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

Friday, October 15, 2010

9 a.m.

Summit Room, Ramada Plaza

Abbotsford, 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 9:00 a.m.

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

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

4. The Committee recessed from 12:06 p.m. to 1:04 p.m.

5. The Committee adjourned at 5:07 p.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Friday, October 15, 2010

Issue No. 36

ISSN 1499-4178

[ Page 1045 ]

FRIDAY, OCTOBER 15, 2010

The committee met at 9 a.m.

[J. Les in the chair.]

J. Les (Chair): Good morning, everyone. It's time to get the show on the road. My name is John Les. I'm the Chair of this committee and MLA for the neighbouring riding of Chilliwack. I'd like to welcome everyone who is here already this morning and thank everyone who's here and who will participate later today for taking the time to participate in this process.

Each year, in preparation for the oncoming year's budget, the Minister of Finance releases a budget consultation paper by September 15 which presents a current fiscal forecast and also identifies key issues that need to be addressed in the next budget. The paper provides a focus for the consultations of this committee and includes information on how members of the public may provide their views on budget priorities. Print copies of the consultation paper are available on the information table at the back of the room.

Our committee is the parliamentary committee which is responsible for conducting public consultations on the forthcoming provincial budget. Our committee is required to report back to the Legislative Assembly no later than November 15 of this year. This year we have held 14 public hearings in each region of the province, and we've also scheduled three video conferencing sessions to hear from residents of rural communities living in the more remote areas of the province. It's the second time that we have used this consultation method.

We started our hearings in Vancouver and Surrey the week of September 20 followed by hearings in Lake Country, Penticton, Kamloops, Cranbrook, Castlegar, Fort St. John, Prince George, Terrace, Courtenay and Whistler. As I said, we also did the three video conferencing sessions, and those covered Nanaimo, Haida Gwaii, Smithers, Fernie, Golden, Creston, Merritt, Vernon and Port McNeill. Today, as I'm sure most people know, is our last hearing, here in Abbotsford.

In addition to public hearings, there are a variety of others ways that British Columbians can share their views with us. We accept written submissions by letter or e-mail and also video and audio files. Further information on how people may participate using any one of these methods is available on the committees website.

Committee members carefully consider all of the public input that we receive, whether it's oral made here today, online, a submission in writing or an audio or video clip. The deadline to receive submissions is today, October 15.

At today's meeting each presenter may speak for ten minutes with up to five additional minutes allocated for members' questions. We have a very full agenda today, so I'm going to have to chair this thing very rigidly, as I have had to do a few more times in the past. Ten and five equals 15, and that's it.

Time permitting — and there won't be much of that — we may also have an open-mike session near the end of the hearing with five minutes allocated for each presentation.

Today's meeting is a public meeting, which will be recorded and transcribed by Hansard. A copy of the transcript, along with the minutes of the meeting, will be printed and made available on the committees website. In addition to the meeting's 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.

At this point I'd like to ask members of the committee to introduce themselves, starting with Norm.

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

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

D. McRae: Don McRae, Comox Valley.

J. Rustad: John Rustad, Nechako Lakes.

J. van Dongen: John van Dongen, MLA for Abbotsford South. I'd like to welcome all of my colleagues and all of you to Abbotsford South.

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

B. Ralston: Bruce Ralston, Surrey-Whalley. It's great to be here in Abbotsford South.

J. Les (Chair): Say it with enthusiasm. [Laughter.]

B. Ralston: I'm saying it for the record.

M. Mungall: I echo my colleague's enthusiasm to be here in Abbotsford South. I'm Michelle Mungall, MLA for Nelson-Creston.

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

J. Les (Chair): As well, we have with us today our Committee Clerk, Kate Ryan-Lloyd. Staffing the registration desk is Heather Warren, and our Hansard staff with us again today are Michael Baer and Jean Medland, who will record and prepare the written transcript of this meeting.
[ Page 1046 ]

With those things out of the way, I'd now like to call our first witness — on behalf of the B.C. Agriculture Council, Garnet Etsell and Andreas Dolberg. Good morning.

Presentations

G. Etsell: Thank you for the opportunity to be here. We look forward to this on an annual basis.

[0905]

I'm Garnet Etsell, chair of the B.C. Ag Council, and Andy Dolberg is our executive director. I'm going to do the presentation, and Andy will answer all the hard questions. In case we don't get through in our ten minutes, you do have a package in front of you and a summary on the second-to-last page of the 13 recommendations.

The B.C. Ag Council is the umbrella farm organization. We represent the collective interests of B.C.'s farmers and ranchers. Some of the items that we're going to go through today you have heard from our various members, I think, in other presentations. If we're covering them, it's because they affect more than just simply one commodity.

The industry is a large industry. From farm gate to retail it's about a $35 billion industry. When you just take a look at the primary and the processing sectors, it's $10 billion. Those primary and processing sectors employ close to 70,000 people, so it's significant.

The B.C. agricultural industry has had a long track history of good performance — ten years, when we had strong, positive net farm incomes. But as the graph on the second page shows, for the last four years we have had an unprecedented negative farm income.

That's not the fault of government, but unfortunately what has happened concurrent with those negative years is that we have had an ever-declining amount of dollars that have been invested on the part of government into agriculture. That certainly hasn't helped the situation.

B.C.'s climate and natural resources do provide the foundation for a diverse agricultural production base, and BCAC sees a strong and positive future for agriculture in British Columbia. To achieve this, the agricultural sector is looking to government as a partner in key strategic areas. In this regard BCAC has a range of recommendations, which we're going to go through.

First of all, market development. You know, a lot of time and effort was spent by government in developing this agricultural plan. That agricultural plan, when it was developed…. I can remember that Minister Bell said: "You can hold my feet to the fire." Within a month he changed portfolios. It was reiterated that this is the agricultural platform of the current government, and we would dearly like to see it properly funded. Only if it is funded will it cease to be a document that sits on the shelf.

One of the key recommendations in that document was that we need to encourage B.C. residents to buy B.C. products. One of the recommendations was that $2 million per year needs to be spent on a market development–branding program. The BCAC has met with the Canadian grocery distributors and the Canadian Restaurant Association, and all parties agree that we need such a program.

We need to take advantage of this buy-local phenomenon that has been taking place. B.C. residents are crying for local product, but they need to be able to identify it. That's where the branding program comes into play. It's absolutely critical, so our first recommendation is that $2 million per year needs to be allocated to that program.

I want to touch on the harmonized sales tax. As many of you will know, BCAC has for many years been advocating that there needs to be a change to the antiquated PST system. We were delighted when the HST was brought in, because it accomplishes all and more than what we were advocating for. We urge that all committee members objectively evaluate the consequences of this important and fundamental tax policy shift.

It has been raised by one of our members that there was a rule brought in with the HST called the recaptured input tax credits. Inadvertently, this has hit large cooperatives, particularly the fruit cooperative in the Okanagan Valley.

[0910]

Here you've got small farmers that have collectively come together to market their product, and by doing the right thing and consolidating the many processing plants that were in the Okanagan Valley, they've created a large efficient entity. It has put them over the threshold, and as a result, for eight years they will not be able to enjoy the full benefits of the HST. So we urge the committee — and it's our second recommendation — that cooperatives be exempt from that recaptured input tax credit rule.

The carbon tax, of course, has long been a source of contention with the agricultural community, in part because agriculture is a solution to the climate change situation. You've got sort of the weird thing that happens. Plants absorb carbon. Greenhouses will use natural gas to produce carbon dioxide, so the plants can absorb it to produce the product. It's not that the carbon is just simply going off into the air. It's going into the food that they produce. So first of all, our recommendation stands that food production should be exempt from the carbon tax.

If it's going to stick around, drop the revenue-neutral line, take the tax that's being generated and turn it back into the industry to help and assist with mitigation strategies and investments to accomplish what you really want to do, and that's reduce carbon in the atmosphere. At the very least, the greenhouse sector that uses natural gas to generate carbon dioxide should have an offset for that natural gas that's used for that purpose.

I need to touch on the farmland assessment process. I was glad to see John here, who chaired that committee.
[ Page 1047 ]
There were a great set of recommendations that came out of that committee. They haven't all been implemented. For this next year we would highly recommend that farm improvements be exempt at 87.5 percent of assessed value or $50,000, whichever is greater, for the 2011 assessment roll — and for the provincial government to provide impacted local governments with funding to compensate for this loss of revenue. Now I'm told — and I checked with John before this session — that the estimated cost there will be somewhere between $2 million and $4 million a year.

It was the one recommendation out of that committee, by the way, that actually would help improve and give added capacity to the agricultural industry. What that will do is encourage…. It'll be the larger, intensive operations that will enjoy the benefit of that tax, and it will allow them to reinvest those dollars into greater innovation.

Extension services. Extension personnel and industry experts play an important role in facilitating information exchange and supporting farmers in the day-to-day decision-making. Particularly at a time when agriculture is under significant financial pressure, it's important that funding remains in place for these positions.

Now, this ag plan that I referred to encouraged government to increase extension support by $500,000 per year, but it would appear from subsequent MAL budget cuts that this has never been accomplished.

The BCAC would recommend that funding for extension be given priority and would offer to work with MAL to identify key areas for the agricultural sector where this needs to happen. Recently there was a position with the Certified Organic Associations where they did have a B.C. organic extension agent position, and that has been cut. We would recommend that that be reviewed and be reimplemented.

[0915]

AgriRecovery is part of the suite of programs that's shared between the provincial and the federal ministries, but it takes the provincial ministry to trigger that program. It's meant to cover disasters. B.C. has been reluctant to enter into even investigating whether AgriRecovery would be applicable. Two examples have happened in the past couple of years. We had a drought situation — was it last year, Andy? — and a frost situation that affected the B.C. tree fruits. Now, I know some superficial work was done by the ministry in investigating whether these were applicable, but the impression that industry gets is that because there's the 60-40 cost-sharing and because it takes a provincial trigger to initiate that program, there is a great a reluctance on the part of government to pursue that program.

The way it should work, quite frankly, is similar to what happened in the prairies this past year, where there was unprecedented flooding. AgriRecovery was triggered, and it was immediate. The problem with the other programs — AgriStability, etc. — is that it takes so long for the dollars to flow back to the farm. AgriRecovery was meant to be a quick trigger.

The wild predator program. We've run two controlled pilot programs over the past number of years. It's time for these to cease to be pilot programs and to actually implement them. What's going to happen if they aren't implemented? We're going to go back to the good old days, and there will be uncontrolled killing of predators. That's not good for the ecosystem. It's not good just from a public relations perspective. We need to get off the pot and implement those programs. They've been shown to be effective, and they've been shown to work.

Health and agriculture. BCAC has long held the view that we are missing opportunities to address health concerns through more direct linkages between agriculture and food production. The school fruit and vegetable program is one initiative that has been very successful in making this connection, and it's important that we properly fund this program so that it covers all schools in the program.

A specific issue with respect to coloured fuel use in the U.S. Bona fide farmers can apply for a refund for the difference between clear and coloured fuel tax rates on fuel purchased in B.C. and used in farm trucks while travelling internationally for a farm purpose. The intent is to allow farmers to continue to receive the benefit of the coloured fuel tax rate while in the U.S., where the use of coloured fuel is strictly prohibited.

Now farmers can only claim for the fuel used on trips where the vehicle actually crossed the border, which makes for an absolutely impossible situation. You can't empty your tank of coloured fuel, fill it up with regular gas, and then come back and put coloured fuel in it. The coloured fuel remnants stay.

So what we're asking for is that the fuel tax act be amended to allow for the rebate of all fuel taxes paid on clear fuel used both in the U.S. and in B.C. in farm trucks being utilized for travel to the U.S. on farm business.

Investment in rural broadband. You know, the Internet has become such a key tool in business these days. Farmers and ranchers in hinterlands use it to access the market. That's how they auction their cattle. They don't take it to a physical auction anymore. They deal with it through the Internet.

We don't have total access to the Internet throughout B.C. BCAC is pleased with the recent announcement of the connecting citizens grant program, which will provide up to $1.5 million for expanding broadband services in unconnected locales. But we really would urge you to consider that an assessment be done to investigate what the necessary funding to be provided is, to ensure that all rural areas in the province have access to high-speed Internet services.

Interjection.
[ Page 1048 ]

G. Etsell: Okay. I appreciate that. That's why we've given you the paper.

[0920]

J. Les (Chair): Your 15 minutes are up. Thanks for coming this morning.

Our next presentation is from Geoscience B.C. Dr. 'Lyn Anglin is here. Good morning.

L. Anglin: Good morning. Thank you, Mr. Chair and all members of the committee, for the opportunity to come and speak to you again. I think this is my fifth time coming to present before the committee. In the last four years I think I presented largely on how we had spent the money. This year I'm coming to tell you again how we've spent money, what I think some of our impacts have been and how important I think it is for the province to continue to invest in geoscience, and hopefully and particularly in Geoscience B.C.

To start off, I've probably given you much more information than I'll have time to go through, particularly because there's a very topical issue that I'm going to add to the discussion in more detail than I had originally planned. I don't know how much you were following the press yesterday. There were several reports that came out about shale gas and the impact on water.

We, in fact, just coincidentally launched our new Montney water project yesterday in Fort St. John at the B.C. Energy Conference. So I'm going to talk a little bit more about that than I had planned. I'll just try and go through the slides quickly and leave some time for questions at the end.

On the first page there, just the value and the need for public geoscience. I think probably most of you have heard this before. We do this kind of public geoscience to attract investment, drive innovation, create discoveries and bring the information to the table that allows us to make good land use planning and resource development decisions. The water question around shale gas is a big, important example of that.

B.C. really is an international leader in this area, in provision of public geoscience. We've got a good reputation, and I think we're in a position to stay there and continue to show that kind of leadership.

On the next page just a couple of facts. On the mineral side, attracting exploration investment to B.C. is quite significant, because exploration generates about 1,000 person-year seasonal jobs per year, according to the Ministry of Energy, Mines and Petroleum Resources stats. About $100 million of industry's exploration money is actually spent locally, mostly in rural and remote communities, buying goods and services, but it's a significant impact on those communities. I've appended, actually, one of the ministry's maps at the end of this presentation that we could talk about if there's time.

Geoscience B.C., as I think you also know, was a very positive government response to industry advocating for more public geoscience to generate more investment in the province to make B.C. more competitive. Interestingly enough, the precursor was the Rocks to Riches program, which was just over $1 million granted to the industry association AMEBC, which actually led almost directly to the Kwanika discovery that Serengeti is still working on. About $5 million of exploration money has probably been spent on that property already. Geoscience B.C. has to date received $36.7 million of investment from the province.

On the next page just a summary of us and how we operate. Our mandate is to attract investment to the province. We operate with a very low overhead. I think we're still under 15 percent. Up until this past year all of our administrative expenses and operational costs were covered with investment that we earned on that original grant. We happened to get it when the markets were still good, and we luckily got it out of the markets before they went bad. We've actually been able to pay most of our admin expenses from that — the money that we earned on the grant.

We are industry-directed. We try to work in partnership and collaboratively. We consult with industry and with communities, with First Nations and government, and work with academia and try to get results out quickly that we know are going to have a positive impact.

In terms of what we've done in that past five years, we've completed five major projects — three of them minerals related and two oil and gas ones. When I say completed, for the Horn River basin up in the northeast, we've just completed phase 1 of that project, which we released in April of this year. That was looking at the subsurface aquifers in the basin. By subsurface, we mean deep subsurface. These are aquifers and rocks that are over a kilometre down, where the water is way too saline to be used for anything — human consumption, agriculture — and is disconnected from the surface water.

We think that these resources may be quite key to development of the shale gas, but we actually don't know very much about them. That Horn River project was based on essentially seven water wells in that whole area, which I think is 13,000 square kilometres. We only have seven wells. But what it did show was that there was very good potential for several companies to potentially use that water, if they can work out the chemistry. I will talk about that a little bit more if there's time.

[0925]

In terms of our return on investment — the next page — we did engage an economist to try to have a look at some of the impact of our minerals work. It's not an easy thing to do. Most return on investment for this type of public geoscience for mineral exploration is done with five to ten years, maybe 15 years, of hindsight, because it's a long-term investment.

We've had this economist have a look at the staking numbers, the hard numbers that we can capture on
[ Page 1049 ]
what's going on as a result of our work. His estimates are that it's been over a million hectares of new staking, which means about half a million dollars right there back into the province. That's just on four select projects that he looked at — four geophysical projects that have a start date and end date and where he could track the staking around them.

That over a million hectares is a 36 percent increase over what he estimated would have been the activity in those areas without these projects, so that's on top of what would have happened anyway. That's over $10 million of exploration expenditure, probably on the order of 15 to 45 person-years worth of seasonal employment. The project cost to Geoscience B.C. for those four projects was $10 million, plus we had some partnership funding.

The map at the bottom, which I think I've shown you before, is the staking before we launched the QUEST and QUEST West projects and the staking afterwards. The pink is the staking, the black is the outline of the geophysics, and the blue is the area where we did geochemistry. If you have more questions about those maps, I can explain them later too.

On the next page we attempted to do a bit of extrapolation beyond just those four projects. It's a very rough estimate. Again, it's hard to get hard numbers, but we think we're on the order of $13 million to $19 million worth of exploration already stimulated — in the geological time, for us in exploration, that's almost immediately — as a result of the money that we have invested.

What's really interesting is that there's been a new discovery made at an existing mine, the Huckleberry mine, where they took some of our results, identified an extension to their ore body, drilled it and in their press release said it was the longest continuous intersection they had ever hit in 47 years of exploration on the property — which is pretty nice.

They're still trying to decide whether technically they can develop it or not. It looks good. They're talking about extending the mine life. This mine was supposed to close this year, but if it extends for another two years, that's 220 jobs a year and $3 million or $4 million directly into the province.

Plus, we've heard rumours that there is some drilling going on undercover in the areas of the QUEST project north of Prince George, where there was no rock exposed at surface. The companies are in there because of the work that we've been doing, and apparently they have intersected alteration, which is the change in the rocks around a deposit. They haven't hit mineralization yet, that we know of — and these are rumours, so I can't say who it is or where it is — but the indications are very good. We're quite pleased with that and hope they have continued success.

Now the big issue — if I still have some time — is the shale gas one in northeast B.C. It's a huge potential resource for the province. I understand from what I learned at the Energy Conference yesterday that this industry has invested over $40 billion in the province in the last ten years. I also learned that one of those Horn River shale gas wells, when they're doing a completion on the well, has 300 people on site per shift, two shifts a day. That's 600 jobs involved in completing one of those wells. It's a lot of people, it's a lot of money, and it's a huge potential resource for the province.

But there is major public concern around shale gas and the impact on water. I think there is a real opportunity for the province to take what Geoscience B.C. has done with industry and the ministries and working with academia and communities. I consider our Horn River project and this new Montney one to be a small step in the right direction.

We are working in Montney just trying to collect existing public information and compile it so we can make good decisions about where the water is and what's available for use and development. I think it's an area where, considering the scale, the scope of the industry and its potential for the province, this is something that we're really going to want to look carefully at and do a lot more work on.

On the page after that there's another slide on water for shale gas. I'd just bring your attention to the fact that on that Montney project, we already have seven industry partners who are contributing directly to that. Plus the SCEK fund, which is paid into by industry and managed by the B.C. Oil and Gas Commission, is a funding partner on that project as well.

At the bottom of that page I've just listed off some of the people — community leaders, industry leaders and organizations — that have recently expressed strong support for Geoscience B.C. continuing to do what we do. On the next page is essentially what we're calling our data-for-discovery initiative. It's what we'd like to do for the next five years.

[0930]

That map that has the blue squares and the green ovals on it. I think I've shown it to this group before. Those are all the areas — the blue are minerals-related; the green are oil and gas — where we think there's a lot more work that could and should be done to help support responsible resource development in the province.

