old, is that back in the '80s there was some cutback in training in the skilled trades, and they cut the apprentices. What happened was that there's a gap now in my industry. Between 35 and 55 there was no one, so we ended up with some very young people and some very old people, who were leaving. There was a lack of the expertise that we talked about, and I would not like to see that happen again.

J. Les (Chair): I don't see any further questions, so Alex and Dianne, thank you very much for being here this morning.

I'd also like to recognize the member of the Legislature for Kootenay East, Bill Bennett, who's here this morning checking up on us to make sure we're doing our jobs.

Our next presenter is Carmen Purdy, and he's with CP Road Access B.C.

C. Purdy: Good morning. Thank you very much for allowing me this opportunity to come to speak to you today and the opportunity to come before you concerning the province's financial future.

As just an aside, I got a joke yesterday in my e-mail. This is supposed to be the funniest joke of the year. It was two politicians quietly sitting on a park bench, minding their own business. That's really not that funny, but if you think about it for a while, it gets funnier all the time.

J. Les (Chair): All right. Enough already.

C. Purdy: Due to the world economic climate of the recent past, the years and the months ahead may be difficult ones. I'm pleased that our government continues to act. Actions are sometimes painful, especially financial ones.

Finances can be defined as the art and science of managing revenues and resources for the best advantage of all British Columbians. Provincial wealth is a sacred trust that government is bound to administer, during its tenure, for the good of the people.

Wealth is one thing most honoured by men and the source of the greatest power. Debt, on the other hand, is one of hell's catch pots — a trap that man sets and baits himself and then deliberately gets into. Debt is the first and mightiest force to undermine governments and corrupt people. If you don't believe me, you have to look at the economic collapse of many countries today.

We, on the other hand, are living in a blessed country, a resource-rich country that we are all bound to be good stewards of. Stewardship and resource use are key to wealth, debt reduction and future abundance.

Today I'll talk about well-maintained road access and the means and the primary wealth which it produces in
[ Page 725 ]
this land we call British Columbia. I'm talking about the basic foundation of creating and maintaining wealth: access.

[0950]

The discussion between work and play is rife amongst British Columbians. Without work, there is little play. Primary wealth creators and producers are the industries dependent on access and the development of our natural resources.

When I was on the Forest Resources Commission in '88-89, 50 percent of every dollar came — we advertised that — out of the forests of British Columbia, and that has since changed. Our main access to resources now is in oil and gas and mining. The mining industry plays a huge role in all of the things and all of the wealth generation across this province.

Secondary producers and consumers are dependent upon the primary ones. They also require access, and the recreational users fall into this category. The industrial application of Crown lands cannot be left out. We are all dependent on access to natural resources in this province. No one in industry denies the need for good stewardship.

Resource roads across British Columbia are being chalked, blocked, tank-trapped, gated, cross-ditched or destroyed, culverts removed, bridges removed — all detrimental to protecting our forests' wildlife communities and, at the same time, severely reducing economic activities in rural British Columbia.

This isn't new. This started back in the '90s with CORE, with Parks '90, with all of the individual things that happened through the NDP era. We haven't changed those. We changed the Forest Practices Act to the Forest Practices Code. We had CORE. I call it "conflict over resource extraction." I don't even know what CORE means anymore, because I've said conflict over resource extraction too often.

The ecologists and the preservationists will cry foul as roads to resources are reopened. I haven't heard much about the ozone layer lately. As a matter of fact, the 30 million to 40 million sockeye that recently went into the Fraser system this year must really have David Suzuki, Rafe Mair and the Sierra Club stumped.

Was it the mines that did it? Was it forestry? Was it agriculture? What caused this great run of sockeye? They don't know. And I haven't heard Rafe yipping about it — period — or any of the others. They're not saying anything. They'd like to, but their revival is a long ways away, as far as I'm concerned.

Removal of access is the single goal of ecocentrics in the interest of power and conquest to gain control of the entire population. Beware of protectionism, the saving of the planet. The carbonistas have already caught us. Carbon is not a problem — carbon dioxide. We don't say enough good things about carbon dioxide. Carbon dioxide is what makes plants grow. It keeps us alive. In fact, in history, carbon dioxide has been ten times, minimum, higher than it is today, and we didn't go away. In fact, the carbon tax has to go. That's what I say. We've got to can that tax.

I would say to you to read Ian Plimer's book, if you haven't — Heaven and Earth: The Missing Science — and then can the carbon tax. This act alone will save millions of dollars for resource-based industries and save individual British Columbians hundreds of dollars and possibly save our government in the next election. We need courage to reverse past unpopular, needless decisions.

Access made this province. I recommend to you Jack Nisbet's book, Sources of the River: Tracking David Thompson Across Western North America, establishing fur-trading posts, the economy of the day. The book of John Adams, Old Square Toes and His Lady: The Life of James and Amelia Douglas, connecting access roots to our country and holding it together for the long term.

One of the greatest things that James Douglas thought he failed on was that the 49th wasn't at the 47th, that they had established the mouth of the Columbia. He wanted that in the worst way as a politician and as a person who really believed in Canada as a nation.

The Canadian Rockies by Esther Fraser, the building of the railroads, transportation for tens of thousands that settled the west. This is all about access.

This is access that was the glue that held this country together. I'm talking about things like the Dewdney Trail, the Cariboo Trail, CN, CP, the Alaska Highway, the Yellowhead, the Hart, and the list goes on. Those are things that hold rural British Columbia together. And they hold British Columbia together, because 80 percent of the wealth comes from rural British Columbia. About 80 percent of the people live in urban British Columbia and don't understand, really, what I'm talking about here in terms of access, because they're not influenced by it all the time.

We are here. We use our resources. We love the resources. We love the country. And if we take any of it out, we lose. There's no college. There's no medical. All of the things that we take for granted come from some source, and our basic wealth is forestry. Our basic wealth is mining, agriculture, oil and gas. Our basic wealth is fisheries. Our basic wealth is resource-based. It's not industry-based; it's resource-based.

[0955]

Industries that are spinoffs from these basic minerals and natural resources are keeping us, all of us, healthy. And we have a healthy country. One of British Columbia's greatest political leaders, in my view, was W.A.C. Bennett — a man of vision, opening access to British Columbia, creating wealth and, at the same time, a promise for the future.

I look at the mining industry. There are places like the Tat, the Tatshenshini — nobody goes there, about 28 people a year — and the mine that was going to be es-
[ Page 726 ]
tablished there, Windy Craggy, on two holes. The holes are worth $5 billion.

To give you a comparison, the upper Flathead, the Dominion coal block, is 50,000 acres. It holds, in 1992 dollars, $400 billion worth of coal — $400 billion worth of coal in 1992 prices. In today's prices it would be well over a trillion dollars in coal, and we're thinking about parking places like that. Are we nuts?

We can't park one more square inch of British Columbia. We already have more parks than anybody else. We can't park our land and expect to be wealthy and healthy and have a future for our children. Wealth is a requirement of efficient land use. Access to the land is essential to create that wealth. The relationships between politics and resources will determine our long-term poverty or wealth.

Please reduce the inane regulations. We were going to do that when we took over as government, the Liberals. We haven't done enough. Please, no more parkland. We have 5.2 million acres of park in the Kootenay-Columbia. When I was a kid, we had a couple of them.

The reason we had them — the Kootenay and Yoho and others; Banff and Jasper — was that at the turn of the last century, between 1800 and 1900, when the railroads were built, there were no commodities to haul, so they built the Hotel Vancouver, the Empress, the Chateau Lacombe. They brought the captains and the kings from around the world to travel on the most modern railroad system in the world, and they saved the railroad. Then they made parks.

I'm saying that access means access for all people, and we can do it. Sweden has access. Sweden harvests 120,000 moose a year — incidentally, you guys took me away from an elk hunt this morning — plus hart, roe deer and red deer. "No trespassing" isn't a problem there. They have roads everywhere. They shoot most of their game from roads.

They have 1,000 grizzly bears — they're called browns; they're the same — and they harvest 100 a year, ten percent of them. We take grizzly bears in helicopters and dump them on my trapline. It kind of makes me mad because they were a problem when they left, and they're a problem now.

Anyway, thank you very much. You can read my Access British Columbia stuff. I finally decided, after they ripped up a road that I'd been travelling on since 1960 and my trapline…. They've taken it out. They cross-ditched and tank-trapped. I couldn't even get my quad, my four-wheel drive in. Even my skidoo wouldn't go in there.

I finally came home and said to Carol: "I am so sick and tired of people ripping up infrastructure that is so valued for this province's long-term benefit and long-term economy. I am so tired of it. I'm going to do something about it." And I did. My wife said: "Either shut up, or do something about it." So I did.

I've got 4,000 members in a year, and I haven't really tried. I'm going to start now and try.