We are estimating that to do this would be about $10 million a year, and the plan we have right now is for five years. We recognize that this is not a good fiscal time for government, but we really think that a commitment of at least two or three years' worth of funding to Geoscience B.C. would allow us to move forward, particularly on the water studies in the northeast.

Our first priority on minerals — essentially, on the Highway 37 corridor — is what we're calling QUEST Northwest. That's a project where we know that the province has already made an investment or a commitment
[ Page 1050 ]
to the northwest transmission line. We think there's a tremendous opportunity to improve or enhance that return on investment by stimulating more exploration activity and mineral development in that region as well.

On the final page I'm just summarizing some of the advantages I think Geoscience B.C. brings to the province and the fact that we rapidly deliver high-priority results. We work in partnership with a number of agencies, organizations, government, academia, communities and First Nations. I think we've demonstrated our impact. We have worked successfully in collaboration with the oil and gas industry and always try to emphasize public outreach, increasing the public's understanding of the importance of the resource industries to the province.

Thank you very much. If you have any questions, I'd be happy to try to answer them.

J. Les (Chair): Thank you, 'Lyn. We have time for a question or two.

B. Ralston: Thanks very much. I'm interested in your work on the impact on water in the fracking process. You mentioned that there's an effort to identify subsurface aquifers to reduce the need for surface water. At the present time, I mean, it's a very water-intensive process. Is there any cost exacted from industry for using surface water in the drilling process?

L. Anglin: I'm not exactly sure, and I'm not even exactly sure who determines that. I think there's a combination of Oil and Gas Commission and Ministry of Environment responsibilities in actually permitting water. I think the Oil and Gas Commission issues the permits. I have no idea whether there's a price put on the use of water.

I just learned yesterday or the day before that Shell has just signed an agreement with the city of Dawson Creek to invest in a wastewater treatment facility there, and part of their deal is that they will access some of the treated water from that facility to use. They're paying for that, but I think that was a deal between the city and the company. So unfortunately, I don't know the answer to that question.

D. Donaldson (Deputy Chair): Thanks for the presentation, again. Very interesting data.

I'm wondering. Maybe it came out in the presentation, but I missed it. When does the funding that you currently have received from government run out? When would you need to know about funding in order to continue the programs that you've outlined? Is there potential for the team that you've assembled to dissipate and those kinds of things? Can you give me some timelines?

L. Anglin: Some timelines — yes, absolutely.

Well, on the oil and gas, we're just in consultation right now with the Horn River Basin Producers Group about launching the second phase of the Horn River project. We do have the resources to do about another half-million dollars' worth of work in the Horn River, and we're hoping that they will match that. So another one year there. We are running on fumes on the Montney project. We barely have, I think, the money to do what we call phase 1, and after that there will be no more in oil and gas.

On the mineral side, we have enough money to do the initial work we'd like to do in the QUEST Northwest — some initial airborne geophysics and geochemistry — but not the full-scale project that we'd like to do.

We're essentially looking at the next summer field season, and then, as of the fall, we're wrapping up and completing the projects and trying to publish everything by the next spring.

I would say that we really probably need to know by the end of this government fiscal year because then, once we're into the summer, people will start looking for other jobs. It looks like the industry is coming back, and I will lose people. I don't have a lot of staff to lose, but I don't want to lose any of them. So we're looking, really, at this as the time when we need to make that decision — whether the entity continues or whether we just wrap things up at the end of next summer.

J. Les (Chair): Okay. We're out of time, so we'll have to leave it there. Thank you for coming, 'Lyn.

L. Anglin: Thank you very much. I just added, at the back, our new Montney water release — which, incidentally, got mentioned in a news release yesterday about a report that came out of the U of T. So I'll bring your attention to that too.

[0935]

J. Les (Chair): Next we have the B.C. Food Processors Association. Nico Human is here. Good morning.

N. Human: Good morning. Thank you for the opportunity. We just have a short presentation that's being handed out. As I understand it, I have about ten minutes and five for questions. Is that correct?

J. Les (Chair): You can take the entire 15 minutes for your presentation…

N. Human: If I don't want questions.

J. Les (Chair): …but there won't be any questions. It's your call.

N. Human: Thank you for the opportunity to present on behalf of the B.C. Food Processors Association. Apologies from Dave Eto, our president. He was called away to sign contracts this morning for new business.
[ Page 1051 ]
He had to run, unfortunately, so it all ended up in my court.

To give you a brief background of the B.C. Food Processors Association, we're a young organization, non-profit. We're about four or five years old, but it's a vibrant organization that's growing very quickly.

On the first page I'm giving you some idea of the partnerships and the relationships we have. We've grown in the last year from working mostly with agriculture and our producers into more up the value chain, and we now work quite a bit with the grocery distributors, the independent grocers and others, because we see the retail opportunities as a major area of development.

Also something new this past year: we were one of the founding members of an association of food processors associations across Canada. That's the logo that I've included there — CCFP, Canadian Council of Food Processors. That's very good because it's bringing all the provinces together, and all our initiatives work very well together. We've been one of the founding members.

To give you an idea of the size of the industry, the agrifood industry is a $22 billion system in British Columbia, and it brings 280,000 people across the province jobs every year — so one in seven jobs and 16 percent of the gross domestic product. Food processing itself is $6.9 billion, with an estimated 30,700 jobs, and it's the province's largest manufacturing sector. Fish, dairy, poultry, meat and beverages are the major sectors of the food processing.

A core value of our association is to be inclusive, so we work with government and all other entities, and we always have the approach of "Let's invite everyone to the table and work together to find a solution for British Columbia."

Some of the highlights of the BCFPA activities in the past year. Something that's growing nicely is our committees. We now have a set of committees that meet regularly. We bring together people from our member companies to work on things like food safety, operations — we've established one for the meat industry — for sales and marketing, membership development and for advocacy, and we've made this available to government.

We have ex officios from government on many of these committees, because often government needs a sounding board or needs to test something — an idea — with industry, and it's a great place to take this. So we do that with a smile whenever it's needed.

One of the other things that we've made quite a bit of progress on is energy management, where we've worked with B.C. Hydro Power Smart. We're also in the process of establishing a program with Terasen to help with energy management. Our members are major energy consumers, and if we can curb their energy management, they love to do it. They save the money, and it's great for the province.

Risk management is a major other area, as well as bulk buying. With HST, we've been supportive of the government from the get-go, and we've said that publicly. But we have to always consider people that we work for, like the restaurant industry. It's one of our direct customers, and they are pretty sensitive. So we can't be on the front pages all the time, but we do support the Smart Tax Alliance on HST issues because for the majority of our members it is good news.

Branding. I think you've heard from the B.C. Agriculture Council earlier this morning as well. We work with them on the branding initiative, and we're still hoping that the Buy B.C. program will come back. One of our recommendations is that the $2 million per year that was earmarked in the agriculture plan comes back and that we do the Buy B.C. program again.

[0940]

Another major initiative is the B.C. Agri-Food Technology and Commercialization Centre. Our province is the only province in Canada that doesn't have a technology and commercialization centre. A province like Alberta has two centres, and in Ontario they've got nine of these centres. We're working very hard to get the technology centre established. We're in the process now of getting the governance structure in place. The next step would be to start with a virtual and then a concrete centre.

Some strategic planning for the B.C. food industry. We're a major driver behind the B.C. Food Safety Stakeholders Group, which includes now 25 groups. Two ministries are helping us with that one — Ministry of Agriculture and Lands, and Healthy Living and Sport. Our strategy is nearing completion.

We've also completed a training needs survey for the industry, and we're in the process of rolling out a strategy for training needs in the food-processing industry. Some of our major challenges in the food-processing industry…. We, for example, give work to lots of immigrants or new Canadians. Things like English-as-a-second-language and especially cognitive skills training are very important.

What we've found on the factory floor is that certain cultures…. If you say to them, "You have to do this, and you have to put this in there. Do you understand?" they all say yes, but all they mean is that they've heard you. You have to say that to them and they have to do it as well, in certain cultures, whereas in European cultures, normally if we say, "Do you understand what I've said?" we know what we understand. But they just say: "Yes, I've heard you."

It's little things like that…. When it's in a factory environment, safety can go out the door. Occupational safety can go out the door. Productivity can go out the door if that training isn't done properly. So that's a major strategy we're working on.

Also strategy development. The industry plan for the food-processing industry stretches until 2010, and we're in the process of developing a new strategy document for 2011 to 2016.
[ Page 1052 ]

Meat industry support, on page 3. We're now in the process of winding up the transition to provincial licensing of slaughterhouses under the MIR, the meat inspection regulation. Ending the transition means that two programs funded by the province and administered by us are coming to a close. The first is the meat industry enhancement strategy. That is the people that are out in the field assisting these abattoirs to come up to the licensing standards. The next is the meat transition assistance program, or MTAP, which supplies the funding, the 50 cents per dollars, to them.

We've set 50 new licensed fixed facilities, plus mobiles and community facilities, as an objective for adequate slaughter capacity. Over the last five years 28 facilities have acquired an A or B licence, for a current total of 42. So we're very close to what was set originally as enough for the province.

An exciting development in the past year has been the graduated licensing system. It was quite a bit in the news, and I think many of the MLAs have used that as a talking point when going back to their constituencies. This is to help people in the remote rural areas to be able to slaughter their animals in a safe manner. The so-called D and E licences came about. We're in the process of rolling that out now.

It is a very complex and very politically charged area that we work in. We're often seen as sort of the first voices there, and government comes behind us. We sometimes take the flak, and then we go off and discuss it with government, and then we come back again. So sometimes it's a challenging file, but we're making good progress. I must say that the two ministries that work with us on that file are doing a great job.

MTAP itself — that's the fund — is in its third phase. We've sent out a final call for applications to be completed by November 12, 2010. This is to flush out the last people to come with their applications. The thought process is that if you said to people, "This is the final time; the bus is leaving," we're going to get quite a flood here in November. So we're getting ready to handle that. MTAP should be wound up and all funds disbursed by the end of 2012.

[0945]

On the bottom of page 4. We are also in the process of getting ready to start the evaluation programs to evaluate the program itself and the overall intent of the meat inspection regulation — that's something that's been asked for — to see how successful this all was and what lessons we have learned.

Our request to government, on the fifth page. We appreciate the challenges and financial constraints currently faced by the province. At the same time, we believe there are a number of key areas that deserve your attention and support.

First of all, we have — I've mentioned it before — a renewal of funding for the provincial branding program to be co-led by the BCFPA and the B.C. Agriculture Council, and the number that was asked for was $2 million a year.

The second one is renewal of funding and partnership support for the B.C. Agri-Food Technology and Commercialization Centre. At this stage there is Growing Forward funding earmarked for this. As we go to the next phases, we'll have more details on how much will be needed for the establishment of the centre. We've seen that these centres across Canada are run by industry, but they do need government as a major supporter and partner in the centre.

Then the third one — support for the B.C. Food Safety Stakeholders Group strategy. That is happening out of existing budgets at this stage, but as soon as that strategy comes to the table, there'll be a specific ask to government for specific interventions as well as for the B.C. food processing training strategy.

To follow through with the current promising directions and make the meat inspection system work, we ask that the province continue support for the meat industry enhancement strategy and related projects. The MIES program costs $1 million per year. Therefore I'm asking for $2 million to $3 million to complete the transition.

In conclusion, our purpose is to help our industry achieve economic prosperity and sustainable safe production in a balanced B.C. food industry. We appreciate your active support in striving for this, and we appreciate this opportunity to make a submission.

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

B. Ralston: Just interested in following up a little bit on the Agri-Food Technology Commercialization Centre. I know this has been something that you've put forward for a number of years now.

I wasn't clear as to where it's at. You said you're working on a governance structure. Presumably this is pan-industry in different sectors. What's the total financial commitment that you're looking for, and is there any opportunity for government to participate financially in the returns that might come from successful commercialization?

N. Human: The governance structure — we've done the work. It's all in place already. We're in the process now of starting to establish the first board of directors so that they can start off and run this independently. The stakeholder groups around the table total 24 different stakeholder groups, including all of academia, all of industry, all of government and also all the facilities in the province that have something to do with food processing technology.

The first step that we've established is what's called the virtual centre, where it's a central office with a database. The database is nearing completion. It should be com-
[ Page 1053 ]
pleted by the end of this month. It will give us a database of all the facilities across the province. For example, Thompson Rivers University has got something or BCIT has got something or one of our members has got something. So that database will be completed by the end of this month, and then we'll establish a person to start staffing it.

The first portion would be virtual projects. We would say that instead of going to Alberta, to Leduc's centre, we can bring company A, company B, BCIT and Thompson Rivers University together on a project. They may have the electron microscope, but you may have the kitchen or whatever. So that portion should be in place by the end of this year.

What we then envisage, with a board in place as well, is that the first projects will be run in this virtual sense until we find a place or an entity or a group of activities that can stand on its own legs and needs a proper facility. Then we'll go off and build that facility for that specific function. So the first concrete or bricks-and-mortar project will have to pay for itself.

[0950]

At this stage government has earmarked $1 million for the next two years — $500,000 and $500,000 — to get this board and the governance structure and everything in place through the Growing Forward initiative, and we're asking for that support. We've already got some confirmation that that's forthcoming.

But the moment we go beyond that…. If, for example, the small-scale processors need a specific training course, we'll need to bring that back because the small-scale food processors cannot pay the full price of those training courses, and then we will ask for 50-cent dollars. It's a little early to say at this stage how much that ask is going to be, and we're about six months to a year away from the ask.

J. Les (Chair): Okay, Nico, thank you. We're out of time. Thank you for coming.

N. Human: Thank you very much, and good luck with your work.

J. Les (Chair): Our next presentation is from Abbotsford Community Services — Nadine Power and Rod Santiago.

Good morning. You can start whenever you're ready.

R. Santiago: In a perfect world children wouldn't be exposed to drugs in school playgrounds. Everyday people wouldn't lose their jobs, then lose their homes, then lose their dignity. Seniors wouldn't be left destitute after falling prey to swindlers who steal their life savings. Young girls and boys wouldn't be molested repeatedly by a trusted adult and be left feeling like there's no one they can turn to for escape.

But as we all know too well, we don't live in a perfect world. On the contrary, innocent people get hurt. Some lives take very painful turns, and at one point or another we'll all either need help or know someone close to us who will need help through a difficult time.

Good morning. Thank you for the opportunity to present to the select standing committee this morning. This is Nadine Power, the operations manager at Abbotsford Community Services, and I'm Rod Santiago, the executive director.

Abbotsford Community Services has been the primary local community social service provider in Abbotsford, with sites in Mission, Langley, Chilliwack and Aldergrove, for the past 41 years. We are a CARF-accredited, non-profit, multiservice agency. We were selected this year as one of Canada's top 50 greenest employers.

Our mission is to promote community well-being and social justice through positive action and leadership. ACS's diverse range of 70 programs offers support in the areas of anti-poverty and advocacy; family, youth and children; early childhood and family development; community living; addictions; sexual abuse; youth and family violence counselling; multicultural and immigrant services; community justice, legal aid and victim services; recycling; seniors; and community information and referral. The agency employs over 325 staff, operates from 15 different worksites and manages an annual budget of over $15 million a year.

ACS is committed to providing seamless services both within and outside the agency in collaboration with many community partners, who together are dedicated to creating strong communities. That is our common goal: to build a strong British Columbia where all our citizens are healthy, productive and contributing members.

Picture with me a three-legged stool — a solid, made-in-B.C., three-legged stool. The seat of the stool is a strong B.C. upon which healthy, active citizens can rest. The three legs of the stool that ensure community well-being are health, education and community social services. Each leg plays a crucial role in stabilizing the stool. We couldn't achieve a strong B.C. if we weren't investing properly in our health and education systems, and we won't create a strong B.C. without maintaining our investment in community social services.

Yet one of the legs, community social services, has historically received less attention than the other two. Funding allocated to health care and education alone cannot address all the needs of British Columbians. Without the support of community social services, more people end up in hospitals with mental health issues and/or issues related to poor nutrition, family violence or addictions. The cost of providing preventative and early intervention services to people now results in fewer dollars being spent in the future towards much more
[ Page 1054 ]
expensive alternatives, such as jails, rehab centres or hospitals.

[0955]

For example, when someone is released from the hospital, our Meals on Wheels is there to provide nutritional meals to support healing and a volunteer to look in to see if the person is okay. When a victim of domestic violence ends up in emergency and is released, there are two choices: go back to the abusive situation or leave it. Without the support of victim support workers or transition houses, many will have no choice but to go back to the abusive situations, thus ending up back in the hospital, or worse, with their children witnessing the abuse and becoming part of the vicious cycle.

In partnership with the school district, various preventative programs are provided in the schools to support educators. Examples include antiracism initiatives, gang prevention, school-based drug and alcohol prevention as well as various counselling resources to support individuals with mental health issues and disabilities.

Consider what happens to a person sitting on a three-legged stool when one of the legs is compromised. Community social services need to be recognized alongside health and education in order to create a province of healthy, productive citizens in a solid economy.

Not only do community social services play an equal part in holding up the stool; we also strengthen the province with our large influx of eager and capable volunteers. Last year alone, just at ACS, we logged 49,453 hours of volunteer service. That amounts to 27 full-time-equivalent positions. That's just in one year and with one organization. Imagine that each community social service agency in Abbotsford and across the province can tap into those kinds of resources. Together we are a very strong force. There are not many sectors that can harness those resources. Community agencies can, and they do.

Collectively, non-profit organizations in this province are a powerhouse. Not only can we mobilize volunteers like no other sector; we employ 114,000 individuals, and that doesn't include hospitals, universities and colleges. We are more than service providers. We are employers providing careers, professional development and economic benefit to our province.

I will share a story here with you.

N. Power: Before he needed the Abbotsford Community Services food bank, Ian never thought much about it. He admits that his perception of the food bank was that it existed for the down and out or the lazy, those who didn't want to get a job. He confessed that he thought it was somewhere he would never have to go because he had a good job, and if he ever lost it, there would be other jobs.

Then his world changed. He woke up one day to find blood in his urine. A diagnosis of kidney cancer was made and resulted in the removal of his right kidney, but after three months he was back to work, back at Orca Bay Sports, where he'd worked for 9½ years as a carpenter.

But his world changed again. The NHL strike lasted for months and months, and as a result, in March 2005 he was laid off.

He had three job offers in very short order, but he became sick, very sick, again. This time it was his left lung — cancer. He was told to get his affairs in order and that he had no more than two years to live. Life changed very quickly for Ian. He depleted all his financial resources because he couldn't work. Friends and family helped as much as they could. A stranger — someone he barely knew — paid his mortgage, not once but twice.

He said the kindness of people was amazing. We definitely live in a wonderful community. But feeding six people in his household — four children and him and his wife — was more than a challenge.

He was in the food bank lineup. "If it wasn't for the ACS food bank, I don't know what we would have done. They helped us with everything. The food bank really made a difference as to whether we had anything to eat or not. They provided meat, vegetables and food vouchers. It was the main source of our food."

Ian and his family accessed the food bank for four months. At that time he was able to access long-term disability, and so some of the financial pressures were relieved. He gave back, first by volunteering, because he didn't have the money to give, and then he started donating. He eventually became an Abbotsford Community Services board member. He said: "I will be forever indebted to them."

[1000]

Throughout the ordeal, both Ian and his wife agreed. "We didn't realize how lucky we are here in Abbotsford until we needed help. Someone was there. We are proud of the work of Abbotsford Community Services and all the different ways they help people in this community."

Sadly, Ian passed away in December 2008, but this is just one of many stories we could share with you about the clients of Abbotsford Community Services.

R. Santiago: Like Ian's story, community social services have undergone many funding cuts to gaming, children and family development, prevention services, to health and early childhood. Slowly and systematically the sector has been dealing with one blow after another while still doing all we can to ensure that the stool doesn't topple over.

Our sector is resilient. We receive cutbacks, and we find ways to increase fundraising revenues and to work with less in order not to reduce direct services. But like some of our clients, there's a breaking point to our resilience. We are coming perilously close to the point of not being able to withstand another funding cutback or an-
[ Page 1055 ]
other closure of an excellent service and still be required to be the community's social safety net.

As the community social service sector is eroded, what will happen to the stability of the other two legs of the stool? And what will happen to our province, which is sitting on that stool?

We sincerely appeal to the select standing committee to be a resounding voice for the vulnerable and the marginalized in our communities. Increase prevention and early intervention funding for community social services sector, prevent further cuts to children and family development, restore funding for legal aid, endorse a poverty reduction plan, and restore gaming funds to the charitable sector's pre-2009 levels.

With this support, collectively we can find creative solutions that secure appropriate and affordable housing for the homeless, increase family reunification and parenting supports, decrease gang violence, provide sustainable options for individuals with mental health and addictions issues, ensure healthy and vibrant seniors and promote healthy communities. Community social services saves money and lives and gives us the kind of British Columbia we all want to live in and leave behind for our children.

Thank you once again for this opportunity to present to you today.

J. Les (Chair): Thank you. I have a question from Jane.

J. Thornthwaite: Thank you very much for your presentation and all the work that you do. I recognize that you've got a strong volunteer base there, and they do a miraculous amount of work.

I was just at a presentation yesterday with the North Shore Community Resources, and their comments, obviously, were quite similar to yours. One of the things that came out with regards to housing and affordable housing — and yes, we do have a homeless problem in the North Shore as well — is the relationships between the different levels of government.

I was told by our minister, Rich Coleman, who's our minister of social services and housing, that to get stuff done and to get housing built — and I know there have been lots of announcements and lots of positive direction in that regard — the municipalities and the other levels of government have to work together. I'm just wondering if you could give us quick and dirty advice as to how you would ask us to assist you in doing that but also what community services such as yours could do to get all levels of government on board.

R. Santiago: I do believe that it is all about partnering. Each of us on our own just doesn't have the capacity to be able to find the solutions to the real challenges that face us. So in the example of housing, B.C. Housing and, in our case, the city of Abbotsford and then community agencies and churches and donors in the community and businesses can come together towards a solution for being able to find housing for the 300 here in Abbotsford that are currently still without a roof over their heads. The more we can do that together, the more likely we will be to be able to do it.

Then not only the actual roof over their heads, but also along with that would be ensuring that there are support services to make sure that the people themselves can be strengthened to be, on an ongoing and "for the rest of their life" basis, contributing members of society. That example with housing, then, also would apply for other places like education or addictions issues as well.

J. Les (Chair): Okay, thank you both for coming this morning. That's all the time we have.

The next presentation is from the Real Estate Board of Greater Vancouver — Harriet Permut and Sylvia Sam.

Good morning.

[1005]

S. Sam: Good morning. We brought out the wonderful weather for you.

J. Les (Chair): Well, let's not start an argument, shall we.

H. Permut: We're too close to Chilliwack. It must be Chilliwack's presence. That's what it is.

J. Les (Chair): Go ahead.

S. Sam: Thank you. Hello, I'm Sylvia Sam. I chair the Real Estate Board of Greater Vancouver's government relations committee. With me is Harriet Permut, the manager of government relations for the real estate board.

The Real Estate Board of Greater Vancouver represents about 10,000 residential and commercial realtors in the greater Vancouver area, from Pemberton to Tsawwassen, from the Gulf Islands and the Sunshine Coast to Richmond and Maple Ridge. The board runs the Multiple Listing Service, and from this data we produce industry-respected monthly, quarterly and annual statistical reports.

Today we're here to talk about the effect of taxes on families and their home-buying decisions. As realtors, we have plenty of firsthand experience. So what are we seeing? Throughout our board area realtors are seeing hopeful homebuyers who are surprised when they calculate the sum total of the taxes they will pay on top of the purchase price for their new home.

According to CMHC, this average home price is now $894,210 for the Metro Vancouver area. Property transfer tax adds $15,884. HST adds another $81,055, even after the rebate has been deducted. The total tax bill
[ Page 1056 ]
comes to $96,939. This is an additional 9.8 percent on top of the purchase price and represents 10.8 percent of the original home price.

Taxes in our region represent the highest ratio relative to the original home price compared to any other region in the province. If the homebuyer has to finance the tax bill at a 4 percent mortgage rate at 25 year amortization, it will cost them $153,000 in addition to the original mortgage of the home.

Our first recommendation concerns the property transfer tax. We're asking the government to increase the 1 percent PTT threshold to $525,000 from $200,000. In expensive markets we're asking the government to increase that threshold to $700,000. We recommend that the government annually index the threshold.

We're also asking the government to take the 2 percent tax rate that is now charged on the remainder of the sale price over the threshold amount and annually index it. The threshold hasn't been raised since the tax was introduced in 1987.

Our second recommendation concerns the HST. We're asking the government to raise the HST new housing rebate threshold to $700,000 from $525,000 in the expensive markets. Similar to PTT, we also recommend that the government index the threshold for the HST.

So how has the added HST affected the real estate market? In the two weeks following the July 1, 2010, implementation of the HST, home sales dropped 16 percent compared to the two weeks prior to July 1. Sales have continued their downward trend since then. For all of July 2010 sales were 24 percent lower than June 2010, making this one of the quietest Julys of the past decade. Since July, sales have continued to decline.

Realtors are attuned to the concerns of the homebuyers. What we're hearing is that homebuyers are hoping that the HST will be eliminated following next year's referendum, and they are prepared to wait until they know the outcome, since that tax is a huge amount.

[1010]

Homebuyers are also confused about the HST and incorrectly think that it applies to the sale of resale homes. No matter how many times we tell buyers that the HST does not apply to resale homes, buyers are still wary, and this is affecting the market. How do we know this? Well, if you refer to the bottom of page 2 on our survey submission, there is a recent Royal LePage survey that will detail the facts.

Potential home buyers who can't afford to buy are generally renting. Like most renters, they're concerned, as is their landlord, that the HST is increasing costs to maintain and repair buildings. This is because the landlords can't claim HST input tax credits for goods and services associated with the rental service. Rising costs could mean reduced maintenance and delayed repairs.

Our third recommendation concerns HST input tax credits. We're asking the government to lobby the federal government to allow input tax credits for owners of residential rental apartment buildings who cannot claim HST input tax credits for goods and services to provide the rental service.

While the HST adds between 1.5 and 3 percent to operating costs, building owners can't raise rents more than 2.3 percent, which is the maximum allowable provincial rental increase. This is a disincentive that discourages rental investment. We ask your help to convince the federal government to change the status of rental housing from exempt to zero-rated, which would allow landlords to claim input tax credits on HST paid on operating expenses.

The HST has widespread effects. Repairs for leaky condos cost more because the HST is applied to labour costs, which are a significant component of strata remediation projects. As well, there is no longer a rebate on the provincial portion of the HST for the repairs.

Our fourth recommendation concerns leaky condo repairs. We're asking the government to reinstate the provincial portion of the HST rebate or tax credit for leaky condo repairs. This would help the owners of the condos with their repair costs, protect future owners and ensure that the building envelope repairs are completed to an acceptable standard.

Property owners are also paying added costs because of the cancellation of tax exemption for energy-efficient home products. Our fifth and last recommendation concerns the HST and energy-efficient products. We're asking the government to extend the provincial portion of the HST rebate or tax credit on energy-efficient products as an incentive for the property owner to help transform their properties for a greener tomorrow. This is a cost-effective way for the government to walk the talk about reducing our carbon footprint. It could be a point-of-sale rebate or a tax credit similar to the federal home renovation tax credit.

In conclusion, we emphasize that taxes on home buying are hurting everyone associated with a transaction, from appraisers to home inspectors, from electricians to furniture sellers. But the problem is far bigger than this.

Housing is an integral part of the economy and traditionally leads economic recovery. The PTT and HST burden the homebuyers, the sellers, the investors and businesses. These taxes impede housing affordability, the stability of families which comes from home ownership and consumer confidence. This could delay the housing market recovery, hurt economic recovery and inhibit the province's ability to grow and compete.

We believe that our five recommendations will help us out of a home sales slowdown and put us back on track to generate more opportunities for home buying and resulting economic spinoffs and benefits.

Thank you for your time and attention. Questions?

J. Les (Chair): Thank you very much, Sylvia. The first question is from Norm.

[1015]
[ Page 1057 ]

N. Letnick: Thank you for your presentation. I read with interest your recommendations, and I'm very sympathetic to much of what you put in your document.

I do have a couple of questions regarding your table on the bottom of the first page indicating how much tax is too much. If we take an example — actually, right where we are — in Abbotsford $549,613 is the average purchase price. I've got two questions. First, has that price come down, since the embedded provincial sales tax that was in new-housing prices before should have worked its way through the system? In other words, is this the new lower price of homes — homebuilders having lowered their price because they don't pay the embedded provincial sales tax any more — or is this the same price as before, and therefore, the contractors are pocketing the difference?

The second question is.... If that's the case, $549,000 is pretty close to the $525,000 threshold, which means, according to the Finance Ministry, that the effect of the change from the sales tax to the harmonized sales tax should be negligible with the rebate.

You're indicating that the impact of all taxes is close to $50,000 on that line. Don't you think that maybe that's scaring off buyers as well? In other words, based on the information that we have, there should be a net difference of close to zero of taxes from the PST to the HST. In the meantime, you're accumulating the GST that was there before. You're also putting in the property transfer tax that was in there before.

So in your communication with your clients are you explaining to them that yes, it's $50,000, roughly, but that's what was in there before. Now we have the difference.

Those are the two questions.

H. Permut: Okay. Well, in terms of the table, these numbers are CMHC numbers. They're not ours; they're CMHC's. They produce a report, which I can leave a copy of for you, on new-home sales. It's third quarter, 2010, so it's brand-new.

That price is the price that they cite as the average absorbed price for new homes in Abbotsford — "absorbed" being recently sold, brand-new homes.

That's the price. How builders came up with their prices is up to them. We have no idea where the price comes from, but that's the price that they were sold for, however that happened.

N. Letnick: Okay. No, the question is: has it come down since the introduction of the HST?

H. Permut: No, I don't think so. We can absolutely check it, but the problem is it's hard to tell why it came down, I guess, in this case, if it did. We can pull the last quarter and have a look, if you like. We can do that. Would you like us to do that?

N. Letnick: No. I think you understand the implication. I don't want to take all the time away, so I'll just leave it there.

H. Permut: This is the market price, whatever that means.

The second question had to do with…. What was your second question?

N. Letnick: The second question was…. You're showing all the tax impact, but it was pretty close to what it was before.

H. Permut: Well, the provincial portion of the HST, which is new, on that home is $38,473. That's new. All the rest of it, yes, was there before. We show all the numbers. We're not trying to hide any numbers. The calculation is $38,500 in addition to what they were paying before. So, yeah, the numbers are all here.

J. Les (Chair): Okay. I think probably the final question is from Bruce.

B. Ralston: Thanks for your views on the negative impact of the HST on the housing market here.

My question is on a different topic. The Canadian Real Estate Association and the Competition Bureau recently signed an agreement to, I think, open up access to the MLS system. I asked one of your sister boards, Victoria, and they thought that that would not have much of an impact here in British Columbia.

I'm wondering if you know about the agreement and you've had a chance to calculate what the effects might be on your profession.

H. Permut: The agreement was negotiated by the Canadian Real Estate Association on behalf of everyone in the country. The cases that that agreement was based on came out of Ontario. British Columbia has never been a problem from this point of view. We were reviewed by the Competition Bureau. There was never anything found here to be complained about. There have never been any cases against the board or any of its members.

British Columbia is an open market. We have many members who follow various business models, and they're still members of our board. We do business with them the same way we do with anyone. There's no discrimination in this market. So it should be no impact in British Columbia that we can tell. People are already free to do business as they see fit.

[1020]

J. Les (Chair): Just a quick comment from me. You might want to check with the new-home builders — M.J. Whitemarsh. They have made a presentation to us, and she has tables and charts herself that indicate that the
[ Page 1058 ]
price of housing has hardly moved at all in either direction as a result of the implementation of the HST. It might be an idea for you folks to sit down together and kind of sort these issues out.

Anyway, we're out of time. We always appreciate your presentation. Thank you for coming this morning.

The next presentation is from the University of the Fraser Valley Faculty and Staff Association. I believe we have here Rhonda Snow and Vlad Dvoracek, along with the ubiquitous Phillip Legg.

V. Dvoracek: Good morning, and welcome to Abbotsford. My name is Vladimir Dvoracek, and I'm here representing the faculty and staff who work and teach at the University of the Fraser Valley. Joining me this morning is Rhonda Snow, president of our association. As well, we have Phillip Legg, a staff representative from our provincial organization, the Federation of Post-Secondary Educators.

In the time we have with you this morning, I would like to talk a bit about our institution, the important role it plays in the economic and social life of the Fraser Valley, and then conclude with some comments about how your recommendations and report to the Minister of Finance could strengthen the good work we are doing at UFV.

In 2008 our institution was changed from a university college to a special purpose teaching university. Although we welcomed the change, it was a puzzling exercise because it had no impact on the funding levels that our institution received from the provincial government. I will elaborate on this point later, but the change to university status is not without some costs. Unfortunately, however, those institutions that were made special purpose teaching universities had to absorb these costs.

Our institution enrols over 14,000 students per year. We operate three campuses — one here in Abbotsford, a second in Chilliwack and a third in Mission. We also have two regional centres, one in Hope and the other in Agassiz. We're in the process of developing a new campus in the Canada Education Park that is situated along the Vedder River in Chilliwack. These campuses and regional centres are all part of the education infrastructure that our institution uses to fulfil our commitment to provide post-secondary opportunities to students in this region.

We offer 15 bachelor's degrees, one master's degree and more than 80 certificate and diploma programs in applied and academic areas. We also provide a broad range of trades training and apprenticeship programs at our three campuses. In the 2010 Globe and Mail university report, UFV was ranked by students as providing the best public university teaching in British Columbia.

In addition to the typical work that universities undertake, there are a number of specific initiatives within our institution that are worth mentioning as well, because they speak to the unique academic and outreach work we do at UFV.

For example, the Centre for Indo-Canadian Studies brings together faculty from UFV and Indo-Canadian community members, as well as groups from all sectors of the community, including international visitors, students and scholars from India and South Asia. The centre supports the development of linkages that lead to diverse experiences for students, faculty and community. The centre also initiates and supports India-Canada studies, programs and activities that promote the study of and engagement with the subcontinent and the Indo-Canadian diaspora.

UFV also has an aboriginal studies program that has built a unique partnership with the Stó:lô Nation. This program has built strong connections between our institution and the First Nation communities here in the Fraser Valley — a connection that has benefited our university, our students and the broader community as well.

We continue to provide a broad range of adult basic education programs to ensure that adult learners have an opportunity to access and upgrade their skills, whether that takes the form of completing their grade 12 or simply providing them with the necessary prerequisites to advance their career or to move to a different one.

UFV has developed a strong reputation in criminology. Our faculty members in this discipline have not only done nationally and internationally recognized research; they've also provided sound public policy advice to governments on what is generally seen as a complex and important area for governments at all levels.

[1025]

This September UFV, like many other post-secondary institutions around the province, saw a significant increase in student enrolments. That's a great piece of news. It confirms that students are doing what we want them to do. They are taking on the challenge of post-secondary education — a challenge that will be beneficial to them and to society at large.

The research evidence on these benefits is well documented. The Canadian Council on Learning has collected much of that research, and the conclusions all show strong economic and social benefits for the individual in terms of higher lifetime incomes and greater mobility. For governments who fund post-secondary education, the benefits are that higher lifetime incomes mean greater revenues to the treasury.

While the good news this September was that our enrolments were well above our estimates, they were also well above our institution's capacity. We were told by senior administration in September that they were simply unable to take in the increased number of students. As one administrator noted, we simply have to close the door. That is a troubling comment to make in what is generally considered a prosperous province.
[ Page 1059 ]

We should have the capacity to take on these students. The increase in their numbers amounted to about 12 percent more than what we were expecting. However, the fact that we couldn't accommodate the increase speaks to some of the funding challenges that post-secondary education faces across the province.

Per-student operating grants from the provincial government, adjusted for the effects of inflation, have fallen by 8 percent since 2001. How that change in real per-student funding plays out will vary from institution to institution and department to department, but there are some common threads through it all. The most glaring impact has been on the affordability of post-secondary education.

Current inflation-adjusted tuition fees are at record highs. While this has resulted in increased revenue for post-secondary institutions, it has done so on the shoulders of students who carry more debt and have less access. The funding crunch has also meant that student support services have been scaled back dramatically. The problem with doing this, of course, is that students have a much harder time sorting through the courses they might need to graduate or the various career options they should consider.

The do-more-with-less problem also means wait-lists for students who want access to the courses they need or have an interest in completing. That translates into students taking longer to graduate and, unfortunately, taking on more debt as they work their way to graduation.

Relative to other post-secondary institutions, UFV has benefited from some of the capital expansion that has taken place across the public system. The work currently underway at the Canada Education Park would be evidence of some of that capital expansion. However, two things need to be noted.

First, as our enrolment experience this September is proving, our capacity is lagging our enrolment demands. This part of the Fraser Valley is growing at a rapid rate. The opportunity to provide better access to post-secondary education is being lost the more capacity lags the demands in this region.

Second, affordability. Capital expansion and operating grants need to move in unison. When they don't, we have problems. Either the institution is forced to do more with less, or the students are forced to shoulder more of the costs of their education. We think that students already shoulder a lot more than has ever been the case for previous generations. We think it's time for the province to have a more concerted strategy of investing in post-secondary education.

Before I summarize some of the priorities we'd like to see in the 2011 provincial budget, I just want to touch on the issue of our new university status. I mentioned at the outset that the change was made without any changes to our current funding formula. That was perplexing because there were a number of upfront costs associated with becoming a new university. Those costs had to be absorbed by the institution.

Just as perplexing was the fact that the new special purpose teaching universities were excluded from accessing provincial research funding. That creates problems for many of the new universities, because part of the institution's strategy for attracting and retaining faculty is the opportunity for faculty to engage in scholarly activity and research. An active research environment also provides a tremendous benefit to our students, some of whom have gone on to graduate school, law school and medical school. This is an issue on which our provincial organization continues to lobby the Minister of Advanced Education.

[1030]

In conclusion, our association wants to see the February 2011 provincial budget mark a turning point in B.C.'s commitment to post-secondary education. We want to see a three-year plan that would clearly demonstrate that commitment by putting real per-student operating grants back to the level they were in 2001.

We also think it's time to revamp the funding formula for post-secondary institutions. There are problems with that formula, and if there's a three-year commitment to increase per-student operating grants, it makes sense, in our view, to twin that initiative with a thorough review of the funding formula.

We have mentioned affordability as a barrier for many students. The 2011 budget should have some commitment to address that problem as well. Part of that could be accomplished by strengthening the current system of student financial aid.

In closing, I would like to thank the committee for scheduling a public hearing in Abbotsford, and we would be prepared to take any questions you might have.

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

The first question is from Norm.

N. Letnick: Thank you very much for your presentation. In the presentation you mention that it's your belief that it's taking longer for students to graduate with their degrees than before. Based on my conversations with people, part of the big impetus for the reinvestment into capital over the last few years, including you changing yourself, was to allow students to graduate faster than what happened ten years ago.

If you have any data provincewide that could support your claim that it's taking longer, I think the committee would really like — at least, I'm sure I would — to see that, if you could submit that. Unfortunately, today is the deadline, by midnight tonight. So if you have it, great. If not, just send it to me.

The question has to do with the claim that the formula has to be tweaked. If there's anything that you can articulate now as to what you think isn't working with the
[ Page 1060 ]
formula so we can put that on the record, that would be appreciated as well.

P. Legg: Can I just answer? On the question of the formula, at a minimum, we need to see a CPI figure that is tied to operating grants that reflects real costs of inflation within post-secondary. There is an actual index. So that would be a useful place to start.