J. Les (Chair): Thank you, Carmen. I gather this calendar is something you produced as well.

C. Purdy: Yeah, we actually produced that calendar with the Nature Trust. I'm 20 years with the Nature Trust. I was actually awarded the conservationist of the year three years ago, the Roland Michener Award for Canada. I believe that Bateman and Suzuki are on that list too, and I don't know whether I'm going to take my name off or not. I was president of the B.C. Wildlife Federation agency.

I've been involved actively for 45 years with land use questions and issues. In my real life I worked for the mining industry in the north and worked in the forest industry for 30 years. I retired at 57. I'm 70 years old. I still have lots of energy to play.

J. Les (Chair): How come you didn't allow your picture to be on the back of the calendar?

C. Purdy: Too ugly.

J. Les (Chair): Oh, I see. Okay, just thought I'd clarify that. I have a few questions here.

[1000]

M. Mungall: Thanks very much, Carmen. You talked a little bit about carbon. You used a term — I'm guessing it is your term — which is just carbonista.

You talked about the carbon tax. You didn't quite go as far as saying that climate change and global warming aren't a reality. I'm wondering if that's where you were heading.

C. Purdy: Actually, in the last ten years it's been cooling, if you read the science.

M. Mungall: So your point is that climate change is not really happening?

C. Purdy: Climate change has happened since the last ice age, and it will continue. It will come and go as it feels like it. It does it all the time. If we think we're that good that we can change the climate by messing around with less than 0.00003 percent of CO2….

CO2 is not the problem. Actually, it's a benefit. If we have four parts per million — which is minuscule when you look at oxygen, nitrogen and the parts of the 1 percent of the air that we breathe and carry on that are other elements — CO2 is a benefit. We want CO2. If it goes down to 250 parts per million, then we freeze, nothing less.

We're just on the edge here. Carbon is not the big deal. It's a big deal for guys like Al Gore and others who are
[ Page 727 ]
going to make billions on this carbon-trading system. It's wrong, and it hurts everybody.

When I see loggers in the bush who are paying up to 40 percent of their total costs in fuel because of added costs on fuel, that's wrong. Those guys can't make it. They can hardly make it now, and if we add a carbon tax on top of that….

No matter what your stripe — whether you're Liberal, Conservative, NDP or whatever — carbon tax is not the way to go. It is not the way to go.

Take the time to read Ian Plimer's book, and then read some other stuff about where we're going with this. It's been disproved, but they don't die easily because they're on a roll. It goes right to Gore; it goes to the existing President. It comes out of the UN; it comes out of England. They're all there in place. Take the time to read different stuff.

Go to www.junkscience.com. Read some of the stuff on carbon.

M. Mungall: Yes. I understand that that site has been funded by the Exxon Corp.

C. Purdy: Oh, it could be.

J. Thornthwaite: Another provocative question. You had mentioned that 80 percent of our wealth or resources comes from rural areas but 80 percent of the population is in urban areas. Maybe I haven't paraphrased that quite correctly.

C. Purdy: I think that's correct.

J. Thornthwaite: I get what your point is, and I appreciate that. Then you've also said: "The ecologists and preservationists will cry foul as roads to resources are reopened."

My question to you is: to try to get all of us to be one great big happy family in British Columbia with urbanites and ruralites, what is your opinion about opening up and agreeing to access to parks, etc., but maybe encouraging ecotourism or a way of trying to encourage the urbanites to get onto the bandwagon of opening up all of these parks and actually utilizing them for wealth?

C. Purdy: I think that we should take a look at the park legacy over a hundred years and see just who pays the bills. It isn't parks. And ecotourism isn't going to pay the bills either. Parks are very costly. We park land. We decide that we're not going to use it. It's like not using half of your house or like ripping out the north wall and saying: "Why am I doing that? Because I want to?"

We should look at parks. There is lots of wealth in parks. Like in the Muskwa-Kechika, 11 million acres, there's coal, there's oil, there's gas, there's zinc and there's lead. There are all kinds of things there that we won't use. We've decided we're not going to. The Tatshenshini, the Tat — that one mountain, they say, is worth $500 billion. Can we afford to do that?

If you read Madame Brundtland's stuff, they have less than half of 1 percent of their country in what they call…. It's an area like a park, but they don't use it like a park. They use it. But they want us to lock up more and more and more.

It's never enough. It's never green enough, blue enough, clear enough.

J. Thornthwaite: I'm not suggesting locking them up. I'm suggesting opening them up.

C. Purdy: I'm saying use them, yeah. We could use them. It would probably be better than what we're doing now. They should be able to pay their own way, and if they don't, we should question why they're there in the first place.

J. Thornthwaite: Would ecotourism be an opportunity for us to really capitalize on?

[1005]

C. Purdy: You know what? It's all based on how much money you can bring into the province. Ecotourism is a nice, easy….

You know, when we shut down the Clayoquot and laid off 1,700 forestry workers…. "Not one job will be lost." I remember somebody standing on a stump and saying that. It didn't happen. We probably have 17 workers in the forest industry now in Clayoquot, and the trees are there, dying.

I just came back from Alaska. It's the same there. Access is a huge problem there. No access to resources, and it's because the southern states are saying, "We want this special area set aside, this set aside" — whatever. "We're going to protect whatever it might be" — the flavour of the day.

Right here it's caribou. Caribou are finished here. Get used to it. They're finished. There's not enough snow and ice here. The trees have grown to the top of the mountains. We have predators.

We've got grizzly bears in town — three of them last week, actually. If you want to see bears, grizzly bears — lots of them here — cougars, bobcats.... We introduced wolves in 1981 back into the area. We've got wolves everywhere. Caribou are finished. They're dumber than sticks. They're the first ones that get eaten. Putting them back in here isn't going to do it either.

If we expand the Purcell Wilderness…. The Purcell Wilderness is half a million acres. It has 100 million cubic feet of wood in two drainages. They all tell you that it's rock, ice and snow. It isn't. That wood is going to die. It's big gun-barrel spruce, three- to 40-footers and a top log in every tree, and we're locking it up. I don't think so.
[ Page 728 ]

There's no way our kids can live with this. I've got four nieces and nephews who left B.C. during the '90s, and they're not back. We were hauling wood out of Alberta and Saskatchewan, when we had places like that where we could have been bringing wood in. It didn't happen though. They're still there.

If we want the things that other people are saying — we want jobs; we want training; we want this; we want that — we've got to have money to do it. The basic resource industries are the ones that do it, and access is how you get there. You've got to have access to it, and it has to be well maintained.

How do you think the Swedes do it? They kick our butt every year in fibre, in board and in paper. They have roads that have been in place for up to 700 years. They don't destroy them. They don't build them and then rip them apart, take the bridges out and say, "You can't go there," and put on gates because they're protecting some imagined species. I don't think so.

We've got more deer in Cranbrook, Kimberley and Revelstoke. You name it. We're getting elk in town now. They're even worse.

I might not have answered your question. I'm rambling a bit.

J. Les (Chair): All right. We'll move along to the next question, from Doug.

D. Donaldson (Deputy Chair): I'll pass on this presentation.

J. van Dongen: Carmen, I appreciate your submission as a supporter of resource industries, and I've always believed that good resource utilization is compatible with conservation. I think you certainly have the credentials to say what you're saying. I'd appreciate you giving us a copy of your submission. I made a lot of notes, but I'd like all the specific references.

J. Les (Chair): It's in the calendar, John.

J. van Dongen: Oh, it's in the calendar. Okay. Perfect.

J. Les (Chair): It was a little trick he had to make sure you actually looked at it.

J. Rustad: Thanks, and I just actually want to comment about road access. There are a number of things I'd like to talk to you about, but I know that we're short on time here. I wanted to talk to you a little bit about road access because we have a big issue in the province with road access. There's no question. I hear it in my riding. I have a very rural riding, probably the most rural riding in the province.

Whether you're hunting or fishing, whether you need to get out for preservation or for forestry, access is a big issue. And how we maintain those roads, how we pay for those roads, how we deal with liability, is an enormous issue that is critically important for most of the people in rural B.C. and certainly important for the resource industries.

If you have any ideas as to how we should develop a model that can maintain those roads, that can try to remove the legal liabilities that we have and the challenges that come up with maintaining those roads and how we can fund that over time, I would love to hear them.

C. Purdy: Over time — up until about the mid-'90s, when the Forest Practices Act was changed to the code — the liability thing reared its ugly head. To me it's nothing to do with liability at all, because I don't think the government's been sued on one occasion.

I was going down the road the other day, coming out of Alberta. I can't buy a suit in Cranbrook. I had to go to Alberta to buy it. My wife wanted me to get a suit — haven't had one for 15 years. They were doing some construction between Fernie and Sparwood, and I hit a huge pothole on the highway. So who do I sue if I went off the road and killed my wife?

[1010]

The liability question should be on every road and every bridge, if that's the question. But for all my life I've driven on back roads — walked them, done whatever. There was no liability question in those days. It was understood that you were using them at your own risk.