We have a very good transfer system in B.C., a system that allows students to move between institutions and have the programs that they've taken at one institution recognized by another. That institution, BCCAT, also provides some tracking of students in terms of outcomes. That's the source of provincial data on the time it's taking students to complete undergraduate degrees, as a good example.

So right now we're currently looking at about 5½ to six years to complete what is essentially a four-year degree program.

D. McRae: Thank you very much for your presentation. One of the things we see is that in the last ten years the high school enrolment numbers or the elementary and secondary numbers are declining, in some places, in many districts, rather rapidly. Yet in the last ten years we've seen a substantial increase in the number of government-funded seats into post-secondary.

Have organizations like yourselves taken into account that there will be less students graduating from basically high school in the next couple of years because of these declining enrolments and adjusted accordingly? We've added seats, and yet there are fewer students coming. Now, I know older students do go back. But is there a concern that perhaps by overfunding seats, there would be basically a misappropriation of resources when the people might not be there to take the courses?

P. Legg: Well, two things. One — and Vlad spoke to it — is the issue of capital. It's one thing to build a seat; it's another thing to operate a seat. So the stats on per-student operating grants are the ones…. That's really the test. When senior administration at the University of the Fraser Valley say, "We're simply going to have to close our doors in September because we can't take any more students," it's more a function that reflects the operating grant crunch more than the capital side.

So this is the fine balance, coming back to this whole issue of reviewing the funding formula, looking for ways to make sure that the funding that we're providing are real dollars, not depleted dollars that show the effect of inflation.

[1035]

Then on the flip side of that coin, you have to look at the challenges facing students, because you're really trying to balance the system in two ways: make sure that the actual infrastructure and operating capacity is there and that you're reducing the barriers students face — certainly, around affordability.

There is a variety…. This committee has heard from the Canadian Federation of Students. They put together a very good brief — some modest proposals. I mean, $27 million would be an amount of money in the 2011 budget that could address some of the interest burden that students face. It's a modest amount of money in a $40 billion budget, but it would start to chip away at some of the affordability barriers that students face.

J. Les (Chair): Okay. With that, we're out of time. Thank you for coming. You can't come again, Phil, because this is the last day.

P. Legg: I could hang around.

J. Les (Chair): Yeah, sure.

The next presentation is from Abbotsford Hospice — Marion Keys and Debbie Lehmann.

M. Keys: Good morning. It seems to me that we should have this outside, because it's way too nice out there.

J. Les (Chair): This is the Fraser Valley after all.

M. Keys: That's right. At least there's a window in the room.

I'm glad I can see my name. It's in big print. We need to be reminded this morning of what our names are. We're sleep-deprived, but that's another story.

D. Lehmann: Ready?

J. Les (Chair): Whenever you are.

D. Lehmann: Good morning, and thank you for coming to Abbotsford. I truly appreciate the opportunity to speak to all of you today.

My name is Deborah Lehmann, and I'm the executive director of the Abbotsford Hospice Society. I've been in that role for the last four years.

In our opinion, health care service, funding and delivery remain high on the public and political agenda. With health care expenditures forming over 40 percent of the annual provincial budget, we recognize the fiscal challenges facing the government and that the Ministry of Finance has some truly difficult decisions to make.

We understand that the struggle continues as to how to spend health care dollars and that there are many competing priorities to consider while in your planning process. I imagine it's quite the planning process. Our submission today reinforces the concept that hospice care is a cost-effective way to ensure that public funding is spent effectively.

Through strong governance and responsible, passionate stewardship, AHS provides a solid framework in
[ Page 1061 ]
which our non-profit charitable organization operates. In 2009 thousands of people in Abbotsford directly and indirectly benefited from our services. Some of those services include public education events, awareness initiatives, community outreach sessions and special training sessions for our volunteers and community.

We've operated in this community for the last 24 years, and we've provided a range of services to this community and its people at no cost. In addition to helping those who are dying, our programs comfort children, teens and families who are experiencing grief and loss in a very personal way, because each situation is different.

Our services, offered by specially trained volunteers and our team members, look like: companioning; group support; family counselling; expressive therapies for kids; music and play for bereaved children; and something called equine-facilitated counselling for kids, which involves horses and being in nature. Additionally, we offer a comprehensive lending library designed to support patients and families, because some people don't necessarily want to come in and speak. They actually want to come in and spend some time on their own and read and reflect.

However, here's the problem: we do not have an adult residential hospice in this community. We're here today to substantiate the case for such a facility, as it's commensurate with the stated objectives of the government of B.C. since 2002. We quote from the discussion paper called Strategy for End-of-Life Care, produced by the B.C. Ministry of Health Services in 2002.

"All British Columbians have at least one thing in common. Every one of us, one day, will die. And when we do, our hope is that we will have a pain-free and peaceful death. For British Columbians who are dying today and their families, this hope for comfort is immediate, and their need for compassionate, competent, respectful care at the end of life is urgent."

[1040]

M. Keys: Now we're going to switch to me. My name is Marion Keys, and I'm the capital campaign manager for the Abbotsford Hospice Society. The AHS framework supports high-quality end-of-life services, considered by the Ministry of Health to be a critical part of B.C.'s health care framework.

The ministry, on its current website, states that in 2010: "Nearly 56 per cent of people who die in B.C. spend their final hours in a hospital, despite the fact that nearly 90 percent of Canadians report they would like to stay at home during their remaining time." The ministry goes on to say that with good planning and appropriate services, the province believes that many more people would be able to spend this time with the support of family and friends in the comfort of their own homes or specially designed hospices.

We need this adult residential hospice in Abbotsford, as well as in the growing communities throughout British Columbia. It should be noted that there are adult residential hospices in Surrey, Langley, Chilliwack, Maple Ridge and Mission. Access to a residential hospice in all communities in the Fraser Valley will not be complete until the growing city of Abbotsford, with a population of close to 140,000 people, has such a facility.

This concept has been further reinforced in the Ministry of Health document entitled A Provincial Framework for End-of-Life Care, a document produced by the B.C. Ministry of Health in May 2006. To borrow from this 2006 report: "End-of-life care is continually evolving, and as British Columbia's population grows and ages, government recognizes that this area is an expanding priority."

The report goes on to say: "Today's acute care hospitals provide increasingly sophisticated and expensive services. Not everyone needs this intensive level of care, and many could be cared for in other settings."

Clearly, adult hospice services are a cost-effective alternative to meeting this growing need in our aging society. A report released by the Senate of Canada in June 2010, entitled Raising the Bar: A Roadmap for the Future of Palliative Care in Canada was presented by the Hon. Sharon Carstairs, PC. The Senate report set out "a vision for palliative care in Canada in the future with realistic and attainable goals."

The report stresses that "to realize a society where all Canadians have access to quality palliative care services, we need five things: a culture of care, sufficient capacity, support for caregivers, integrated services and leadership." AHS provides all five.

Now into what we call the AHS action plan. The citizens of Abbotsford feel the absence of a hospice residence on a very personal level. As an example, the number of Abbotsford palliative adults 19 and over who died in a four-month period in 2009 was 67. As so poignantly put by Wendy Neufeld, Abbotsford resident and owner-operator of Co-operators insurance:

"In 2008 my mother was terminally ill. It was my mother's wish that she be taken to a hospice for her final days, in part to alleviate the suffering that my father was enduring as the caregiver at home. At that point for my family, any distance was too far. But to respect her wishes, we were able to find space at the hospice residence in Maple Ridge. Indeed, while there, she did rally at the hospice for her final days. But the night she died, we received that call and almost didn't make it to Maple Ridge in time.

"I can't say enough about the quality care that she received in the hospice in Maple Ridge, but this should have taken place in Abbotsford."

D. Lehmann: Along with the needs in our community, an unparalleled opportunity arose in 2009. Canuck Place — I'm sure you've all heard of Canuck Place, a Vancouver-based hospice for children — was seeking to expand a second facility. Additionally, Matthew's House, operated by Communitas Supportive Care Society, was planning for a residence that provided long-term respite care for children and adolescents who live with chronic disabilities.
[ Page 1062 ]

Leaders from AHS — including me — Canuck Place and Matthew's House connected and entered into discussions about how best to cost-effectively serve their respective clients and the community, to share resources and to set a standard in hospice and respite care. As a result of many discussions with community leaders and visionaries, a partnership was formed between the three organizations.

[1045]

Now, interesting enough, recognizing the critical need and the incredible resources that would become available from a provincial children's hospice, a local adult hospice and a local children's respite facility, the city of Abbotsford stepped up. They offered a lease, for 99 years at a nominal fee, for approximately two acres of prime real estate to the partners, located on the west side of the Abbotsford Regional Hospital and Cancer Centre.

This partnership is called, today, the campus of care, Abbotsford. It's valuable in a number of ways. In the longer term these partner facilities will create specialized research initiatives in the area of hospice, palliative and respite care for adults, children and families.

Now, Canuck Place serves children up to the age of 19. AHS will serve those 19 and over. This will allow Abbotsford-area patients to smoothly and cost-effectively be transitioned to our adult facility, which will be located on the same property. We believe — we've done some research — that does not exist anywhere else in North America.

The campus of care partnership is an outstanding example of how organizations can work together in an effective and cost-conscious way for the betterment of the community as a whole. This enhances the role of hospice as it plays a complementary role in the emerging critical public policy issue of end-of-life care.

It's also an important infrastructure project in Abbotsford that will provide ample employment opportunities during all of the construction — and there'll be three buildings — and long-term, highly skilled job opportunities in the administration and delivery of health care services provided at each individual facility.

Of course, our board of directors plays a very important role. They're extremely committed to AHS and are actively engaged in the process of persuading others — I was going to say "pursuing" others but changed it to persuading others — to invest time, money and other resources in this capital project.

With our broad-based community support and the dedicated efforts of the executive director, a capital campaign team was formed, and the campaign to raise the necessary building funds began in the spring of this year.

M. Keys: The challenge is great. AHS needs to raise $7.5 million over three years to complete the project. The support from the outset of this important project has been significant. I do have listed here several supporting notes. As I'm mindful of the Chair's capacity to look at his watch, I'll simply touch on a couple of them.

The first one has already been iterated, and that was that the mayor, council and city manager in Abbotsford rose to the occasion, and approximately two acres of prime real estate located by the Abbotsford Regional Hospital and Cancer Centre was offered to the three organizations.

Another key piece is that Abbotsford Hospice Society itself has managed its resources well and, in 2003, had reduced, in part, its mortgage of $400,000. It was supported by the Abbotsford Rotary Club, which saw that mortgage retired, so that Abbotsford Hospice now has considerable property assets, in the range of $1.3 million, to contribute towards the project. Of course, we need more than that.

Almost immediately Prospera Credit Unit stepped forward and pledged $50,000. We also have an interesting piece of support from TELUS. They have a marketing program whereby they donate $100 to a local area, in this case the Abbotsford Hospice Society, for their new optic TV customer program, at a value of $100 per newly signed customer. To date this campaign has raised over $80,000, with a target of $225,000 by August 2011.

In conclusion, as we pursue securing the needed funds for this project, we emphasize that a portion of this funding could and should be provincially based in an appropriate manner that is commensurate with the clearly stated objectives by the government of British Columbia to support all required services that surround the public policy issue of end-of-life care.

We look forward to more detailed discussions, on a moving-forward basis, as to how this might occur.

This presentation is a brief overview of our society, our commitment to the people of British Columbia and how the project is a critical part of health care planning.

[1050]

J. Les (Chair): Thank you.

M. Keys: Sorry, just a couple of things.

D. Lehmann: We're so close.

M. Keys: Yeah, we're almost there, John.

In addition to the copies of this written submission, we will have available for you — after this meeting, not today — our recently completed statement of case. We would also like to make the observation that we do have a concern over the HST referendum in the fall of 2011. We would find, I think, that a vote against the HST could impact available resources on a moving forward basis, and we just wanted to note that.

D. Lehmann: Over the coming months you will make critical decisions affecting British Columbians, and I and
[ Page 1063 ]
our organization would like to serve as a resource to government, the people of Abbotsford and beyond as we take our place in this campus-of-care project.

We're very excited as we take our place in this campus-of-care project that will serve the community and beyond, which includes the province of B.C.

Thank you again for your time and for your commitment to the people of B.C.

M. Keys: We now welcome any questions.

J. Les (Chair): There won't be any of those, because you're flat out of time. But we do very much appreciate the work you are doing and being here this morning.

Our next presentation is from the B.C. Arts Council — Dr. Stan Hamilton, Karen Young and Jackson Davies.

S. Hamilton: My name is Stan Hamilton, as you can see, and I am the interim chair of the B.C. Arts Council and have been so for about 2½ months. I thought I'd better bring some learned support. You I'm sure are aware of Jackson Davies, actor and arts entrepreneur, who is a member of our board, and Karen Young, who is the arts manager and a member of our board. So I think we've got some representation from all sides.

I want to begin by expressing appreciation to your committee, Mr. Chair and members of the committee, for this opportunity to be here. This is the second time that the Arts Council has made a presentation to the standing committee.

It may perhaps seem somewhat unusual that an agency of the government would be here making a presentation, but one of the things we try to do as an Arts Council is be visible to our stakeholders, and part of that visibility is them knowing that we are here to speak with you today. We do so with the support of our minister to be here. So thank you for that.

Just a little rehash. You are probably aware that the Arts Council is an independent agency of the province of British Columbia, and our mandate is to deliver, throughout the province, arts and culture funding based on the allocation that we get from our government each and every year. That includes not only the distribution of the funds but also includes undertaking research, advocacy and public education. Those are three areas that I'll tell you a little later on we have not been servicing as well as we should, and that has fit into our new strategic plan.

We will have 15 appointed members. We currently have 12. We have three appointments "in the works," and we hope to have a full complement working on your behalf at the end of the month.

We state here in our mission statement — because that's kind of what guides us all the way through this — to engage all British Columbians in a healthy arts and cultural community that is recognized for excellence.

[1055]

So we have two kinds of standards that we want to impose here. One, we want to be all-encompassing. This is for the province. Second, we want to focus on excellence. Whether it's a youth program or a professional program, a theatre or a symphony, excellence is the criterion.

We have a breadth of programs. This past year, where we have the full, complete data, we received 2,030 applications from individuals and organizations around the province. These were adjudicated by a large team, and we made 1,036 grants which cover 228 communities in British Columbia. So that gives you a sense that we are there serving the needs in a broad-based sense. In addition, we work with the schools in our arts-in-education program, and we fund a series of community concerts.

I think this puts us in a unique position of touching a breadth of communities that many, if not most, other agencies of the government would not be able to reach.

We know that you recognize the importance of arts and culture. I don't want to dwell on this too much, but I think there are a couple of points I would like to make, if you follow along in the notes.

"Working Artists in British Columbia." It's a very strange definition, so I'll gloss over that. It's 26,500, or 1 percent, of the workforce working at an average income that's about 52 percent of the average for workers in British Columbia. I think what that does is clearly indicate that we have a larger proportion of the workforce in arts than any other province in Canada, a significantly higher proportion. That indicates to me that this is an attractive place to work in the arts community in Canada.

We think we're a vital part of the creative economy. We don't know how the creative economy would work if we didn't have, within our own community, opportunities for the next generation — opportunities to build the talent pool that we have today. We believe that we make very significant direct and indirect benefits.

I will leave the rest to you, except to note one point, and that is cultural tourism. I know the province is trying to make cultural tourism one of the key activities, and I applaud them for doing so. We have a beautiful province. British Columbia is absolutely beautiful. But we think we can make it a more beautiful place for tourism if we can augment it with very meaningful arts and cultural activities not just in major urban centres but in all the smaller communities, and that will indeed be one of the initiatives of our budget this year.

We made some investments. You have made some significant investments over the years, and I'll look at the tables here momentarily. In addition to what's shown in the tables, you've established the BC150 cultural fund, the 2010 sports and arts legacy fund. We have gaming money that has gone into this corner of our economy in society. We know, we appreciate and we recognize these contributions, but as you'll see, the last two or three years have had some hiccups. We want to focus on those hiccups.
[ Page 1064 ]

What I'd like you to do is turn to chart 1, and I'll very quickly give you the Reader's Digest version on this. Chart 1 is basically the B.C. Arts Council's budget available for grants, so it excludes the administrative costs of running the council and the administrative costs associated with the board. This is as close as we could come to what we think would appear on the financial statements.

I'll draw to your attention two little anomalies that we'll need to speak to. You'll note a very significant increase in 2008-2009. We received in that year — mid-March of 2009 — a supplementary budget of $7 million, and it was made clear that that was for the 2008-2009 year. You'll see that I've given you two 2010 numbers there. We began the year 2010-2011 with a budget of just over $9 million, and then approximately eight weeks ago we had a further $7 million brought into our budget from the 2010 sports and arts legacy fund.

All of this leads me to a couple of observations in terms of creating a better picture. I've gone to chart 2. What we have done in chart 2 is say: "Look, the $7 million in 2008-2009 really came at the end of the year. From the artists' point of view, it was money available for the following year."

[1100]

So I simply moved it over to the following year to give a more realistic picture of where the money was actually at work on your behalf and on behalf of the people of British Columbia, and I've only shown the now current 2010-2011 budget. We did this per capita. It looks the same as chart 2 because over this period of time our population has been looking at relatively steady growth.

A couple of issues have come up with the way these budgets have been handled. The first is related to the confusion surrounding the $7 million back in '08-09. We spoke about this with your committee last year — that there was a great deal of confusion amongst our clients.

We hinted at them — in fact we told them very clearly — that any money we gave them in late March would be considered when we made the awards the following year. But for many of them the signal was not quite strong enough. So we had a lot of clients that were unhappy when they got their budget the following year, where we basically deducted a large portion, if not all, of what we gave them at the end of March. That was a messaging problem, and hopefully that's done.

The second issue that has come up in recent years is…. In 2009-10 we in fact got all of our money, except for the BC150, from gaming. This created, I think, two issues. One, somewhat minor, is that our clientele was not accustomed to the paperwork that's associated with gaming. They're much more comfortable with the paperwork they're familiar with through council. That was an irritant, but they much appreciated the money.

There was a more important signalling that occurred, and that is that our clientele had become accustomed to having a grant that was an appropriated grant. They hung their hat on that as having some symbolic meaning. They felt that getting an appropriation, as opposed to money from gaming, somehow suggested that arts were more of a core activity in the overall budgeting scheme. Now, one can call it optics or otherwise, but it clearly had an impact on our client base.

We asked last year that we return to an appropriation, and indeed that was done this year, except for the money from the 2010 fund. But our clients believe money from BC150 and from the 2010 legacy fund is really money that was earmarked for arts, and they treat that as if it were an appropriation to this sector of the economy.

There's a third issue, and that is the uncertainty. That's what haunts us this year. We started the year with a budget of $9.1 million. We immediately go into a process of peer review, and we do over half of our major operating clients in May-June, which means we send them their letters at the end of June.

We had a set of our major operating clients that got a letter sometime in June saying, "Your budget for this year is approximately one-half of what it was last year" — on average, because $9.1 million was roughly half of what we had the previous year. You could say, "Well, they should have anticipated this," and yes, they should have. But it's very different to get the piece of paper in the mail that says: "Here's a cheque for roughly half of what you had last year." Because of some other policies that were uniquely board policies, some of our clients got a letter saying: "You get nothing this year, because we felt we had to redistribute because we have a very limited budget."

So here we were in June with a group of very grouchy, unhappy and angry clients, and at about that time we were announcing that we just received $7 million of additional funding. You know, that should have been an occasion for happiness and joy. In normal circumstances it would be. But if you start the day mad and angry and frustrated, you've got to overcome that hump before you can start going on the positive side of the emotion level. That was a problem we had to face.

That will not affect the fall people, because they will only see one budget. They will only see one letter because we now know what we have. So there's some communication here, and that is very serious.

There are a couple of unintended consequences. One I just mentioned is the anger associated with the cut and then bringing it back, not to mention the fact that we had to bring the peer panel back together and have them go through the process again, which we just completed this morning.

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There's a second, and what we felt might have been a damaging, implication of what was going on. With the cuts in the budget that we faced in April — roughly a 50 percent cut — tempers were short in the industry. They were getting angry. Our client base was getting angry.
[ Page 1065 ]
We were frustrated. We're not supposed to get angry as a council. We just get frustrated. The dialogue was getting fairly ugly, as you probably will recall.

We then had the resignation of our chair, Jane Danzo. That was a public resignation, and that further stimulated some concerns that maybe the B.C. Arts Council is not operating at arm's length from government in terms of making grants across programs and across clients. This was a hill we had to push up. I think we've done so successfully, but it does alert us that there will be some unintended consequences.

I mentioned the direct grants, but I will leave that very briefly.

In terms of recommendations, you will note that we are not going to recommend a specific amount of money this year. We think, as a Crown agency, we should do the courtesy of raising that with the minister before we raise it in the public domain. There are four areas where we'd like to ask for the support and assistance of this committee.

(1) We'd like to ensure that the funding for council is seen to be consistent with the traditional notion of an appropriation. That includes BC150 and the 2010.

(2) We would like your assistance in encouraging and promoting the development of a long-term shared vision for arts and culture in British Columbia. I don't think we have a vision at the government level that is widely shared and widely circulated. We think that would be a very important statement from the government.

J. Les (Chair): What I will do, Dr. Hamilton, is have the committee read the rest of the submission, because we are flat out of time.

S. Hamilton: Flat out of time? I apologize for going slowly. You should never fail to get to the punchline. But I know you'll read it with care.

J. Les (Chair): We will. I apologize for having to stay on track like this, but I just don't have any options. Thank you.

The next presentation is from the Business Council of B.C. — Ken Peacock.

K. Peacock: Thank you for the opportunity to appear here this morning. I'll try to stick within the time limits, of course.

In keeping with what we usually do at the business council, the first part of my presentation and our submission talks about the economic climate and the environment and some of the changes that we're going through. The second part will get into some thoughts on budget and some of the priorities that we see, going ahead.

A year into the recovery from the great recession, I'd say we're well into that recovery process, but the growth prospects have dimmed somewhat in recent months. We've seen a significant downshifting in forecasts and projections, mostly for the industrialized world, and that spills over into North America, the U.S. as well as Canada.

The U.S. economy is now expected to grow just over 2 percent. That's a relatively tepid pace of growth for the U.S., particularly considering that we're coming out of a very severe downturn. Usually you experience rather robust growth for a number of years when you come out of a downturn or a recession, particularly a large one.

The main reason that we're experiencing slower growth is the hangover from the financial crisis — the whole process of de-leveraging and households rebuilding their balance sheets, and companies rebuilding their balance sheets and bank credit being not as available as it might have been without the financial crisis. This, of course, affects B.C.

There is also, around the globe, a shift in what is driving the global economy and the global economic expansion. That is, we're seeing the emerging markets — everybody knows the China story well, but it's also India, as well as other emerging markets — growing very, very rapidly and, in fact, being the main growth drivers of the global economy in general. That is good news for British Columbia because of our position on the Asia-Pacific here and as an Asia-Pacific gateway.

We've got weakness in the U.S., but that is in large part being offset by strength in China. But it's important to remember that the U.S. is still our single largest trading partner. Yes, they've diminished in importance over the past few years but still account for 50 percent of all our exports. We expect to see a slow housing market in the U.S., which is going to continue to weigh on lumber exporters.

[1110]

Turning to the domestic side of the economy, it's relatively healthy. We saw housing sales rebound rather strongly. I for one was surprised at the strength in housing sales and even some of the strengthening in price over the last year. That has since softened as interest rates have edged up a little bit and some of that pent-up demand that was in the housing market was used up. Consumer spending has recovered. We've seen a little bit of pullback in that area as well, but for the most part it has recovered.

There are some concerns about the job market in B.C. We have relatively strong job growth in the province, but if you split that into public sector and private sector, what you find is that most of the jobs so far have been driven by the public sector. There's a little bit of weakness and overhang from the downturn in the private sector. The last couple of months the employment picture in the private sector has been better, but still there's a ways to go to get back to where we were at the start of the recession.
[ Page 1066 ]

For a number, for forecasts for the province this year, the business council projects 2.5 percent growth in 2011. That's looking ahead. We had a stronger growth this year, over 3 percent, but 2½ percent next year. We're a little bit more optimistic than some other forecasters. I've seen some forecasts out there for 2 or 2.2 percent, so we're a little bit on the optimistic side. Still, that is a modest rate of expansion. As I said previously, coming out of a downturn, you hope for much stronger growth.

Turning to the fiscal plan, as we've noted in previous submissions, we believe the government deserves solid marks for its fiscal management. We were very well positioned, going into the downturn, to weather the storm. That's because we had relatively low debt loads. We were in a position of a balanced budget prior to the downturn.

Unfortunately, with the onset of the great recession, the province — as with the rest of Canada and the U.S. as well, and many other advanced countries — was pushed back into a deficit position. That was unfortunate, but we do note that B.C. is still in the fortunate position of having the third-lowest debt-to-GDP ratio, so we're in good shape in terms of our debt load and our capacity to carry that debt load. We believe that over the medium and long term, fiscal policy should aim at restoring a balanced budget, at continuing to lower the debt and at preventing any sort of sustained increase in the debt-to-GDP ratio over time.

For our budget submission we do not propose any major revenue or expenditure items this year. Instead, we want to focus on deficit elimination and sort of stay the course, if you will. Having said that, we do believe that the government may wish to boost capital spending, if it turns out that the economy slows more than anticipated.

There are some significant risks out there, particularly on the U.S. side, and if economic expansion falters and stumbles and slows dramatically more than anticipated, we believe there is scope to increase capital spending. That would provide some elements of stimulus for the province. In addition to that, if there are infrastructure projects and whatnot, it does feed into improving our competitive position and helping the province to improve productivity and growth over time.

In the medium term, we'd draw out a number of themes that emerged in our 2020 project. For those who aren't familiar with it, that was a major undertaking that we did at the business council, kind of looking ahead a decade to what is in store for B.C. and what we might do to best position ourselves to succeed in the coming decade. There were 29 papers involved in the exercise, and three themes that emerged from that were competitiveness, human capital, and fostering a more innovative and productive economy. We believe those are kind of the three elements that are going to be very important for us to succeed in the future.

We note that B.C., along with other jurisdictions, is continuing to grapple with this changing global economic environment — globalization, integrated supply chains, intense competition from these emerging markets. It's all bearing down upon B.C.'s well-being and our ability to compete in the future. This, to our mind, means that competitiveness actually may be perhaps the single overarching priority that we see in the years ahead.

That, of course, does include strengthening human capital. This is a key part of competitiveness. There are many dimensions to that, but one of them is improving the post-secondary education system. Along with that, with the demographics and the rise in the number of baby boomers stepping into retirement, we think it's going to be important to increase capacity to retrain and retool older workers' ability to participate in the labour market.

Infrastructure is another area that is linked to competitiveness. In this regard, we see the continued investment in the Asia-Pacific gateway as critical. Transportation services loom very large in B.C.'s economy. My take is that perhaps the gateway and the port activity may be the single largest economic engine for the Lower Mainland economy.

[1115]

Now we look up at the north, and the Port of Prince Rupert and the northwest transportation corridor are emerging as vital connections to the Asia-Pacific. We believe that further investment in that corridor is warranted, in that it can move a lot of goods and is closer to the Asia-Pacific market, people have reported, by three days for shipping times. So we anticipate that as China continues to grow at near double-digit pace, trade through that corridor will continue to grow.

Specific steps to improve competitiveness — a couple of more specific points here. One is the dual environmental review process. We believe that this absolutely needs to be streamlined. That is the dual federal and provincial environmental review process. They're done separately, and it's time-consuming and cumbersome for companies and businesses trying to get major projects off the ground. We believe that it should be streamlined into a single, high-quality review process. You've heard that before, but we continue to advocate for that.

The second specific element is Open Skies. We continue to advocate for more liberal air policies for both passengers and cargo in the province. Of course, this is federal jurisdiction, but we believe that the province and the private sector should continue to press the federal government to liberalize and open up air policies.

Just quickly, a couple of tax policy notes. First of all, HST. We don't revisit all of the HST issues and the issues surrounding it in our submission. We do note, however, that we continue to believe that it is a very smart tax policy for British Columbia. It improves our competitive
[ Page 1067 ]
position, and it will help stimulate investment, which ultimately improves productivity over time. I did leave a paper here that Jock and I recently wrote on HST misconceptions. It's kind of a public education piece. I left that with our submission for those who are interested.

I also note that we have a number of publications on our website regarding the HST and why we think it's good for the province over time. We do note in our submission that if it is dismantled next year in the referendum, that will be disruptive for businesses. Businesses have invested a lot of money in the transition. Undoing that is going to be costly and problematic. There is a period of uncertainty in the months ahead, as some people may postpone purchase of a home or whatnot as they wait to find out what the ultimate outcome of the referendum is.

A couple of other tax notes. We highlight the property tax issue in our submission. Property taxes continue to be a problem for competitiveness in B.C. Industrial property tax. We recognize that a review of that is underway, and the Business Council is participating in that. We appreciate that, but we continue to believe that any meaningful solution to the cumbersome property tax issue is going to require some sort of legislative restrictions on municipal capacity or ability to set their own property tax rates.

Finally, the carbon tax. While there are very compelling arguments for it and for its use in the province, we believe that it undercuts our competitive position. Other jurisdictions don't have such a tax, and it does sort of erode our competitive position. We recommend that the province freeze the tax at its current 2010 level, which is $20 per tonne of carbon-equivalent emissions, instead of increasing it next July as planned.

With that, I will wrap up. Thank you for your attention and the opportunity to present this morning.

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

B. Ralston: Thanks very much, Ken. I think all of us have appreciated the B.C. 2020 series of papers. They're quite stimulating.

I had a question. You mentioned innovation. I haven't had an opportunity to read this report that you speak of, but I noticed that at least some of your recommendations focus on tax changes and, typically, tax reductions.

But it would seem that in some of the analysis, Canadian business is sort of independent of the tax regime. When you compare it internationally, Canadian business is pretty ineffective at innovation, arguably. Are there any specific policy recommendations that you would direct to Canadian business in particular to encourage innovation?

K. Peacock: We don't at this point have any specific recommendations on innovation. It's a very amorphous, difficult area, of course, but I would note that there is some discussion out there about the broad target or the way the policy framework in Canada has gone about trying to stimulate innovation, and that is providing rebates for R-and-D spending. Canada does all that very effectively, much more so than other countries, but less money directed towards actually getting products to market — the actual commercialization process.

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If you look at the overall process…. Of course, the linkage with innovation is the commercialization aspect, and that is probably, arguably, the more important component of it. So if there's anything that can be done to stimulate that commercialization element….

I think we're very effective at stimulating research and providing funding for research — R-and-D tax credits and whatnot have been effective — but in a lot of ways, it creates an environment where you have this incentive to continue to do research and development almost endlessly rather than moving to the next phase of commercialization. So that would probably be my main comment.

J. Les (Chair): Okay. Final quick question from Jane.

J. Thornthwaite: Thanks very much for your presentation. My quick question is about your comment about human capital. I notice that we do have Dr. Paul Kershaw coming today — later on this afternoon, actually. You're obviously familiar with the 15 by 15 and his emphasis on the early learning aspect. You just mentioned post-secondary. Could you comment on that?

K. Peacock: Yeah. I think there's the expansion of full-year kindergarten going underway. We're very supportive of the whole notion of making sure kids are in a position to learn and get the most out of school at a young age. I think they actually did a paper for us as part of our 2020 series. So we are familiar with early education.

I think it absolutely pays dividends over time. The challenge is the current fiscal environment. It costs a lot of money, and the benefits are quite far off in the future. So the provincial government is going to have to grapple with that upfront investment and payoffs further down the way.

But there's no doubt about it. Investing in early childhood education is the right thing to do, and it will be good for the province over time. It's the current fiscal environment that makes it more challenging at this point, I would say.

J. Les (Chair): Thank you, Ken, for coming today.

Our next presentation is from the British Columbia Association of Child Development and Intervention, by Bruce Sandy.
[ Page 1068 ]

B. Sandy: That was a good segue with respect to the investment in early childhood development. I couldn't have asked for a better segue there.

I'm pleased to actually be back to present to you. This is about my fifth or sixth year that I've come to present to the group. You will have heard from a number of our member agencies already. You would have heard from the child development centre in Prince George. You will also have heard from the child development centre in Courtenay and Comox. You will have heard from NONA, the Vernon child development centre, as well.

We're the provincial association that represents approximately 30 member agencies that provide services to children and youth with special needs across the province and in the Yukon.

In my presentation today I'm going to have seven recommendations. I'm also going to be talking a little bit about where things are with respect to the demographics, what population we serve, and to be specific around the children that we are serving through our member agencies.

It's actually children recognized as having significant special needs, and this is the definition that we use for children and youth with special needs. It's from the cross-ministry framework, which was developed about two years ago. The definition is children and youth between birth and 19 years of age "who require additional educational, medical-health and social-environmental support beyond that required by children in general to enhance or improve their health, development, quality of life and community integration." That is the definition of special needs that we use.

There is a whole section in the report around the demographics. The population that we're looking at is 5.65 percent of the children's population and represents about 52,000 children in the province. These are figures that have been developed by the Ministry of Children and Family Development.

We also look at school-age children with special needs. There are approximately 90,000 of those. We also look at children in care. There are approximately 9,000 children in care, and it's recognized that between 50 and 80 percent of children in care have some form of significant special need.

The other thing that we are fully aware of is the wait-lists and wait times for services. The latest figures around wait-lists for services for children and youth with special needs is over 6,000 children. That figure was derived in 2007-08.

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Some of the things that the government of British Columbia has actually stated in the past and currently states are encouraging to us. The government has previously stated that children are one of its top priorities. We recently had the Deputy Minister of Children and Family Development present at one of our fall provincial meetings, who confirmed that the Premier and the government continue to see children as one of its top priorities.

One of the government's key goals is to "build the best system of support in Canada for persons with disabilities, those with special needs, children at risk and seniors." This comes from the B.C. government's 2006 to 2009 strategic plan with five great goals, and this is goal 3. Another one of the government's key goals is to "make B.C. the best-educated, most literate jurisdiction on the continent."

The government of B.C. has seen services for children and youth with special needs as core services and as being important to actually enhance the funding and protect the funding for services for children and youth with special needs. Last year they again recognized that services for children and youth with special needs were truly core services and should be protected.

There were no further funding cuts other than what had happened in the disbanding of the early intensive behavioural intervention program, which had happened in 2009, and also the closing down of the provincial offices for supported child development and infant development.

There have also been recommendations. In the September 2009 budget there had been an indication that there would be additional funding coming to services for children and youth with special needs in 2009-2010. They did actually put in additional funding of $11 million. There was also an indication that there would be additional money coming in this fiscal year and the next fiscal year. Those dollars did not actually materialize.

Health, education and vital social services are identified as priority services for the government. The province has also stated a goal of reducing the vulnerability of children entering the school system to 15 percent by the year 2015, and this was in the Province of British Columbia Strategic Plan 2009/10–2011/12.

We also know that the economy is improving. We've actually heard that the projected deficit for the government is now in the order of $1.38 billion as opposed to $1.7 billion, so we're encouraged to see that the economic situation is improving.

I want to actually refer now to some recent studies around early childhood development and children and youth with special needs. It was very encouraging to hear that Dr. Paul Kershaw will be coming this afternoon to present. As you know, Paul and his group at HELP through UBC have identified that actually 30 percent of the children entering kindergarten are now vulnerable and that there is going to be a necessity to take dramatic action to meet the goal of reducing that to 15 percent by 2015.

The other thing that Paul will point out to you is that…. In his report, he projects that allowing children to enter the school system with biologically unneces-
[ Page 1069 ]
sary delays will reduce our provincial economic growth over the next six decades by 20 percent, at a cost of $400 billion.

It's so encouraging to see the support from the business community. We also saw a report come out from the Vancouver Board of Trade and the Justice Institute this fall entitled Kids 'N Crime: Economic Aspects of the Development and Prevention of Criminality among Children and Youth. This report was released in September 2010. It further emphasizes the case that investing in early childhood development, particularly before the age of five, will save the government and society millions of dollars.

The other study that we've been referencing for years is by James Heckman, which indicates that a dollar invested in early childhood yields three times as much for school-aged children and eight times as much for adult education.

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In another recent poll by Angus Reid, people that completed the poll have indicated they would endorse an additional public expenditure of a billion dollars a year in B.C. in support of the government's goal of reducing the number of vulnerable children in B.C. to 15 percent by 2015.

With respect to the support from this committee in the past, we have certainly appreciated the recommendations that have come forward from the standing committee, and each year since 2007 there have been recommendations for additional funding of $25 million to $40 million extra regarding and supporting services for children and youth with special needs.

In the last year there was also a recommendation of eliminating inefficiencies across ministries and improving resourcing to address delays for services and programs for children with special needs, and we really appreciate that the recommendations have gone forward. They haven't been acted upon. So this is something that we want to emphasize again — the importance of investing in early childhood development and children and youth with special needs.

How are we doing for time?

J. Les (Chair): You've got about 5½ minutes left.

B. Sandy: The first recommendation and the first issue that we're going to talk about is around…. I've referenced the number of children on wait-lists. This was highlighted as one of the key concerns by the Representative for Children and Youth in the monitoring brief System of Services for Children and Youth with Special Needs in 2008. She stated: "Wait times are problematic. From assessment to intervention services, there are access issues."

One of the areas that truly requires additional funding support is for early intervention therapies. Early intervention therapies include physiotherapy, occupational therapy and speech language pathology. I won't go through the further analysis around this, but our recommendation is that the B.C. government should, as a start, double the resources available to the Ministry of Children and Family Development contracted provincial early intervention therapies — including physiotherapy, occupational therapy and speech language pathology — from $30.7 million to $61.4 million.

The second recommendation is to increase the funding for school-age therapy programs by $10 million. Our third recommendation is that the B.C. government should continue to view services for children and youth with special needs as a core service and should maintain or increase the funding service levels of all the other MCFD contracted services for children and youth with special needs.

The next area, which is an ongoing recommendation from the association, is around providing appropriate mental health services for children and youth with special needs. There has been additional funding that has gone into this around child and youth mental health services, but not specifically into the area of children and youth with special needs. So our fourth recommendation is that additional funding of at least $15 million should be allocated for the hiring of psychiatrists, developmental psychologists and other mental health professionals to address the diagnostic and behavioural needs of children and youth with special needs.

The next area that we'd like to address is around facility and capital costs. At the present and in the past no additional funding has gone into capital funding for our member agencies. There's a need for upgrading facilities, new buildings, new green initiatives. New accessibility issues, as well, are apparent. So our recommendation 5 is that the provincial government, in cooperation with the federal infrastructure funding program, should invest a minimum of $50 million for capital projects and environmental upgrades, and that contracted agencies should receive the appropriate capital allocation grants along with their third-party service agreements.

The next area that we'd like to address is around collective agreements and other cost pressures for our member agencies. The collective agreements are negotiated on behalf of the government by agencies such as the Health Employers Association of B.C. and the Community Social Services Employers Association.

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Our recommendation here is that government as a partner in negotiating increased compensation to union employees must honour the commitment with appropriate increases in contractual funding to all contractors, and those are contractors that have both unionized and non-unionized workplaces.

The next area is around training programs for rehabilitation therapists in B.C. This is an ongoing recommendation that we've made over a number of years. With the
[ Page 1070 ]
shortage of therapists in the province, we see the need to increase the size of the training program.