In terms of the forest industry having to maintain roads once they cut timber, there should be some responsibility there. But once they're finished a block, if they just put a big old yellow machine on the road and graded it out, crown-graded it, but this is too simple. Then they seed the areas that they think are going to slough or be a problem. You can't have one rule for the coast and another rule for entity forest types like we have in the Interior — the dry forest types — and rockier ground and better drainage.

We don't have road sloughs here. We can have 200 millimetres of rain, and we don't really have big problems with road sloughing here, where they might on the coast.

But if they seeded the edge of those roads.... Crown-grade them. Seed the edges.... Don't rip up the culverts. Put oversize culverts in to begin with, maybe. That would help. But don't rip up the culverts. Put sod-forming grasses on the sides of the road. It would hold the shoulders, and most of the time you wouldn't have a difficulty with it.

They do that in the U.S. They do it in other jurisdictions where they log. We're using logging roads, mainly — mining roads too. I'm talking roads that have been in place here for 50, 60, 70 years that we're ripping up. It's illogical.

There are lots of things that we can look at that wouldn't be costly for the industry, wouldn't be costly
[ Page 729 ]
for the government. In terms of liability, use at your own risk rather than a wilderness road and all this stuff that we've come out with. Use at your own risk. You know it when you go in there. I don't know if you can do legislation like that, but I think you can.

These are forestry roads, and if you're going to be out playing on them…. We all accept the risk. In fact, we take risks lots of times when roads are sloughed out to try to get around them or go through them or over them or whatever. So we're not going to….

As a trapper, as well, there are all kinds of places that you get yourself into. You know what you're doing, and you try to make sure that you take the necessary precautions. I don't think it's a big deal, although it's a big deal from your perspective. Government has legal people advising them. I don't think it's a big deal to go back to where we were before in the '80s, '60s, '70s, '50s.

J. Les (Chair): Thank you very much, Carmen, for your presentation. Appreciate you coming.

Our next presenter is the mayor of Cranbrook, Scott Manjak.

S. Manjak: That sounds like a court introduction or something.

J. Les (Chair): Well, we just want to be appropriately respectful of your position.

S. Manjak: I appreciate that very much.

First, I want to take the opportunity to welcome the committee to our great city. If I'd had time to get into city hall this morning, I would have been able to grab some of the coveted city pins for you all, but I didn't get a chance to get into city hall this morning. But I do, on behalf of my community and council, want to welcome you to Cranbrook.

My presentation this morning is just going to be brief on some of the realities that municipalities and rural communities face in the present time and in the immediate future in terms of infrastructure and our relationship with the province. The first presenter this morning really gave a good example of what I consider is the most important relationship we have, and that is with the upper levels of government, the province being the primary one.

I think it's all about partnerships. You heard the first speaker this morning talk about all the projects that this region. I should back up just a bit. As well as being the mayor of the city of Cranbrook, I'm also the current chair of the regional district of East Kootenay. I've sat at that table, as well, since I was elected in '99, so I have a good idea of the needs and the pressures that are going on in the region as well as in the city of Cranbrook.

You heard Judie talk about all the projects that have happened in Cranbrook and the region. I won't go over them all. But the main ones…. You heard a presentation from the college. The investment in the college; in our health care facilities; in our infrastructure, roads, wastewater treatment; and the social investments around housing and social agencies are all very important.

I think what they do is represent an attitude of when we come together as two levels of government to work for the betterment of our communities and the province. I think that is where we make progress. It's very easy for an elected official and for others to identify the problems. Quite frankly, it's easy, and we can all do it.

[1015]

I think the real opportunity is when we identify what works. So from my perspective as an elected official, I look at the relationship that we have with the province through our MLA, and I see lots of good things happening.

It's not because we as a community or a region say to the MLA or to the province: "Here's the problem. You go fix it." We identify the problem, and we sit down in a spirit of collaboration, saying: "How can we make this work?" It's with a buy-in from the municipality and a buy-in from the province. That's going to be the gist of my presentation to you. As I look at that as a mayor, it's a model that works.

The challenge that we have in local government is that our only means of revenue generation, primarily, is property tax. Quite frankly, in Cranbrook, as an example, we are bumping up to the maximum capacity of our taxpayers to weather any more tax increases through property taxes.

Cranbrook has recently been in receipt of a report we commissioned in 2006-2007. We called it Growth Management Study, but in fact it's an infrastructure management study. This report was finally delivered to the city of Cranbrook, and it told us exactly what I knew it would tell us — that the city of Cranbrook is facing, between our road system, our wastewater and potable water systems and other infrastructure, approximately a $70 million to a $100 million deficit that's unfunded.

My community's ability to raise those funds to address that problem over the next ten to 15 years is primarily based on property tax. In the city of Cranbrook our property tax breakdown is that our budget is 60 percent residential tax and the remaining 40 percent is a combination of business tax, which is approximately 37 percent, and 3 percent from other uses. Cranbrook has no primary industry to speak of. Even if we did, we all know in this day and age that we have to be responsible in our taxation of industry within the borders of our municipalities. That's the challenge we face.

When I look out over that, I say to myself: "How do we constructively address that deficit?" When working in collaboration with the federal and provincial governments, primarily the provincial government, I think the challenge that we have in working in partnership is sit-
[ Page 730 ]
ting down and figuring out new models. I'm going to give you a couple of examples.

The gas tax model that came about, I think, about four years ago is something that all municipalities in the UBCM pushed for. It's a good start, but I want to give you some context to the challenge that we face as a local government. Over the life of that program Cranbrook will so far realize between $3 million and $5 million.

In the city of Cranbrook, which is probably reflective of most communities, when we do infrastructure work — that's water, sewer, sidewalks, gutters and roads — right now in today's unit prices, we can do one city block for approximately $800,000. You can see that $5 million may sound like a lot, but depending on the project that we may be deciding to do — we do an infrastructure program every year — that type of money, $5 million, might get us ten city blocks. That's the challenge we have.

We look at our wastewater project, which we receive provincial and federal funding for. When that project is said and done, we'll meet or exceed all provincial or federal requirements for wastewater treatment. That project alone is about a $20 million project. That's the challenge we have.

When I look at different models as a mayor and my council sits down at that, we say: "Okay, first it's critical that we work with the province and federal government on this." When the Community Charter, which I personally think is a great piece of legislation, rolled in at the beginning….

If we all go back to that time — and I know some of you were around at that time — there was a conversation that the province had with the municipalities to explore new levels of fund generation to generate revenue, because property tax, as we all know, is the most regressive form of tax. There was some conversation around what the municipalities and the province might be able to do to find new ways of creating revenue, and that went by the wayside.

I would suggest to your committee and to the province that I think we need to have that conversation again, so that we can find creative ways to reduce the impact on our property owners as we move forward and also address the infrastructure deficit we have. I think the hotel tax is a model that may work, but we need to expand on that. With hotel taxes there's a levy on visitors that come into town or people who use them — Cranbrook doesn't have them, by the way — and then that money is used for marketing or tourism, as you know.

[1020]

No one likes to talk about taxes, and all politicians, for the most part, don't like to talk about it, but it's a reality in the business we're in. So I think that the conversation needs to go, in collaboration with our MLA and the government of the day, to find a model that would give us a new mechanism for revenue generation that isn't primarily based on property tax but is also reflective — we heard from presentations — of the outflow of money from this region and that would bring some of that back but in a more substantial manner.

No one likes talking about taxes. But for example, if we were to go to create a partnership with the province that saw some type of feedback or giveback from, say, the sales tax or something at that level or even gave us the authority to create what I would call a municipal sales tax…. If you gave us the authority to do it, then it's my job as local government to defend it in front of my community, if we choose to go down that route. The argument that we would make to use that tax, if we had the authority to do it, is that this gives us a mechanism to hold the line on property tax.

Since I was elected to office in Cranbrook in 1999, we've had ten straight years of increases to our property tax. My anticipation is that the mayors and councils that come after me in the next 20 years are going to be doing the same thing. If they don't, then they're going to look at a reduction of services. Right now most municipalities in the rural area don't provide a whole lot of services past the traditional water, sewers, roads and recreation.

I'll give you another example. The city of Cranbrook's ability to generate revenue outside of taxation is limited because it's basically fee-for-service-based. We run our recreational facilities, but not everyone in the community…. The more we jack up those prices to use those facilities, the less people may be able to afford to use them.

Cranbrook has a growing senior population. As we all know, seniors live, for the most part, on fixed pensions or incomes. So every time my council and I look at what we have to increase for the year to meet basic needs and to address the infrastructure issue, we're keenly aware that we have basically reached the threshold in our ability to do that.

I want to leave it at that point, because I think that is a conversation that is going to be thrust upon us, and the sooner we do it, the better. I think the Cranbrook model that we have with our…. I know this is not about the local area and constituency, but the fact is that the model works in this region. We identified the problem. We worked with the province to identify the funding mechanisms. We work in collaboration, and it's worked to the benefit of the constituents of this riding. I think it works in other areas of the province as well.