The recommendation is that the size of the physiotherapy and occupational therapy training programs and speech language pathology program should be increased at appropriate universities across the province, similar to what's happened with the faculty of medicine at UBC, UVic and the University of Northern British Columbia, where we've seen doubling in the size of the program.

Then we have a couple of policy statements in the document that I will just leave for your reading. I want to thank the committee for the opportunity to come and present on behalf of BCACDI today. We look forward to your continued support and also the government following through on your recommendations.

J. Les (Chair): Thank you very much, Bruce. That takes us flat out of time. Unfortunately, there won't be time for questions. However, you have a fairly lengthy document here, which I'm sure all committee members will be studying over the weekend.

B. Sandy: If you have any questions, certainly get in touch with me. Thank you for the opportunity.

J. Les (Chair): Certainly. Thank you.

Next presentation is from the B.C. Apartment Owners and Managers Association, and Marg Gordon is here.

M. Gordon: Morning.

J. Les (Chair): Good morning, Marg.

M. Gordon: You guys are still all awake and bright-eyed and bushy-tailed, so here we go.

J. Les (Chair): Absolutely.

M. Gordon: Today I'd first like to start with thanking you for holding this on such a sunny day when we're all staring at the golf course.

What I'd like to talk about is the British Columbia Apartment Owners and Managers Association. It is a provincewide member association voice for the apartment and rental housing industry. That's all the way from one basement suite to an investor-owned condo to apartment buildings.

The presentation today will deal with saving the roof over one-third of British Columbia's population by promoting and sustaining rental housing in British Columbia. Together, our members contribute hundreds of millions of dollars annually to the province's economy through taxes, fees, construction and purchases. We provide rental housing options for fully one-third of all B.C. residents.

The issue today is HST and the rental housing sector. It is our understanding that the mandate of the HST is to share the tax burden across all taxpayers and not disproportionately tax any one sector. We're seeking further opportunities to meet with government officials and to explain what we believe to be an unintended and negative consequence of HST on the rental housing industry.

It's really important to state from the start that as an industry and as business owners, we are supportive of the HST. We understand the business implications, and we understand that we need, as consumers, to buy our way out of debt. It's a positive new consumer tax policy with resulting benefits to the whole provincial economy. However, what happens with landlords, as there are no taxes charged on rents, is that we're in the anomalous situation of paying the HST out of our own pockets as landlords.

The HST will increase rental housing costs, understanding that HST now applies to all goods and services needed to operate, maintain, renovate and run a rental housing property. This impact, with PST — which we pulled out, which was embedded before — will impact the industry by 1½ to 3 percent. That's a significant percentage in a low-margin industry. As a result of the rent increase formula, because we do have rent controls in B.C., the situation is made even worse.

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If just HST is causing an increase in expenses of 1½ to 3 percent and the rent increase formula is limiting our revenue increase to 2.3 percent, we can all see right there what the issue is. It has the unintended consequence of a further disincentive to property owners for developing new housing units, and it also has a serious consequence of affecting the viability and sustainability of the rental housing that we already have in the province. Because property owners and landlords will be challenged by increasing costs and controlled revenues, this will potentially place owners in the unsustainable position of a negative cash flow.

While accommodation for the impact of B.C. HST has been made by the B.C. government for other life necessities such as groceries, no accommodation has been made for the necessity of shelter. There really are two basic necessities of life, and those are food and shelter.

The elimination of rent controls, of course, is something that we've looked at, but across Canada every government in Canada has agreed that rent shall not be taxed. We agree with that. So we need to look at the mitigation of HST.

We have met with the Minister of Finance and his staff on a number of occasions. We have met with the Minister of Housing and Social Development and his staff on a number of occasions. We've come full circle, in the 16 months that we've been talking about this issue, to the fact that we really seriously need to look at zero-rating of HST.
[ Page 1071 ]

I think that just a short explanation is in order. Let's take the two different rental industries. There's commercial rental and residential rental. Because commercial rental has input tax credits, they can claim against what they've paid. Rental housing can't do that. We do not collect HST, so we have no input tax credits to claim against.

In considering this submission, it's critical that the government recognize that the residential rental industry is unique in that this industry is one of the only industries in B.C. that is restricted by government legislation from passing cost increases on to its customers through increased rents because of rent controls. Secondly, we do believe, through our talks with the different levels of government, that it was an unintended consequence that HST land at the doorstep of landlords themselves.

What we also wanted to talk about today was that the rent control formula is derived from the CPI plus 2 percent. This has been in effect since 2004. It goes from July to July, plus 2 percent. This was brought in seven years ago. The 2 percent was to cover the costs of owning and operating a building besides the CPI.

The issue with that, first of all, is the CPI formula itself is flawed. I understand we can't adjust the formula for every industry that's asking for this. Why is it flawed? Because the research that we have — and I have pages and pages of it; if anybody wants executive summaries, I can send them to you — shows that the actual CPI portion that pertains to operating and maintaining rental owner property is only 8.6 percent. So out of that 100 percent basket of goods, there's only 8.6 percent that actually pertains to the cost of being a landlord. That plus 2 percent is just not doing it. Therein lies the first problem.

The second issue is that through 2 percent plus the CPI, rents have been falling below market. The whole idea of rent controls — not the whole idea, but a large part of rent controls — was to protect the low income, to ensure that rents are affordable for everybody.

It's having the exact opposite effect as the years have gone by, because rent-controlled units are hoarded. They're not passed on. The turnover of units in our industry is about 20 percent per year. It's always the same 20 percent that are already at market, because when a suite becomes available, you can charge market rent. What's happening is the people that need the lower-rent units are not being able to avail themselves of them because they're not being released.

You can take a tour of any of our apartment buildings. Particularly in the West End you'll see two-bedroom suites on the beach or on the water renting for $840 a month, and you'll walk through the BMWs and the SUVs and the boats in our parking lots. Because people are living in rent-controlled units, they're using their disposable income for other assets instead of moving through the continuum of housing. We have a problem there, where we've stalled in having lower-rent units available.

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Finally, if we could look at the HST problem initially, zero-rate it so that we'd be treated like any other industry. That would stop taking money out of the pockets of landlords who are right on the edge of being in an unsustainable position.

Secondly, we appreciate that you're being approached by many industries and sectors for some form of relief from HST. We're not asking for that. We're asking to be treated like every other industry and have the ability to have input tax credits.

Then when we look at the bottom end of it, we believe that one of the best market stimuli available to the province of B.C. is to maintain the existent rental housing, to encourage the development of new rental housing. In order to do that, we need to ensure that the cash flows are there for these projects to exist.

What impact does HST have on the rental market? It's going to be at least 1½ to 3 percent out of the operating expenses. What impact do rent controls have on the rental market? Combined with every other cost, it is now a formula for deteriorating buildings. The average age of apartment buildings in British Columbia is 57 years old. I also have the report that backs up all that data.

So what do we have? We have aging, deteriorating buildings. We have landlords that are no longer putting money into renovating and upgrading buildings, except for the very large ones that still have the cash flow available because of their business models of having been able to borrow from one building to another. In the end, what we're looking at is the aging stock.

Engineering studies have shown the current rent control system is not allowing for adequate new investment in rental stock. Rents are not always going up by the annual guideline. We're at a very interesting point right now. We have a very soft market. Vacancies are rising, and rents are falling, so the market could control the market rate here. Quite often it's mistakenly assumed that rents always go up by the annual guideline. We're finding landlords are renting up to $100 a month less this year than they were last year.

Vacancy decontrol does provide some relief, as I explained. When units become vacant, we can rent at market rents, but we're finding it's the same 20 percent that are turning over. Our lower units are not being turned over. We feel that if no action is taken, there are serious consequences for the viability and sustainability of this sector. We find that rent controls are taking away options for tenants because they're not as mobile as they could be if they could have a choice of where to live.

We also, through studies, have found that a huge infusion of capital into B.C.'s aging rental stock could be realized if decontrol of rents was introduced or the formula was adjusted to reflect real economic times. We
[ Page 1072 ]
could create about 30,000 jobs per year or more, and investors would start to return to B.C.

Still, the overall conclusion is that there are barriers to existing and new rental housing. We need to look at mitigating HST if not decontrol of rent — however, adjusting the formula to reflect true economic times — or institute flow-through costs, which is very similar to what the manufactured home parks have. They can flow through extraordinary costs to the existing tenants, which is interesting because they fall under the same RTA act as we do.

The consequences of doing nothing? HST is causing a significant increase in the net costs of providing existing rental homes. The viability and sustainability of some of these buildings is already in question. It will necessitate cost containment strategies, including reduced maintenance and the inability to carry out essential upgrades. Housing quality is and will deteriorate and in some cases become unsustainable. There's the ever-widening gap between supply and demand.

The last, most important one is that there's no market in green landlording. We all know the government's goals of reducing GHG emissions, greening our buildings, getting to a point where we could be proud of the sustainability of the greenness of our province. It's not going to happen if there's no money to do that.

[1150]

Conclusion? Our buildings are 40 to 65 years old. Years of price and cost compression in the industry have resulted in little or no new purpose-builts. Studies have shown the current rent control system does not allow for adequate investment to ensure viability. And what's the social cost? Lost rental stock. No new purpose-built. The livability of one-third of B.C. households will be dramatically affected. The combined impact of HST and rent control guidelines means a major reduction in repairs and maintenance in the buildings.

The size of this impact affects the future viability and sustainability of B.C.'s rental stock. It also means that B.C. renters will face growing maintenance problems, reduced customer service and reduced investment in their homes.

Do I have any time left? I have one more point about carbon tax.

J. Les (Chair): You have one more minute.

M. Gordon: One more minute.

The carbon tax policy. We really believe that the government is right in setting their objective of achieving 80 percent reduction in GHG emissions, and our suggestion — you can read about it, because I only have one minute — is a refund of the carbon tax credits. It would help ensure that landlords would then invest in greening their buildings. It's a really simple formula. Basically, the $300,000 that a landlord could spend in upgrading and greening their building could then result in carbon tax credits coming back to that landlord.

I'd like to thank you for your time today. Hopefully, I didn't speak too fast, but it was important to try to touch on my three major points, and you can all go for lunch when I'm finished. No you can't. There's one more person. Sorry. I was just kidding.

J. Les (Chair): Thanks a lot, Marg.

The final presentation. Tim Crowhurst is here from the Import Vintners and Spirits Association.

T. Crowhurst: I will be fast, and I will also give you written remarks so that we can follow along. I can read faster, and it will all be on the record. Maybe I'll give you two minutes extra for you to get to lunch.

We'll go through one quick example in this presentation, an example about costing, because everyone always wonders how that price from California got to be the way it is on the shelf here. I'll just keep going, and I will not speak about the HST today. I'm sure you've had enough of hearing about that for the last little while. So that's my pledge to you today. No HST today.

I'm obviously pleased to be here on behalf of the Import Vintners and Spirits Association. We are the trade and lobby group on behalf of all the import agents in B.C. and Alberta. We employ more than a thousand people in small businesses, and the companies that we represent — 150 to 160 small businesses — bring 90 percent of all the products into the marketplace here. Needless to say, this is more than half a billion dollars of profit to the B.C. government — funds for roads, schools and hospitals.

The three broad themes that I want to talk about today very quickly, obviously, all relate to a greater vision of the beverage alcohol industry that we would like to start with this committee.

First is transparency and accountability. Political parties of all stripes have avoided accountability for the billion dollars a year in net revenue that beverage alcohol brings to the B.C. government. There are numerous taxes that have been levied over the years, all with the tacit approval of the government of the day but zero accountability. Why is this? Because the legislation was specifically written to remove the Legislature, the executive council and the minister of the day from having to take responsibility for what have always been price increases rather than price reductions in beverage alcohol.

Of course, two former ministers responsible for the LDB I'm sure will challenge me on many of these facets, but I'll keep moving ahead.

Decisions related to the financial agreements as well as concessions in the industry are not really publicly available or easily accessible. All these documents must be accessed through freedom of information. We have seen, over the years, what I would refer to as a tax creep to the
[ Page 1073 ]
point that there are now seven separate taxes upon taxes placed on the average bottle of wine and spirits.

I'll just lead you to this example here, the blue sheet that was handed out separately. Everyone says: "Why does it cost so much? I bought something at a gas station in Washington State, and why did it cost less than half of what we're paying here?"

[1155]

I'm going to take you through an example. Here's a California Merlot, which is in the marketplace here. Our agents would have bought it from the winery for $5. You add, at the time of this writing, 8 percent exchange. You've got an extra 40 cents there.

You've got to bring it up here. That will cost you about another 57 cents. This is per bottle here. The agent makes about 15 percent for bringing it in. Then, on that, you add the Canadian government duty and excise. Then you add the B.C. volume charge, which is a tax that was brought in, in the mid-1980s to pay for the destruction of the Marechal Foch vines in the Okanagan — 25 years later, still on the books.

Then you add B.C. cost of service, which I'll talk about in a moment, which is another 42 cents. You add now a 123 percent B.C. government markup of $9.68; a recycling and container fee of 11 cents; and that tax, which I won't talk about, of $2.12. You have that $5 bottle become $19.78. That's how it happens.

Now, for example, in Alberta the wholesale cost of that same bottle with a flat tax would be $10.44. With the average private store markup there, you'd probably add 25 percent of that, so your cost would be about $13. That's the difference there.

I also want to talk about respecting international trade. The Canadian government, as well as the provinces, has some work to do when it comes to the two-way street of international trade. I'd like to talk for a moment about the cost-of-service differential, as mentioned in this chart. This was implemented in 1989 following the Canada-U.S. Free Trade Agreement.

This particular tax has been implemented not just in B.C. but also by other provincial governments that have a state-run distribution system. It is backed by a report which states that it costs an additional 50 to 75 cents per bottle to place an import product on the shelves in British Columbia. This is nonsense, and it is little more than a punitive tax grab that has been on the books now for 21 years. I would challenge any politician or any public servant to justify the cost-of-service tax in a public forum. The argument simply holds no water.

As part of the Canada–European Union free trade talks that are ongoing right now, the EU has requested that all cost-of-service taxes be rescinded across the board where they still remain. Next week in Ottawa, Canadian and EU negotiators will meet to discuss the cost of service and other issues. The B.C. Standing Committee on Finance could be at the forefront of the movement towards true free trade by backing the EU calls to eliminate the punitive import cost-of-service tax.

Alberta had the right idea and adopted a flat tax on wine, beer and spirits in the 1990s. Their government revenues have climbed since then. In fact, they receive more government revenues per capita than we do in B.C. Their system is simple. Consumer choice is second to none. Prices are much lower, and alcohol abuse is no greater than in B.C. It's time for the B.C. government to institute a flat tax on wine and spirits, as they have in Alberta, and we hope that this committee will help us further that conversation.

At the very least, we request that this committee support our call for improving free trade around the world and recommend the elimination of the cost-of-service tax.

Lastly, and very briefly, I would like to talk about creating a vision of B.C. as a wine and spirits hub for the west coast of North America. Just over a year ago, in July 2009, Hong Kong cancelled its tariffs on wine and beer in order to make itself a premium wine-trading centre like London and New York. This took vision. It took guts. Previously they had levied an 80 percent tariff on alcohol.

According to the Hong Kong wine and spirits association, they say that excessive wine and spirits duties — amongst the highest in the world, in their opinion — created significant market distortion in Hong Kong's beverage alcohol market. Faced with artificially high prices, residents and international visitors alike were forced to trade down and select lower-quality beverages, negatively impacting consumer choice.

The difference between Hong Kong's high level of taxation and that of various neighbouring regions may also have caused increased smuggling of alcoholic beverages, resulting in a loss of government revenues. So why, then, did Hong Kong move and eliminate their tariffs? They immediately lost $70 million in government revenues.

The answer is that they believed they could become the wine centre of Asia, and that meant a lot more revenue. What has happened since? Wine imports jumped to nearly $500 million.

We here have the gateway project. We're intending to open our ports, highways and distribution systems to the world. So why not become the beverage alcohol hub for western Canada or the Pacific Northwest?

[1200]

We can create B.C. as a cultural capital and a distribution centre when it comes to wine and spirits. This would be good for tourism. It would be better for jobs. It would create stability in the industry and open up new opportunities. We can create B.C. as a wine and spirits trading hub. Doing so would then open up opportunities in retail, logistics, the wine trade, hotels, exhibitions and conferences, restaurants, transportation and warehousing.
[ Page 1074 ]

What will this take? It takes a vision and the belief that it's all right to be first out of the gate and demonstrate leadership to other jurisdictions in Canada. We're opening up our ports and highways with the gateway program. Let's open our minds to new products and new thinking.

We urge this committee to recommend that the government undertake a comprehensive review of its tax treatment of imported beverage alcohol, with a view to respecting international trade agreements and levelling the playing field for all businesses and players.

Thank you for your time. I think that was seven minutes.

J. Les (Chair): Thank you, Tim. No, not too bad at all. Michelle has the first question.

M. Mungall: I'm just wondering, Tim. You've brought up that London, New York and Hong Kong have become hubs of trading wine and spirits and that you're looking for B.C. to be the hub for the west coast of North America. I'm wondering if those other jurisdictions also have domestic wine and spirits production in the same way that B.C. does.

T. Crowhurst: Sure. All of them do. Everywhere in the world, really.

M. Mungall: I've never known England, though, to be a producer of wine.

T. Crowhurst: They actually do. We wouldn't talk about it right now, but we're talking cider and Scotch and beers — many, many different varieties of beer. Not wine, but every other product they do.

D. McRae: I notice that in Quebec they've recently made an announcement that SAQ is going to become an exporter of product. Basically, it's using its position as one of the five largest wine importers in the world to market outside of its province.

I'm wondering if your organization has done any analysis about having such a monster organization changing its business model — how it will affect places like British Columbia or other jurisdictions.

T. Crowhurst: We think it could be very devastating, actually, for the agent community and for all the movement towards a mixed system that we have in many parts of the country, of a public and a private system.

Here's the interesting thing. The SAQ has given $25 million, half of government money and half of union-sponsored funds, to create an agency that would go into direct competition with the private sector. No one has ever started up a small business here with $25 million in government backing.

The interesting thing is they aren't doing it in Quebec. They're not going to be competing in Quebec. They're looking to make a toehold in Alberta and then in the Maritimes. I'm told that they've made forays to the B.C. LDB as well, but that has not proven to be successful.

We think it's very dangerous. It is a step in the wrong direction. You're creating a larger monopoly through those buying powers that the Quebec SAQ has.

J. Les (Chair): Tim, I might have a question here. We've had presentations to this committee that we should change the way liquor is taxed, and that it should be taxed according to the percentage of alcohol contained in the liquor.

Now, using the taxation system per se to do that may be very difficult, given the various constraints, but besides taxation, of course, there's also markup.

I'm wondering if the markup system could be used to reflect alcohol content and, if so, what comment you might have with respect to that.

T. Crowhurst: Well, there have been two studies that I'm aware of, in particular, that have been attempting to gather some steam and some public support. One is the issue of taxation according to volume, and the other is the one out of Victoria, which we refer to as the five-cent-a-drink tax, to fund alcohol abuse issues.

Well, first of all, the issue of alcohol abuse…. There's a lot of work going on — not just from manufacturers, from the government, from all sides — to focus on responsible use programs and campaigns, obviously acknowledging the challenges that alcohol faces in society.

[1205]

We're actually working with the minister and with the LCLB to coordinate all those activities, to have a more powerful voice on that one, on the issue. I think we're having some success on that one.

We already have the highest taxation levels in the world. So changing that skew, you'd have to actually state that spirits in particular obviously are creating a greater problem. There is nothing to say that spirits are actually causing a greater problem as far as alcohol in society.

If you're talking about binge drinking, if you're talking about youth drinking, a lot of that binge drinking happens outside of clubs because it costs too much for the young people to go into these places. So they'll have a few drinks ahead of time and save money. So increasing the price based on alcohol consumption is really without foundation, in my view.

J. Les (Chair): All right. It looks like we're out of questions and also out of time. Thank you very much for coming today.