I do think that the conversation is difficult, but I think it's necessary. I think the necessity is that sooner or later, in my personal opinion, as our communities, especially rural communities, look at that end-result bill…. In Cranbrook, like I say, we now have an analysis that says $70 million to $100 million. If we can't start to address that, then quite frankly, as the province is our political master — we operate at your discretion — sooner or
[ Page 731 ]
later we're not going to be able to, and then the problem is just going to be thrust upon you.

I think that's the challenge we all have. We don't need to go there. I think we just need to get creative in working with MLAs and the government to ask the hard question. If we get to that end point that says, "Yes, there's got to be new means for revenue generation for rural municipalities," then let us defend it. Give us the authority, and then it's my job as an elected official to defend it and make the case why it would or not work.

It's unsustainable — the mechanism for property taxes that we have in place. I'm going to end on that.

My chief financial officer gave me some…. I told him I was coming to speak to you folks, and without me even really asking, he gave me a long list of things to give to you from his perspective on what works and what doesn't work. I'm just going to highlight a couple of them.

The Municipal Finance Authority borrowing process. It's the opinion of our staff that it's a little cumbersome. It's a little overly bureaucratic. One example would be that whenever we go through a borrowing process, we have to have that bylaw vetted through the regional district process. Quite frankly, we're not sure why that is. We just think it's another level of bureaucracy that really doesn't make any sense.

[1025]

The other one he talked about was that the Financial Information Act requires that a municipality provide the province with a list of expenditures over $75,000. We believe the threshold should be raised to probably $250,000.

Again, as you know, all municipal budgeting processes are open and transparent. Everything we do is open to the public. The city of Cranbrook's budget process usually starts around the end of October and finishes in late March, early April — all open to the public. There's nothing hidden. It's just more reporting that municipalities have to do to the province, and we're not sure that it's always efficient.

I want to thank you for coming to Cranbrook and thank you for the work that the province does for my community. We have a lot to be thankful for. We have a lot of good things happening in Cranbrook. As I said, I think the partnership works very well, and I want to thank you for that.

J. Les (Chair): Thank you very much. I have two quick questions. The first one is from Norm.

N. Letnick: I thank Your Worship for welcoming us here. It's a beautiful city. I've enjoyed, I think since the early '80s, coming through and taking advantage of the hospitality. So again, thank you for welcoming us.

The issue of property tax, since you brought it up. What are your citizens saying regarding two initiatives that the government has in place — for seniors who can defer their property tax, and therefore, the tax issue should go away for them, and for young families who are struggling right now financially who can also defer their tax? If you can give us some input as to how that's working for your community that would be great.

Just to finish the second question…. Have you talked to your colleagues around the province — at UBCM, for example, other UBCMs — regarding your idea of a local or a regional district sales tax?

S. Manjak: No, I haven't had any conversation with any of my colleagues on that because, as you well know, it's highly controversial. But I think it is a conversation that's going to need to happen sooner or later, and it can only happen in collaboration and partnership with the upper levels of government.

So no, and quite frankly I haven't seen since my first term in 2000-01…. At that time there was a lot of talk around the UBCM about different mechanisms that may be embedded in the Community Charter. But I haven't heard any conversations since then.

On your question on the deferment for seniors and young families, my financial department tells me that there has been some interest. Quite frankly, I haven't had any of my constituents give me any feedback on that program per se. I do think they're very worthwhile programs, but I think what they don't do is address the problem as I identified it to your committee — that is, the property tax as a means for revenue generation to provide a level of services to any community has outlived its usefulness.

I think most communities are in the same situation as Cranbrook. I don't know how much further we can go. If we don't have a different mechanism, then we're going to either have to hold the line and not address the problems or start cutting services. Both of those are very hard. I think they're very valuable programs. I think they work for the folks that choose to take advantage of them, but they don't address the bigger problem and challenge that we face in the rural areas, and that is: how do we go about addressing these huge infrastructure issues?

D. Donaldson (Deputy Chair): Thanks for your presentation. If you could provide that list from your chief financial officer to the committee, that would be helpful. I'd appreciate that.

I have had ten years on municipal council before taking on this position, and from a rural area with many communities of smaller size, so similar problems to what you're describing. I'd be curious about your thoughts on the capital funding program, where small communities have to come up with one-third of the funding — the same as larger communities — and whether you've got some ideas and suggestions about how that might be improved for rural communities.
[ Page 732 ]

S. Manjak: Now, this is my own personal opinion. I think that that's the proper model. I just think it needs to be built upon. I'm not a person and it's not my community's personality — I guess it's the word I'll use — to identify a problem and tell you it's your problem.

I think there needs to be buy-in. So when we look at the airport, for example, we were one-third partners in that. When we look at the wastewater project that's going on right now, we are one-third partners in that. The Rails to Trails — we were one-third partners in that.

From my perspective, I think there needs to be buy-in from any municipality when we look at these capital programs. To me that's not an issue, because I think we have a responsibility as well.

[1030]

I think what we need to do is grow it. It's very hard for Cranbrook to compete with Vancouver, Chilliwack. It's hard for any rural community to compete with the Lower Mainland. Now, I'm not suggesting a rural fund, but what I'm suggesting is that I think there needs to be a dialogue that recognizes that the pressure that we face around capital improvements and infrastructure is different in our ability to respond to it than maybe a larger urban municipality — Vancouver, Victoria, Kamloops, Kelowna — simply due to size.

In an infrastructure issue…. I don't like to say, "Let's solve all problems by throwing money at them," but when we are talking infrastructure, the bottom line is money. So I think if there were different rules that are considerations…. I say that with some hesitation, but I think that's where we need to go. I think that's, again, addressed by finding new models of revenue generation that work for rural communities.

B. Ralston: Thank you for your thoughts about property tax as a source of revenue for municipalities. It's a familiar refrain from many leaders in our communities throughout the province.

You didn't really touch on it though. I'm wondering. Do your comments apply to commercial and industrial taxation as well, or are you simply focusing on residential? I'm just wondering if you could give us a little bit more of a sense of what the ratios are here in terms of revenue from commercial and industrial.

S. Manjak: Well, industrial is very small because generally speaking, Cranbrook…. Due to the downturn in the forest industry in the late '90s, we lost our sawmill. Any industry in Cranbrook now in the forest industry is nonexistent for the most part. Our commercial is a little better, but the city of Cranbrook is very sensitive to our factors, to our ratios.

We recognize that the burden should not be placed overly heavily on those things. So for example, our ratio for business is less than 3 percent, as opposed to residential. There's a 3 point gap there. Again, my comments do flow to that, because in a community of my size that depends on the wealth and job generation from medium- and small-sized businesses, if we tax them too heavily, we're going to drive those away from town.

I see a benefit, quite frankly, if we find new models that benefit the business community as well as the residential community. Cranbrook is in a unique position where we don't really have to grapple with the inequities in taxation between residential and commercial industry, because quite frankly, the industry is nonexistent.

On the commercial side we're very sensitive to it, and our council spends a lot of time in consideration to make sure that we are not out of whack in the levels of taxation. That's just a reality because we can't afford to drive away business. We just can't.

M. Mungall: Thanks very much for your presentation. Like Doug, I also come from a background in municipal government. I'm hearing what you're saying about looking for new revenue generation opportunities for municipalities and not focusing solely on property tax; however, the taxpayer pays at the end of the day. Regardless of how you are taking it, the taxpayer pays. And property tax is a flat tax — absolutely.

So you talked about a municipal sales tax, which is a regressive tax, and a variety of other ways. I'm just wondering. How do you…? Why would it be different whether it's a property tax or a municipal sales tax? At the end of the day, it's still the same person who is paying.

On top of that, you said that around the infrastructure funding…. I remember that the Federation of Canadian Municipalities, much more so than the UBCM, advocated strongly for reinvestment in infrastructure funding. Well, their focus is the federal government, but I dare say they're probably looking at provincial governments out of the corner of their eye as well.

You said you weren't going to go towards a rural fund when acknowledging the differences in need between urban and rural areas. Why not? Why did you put that aside?

S. Manjak: Well, I didn't put it aside. I'm reluctant…. Again, I think the challenge is that even though rural communities' pressures may be in some ways different than the larger municipalities, at the end of the day, we all face the same challenges. So I'm cautious to draw a huge distinction between the larger communities and the rural area per se, because quite frankly, I'm sure that Vancouver's infrastructure issues in the abstract are the same as Cranbrook's. It's just a different application.

[1035]

I agree with you. At the end of the day it's all the same taxpayer. But upper levels of governments have different means of raising revenue through taxation than a municipality does, as you well know.

Am I crazy about a municipal sales tax, if that's the authority you gave us? I'm not crazy about it, but what
[ Page 733 ]
it is, is another option. I think right now, as you know, coming from local government, my only option is either property tax, business tax or fee-for-service generation. Cranbrook doesn't have our own industry that we own as a municipality that can generate — similar to Nelson, right, that owns their own hydro….

I recognize it is the same taxpayer. I think, Michelle, it's truly about giving us more resources or tools and letting us be accountable for that, truly. And I agree. If it's property taxes or a municipal sales tax or a give-back from a federal government on a gas tax, the same person is paying for that. But what it says is that property taxes are not optional. They're not optional.