T. Crowhurst: Thank you very much. Have a good lunch, and have a great weekend. Thank you for doing
[ Page 1075 ]
this for a month. I acknowledge what it would take for your feat.

J. Les (Chair): That's right. We do it because we love it.

With that, we'll break for lunch.

The committee recessed from 12:06 p.m. to 1:04 p.m.

[J. Les in the chair.]

J. Les (Chair): Our first presenter this afternoon is from the B.C. Federation of Retired Union Members. On their behalf, Bill Silvester is here.

Good afternoon. Go ahead whenever you're ready, Bill.

B. Silvester: I would like to thank the hon. members of the committee for taking the time to consider our submission on priorities for the next provincial budget.

[1305]

Our president, Alice West, was not able to be here today. My name is Bill Silvester, and I am vice-president of BC FORUM.

Our organization represents several thousand retired workers and older workers who are still on the job. Our youngest member is 50 years old; our oldest celebrated his 97th birthday in June. We are a volunteer organization. We work together to negotiate group rates on extended health and other services our families need. We find that by working together to support each other, we can achieve more than any of us can do alone. It is in that spirit that we make this submission.

The title of this year's public consultation document is Building B.C. for Your Family. That is a worthy objective. It is a goal that we share with the committee. We hope that you will follow through on it in your final report, because many British Columbians have lost faith that government has their interests at heart.

A month ago an Angus Reid poll found that 83 percent of voters don't trust the Premier. Much of this is directly tied to budget decisions and taxation policy. It is a reflection of how government spends our money and who it collects it from. In a civil society the strong must support the weak, not take from them. We have a shared responsibility to each other. Establishing that sense of balance and fairness for all citizens is a primary role of a democratic government.

Government is the way all British Columbians can work together to achieve the things that we cannot achieve alone. This principle appears to be sadly absent from many of the government decisions. The guiding principle seems to be competition. We could use a little more consensus-building and cooperation. The HST is only the latest example of how government has shifted the tax burden away from corporations and onto ordinary people.

This is more than a communications challenge. It's not what the government said or didn't say; it's what it did. Every family is paying more so that corporations can pay $1.9 billion a year less. If the object is to, in your words, build B.C. for your family, this is not the way to go about it.

Progressive taxes, including corporate and personal income taxes based on the ability to pay, have been cut. This is another tax shift. The repercussions are being felt throughout society. Our tax system has been skewed to give more thousands of dollars to those who already have the most. The rest of us are paying for it in higher fees and lost services.

The government argues that these tax giveaways will encourage innovation. That doesn't make sense. There is no incentive for corporations to seek new ideas when government guarantees net profits will go up if they just keep doing business exactly as they are. There is no incentive to invent anything if government keeps giving corporations a free ride with the lowest minimum wage in Canada, weakened environmental regulations and an even lower share of the cost of public services institutions that shape the society in which they operate.

These changes are happening while many retired workers are finding it even harder to make ends meet. Our president talks about meeting an elderly couple in the supermarket struggling with their decision over which loaf of bread to buy. They were not checking the nutritional value; they were counting the number of slices.

Many seniors have seen their savings dwindle as a result of the financial meltdown. Some have lost their homes. The fastest-growing segment of the homeless population is seniors. Retired workers have contributed a great deal for society. They seek to live out their days in a society that respects their independence and dignity.

There are so many areas where government decisions can make the difference between dignity and despair for ordinary people. When government chooses to continually redistribute more wealth to the wealthy, everyone else suffers. In the early part of this decade ours was the only province in Canada where working families suffered a significant drop in their average income. While all around them the economy was supposedly booming, even the good times weren't good for the middle class in B.C.

More recently we've seen the elimination of government grants to volunteer-driven non-profit societies that help seniors who are isolated and alone. Now they are really on their own. In addition, thousands of seniors must pay out almost $700 a month more as they await the end of their days in residential care.

These cost-cutting decisions involve amounts that are almost insignificant in relation to the size of the provincial budget. They are also insignificant in relation to the size of the benefits and tax giveaways that continue to
[ Page 1076 ]
flow unabated to the richest of the rich. But they are a huge burden on the frailest of the frail and an unnecessary attack on some of our most defenceless citizens. Government needs to change course.

We do not object to paying higher taxes in return for services people need, including public health care for the sick; public education for our children and our grandchildren; equal access to justice through legal aid for those who need it; and protection of our rivers, streams and natural heritage from unregulated exploitation and pollution.

[1310]

Some things we pay through taxes; some we pay on our own. In many cases paying for them through taxes is less expensive, provides better service and is more fair to those who pay.

As a small example, BC FORUM negotiates group rates on services for our members. This includes services that government has eliminated, even as it continues to increase Medical Services Plan premiums. As a group we get more for less than any of us can negotiate on our own. That's even more true for public services paid for through fair and progressive taxes, because government represents a much larger group.

We do not object to paying more taxes to pay for services to people. We do object to tax increases for which people get nothing in return, such as the harmonized sales tax. It is a profoundly unfair shift in taxes. We get nothing in return for this additional gift to the powerful, not even a thank-you card.

I ask you to move B.C. towards a fair, progressive tax policy that recognizes the needs of the weak as well as the strong. I ask you to put people first and to seize that principle as the light that guides every government decision and thereby helps us move towards better days, more opportunities and more respect for every citizen. It is time now for budget decisions that reflect traditional values of British Columbians: concern for others; compassion; and simple human decency towards our fellow men, women and children.

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

Are there any questions?

B. Routley: Well, you're certainly a man after my own heart. I don't know why these guys laugh. Well, maybe I do. Anyway, as far as saving money for yourselves, do you have any other recommendations?

Getting together obviously helps reduce the cost of important things like medical and dental. I've discovered that more and more seniors, even former union members, find that their costs are escalating in terms of providing adequate medical and dental care. Is your group open to new members? I'm not sure I understand who all is in your organization.

B. Silvester: Our organization is an acronym for B.C. Federation of Retired Union Members. It's open to anybody that was a union member at any time in his or her life.

J. Les (Chair): So I can apply?

B. Silvester: Yes, if you were a union member, you could apply. We welcome everybody.

So that was your question?

B. Routley: Yeah. Good for you. It sounds like you're doing important and worthwhile work to help people, so good for you.

B. Silvester: Yeah, we are.

D. Donaldson (Deputy Chair): Thanks for the presentation. I've read material from the organization before, so thanks for that and your perspective on various issues.

The one topic I was curious about in your presentation is BC FORUM negotiating group rates on services that the government has eliminated. Can you give me an example or two of that, where you've had to take on the responsibility for negotiating lately?

B. Silvester: We partner with Working Enterprises Insurance to put together a health benefit extended care package and dental packages. Those are the things that are mostly in demand. Most employers right now are taking those things off the bargaining table, or after they go into retirement, they don't go with an extended health plan anymore.

The government has cut back, I understand, on products that go into extended health plans, so there is a demand out there for those services. So we've put together what we think are basic — not luxurious but good — plans for as reasonable a price as we can negotiate through WE and the insurance companies. We have four products right now.

D. Donaldson (Deputy Chair): That's at an added cost to the retirees.

B. Silvester: There's a cost to those, yes.

J. Rustad: A couple of quick questions. In the States right now, in many states, there are literally tens, if not hundreds, of billions of dollars of unfunded liabilities associated with pension plans that were negotiated but never funded. And you're seeing in Europe, of course, austerity measures because of certain conditions that were put in place in some countries.

I'm wondering, first of all, if B.C. is in a similar situation. Or do you know that? I don't the answer to this
[ Page 1077 ]
question, so it's one of the things that I need to look into.

[1315]

Second, for those jurisdictions in the States and in Europe that are facing those kinds of challenges, how would you recommend that they get out of that situation?

B. Silvester: This is not my area of expertise by any means, but I know that in our pension plan it is completely funded, and I think in Canada there are federal rules governing pension plans that put safeguards in place that we don't have in the States as far as unfunded pension plans. I guess as the market goes down, some pension plans have found themselves in trouble.

I guess the only way I can answer your question is due diligence by the trustees to make sure that they don't overstep, try to achieve too much with what they have and leave themselves vulnerable. I don't know if…. I really can't answer that question. It's a big question.

J. Rustad: It is.

B. Silvester: I know that our plan is completely funded, and I know there are some plans in trouble in B.C. and some that aren't.

J. Les (Chair): No further questions?

Okay. Thank you very much, Bill.

Our next presenters, on behalf of the Sunshine Coast Community Services Society, are Vicki Dobbyn and Gloria Lifton.

While they're making their way up, I will note that the member for Delta South is here — Vicki Huntington. She was present in Whistler as well. I'm assuming she came back because she liked it so much.

Good afternoon to you.

G. Lifton: Good afternoon to all of you. I want to thank you for providing the opportunity for the citizens of British Columbia to talk to you about the upcoming budget. My name is Gloria Lifton. I am the president of the Sunshine Coast Community Services Society, and our executive director, Vicki Dobbyn, is here with me today to help me answer any of your questions.

I'm also the secretary for a new organization called Board Voice Society of British Columbia, so I'm here representing both of those today.

The Sunshine Coast Community Services Society is a multiservice agency that delivers over 40 different community social services and has been in existence since 1974. Our non-profit society provides child development services, family and youth services, and support and shelter for women and children escaping violence and for persons with mental illness. We operate a food bank, and we lead many community development initiatives, currently one to address homelessness.

Board Voice is a new organization formed last November after a year of planning by a number of dedicated community board members. It was set up to reflect the views of volunteer governors of community social services across British Columbia. You've already heard presentations from two other Board Voice members.

They have given you information about the many hundreds of social service agencies across the province who provide a host of programs to citizens, from early childhood development to community programs for senior citizens and everything in between — youth, justice, mental health, family support, services for victims of domestic violence, disability support, employment support, housing support, food security, child care, and immigrant and refugee services. I believe there are over 500 social service agencies, non-profit, in the province.

They've also spoken to you about the elected volunteer governors who are responsible for billions of dollars of spending every year in British Columbia and yet had no forum through which they could discuss their concerns and ideas. In this past year Board Voice of B.C. was formed and has brought groups of boards together in local communities to discuss interests across the boundaries of these particular agencies.

We've begun discussions on social service policy with politicians and senior public servants and have connected with many other related community and provincial organizations, such as the UBCM and the government/non-profit initiative.

Today I wish to talk to you about a concept that would refocus the way that dollars are allocated in the provincial budget. The concept is that of the social safety net being intrinsically linked with health status.

An excellent report published last spring called The Social Determinants of Health outlines clearly how social factors, if not addressed, lead to higher health care costs in the future.

[1320]

A quote from this report states: "Primary factors that shape the health of Canadians are not medical treatments or lifestyle choices but rather the living conditions they experience. These conditions have come to be known as the social determinants of health."

This report should be required reading for anyone who has to make decisions on how to optimally allocate our tax dollars to increase the health and well-being of our citizens. The health of our citizens needs to be evaluated through a larger lens than treating physical symptoms once they've arisen. Social services need to be valued in the same way as education and health care, to be seen as the third leg of the stool that supports healthy, safe and economically vibrant communities.

Some of those determinants of health that we in the community social services sector address in our work are income and social status, social support networks, education and literacy, employment working conditions, social environments, physical environments, personal
[ Page 1078 ]
health practices and coping skills, healthy child development, gender and culture.

Increasing dollars in the safety net of social services is the most effective investment to improve the health of British Columbians. Research demonstrates the truth of the old adage: an ounce of prevention is worth a pound of cure. For example, working with children with fetal alcohol spectrum disorder and their families to develop practical life skills to cope with decision-making can help those children understand their impulsiveness and practise strategies that help them navigate through daily life.

Even more effective are efforts to prevent FASD in the first place. When one considers that a majority of inmates in prisons across Canada are on the FASD spectrum, it makes sense to avoid that financial and human cost by investing in teaching strategies for healthier decision-making or by funding FASD prevention programs.

This is common sense to a large majority of British Columbians. In August 2010 an Angus Reid poll was conducted, with the following finding. Three out of four respondents, or 75 percent, believe that in tough times government cuts to social services hurt people now and in the future, where missed opportunities for prevention end up in costly crisis intervention. Isn't it time to go back to the drawing board and take a look at the bigger picture of what creates health from infancy to old age? While acute health care is indeed a necessity, prevention, through appropriate social services when necessary, can save significant dollars in the future.

I ask you to remember these three key messages. First, social services serve the public interest. Community social services are an investment in our community, based on the belief that every person is a valuable member of the community and deserves support. One in three Canadians will use a community social service. For many, this experience is life-changing and, sometimes, life-saving.

Women who are met at the emergency room at the local hospital by a transition house worker in the early hours of the morning and are taken to safety. Children who learn what it is to live without the fear of violence. Families who learn to accept and live with the disability of a child. Families who have lost their way and need help to live with each other in a healthy way. Parents who are isolated by poverty and who find friends through a parent-tot drop-in program.

These are all examples of the ways that people are supported by social services in our community. These people are our friends and neighbours. I see them in the stores or walking in the park. They're there at the Christmas concerts or at the soccer field. They are real people with real problems, and community social services help them find solutions with respect and caring.

Secondly, social services save money, as proven by the social-determinants-of-health research. Social services can prevent crises and intervene in people's lives before small problems become big ones.

Thirdly, social services are us. Everyone in our community benefits from social services. Even for those who never need them, the fact that social services exist means a great deal to their daily lives. Their schools are functioning better. Their children are growing up in a happier and healthier environment. The streets are free of chaos and misery. Their elders are better cared for, with a high quality of life right to the end.

In our social service agency's 36 years of history we have seen countless examples of the changes that social services have brought about in people's lives. We've watched children with disabilities gain confidence and strength — grow to become independent adults — and adolescents in crisis or in danger of living a life of criminal activity learn to make better decisions and become contributing members in our community. We've watched women and their children break the cycle of abuse by taking the first steps towards freedom from violence. We've seen families in crisis find the strength to become the parents they want to be, raising healthy and happy children.

[1325]

In conclusion, I have two requests.

(1) That your committee consider the inherent value in the social service sector infrastructure and services as a key to improving community health and well-being and that our sector be viewed on an equal basis with health and education when setting budget priorities.

(2) Cuts to MCFD-funded programs this year in our community have eroded the most essential services for the most vulnerable citizens, many of whom are children. This year we now have less family counselling when child abuse or neglect is an issue. We have less family support when relationships and behaviour are in crisis. We have less counselling for children who have been sexually abused. We have less counselling for children with mental health and behaviour issues. We have less early childhood education programs to give children the best possible start in life and less life skills for youth at risk in transition to independence.

We also request that you recommend restoration of this funding and ensure these services are protected from shortsighted budget cuts. The result would be savings for us all — as individuals, as families, as communities and as a province.

Thank you for your kind attention.

J. Les (Chair): Thank you. We've got a couple of questions. The first one is from Norm.

N. Letnick: Thank you for your presentation and for your work in our province. I think everyone around the table understands social determinants of health and does what we can to improve the social infrastructure. This
[ Page 1079 ]
leads me to my question. We are in a budgetary process, and therefore money going to one place comes from somewhere else. Either it comes from debt, from taxpayers or from some other program. We have to be very careful as to the redistribution that we're talking about here.

If there was one thing that would have the greatest impact…. In your analysis over your years in this field, what would be that one place that you'd want to see us put more dollars in, that would reduce the social-determinants-of-health impact?

G. Lifton: Wow. That's a difficult question. I'm not an expert in the social determinants of health, and I think it's a huge issue which requires a lot more research. I don't think it's something that can be implemented in even a one- or a five-year process. I think it needs a really thorough investigation as to just how those links are, like which link creates the most impact along the way.

I'm looking at the big picture there, but from our community, I think more dollars into early childhood education and violence prevention would be where I would want to see any dollars go. Vicki may have a different perspective. She's the executive director.

V. Dobbyn: Yeah, I'm happy to add to that. I see that this afternoon you're going to be getting a presentation from the B.C. Association of Family Resource Programs. I'm really encouraged. I would say, similarly, early childhood programs for families, family resource programs.

I know the province has invested in StrongStart programs and full-day kindergarten in terms of the early learning aspects of child development, but what we find is that for those families most at risk, the opportunity to have informal family resource programs, where they can be linked to other services in the community, is really essential.

That's where we're seeing funding cutbacks. I'm sure that this will be reinforced by what you hear this afternoon from family resource programs.

I also see that you're hearing from a human early learning partnership as well. I think they'll also validate that.

M. Mungall: Thanks very much for your presentation. I see here in your first request…. To me, it could be reframed in another way — looking at a poverty reduction plan. Maintain the priorities of social services within a framework of reducing poverty and make sure that all things that you have been talking about are realized.

I'm just wondering. Before I go and assume that we can reframe it as a poverty reduction plan, I'm wondering what your comments are on that.

V. Dobbyn: Well, I would really support that kind of reframing. Again, the research…. That's one of the major social determinants of health. And that's what our experience is in our community. It's that poverty really is at the root. It creates instability in housing, lack of opportunity, lack of food security, all those things.

[1330]

We have, as an agency, signed on to encourage a poverty reduction plan for British Columbia. So yeah, I would really support that point of view.

G. Lifton: I would also like to say that some of the problems that arise in families, the family violence situation, are not in a poverty-based environment…

M. Mungall: Absolutely not.

G. Lifton: …and that we wouldn't want to just look at increasing services for people that have low incomes or at decreasing the level of poverty at the expense of those programs. They are just as critical, I think.

M. Mungall: Certainly. I'm sorry if you felt that I was suggesting that. I by no means was at all.

G. Lifton: I just wanted to make clear that we feel that those programs are critical too.

J. Les (Chair): Nobody around the table misunderstood you.

Any other questions from anyone?

Thank you very much for coming this afternoon.

G. Lifton: Thank you for having us.

J. Les (Chair): Our next presentation is from the Ladner Sediment Group, and coming on their behalf is John Roscoe, Jim McMillan and the aforementioned Vicki Huntington.

J. Roscoe: Good afternoon, ladies and gentlemen. Thank you for this opportunity.

We want to talk to you about the Fraser River. The management of the Ladner channels is becoming a very severe scenario. We'd like to look at two scenarios.

One is the short term, which is immediate dredging of these channels. This is going to improve the navigational safety for both commercial and pleasure craft. The other thing it will do is effective water use for businesses and residential owners that live along this waterfront. It will improve the channel depth to enhance flood protection during the spring freshets. That's the short term.

In the long term we need to study and implement corrective actions to sustain these renewed river depths by river management draining techniques in conjunction with Port Metro Vancouver, the corporation of Delta and the city of Richmond.

The channels mentioned above are identified by Port Metro Vancouver as Deas Slough, Ladner Reach,
[ Page 1080 ]
Ladner harbour, Canoe Pass and Sea Reach. Prior to 1998 the total Fraser Valley lower region, including the above-mentioned channels, was managed by and was the responsibility of the Canadian Coast Guard, and it was funded by the Canadian government with the Department of Transport and Public Works playing an important role.

During that tenure draining diversions were installed to enhance the flow in the main river channel, which had the effect of greatly reducing the need for dredging that main channel and saved the government millions of dollars annually. However, this proved to be at the expense of the secondary channels. With less flow and therefore a slower flow, these secondary channels have now silted up at an increasing rate.

In late 1998 the federal government discontinued its funding, and the responsibility for Fraser River management fell to what is now Port Metro Vancouver. However, funding for other than what would be self-generating did not accompany this transition. The net result is that no secondary channel maintenance has been performed for the last 15 to 20 years.

For those not familiar with the Fraser River, it's the largest river in British Columbia. It flows through nearly three-quarters of B.C.'s length. It carries an average of 20 million tonnes of sediment a year to the ocean. Typically, about 3 million tonnes of that are distributed from Hope to the ocean. Of that 3 million tonnes, we in the Ladner secondary channels receive about 5 percent of that, or about 150,000 metric tonnes per year. From quick math, that's over 7,000 dump truck loads every year.