But another mechanism for local government to raise revenue through taxation, in some cases, is optional. Not everyone chooses to go out and eat at a restaurant, or not everyone chooses to go to a hockey game. Not everyone chooses to do a number of activities.

What it does do, if we have a different mechanism, is it does give me the capacity to say to my community: "If we were to look at different options, I can tell you with some certainty — not with complete authority but with some certainty — that we now have another mechanism to start to hold the lines on property taxes." Like I said earlier, this town has seen 15 straight years of tax increases.

That's a political choice, but we also know that it's a responsible choice, because if we go to zero percent increases as local government, two things happen. Automatically, we look at service cuts. But we are just postponing. We are just giving the problem on the infrastructure replacement to future generations of our community members and leadership. That's the challenge. We can no longer put our head in the sand.

I've been around for 12 years at this job. I take my share of criticism for not addressing this problem earlier, but the fact is that we are here. I recognize it's the same taxpayer, but I do think we need more tools.

J. Les (Chair): Okay. The final question is from John Rustad.

J. Rustad: Thanks very much for your presentation.

I disagree about the idea of a sales tax being regressive. I think if you structure it properly, it can be very progressive.

S. Manjak: Could I clarify that? What I said was that property taxes are regressive. I don't think a sales tax is regressive.

J. Rustad: Sorry. One of the members on our committee said it the other way.

In any case, the question I have around it, actually…. I think any taxation system has challenges and problems. I come from a very rural area. I have small communities. Only about 18 percent of the retail dollar actually stays in the community. A lot of it goes to larger communities.

What you end up with is you end up with communities competing on a tax level, if you went like that, to try to attract the business. Plus you would end up seeing taxation leave.

The challenge with property tax, of course, is that there are a large number of people that don't pay property tax because they're renting or whatever the case may be, and it's built into the rent in those things. The challenge with a sales tax, of course, is that you've got absentee landowners who are getting the value for the property they own without having to pay into the taxation system.

I think there are challenges in both sides. I like the fact that you're thinking outside the box. I agree with you that we need to find a different way to be able to fund the capital challenges that all of us have, particularly for small communities.

Cranbrook, of course, is over the 5,000 threshold in terms of Towns for Tomorrow. For a lot of the small rural communities, we've been able to do that, which allows for only 20 percent funding as opposed to one-third funding.

I'm wondering if there is some way we can find a way to be able to extend that or to be able to help create that sort of a capital pool and whether we should be thinking about some other way of doing that kind of capital ability to be able to fund those types of projects.

[1040]

S. Manjak: Yeah. Sure. I agree. I think the example, the metaphor, is…. We're all going down to UBCM next week. For the longest time there were two forums at the UBCM — small communities and large communities. There was nothing in the middle. Finally, through a dialogue, we recognized that there needed to be mid-sized community forums at UBCM.

I think that's a perfect analogy for what you said. I think a recognition of that — what you just said very well — would be a good step towards that.

J. Les (Chair): All right, Your Worship, thank you very much for coming this morning.

Just for the committee's information, there are three remaining delegations: the Southern Interior Development Initiative Trust, the Canadian Museum of Rail Travel and the Cranbrook and District Arts Council.

Now it's the turn for Cindy Popescul. I hope I pronounced that correctly.

C. Popescul: Yeah, you did.

Thank you, members of the committee, for the opportunity to speak to you. My name is Cindy Popescul. I'm a chartered accountant, a partner in a local firm, a na-
[ Page 734 ]
tional firm, BDO Canada. I am here, I guess, to acknowledge the benefits of the Southern Interior Development Initiative Trust as I see them, being one of the initial members of that trust since creation.

Just to give you an idea of the work of the trust and what has gone well and how it works to benefit communities like ours, as Your Worship Mr. Manjak indicated, it does help with diversification and job creation in communities like ours.

It was created through an act of legislation in 2006. It was set up as a society incorporated under the companies act. It's independent of government. We produce audited financial statements and such, and they get dispersed back to interested parties. There are 13 members on the trust. Eight of them are representatives from municipal government and regional districts, and there were five appointments by the province.

It's a good mix. I believe that the purpose of the representation to the trust was to get, first of all, input from local communities on what are matters of importance to the communities in terms of their problems, their challenges and where they see opportunities; and then, five from outside of government who have a variety of backgrounds — from real estate development; chartered accountants, like myself; and we had some members from the aboriginal community, First Nations. So it was a good mix of people in the communities who hopefully had a vision of how to make them better.

There was a one-time allocation of $50 million, and we commenced operations in the southern Interior in 2006. The legislation is very broad. It didn't really tell us what we were supposed to do with that money, so we had to start from scratch and set up the strategic plan and decide what we were going to do with that $50 million and reach consensus on it.

Our guidelines were that we were to support initiatives that would have a regional economic impact; create sound, economic, viable communities; support economic diversification and sustainability; and encourage investment within the region.

It was very broad what our mandate was, so as a group we sat down and tried to hash out what that would be. There were a number of options. We could just dole out $50 million over X number of years and just slowly get rid of the money that way. We could just invest it and return the income on the initial capital to communities to help them.

We came up with a blend. We decided we would try and create some long-lasting endowment but disburse $7.5 million over a year until we disbursed $30 million.

We created a strategic plan, goals, missions and so on, and we really focus on the creation, enhancement and preservation of employment, economic diversification and creating maybe offshoot or new opportunities that come from our historical resource-based industries.

[1045]

We had to decide how much we were prepared to distribute as grants in a year. To fit with our model of an endowment and true diversification of the economy, we limited our grants in a year to $750,000 and capped the maximum at 50. We did that for a number of reasons. One was to help some smaller communities in our region, since it is a vast region, and to provide some level of funding. We weren't prepared to just dole out grants of a million dollars here and there.

We did come up with models and have projected returns from market investments. Some of the funds are obviously invested long-term. We also hope to grow from our investments in the businesses in the community.

Some of the challenges that relate to the southern Interior trust were at the time — and some of them still exist now — capital shortages due to some of the recessionary pressures we were seeing; bank lending tightening; and, for the trust, devaluation of market investments.

We decided that there were a number of options we had as lenders ourselves. We didn't want to necessarily operate like a chartered bank, and we didn't want to take on an extremely high level of risk where we were not likely to see any return. I'll talk about that a bit more later, but we did focus on trying to help in financing startup businesses and expansion of existing businesses.

We saw that there was a shortage of skilled labour at the time. The area was doing quite well for a while there, in the mining sector and such, and we could see that there was a real shortage of trained people in the trades. There were job losses, but at the same time there was a demand for skilled labour, particularly in trades areas, as I mentioned.

StatsCan statistics indicated that in 2009, 26 percent of the workforce was greater than 55, and that was probably true in a lot of our industry sectors here. We could see the need to encourage training for younger people, and we were interested in helping the educational institutions that were already here with that mandate.

We are heavily dependent on resource-based industries. I don't have to tell you that, but we could see that we wanted to help with diversification and innovation in those sectors and also develop new sectors.

Some of the opportunities we saw in our region were that it was a place where everybody wanted to live. It's a beautiful area. It was attractive to people looking for a different lifestyle, who could perhaps relocate a non-location-sensitive business.

We could see that there were some emerging technology industries in the area. An example of one that we've helped recently is a company called VeriCorder Technology. It's a company out of Kelowna. It was started by two former CBC reporters. What they were trying to do was overcome the problems that mobile journalists had in packing all their equipment and cameras and all the other devices they need for information transmission.
[ Page 735 ]

What VeriCorder did was utilize the iPhone and some micro mike — some combined technology — to replace all that equipment. So a mobile journalist now can record, edit and send the report to any number of news stations for immediate release. It also has the capability of tracking edits to recorded messages. It's useful as a program to allow police to gather information at crime scenes and such and secure the evidence that might be required in court.

They started with two in 2008. Right now they employ 15. They're currently providing more programmers and expect to have a workforce of 100 to 200 more jobs in the next three to five years and, hopefully, plan to export their technology.

We do also see opportunities in the region with something called business incubators. They are something like the Okanagan innovation council that provides a one-stop service to new businesses, where they are able to obtain space, all the Internet-based technology they may need to operate their business and individuals who are trained in a specific area that they can go to as resources. We've had some success with that — helping with funding of that through the trust.

[1050]

Currently we're looking at assisting some business clusters that are interested in coming together within the region. An example of that is in the manufacturing sector. The marine manufacturers have come together to try and set up a marketing system for their product that they'd all belong to and use their common goals to reach some successes.

As I said, we really wanted to focus on students. We hashed out how we'd do that. We weren't in the business, the 13 of us, of doling out scholarships and reviewing scholarship applications. We thought there were people much better trained and able to do that than we were, so we decided that the best way to help was with a grant program.

We've committed $3 million over three years to our existing colleges in the region, which covers College of the Rockies, Selkirk College, Thompson Rivers and Okanagan College. It was a combination of awards and grants for the trades and technology students in these schools, and it also starts right at the high school level.

We've also had some partnerships with other higher-level groups handing out even more specialized scholarships for innovation and advanced technologies. I really think that was a good way to try and create jobs in the areas of trades and help facilitate our local institutions, educational institutions, to perhaps expand what they could provide in our communities.

Cumulative potential for job creation, year to date, with the businesses we've assisted — we believe that we've created 1,503 jobs.

I think one thing I may have missed discussing in the presentation was our commitment to try and leverage. We believe that it is important to assist businesses, but we also are not interested in assuming all the risk related to advancing funds to businesses. We try to spread that risk around.

So the bank may invest. We may provide lending funds as well. A certain level of commitment is required by the business enterprise. It's through that process that our $27 million of approved development initiatives to date have created $97 million in total project value. So that other $70 million has come through leveraging from other sources. We've worked with Community Futures, BDC and other institutions to try and expand that leveraging.

Total funding by region. There's a bar chart in your handout material that indicates the grants and awards and the loans and equities that have gone through the various breakdowns of regions within the southern Interior trust grouping. A lot of it has gone to the Central Okanagan, and obviously, this is somewhat population-based. That's where you have the majority of the population, the majority of the industry, although we are cognizant of the fact of making sure that we try and reach out to every one of the subcommunities within the region.

The grants and awards approved by region are also indicated in the graph. The East Kootenay region, to date, has benefited from $1.2 million of funding. I believe that that program is going relatively well. Perhaps some of the colleges that will speak today will speak on it.

To date we have added 2,696 students in the trades and technology program. We've provided financial support to them. Some 26 new businesses have been created, and 17 expansions and 17 new technologies, like the VeriCorder one that I described, have been assisted by the trust.

[1055]

The operation of the trust I just want to touch on a bit. We have an executive director, and she has a couple of assistants. One of the things we did when we created the strategic plan was decide that we were going to try and keep administrative costs to a minimum. We did not want to become a huge entity where all the funding was taken up by internal salaries and such.

We try to contract out many of our services — legal counsel, other things we need. We have a great executive director right now with a history in banking. Every project is reviewed under a consistent process. The process looks at our criteria — business viability, number of jobs created, economic diversification. It goes through our requirements, our specifics that we're trying to focus on. So far that seems to have worked well. We are lucky to have the staff that we do.

Our future is continued strategic economic development that focuses on diversifying local economies, job creation and market diversification. We're always looking to leverage with new partners and keep expanding
[ Page 736 ]
that multiplier effect. So if we can continue to have $27 million grow to $97 million, we'd be happy to do that.

We do have projected cash flows from what our loan investments are to date. We are still at fiscal 2010, but it has taken us a few years to get that $30 million out, so it's going to take us a while to get to $7.5 million in cash flow in an annual year.

Our projected portfolio growth is the last handout you have. You'll see that by 2011 we'll have lent that $7.5 million a year. From that point on, you can see that it's projected that the balance of the funds will grow, and that endowment, hopefully, carries on long after I'm gone off the board. We will reassess. Every year we update the strategic plan. We'll look at what works, what doesn't work. So far we've reviewed the strategic plan once on a large basis, but we do update it annually.

I think it's something that was a worthwhile project for the government to institute. It is a good way, with the feedback coming from the municipalities and the regional districts on what the areas to focus on are. When a project comes in for review, we get feedback from the communities on why this is particularly important, what will work, what won't. And then we still have our very formalized model for reviewing projects that I think works well.

Thanks for the opportunity to speak to you. If there is any more funding for SIDIT, I think we'd be happy to take it.

J. Les (Chair): Thank you, Cindy. Thank you for being that agreeable.

We have two questions, one from Doug.

D. Donaldson (Deputy Chair): Thanks very much for the presentation. In studying organizations similar to yours around the world who have regional economic development as their main focus — Highlands and Islands Development Trust in Scotland, for instance, and a couple of others in the eastern part of the U.S. — one of the features that they're able to do is take equity positions in new businesses. They say that this has added to the success because they can infuse expertise and capacity from their organizations into these fledgling businesses.

Where I live, the Northern Development Initiative is not able to do that — take an equity position. I'm wondering if your organization is able to do that. And if it isn't, have you thought about that as a strategy to increase diversification and economic development?

C. Popescul: Some of our loans are convertible into equity positions at a certain point in time, so we have allowed for that in the plan.

J. van Dongen: Actually, my question was exactly the same as Doug's. I will simply say that I appreciate the responsible way you're managing these funds and striking a balance between some longer-term sustainability and current active, proactive economic development.

I was more coming from the perspective of taking either an equity position or some kind of debt instrument so that you could get some of that money possibly back in to recycle for further development in the future. That was my perspective. I wasn't really thinking that you would get involved in management, but I appreciate your answer to Doug.

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

C. Popescul: Good luck, and enjoy your visit in Cranbrook.

J. Les (Chair): You bet.

We will next hear from Garry Anderson, who is with the Canadian Museum of Rail Travel.

[1100]

G. Anderson: Thank you, members of the committee. My name is Garry Anderson. I am the executive director of the Cranbrook Archives, Museum and Landmark Foundation, which includes the Canadian Museum of Rail Travel. I appreciate the opportunity to make this presentation to you on behalf of our board of directors and its chairperson, Bob Bennison.

At the foundation board meeting on Tuesday, September 21, the issue of the 50 percent cut in historic funding levels to the arts and culture sector in the new community gaming grant program was discussed. This new grant recently replaced the former direct access gaming grant program. A main criterion of the program was that it would only support the direct delivery of programs to the public, and that would be according to the sector applying.

The board decided that this large cut was very unfair, since it was done unilaterally by the government in an undemocratic manner. It seems to have arbitrarily singled out one sector for a cut but spared others. For example, the sports sector, in the community gaming grant program, is still funded at 100 percent of historic levels. If all sectors had shared in the reduction, there would be less of an issue here.

The new criteria also expected programs to be more directed to youth. This may imply that the sports sector contained more youth than the arts sector. It's not clear why this sector, which also includes heritage and museums, would be thought to contain less youth. For example, in the performing arts of music instruction, hundreds of private students are involved locally. Many are also involved in the performing arts of drama and dance and take painting and photography lessons outside of school.

Students and youth visit museums and galleries throughout the year to experience and become involved
[ Page 737 ]
in local history and heritage, something many will take with them all their lives.

We strongly urge the government to reinstate the 100 percent funding to the community gaming grant for the arts and culture and museum sector in the 2011 budget or reduce all sectors accordingly to share in the pain. A case could also be made to reinstate the 100 percent cultural sector in 2011 but reduce the other previously unchanged sectors accordingly for another year if the gaming budget needs to be balanced in that manner.

It's short. Hopefully, it's to the point. If there are any questions, I could take them now.

J. Les (Chair): Certainly.

M. Mungall: Thanks very much, Garry, for your short and succinct presentation. Bruce over here says that I'm going to give you a short and succinct question, but Bruce can only dream.

J. Les (Chair): So there.

M. Mungall: I noticed when you point out "reduce all sectors accordingly to share in the pain" that misery certainly does love company. One of my questions, though, is about the gaming grant and the B.C. Arts Council funding as well. Do you receive any B.C. Arts Council funding?

G. Anderson: Yes, both. One is for operating. The other is for that direct delivery of services, which is slightly different.

M. Mungall: I would assume that both, actually, are of equal value to the organization. Would you like to continue to see both of those funded so that they're both available to the organization?

G. Anderson: Well, the B.C. Arts Council operating funds that we get are long term. This has gone on for us for several decades. The community gaming grants have gone through metamorphosis for years. They're both extremely valuable, and they've been built into the operations.

We'd like to see them continue, obviously, but why was one sector, or more, just arbitrarily changed? That's our point. There was no hearing. There was nothing on this. It just appeared, and we were told this is what you have to do. And it's not just for ourselves. It's many of these groups that have to suddenly contend with big reductions, when they see other groups not necessarily having to deal with the same reductions.

J. Thornthwaite: Thank you for your presentation. My question is actually related to what Michelle was saying. So you get funding from the B.C. Arts Council for operating. What was the other?

G. Anderson: The other is the new community gaming grant.

J. Thornthwaite: But the Arts Council just funds the operating?

G. Anderson: The operating. I'd have to remember the name. I think it's operating grants for public museums. That's under the B.C. Arts Council. The gaming program, as I said, has gone through several changes.

[1105]

They used to be project-oriented. Now they've become program-oriented for the direct delivery of services to the public. So they both fund museums, galleries and other things in the sports sector and other sectors as well.

J. Thornthwaite: Then my question is: would you prefer the government…? We're struggling with this, because there are lots of groups that come in and, you know, have similar comments. Would it be better for the government to just give all of our funding to the B.C. Arts Council and let the B.C. Arts Council distribute it according to whatever peer-reviewed, arm's-length process they have versus the spits and spats of community gaming grants?

You were just mentioning that they've changed the criteria so that you may get it; you may not. So which way do you, from your perspective…?

G. Anderson: Well, it would probably be easier for us as a museum to look at one type of funding, and multi-year as well. I should state here that it's a little awkward that museums, which are heritage institutions, are funded under an arts council. There are very different criteria for museums than arts groups and some galleries. We're stuck with that.

It really should be a B.C. heritage council funding museums. The B.C. Heritage Society funds heritage organizations but not museums. So it's very complicated. If we could straighten that out, that would help — and then the funding to streamline it.

As I say, the gaming program used to be project-oriented. It was to develop facilities or some physical entity, and then you would build that into your operations. Over the last year it has become program-oriented, so suddenly we're having to apply for operations, not for special projects.

J. Thornthwaite: Maybe you could give us an addition to your submission with your specific asks with regards to how those are — talking about the project/program orientation, the B.C. heritage…. Give us something that we can go with.
[ Page 738 ]

G. Anderson: I could. If I could figure it out easily, I would have had it here. But I will do that — yes, for sure.

J. Thornthwaite: Yeah. If you would just do it through Byron.

B. Ralston: Thanks for bringing your great experience, your commitment, to this enterprise. I know it's a lifelong commitment, and your accomplishments I think are legendary, certainly to B.C. and Canadian museum communities. I'd just thank you for that. I think I first encountered you — you may not remember this — back when B.C. had a museum train back in the '70s. So it's been a while.

I wanted just to get a sense of the proportion of your budget. So could you give the dollar amount and the proportion of your operating budget that's affected by these changes?

G. Anderson: I need to give you a bit of additional information here. We used to operate bingos under gaming, which was earned revenue. We had to supply personnel from our board to help run the bingos, to oversee them. That was classified as earned revenue. It was then changed into more of a granting program, which then became granting revenue. It changes the proportion of what we earn versus what we're granted in our applications and really changes the percentages.

The bingo application date to start bingos was May 1 to April 30. The new community gaming for the arts and culture section starts September 1 to August 31. We're missing not only four months of gaming revenue; we've also been reduced for the next full year from $43,000 to $21,400. So instead of $21,400 for 12 months, we've had to take that for 16 months. It's just a combination of circumstances.

Our total budget, I would say, is about $310,000 or $315,000, but this particular one takes it right out from the direct delivery of services. We now have to fill that in from some of the other areas that are affecting other parts of the budget, which is the way we're structured.

We're a very large facility in a fairly small community. We have big responsibilities. But every time we take them out of strategic parts of our budget, it reduces our ability to earn more revenue as opposed to be granted more, and that has become a big issue with us. We're made to look like we're being granted rather than trying to earn it in this particular instance. We do earn revenue from tickets and things like that, but suddenly this has now become a grant rather than something we help earn.

[1110]

J. Les (Chair): Okay. Thank you very much, Garry, for coming today.

G. Anderson: I should say that I'm not known for short presentations. It's nice to hear.

J. Les (Chair): It suited us.

Our final presentation this morning is from Sioux Browning, who's with the Cranbrook and District Arts Council.

S. Browning: Hi, you guys. Welcome to Cranbrook. It's nice to see you here.

I only found out about this meeting — because I've been out of town — a day and a half ago, so my notes are random at best, but hopefully drawing to a point.

I am just the newly minted president of the Cranbrook and District Arts Council, so my knowledge of the budget numbers is still very new. Therefore, I will not be talking as much about numbers as some other people here today. I'm also green in the way of presidencies. I'm not even president of my own hair. Things like this are very new to me.

To begin, I just want to say that I'm sure that you've heard of the kerfuffle in the arts community over funding this year. I will only add to the kerfuffle by saying that I'm a huge supporter of sport. I'm a huge supporter of amateur sport, of the Olympics. I have as big a hockey crush on Scotty Niedermayer as anyone — yes, confession time. He's a very, very handsome hockey player.

J. Les (Chair): He doesn't live far away.

S. Browning: I know. Also, his wife is very nice.

Anyway, I just wanted to say that sport is deeply enmeshed in arts culture, but arts are not deeply enmeshed in sports culture. Health is deeply enmeshed in culture, but culture is not necessarily enmeshed in health. I just want to say that extreme cuts to arts funding has a global effect on the community and not just on the arts community.

If you look at the rural practice program for physicians, you can see how much money is spent to bring a physician to a community like Cranbrook, how much money is spent to keep them here and how much money is spent to send them on training sessions. What happens in Cranbrook is that we get fabulous doctors from Delhi and Cape Town and Johannesburg, and then they leave because we can't offer them the cultural and arts opportunities that they may have had in their hometown.

When you have an organization like the Cranbrook and District Arts Council, which has been in existence as a charitable organization for 37 years and prior to that for another number of years…. We are struggling to present our community with the kinds of opportunities that will keep them mentally healthy throughout their lives, to keep them invested in their town, to create civic pride and to ask those kinds of questions about society that the arts genuinely ask.
[ Page 739 ]

Specifically with regard to the question you asked Garry, Jane, we have suffered from the same cuts, obviously, and we've been lucky, because we're an arts council that has been managing to keep our doors open.

But the funding that has been made available to us over the last few years is hamstrung by requirements. For example, a bit of gaming revenue was reapplied to the B.C. Arts Council, which was then distributed to, say, us, but now it has two sets of restrictions on how it can be spent instead of just one — like from the B.C. Arts Council. For example, it may be that you can only use it for operations, but the other set of restrictions is that you can't use it for operations but it must be used for youth.

[1115]

Then you have the Olympic legacy funding for festivals. A festival in the winter celebrating spirit under the Olympics would be an awesome thing, but I can't ask my taxed board and my taxed volunteers and my minuscule dollars to go out and beat the bushes for 25 percent of that festival funding when what I need is to keep my doors open. It doesn't make sense to me. So that is money I can't access. It's just right off the table. I'd love to celebrate spirit, but the spirit is weak. The flesh is willing. As I said — random.

I want to say that budgets stem from concepts and from social requirements. Arts stem from exactly the same thing, so I would ask the province to keep that in mind when delivering their next budget.

I want to turn to the Conference Board of Canada, which has been my friend for the last couple of months in the culture sector. This is an August 2008 paper, Valuing Culture: Measuring and Understanding Canada's Creative Economy:

"In the culture sector Canada's changing age profile has enormous implications not only for the labour market but also for the way people spend their time and money. Demographer David Foot suggests that most people, as they get older, become less active and less inclined to engage in strenuous activities. As a result, their leisure and recreation habits change. The impacts of these changes on every recreational pursuit from badminton to birding are dramatic. However, these effects are predictable.

"Although younger seniors also remain quite active, seniors are more likely to engage in activities that are less physically demanding — reading, and attending museums, art galleries and theatres, for example."

In an adjunct to that, I just want to refer to comments that our mayor made about the hotel taxes. When tourists come to this community, and that's one of the things that we're going to have to rely on as we make the transition away from a resource economy, they're going to be looking for an experiential thing.

Why? Because these tourists are older. They're baby boomers. They have more money to spend. They want cloth napkins on the table and not a tray. They want an experience like a festival or a pottery class or a writing conference that they can attend. They're not necessarily going to be summiting Fisher Peak or rafting down the St. Mary River. I think that's good, because I really don't want to be on the search and rescue committee that hoists an 85-year-old out of the St. Mary.

What I'm saying is that we need culture dollars in order to drive our local economy. It ties in with our tourism revenue in a profound way.

Hill Strategies — this is from the Conference Board report again — reports that Canadian consumers spent $25.1 billion on cultural goods and services in 2005, an amount that is 5 percent higher than the combined consumer spending on household furniture, appliances and tools, and over three times larger than the $7.7 billion spent on culture in Canada by all levels of government.

I am proud that Cranbrook is a sales centre for the Kootenays, but nobody goes to Rome for the quality auto parts. They go because they can throw a coin in the Trevi Fountain and visit the Colosseum. When people come here to buy quality auto parts, I'd like to say that they can stay for a play. When they come here to golf, I would like their wives to be able to do some cultural shopping, not big-box shopping. Again, this all ties back to cultural funding for us.

Finally from the Conference Board, they estimate that real value-added output by culture sector industries was over $46 billion in 2007, roughly 3.8 percent of Canada's real gross domestic product. When the effects of arts and culture industries on other sectors of the economy are added to account for indirect and induced effect, the overall impact is much larger. We can estimate that the economic footprint of the cultural sector was $84.6 billion in 2007, which is 7.4 percent of the total real GDP.

[1120]

On average, for every $1 of real, value-added GDP produced by Canada's culture industries, roughly $1.84 is added to the overall real GDP, meaning that when the province helps us with our funding, we can almost double that funding in our community if we execute it well. That is something that the Cranbrook and District Arts Council is working to do, but we have been very hamstrung over the last year.

Finally, I want to just read a brief op-ed piece I've written for the paper, which hasn't appeared yet and won't for a while, I think. It's called "Arts — Anything but a Frill."

"When times are difficult, jobs are tight and the economy moves like the worst rollercoaster ever built, the volunteer organizations become hard up for funding. It's understandable. People and governments are reluctant to part with their rationed dollars for charities, festivals and fundraisers. Usually, and currently, one of the sectors hardest hit by funding cutbacks is the one that governs arts and cultural organizations.

"As a working artist, a writer, I'm often engaged in conversations about the state of the arts. Many times I've heard the argument paraphrased: well, the arts are great, but they aren't as high on the priority list as other things. They're kind of a frill.

"A frill? This makes me laugh and laugh and laugh. Then I spend some quality time with my therapist. Then I laugh some more — not because I am an artist trying to make my way, and not because I volunteer with organizations in support of the arts.
[ Page 740 ]
No, I laugh because there are precious few elements of our culture that are not touched or defined by the arts.

"If you think of an artistic endeavour as one that is concerned with theme, proportion, shape, mood, expression, possibly colour and utility, then you will see how every moment of your day is touched by art.

"Let's examine a day. I get out of bed. Sheets and bed and light fixture, no matter how inexpensive, all designed by a designer. Same with the bath towel.

"I'm greeted by the canine, who sports a lovely purple polka-dotted collar designed by a designer. The spoon that holds my cereal was first sketched by an artist, then carved into foam, then carved into wood and, finally, cast into metal and mass produced. The box holding my cereal — the anthropomorphic critters, the colours, the lettering — is courtesy of an artist.

"The car I get into was initially drawn, and possibly carved, by an industrial artist, who worked with engineers to find the best possible form and aerodynamic flow. The dashboard and seats are artist-designed.

"As I drive through town, the work of artists surrounds me — graphic designers who created signs and banners; landscape designers who create lovely plantings; public sculpture; uniforms; buildings created by architects to be both functional and appealing.

"If I'm shopping, virtually everything I can buy, from flooring tile to footwear, teapots to men's ties, was conceived of or influenced by one or more artists. The magazine at the checkout is full of layouts and ads created by artists and writers. The fonts on the pages, the fonts on every computer were designed by artists who considered the function, the shape, the weight of every letter.

"On the radio, music by artists. On the TV, actors, dancers, set designers, costumers and writers. Even reality shows have set designers, musicians, editors and writers working on them.

"Watching sports? The fancy design on the goalie's mask, the team's logo, the music pumping up the crowd, the mascot's outfit — all artwork. The half-time show and the cheerleaders' performances were all created by a choreographer.

"The clothes I wear, the lottery ticket I buy, even the colours I paint the walls of my house — all artist-generated. The logos on business cards; the special dishes created by chefs, who are culinary artists; any site on the Internet — all adhere to the principles guiding artists: theme, proportion, shape, mood, expression, possibly colour and utility.

"When pressed, people will say that they will donate money for health care before donating money to the arts. Hey, I'm all for health care. I am as accident-prone and rapidly aging as anyone.

"But let's say we all live long and healthy lives in a place where all the arts have tragically expired from neglect. What are we going to do with all that darned health? Not read nor watch TV nor sculpt nor play board games nor even stare at the artwork on our walls.

"The arts sustain our daily lives. Perhaps because they are so enveloping, so critical, they are overlooked. They seem like frills, but if we can't even get out of bed without brushing against the arts, they are not so very frilly."

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

D. Donaldson (Deputy Chair): Thanks very much for your presentation. I have to say, with the reference to ties, that this is Ken Mowatt, the Gitxsan artist from up where I live in the northwest, so it's very apropos in relating to your presentation.

[1125]

One point that you made that I'm interested in is the cultural shopping, not big-box shopping, especially in light of the presentation made by the mayor previously about trying to reduce leakage of dollars out of the Cranbrook area.

Can you describe to me how your organization enhances and supports the ability to provide cultural shopping opportunities and how the declining investment by the government in organizations like yours has inhibited that ability?

S. Browning: Sure. One element of it is that the Cranbrook and District Arts Council doesn't have a permanent home. That's one thing they're working on, which means that the arts that we provide for people to buy often move. We're on Baker Street one year, and we may be on 11 Avenue another year, so someone who comes to the town on an irregular basis may not be able to find us.

Just to finish that thought, one of our long-term plans is to find a permanent home, hopefully downtown because I believe that downtown is the place to create a cultural shopping experience for Cranbrook.

By cultural shopping, I'm thinking of things like Granville Island, which is a cultural shopping experience, versus going to Home Depot, which is a practical shopping experience. People go to a place like Granville Island to find something unique, possibly unpackaged, often artist-generated if not a pure food product. Those are the kinds of businesses that I think would help generate a more vivid downtown for Cranbrook.

At the moment — I did a rough estimate — about 40 percent of the streetscape in downtown Cranbrook on Baker Street is empty. I've been looking at a place in Kentucky called Paducah which, like Cranbrook, was a resource town and made a transition to becoming an arts-culture-supported town, a very successful one, by creating an artist relocation program.

What they did was work with their business associations, their realtors, their insurance people, their bankers to encourage artists to come and live in Paducah for a minimum of three years. In exchange they would be given assistance finding a home to buy. They would be given a very low-interest loan to begin a cultural business. This program has been enormously successful for Paducah, and it's become — I can't remember what the phrase is right at this moment — an example for other cities in the U.S. to try.

This hasn't been done in Cranbrook, and even though I have not approached the mayor or — let's face it — anyone else yet about this kind of program, I think it would be ideal for Cranbrook. Cranbrook has a solid population base, it's got a solid tourist infrastructure, and it is a cool place to live.

We have a lot of the things that artists like. One of the things we don't have is a strong cultural foundation. If we can't even find a home for our arts council, how strong is our cultural foundation? So that's one of my
[ Page 741 ]
tasks: to help the downtown business association fill the downtown with vivid, local, artistic cultural products and cultural events and experiences that will keep tourists here. They won't just pass through. They will stay.

Does that answer your question?

D. Donaldson (Deputy Chair): Yes. Thank you, Souix.

B. Routley: First of all, well said. I really enjoyed your letter, and I'm sure that folks who hear that in your local paper will be very interested indeed. Certainly, I think you get the last laugh, so to speak. I was wondering where you were going with the laugh part, but it all fits when you get to the end and hear how everything is connected.

[1130]

I might add that my own father-in-law…. It came to mind as you listed all of the things — the design work, whether it's business cards or whatever. Just to give you an additional example when you're doing your toing and froing, my father-in-law spent 25 years as a commercial fisherman, and he patented the design and shape, the intricacies of a piece of…. He didn't think of it as art, but it was a fishing flasher.

He did very well with that — made millions of dollars in business revenue, created jobs, all of that. In fact, he didn't think of himself, certainly, as an artist or a designer. He was a fisherman. He was trying to make something to catch fish.

But at the end of the day, without that creativity that comes from working with your hands, designing, manipulating, in this place, plastic…. He manipulated plastic in all different forms. It turned into a multi-million-dollar business. Fishermen actually stole his gear from him that he was creating for his own use, and that gave him the idea that maybe if they wanted it so bad, he should start selling them this stuff, so he went into business.

Anyway, the connectedness to everything that we do, whether it's designing cars, or you could go on and on with your example…. So I think it was very well written, from that perspective.

My question, getting to the issue of arts, is the core funding. We heard from other art groups about the fact that in some cases art groups are required to jump through hoops and, for example, come up with a flavour of the month like a festival, or that kind of thing. I imagine that it would be your pitch to have some kind of either core or ongoing funding. Could you elaborate a little bit on what you believe should be the future of the arts? If people were interested in having an ongoing connection to the arts, what should it look like?

S. Browning: Big question. I'll try to keep the answer small. I am a very practical artist in that I do make my living as an artist, as a writer. To me the practicalities of art, the commerce of art, the business of art are very real and important things.

I think when people who are maybe not as invested in the arts think of them, they think of them as something outside of an economy. It's like you have an economy, and then one of the outside elements is the arts — that frill, if you like.

I would like governments, when they consider funding the arts, to consider that culture and art is a fundamental driver of economy and to fund it thusly. How do you assist loggers when there is a downturn because of pine beetle? That is a similar way that you could assist artists when there's a downturn because of arts cutbacks.

I would like to see more trust placed in arts organizations, that they can spend their money in a responsible way without saying: "You can't use it for operations; you can only use it for this." In fact, a lot of grants and other funding bodies have real restrictions on operating costs. You can't use it for operating costs; you can only use it for programming. Well, that's fabulous, but who's going to program it?

I would like to see some of those restrictions lifted, and I would just like to see it considered in the same light, with the same value, as health care, as sport, as other industry, because it is the cultural industry.

J. Les (Chair): Thank you very much, Sioux. We appreciate you coming this morning.

Is there anyone else here who feels they haven't had a chance…? I think we've heard from a good cross-section this morning.

That concludes our hearing this morning.

The committee adjourned at 11:35 a.m.

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