A recent survey by Port Metro Vancouver and the Canadian Coast Guard estimated that there is a minimum of approximately 1.2 million cubic metres now to be removed from the navigational sector of these channels to bring them back to the 1998 conditions.

What impact is that having? Foreshore water lot owners and leaseholders are having difficulty getting their boats to the dock. Floating docks and floating homes, etc., are going aground at low tide. This is costing the users of these channels, both commercial and residential, time and dollars to try and work around this problem. Vessels are going aground on a regular basis, which can prove a safety hazard to the environment and possibly threaten the lives of those people on board the vessels.

[1335]

This is also affecting the Department of Fisheries small craft harbour in Ladner and Tsawwassen First Nation peoples who operate their fishing vessels in these channels.

Commercial users and residential float home owners along these channels are going to have to consider moving to other locations within the next few years, and some of those commercial establishments will probably close their businesses. The resulting devaluation of these properties, from a waterfront lot to a swamp lot, is going to be in the hundreds of millions of dollars, and it will result in major tax revenue losses for the Ladner community as well as revenue losses for the provincial and for the federal governments.

Within the water lot leases that are held by the province of British Columbia, we as water lot owners are responsible for keeping our property clean. Unfortunately, it's hard to dredge out the area where we live. We end up digging a hole that's deeper than the middle of the channel, and the mud just slides right back in again.

What used to be able to be a five- to six-year program, where we can clean our own area out and it'll sustain it, now lasts three to four months. So it's not a simple problem. It's becoming a major problem.

Who are we? The Ladner Sediment Group is a group of volunteers comprised of local business people, foreshore property owners and concerned citizens, and we have banded together to raise attention and acquire funding to have these local channels dredged and then properly managed. We were encouraged by Port Metro Vancouver to form this group to work with the port and others to explore ways and means necessary to achieve this management over Ladner channels.

With financial assistance from Port Metro Vancouver, we have recently commissioned Hay and Co. engineering to compile current data of the silt infill. They have done that, and they are now proceeding to the next phase, which is to run that data through their computer model to determine what river management actions would produce the most effective and beneficial results.

These results and recommendations should be completed and presented to us by the end of the year. We should then have the necessary data to proceed with the dredging and move forward to river management scenarios to establish some long-term solutions to the funding.

We believe that this type of project needs to be overseen by and funded through government offices, and we are requesting all levels of government to come to the aid of this issue.

The scope of this project will run in the vicinity of $5 million to $8 million dollars, with about $4 million to $5 million for initial dredging, and the balance will go into the first phase of the in-river management. That information is based on preliminary information from Port Metro Vancouver, and a much more accurate estimate will be forthcoming when the Hay and Co. engineering report is finalized at the end of the year.

Where are we to date? Port Metro Vancouver, through their local channel-dredging contribution program, has contributed $125,000 to this project to fund the engineering study mentioned above. They have also recently advised us that they are prepared to commit an additional $2.3 million as their full contribution to this project.

The corporation of Delta — I believe that you people had the opportunity to listen to our Mayor Jackson a
[ Page 1081 ]
couple of weeks ago talking about this same scenario — has recently applied for funding for this project through the provincial government under the flood protection program. I believe it's called tier 3 in-river sediment management.

Sitting with me today, which you have already recognized, is our MLA, Mrs. Vicki Huntington. She's been working with us on our behalf to obtain the funding for this project. She has been in contact with the provincial Ministry of Transport in this regard, and we're very hopeful that Mr. David Byng from that ministry will visit with us and that we'll have some discussions with him in the near future. We've also been in discussion with other organizations and intend to pursue these in hopes that they also will be able to contribute some amount to the project.

In summary, there is an urgent and immediate need to correct this dangerous situation in these channels. Aside from the frustrations and the costs of dealing with the silted-in channels on a regular working basis, there is a potential for a major safety situation to arise, as well as the unknown of next season's spring freshets.

Our request to you and to our provincial government is to recognize the severity and the importance of this issue and to accept the financial responsibility of partnering with other government agencies to address and correct this situation.

There is one other point that Vicki Huntington would like to bring to your attention, if I could pass the speaker over to her.

[1340]

V. Huntington: Thank you, John. There is only one reason why I'm here in front of the committee. I know it's unusual. I believe it is absolutely critical that members of this committee understand that it is the province that owns the river bottom and, thus, the water lots. The province is the leaseholder along this river, the lower Fraser Valley and therefore, I believe, has a fiduciary duty as landlord to consider the protection of both the asset to the province of the water lot and its income-producing capacity but also the infrastructure that those water lots represent along the river.

There are homes; there are businesses; there are marinas; there are fishing fleets; there are extensive industrial assets. When the Port of Vancouver decided that it would no longer engage in dredging on the secondary channels, it basically left those water lots at the mercy of the river. Unless the province steps in….

That's why I'm in fairly extensive discussions with David Byng, deputy and CEO of Transportation, and his staff. Mr. Byng has been wonderful. He's been attempting to come and take a look at this issue, but we need the low tide for him to review it.

I just want this committee to know it's a very significant issue not just for Ladner but for Richmond and for other areas along that lower Fraser. You are owners of these water lots, and we need the assistance of the province in order to protect these assets.

J. Les (Chair): Good. Thank you. We could take a few questions.

D. Donaldson (Deputy Chair): Thanks for the presentation. It was great. It built upon what we heard earlier from the mayor of Delta, Lois Jackson.

You know, there's no denying the impacts that this is having. That's for sure. You've made that very clear.

My question goes back to the initial installation of the diversions. Who installed the diversions, and was that with the tacit approval of the province? In other words, did the federal government pay for the diversions and therefore should assume responsibility for the consequences that those diversions have created?

J. Roscoe: Good question. I guess probably from history, from what I know, only speaking from that area, it would have fallen under the auspices of either the Department of Transport or Public Works. So yes, it would have been a federal scenario that put those diversions in there, and that was the result of it.

Who's going to pay for it today? Everybody is Callaway Went Thataway. So what we're looking at, as the Ladner Sediment Group, is to try and get all levels of all governments together and say: "Let's do something about this."

It's got past the point of…. We have sent letters to Ottawa. Yes, we've talked to Fisheries; we've talked to Transport. We've had the Fisheries Minister, for other reasons as well, also come and view the scenario. She took a boat trip down our channels last winter. But we have seen nothing come from that. The most encouraging comment and situation we've had are from Port Metro Vancouver, with their contributions to the local channel thing.

V. Huntington: Could I just add to that, Doug? The province has an arrangement with Port Metro Vancouver to administer the water lot leases, and they split the revenue. But the port decided, when it amalgamated with the Fraser River Port Authority, that its only mandate was international trade, and thus it doesn't even assist politically in the attempt to find funding from the feds anymore. It just says: "It's not our problem."

You go to Transport Canada, and they say that it's the port. It's just become a circle.

Now, the port is assisting people, but only because they want those people to take on the job, so ultimately, they want to just pass it off.

We can't do this without the province, and it's a critical situation.

[1345]
[ Page 1082 ]

N. Letnick: Thank you for your presentation. Is there any opportunity to profit from whatever is mined through the dredging? Is that part of your financial analysis on the aggregates that are removed from the river?

J. McMillan: One of the other groups we have talked to is the Farmers Institute. We were looking at using the dredgeate for creating more habitat, especially off the west side of Westham Island. We have a snow goose influx starting any week or any month now, and it would be nice to keep that habitat for them located out there — so the dredgeate to be piped and added to that area.

N. Letnick: There's no financial private sector market for the dredgeate, as you call it?

J. McMillan: We were hopeful that it would be a little coarser than it is. There's great opportunity for creating roadbeds and what have you with the coarser material, but at our location in Ladner it's quite fine, and so that really isn't too constructive that way.

J. Les (Chair): One quick, final question from Michelle.

M. Mungall: Actually, you know, my question was answered.

J. Les (Chair): Good.

So that is it. We'll leave it there. Thank you for coming. It dovetails, obviously, perfectly with what your mayor was talking about a few weeks ago, and coming from a little further upriver, I can actually relate to the problem myself.

The next presentation this afternoon is from the B.C. Government and Service Employees Union. Darryl Walker and Michael Eso are here.

Whenever you're ready, just dive right in.

D. Walker: Thank you very much. I'm Darryl Walker. This is Mike. I'm the president of the BCGEU, and Mike is on our staff. He works in Victoria. Thank you for the opportunity to present to you today.

As you probably know, we represent about 65,000 people in the public and broader public sector in British Columbia as well as some private sector folks. Our membership is very diverse. We represent not only direct government employees in the public sector but health care and community social services and a number in the private sector or broader public sector, including privatized highways. We represent members in every area of this province, in every community of this province, and we're pleased to have the opportunity to speak with you today.

First, I'd like to provide a little context for the upcoming budget. I'm not sure I need to tell you because I suspect you all know, but we are going through one of the worst recessions that possibly most of us have ever known. Although we've seen some economic growth this year, several indicators make it clear that the economy remains very fragile. Fundamentally, household debt, interest rates and unemployment are weak, and the global economic growth is slowing — certainly not growing. There's some concern about whether we're going into a double-dip or whether this is just one great dip. At any rate, it's difficult times.

We believe that it's not time for the government to pull back and retrench. That would only take the steam out of the economy as it continues to grow, such as it is, but we believe that there is room for fiscal growth for investment. The provincial deficit is lower than expected, and revenue projection seems to be higher than anticipated. Indeed, the Ministry of Finance is telling us that B.C. is in a strong financial position.

Given this financial position and the current economic context, the BCGEU is recommending that the provincial government make immediate investments towards a long-term vision for healthy families, strong communities and a green economy. Specifically, we would like to talk to the government about having a look at five priority areas.

First, we believe there's a need to rebuild the public services for the benefit of all British Columbians. Second, we believe there's a need to support the well-being of families by investing, at a minimum, in health care and social services, and certainly education. Third, we need to protect our environment and their resources by addressing the crisis in the forests. Fourth, we need to rebuild our communities by promoting equity, sustainability and productivity. Lastly, we need to increase government capacity to support British Columbians by expanding provincial revenues and moving towards tax fairness.

[1350]

I'd like to go through these one at a time, if I could please.

First of all, public services. Simply put, it's small and it's shrinking. It is too small. It is, per capita, the smallest public sector in this country. We've seen over 800 jobs lost in the last year alone, and all forecasts point to significantly more reductions. These job losses create a drag on the economy, and they diminish the ability of the government to deliver important programs.

Although this erosion of government services appears to be frozen temporarily, that is not good enough. It is time to rebuild public services. To do this, the government must restore jobs and funding to ministries that have been cut and have seen layoffs since 2001.

We also need investment in public infrastructure. The government must reopen local offices and facilities that serve British Columbians throughout British Columbia. We need to fund new expanded infrastructure programs
[ Page 1083 ]
to improve service delivery. For example, we need to deal with the overcrowding and expansion of our correctional facilities, and we need to restore the work to our highway infrastructure. We need to make…. Why don't I go to the next page? That's that particular piece.

Health and social services — our recommendations around health and social services. As you know, investment in these sectors pays huge dividends both socially and economically. Unfortunately, we continue to see cuts and service reductions in seniors care, mental health, addictions services, services to children and families, and support for families or individuals with disabilities. The list goes on and on. We recommend that the government change its course and reinvest in these services to ensure that British Columbians have access to quality care and the supports they need.

For example, the government must invest in community health and residential care for seniors, in mental health and addictions services and in prevention and health promotion programs. These community-based services reduce acute care costs in our hospitals, and they create long-term savings and benefits to British Columbians.

More specifically, we need increased funding for home support to allow seniors to remain in their homes. We need increased funding for residential care sufficient to build 500 new not-for-profit licensed beds and provide a minimum of 3.5 hours of care per resident per day. We need a fully funded, comprehensive mental health and addictions program.

On the social services side, a recent poll by Angus Reid shows that 90 percent of British Columbians recognize that community-based services make their communities safer and more stable in the long run. The government, too, must recognize that these supports produce immediate and long-run economic returns, while also reducing health care costs and demands on courts, the prison system, police and, of course, municipal services.

We need to increase funding for government ministries and contracted agencies to be able to provide these services. We continue to need a comprehensive, fully funded plan for universal public child care. We need sufficient capital investment in community services in general, and we need an increase in government funding for Community Living B.C. sufficient to meet the needs of adults with developmental disabilities. Right now we are seeing cost-driven group home closures and service reductions that have created a crisis in this particular sector.

In our B.C. forests is another crisis that we're facing. Addressing this crisis is a further priority upon which a provincial government must focus. I don't need to tell you that the B.C. forests and parks are among our most valuable asset and are integral to our quality of life. Unfortunately, due to the cuts in servicing and staffing, we are no longer able to effectively manage these resources and protect our environment.

[1355]

At the Ministry of Forests alone, roughly 1,000 positions have been eliminated in the last decade, including 245 this year alone. Our forest stewardship capacity is crippled. Fires and pine beetles have decimated large areas, and forest-based communities are being devastated.

We are recommending the following action to address this. Restore funding and staffing at the Ministry of Forests and Range. Restore funding for environmental protection and assessment and compliance for Crown lands remediation and for B.C. Parks. Invest in reforestation, and support rural communities to gain more value from their forests and to diversify their economies.

Fourthly, equality, sustainability and productivity. In terms of equality, we need bold and immediate action to reduce B.C.'s exceptionally high rate of child poverty and the high rate of poverty in general. Not only is this the right thing to do; it will also benefit us in the long run by reducing crime, health care costs and demands on social services and by increasing school readiness and economic productivity.

There are a number of steps that the government must take to do this. It must develop, fund and implement a comprehensive poverty reduction plan with legislated targets and timelines. To end homelessness, increase income levels and reduce poverty rates, the government must raise the B.C. minimum wage and index it to inflation. Our minimum wage is the lowest in Canada and continues to decrease in real value.

The government must pursue programs and policies to raise British Columbia's standard of living, such as investing in public transit and affordable housing. This will reduce the living wage that families must earn in order to make their ends meet. And the government must restore funding to our legal aid system to improve access to justice and to facilitate increased court efficiency and cost savings.

On sustainability we need to create an environmentally sustainable economy built on good jobs for our local communities. B.C.'s greenhouse gas emissions are rising, our economy is in transition, and the employment levels are higher, perhaps, than ever. We can't address these issues in isolation. We need to reduce emission levels to create more employment and a higher wage by moving to a low-carbon, green economy.

We recommend that the government develop, fund and implement a comprehensive green economy strategy which will include the creation of green jobs, green manufacturing, green building construction and retrofitting, conservation measures and just transition programs for all workers. The government should also invest in research and development in new, green technologies.
[ Page 1084 ]

Lastly, it is critical that we must create support for families who are being hit hard by rising energy and carbon prices.

On the productivity front we recommend that the government invest in our universities and our colleges and in training and apprenticeship opportunities for young people. As we all know, education and skills training increase productivity and fuel long-term economic growth. We need significant investment in institutions and programs in these areas to move them more effectively, affordably and accessibly.

On the issue of revenue and taxation — which is, I think, the last of the issues I wish to speak to you about — over the last decade government policies and choices have constrained our capacity to support British Columbians. Combinations of corporate tax cuts and forgone government revenues have reduced government spending as a portion of our GDP. We need to turn this around by implementing measures to achieve fair taxation and by addressing B.C.'s revenue problem.

In tax terms, we think that everybody, especially big corporations and the super-rich, must pay their fair share for the public services.

In terms of revenues we would like to recommend, I believe, four areas that we would ask you to look at. The first one is our public liquor stores, where we believe perhaps as much as $150 million a year may be gained by opening more stores, having longer hours and Sunday openings.

[1400]

Our weigh scale operations, which have been shut down around the province or at least downsized because of the lack of staffing, are another area where we believe that there is money available. Our highways are being, I think, overloaded by vehicles that are too heavy, that are running without proper loads and so forth. So our weigh scale operations are an area that we can actually measure, and if indeed there are issues there, there are revenues available.

We need fair value for our forests in terms of making sure that when cut blocks are estimated for stumpage, we're actually getting proper stumpage rates out of them so that we actually get what British Columbians deserve.

Last but not least, we would ask the government to have a look at dealing with the federal government in terms of funding, as our provincial prisons become fuller and fuller due to changes that have been made around federal regulations around time served prior to trial.

We thank you for the opportunity to present to you, and if there are any questions, we will do our best to answer them.

J. Les (Chair): We have a couple. Probably time for only one, however.

D. McRae: Thank you very much for your presentation, Mr. Walker.

On page 7 — and you also made reference to it — you talk about where government can get some revenues. I was going to ask you how much you think the increasing of public liquor stores would bring, in dollars. You quoted $150 million. Basically, I think we see about $300 million or more, potentially, in revenue, but you asked a lot of billion-dollar questions today — billions and billions of dollars.

One of the things I'm always curious about is: where do you wish those billions of dollars to come from? Your members pay the lowest personal income taxes in the country. So are they in favour of raising the personal income tax? Or is your organization in favour of things like the HST, where we might grow the economy and have more dollars to invest into programs that you mentioned over and over again? It's really important that we get a sense of where you want those billions to come from.

D. Walker: I truly appreciate that question. I think it's a discussion that needs to be had with the government and with British Columbians in general. I think that now that question is being asked and the discussions are taking place. It would have been, I think, more appropriate had it been done ahead of time. Our members are not necessarily opposed to taxation, as long as they understand that the taxes are going to the needs of average British Columbians or ordinary people — education and health and so on.

When we poll our members — and, of course, we do polling beyond our membership — if the question is, "Are you in favour of increased taxation or things such as the HST if the money will then go to community social services, will go to education and health, will go to protect your environment?" inevitably, the answer in the 80-plus percent range would be: "Yes, we are."

It's a matter of how you tax people, and that's why we talk about fair taxation. Then it's a matter of how you spread those tax dollars around.

D. McRae: So you're saying that you would favour personal income tax increases?

D. Walker: What I'm saying is that if we talk about it…. I think there are ways of talking about taxation where people understand where the money is going and that people are willing to pay taxes for the right things. I think there's a balance to be made there. Those are discussions that we believe that our organization and other labour unions as well as other organizations around this province have a fair right to discuss with governments as we go towards budgeting.

J. Les (Chair): All right. We're more than out of time. Thank you, Darryl and Michael. Appreciate it.
[ Page 1085 ]

It looks like we'll be taking a recess for a brief time. The next organization that was supposed to be here now was the Canadian Federation of Students, to be followed by the Christian Labour Association.

Let's take a five-minute recess, possibly longer.

The committee recessed from 2:04 p.m. to 2:10 p.m.

[J. Les in the chair.]

J. Les (Chair): David Prentice and Alex Pannu from the Christian Labour Association of Canada are here.

Come on up, gentlemen. Go ahead whenever you're ready.

A. Pannu: Committee members, my name is Alex Pannu. I'm the director of communications and public affairs for the Christian Labour Association of Canada, also known as CLAC. With me today is David Prentice, who is the B.C. director for CLAC.

We'll just give you a brief outline of who we are. Then we'll go through a couple of points that are of particular interest to us, but we think that they could contribute to the debate about where B.C.'s economy is going.

Just to start with, CLAC is a labour union. We were founded in 1952 in Ontario. Today we are operating in every province from B.C. to Ontario. Although we don't operate in Atlantic Canada, we do have about 4,000 members who work for us, primarily in the Alberta oil sands.

We are in a variety of sectors, primarily construction, health care, transportation, manufacturing and mining. In British Columbia we have been involved in a number of high-profile projects, so although we're not as well-known as some of the other unions, you'll certainly recognize some of the things that our members have been working on, such as the Sea to Sky Highway, currently the Port Mann bridge and Highway 1 upgrade, the Shangri-La tower. Our members have built the convention centre, the Canada Line, the skating oval and the athletes village.

You might also note that we have a number of members in B.C. who work in the long-term-care industry. If you go to a Vancouver Canucks game, it's our members who will be taking your tickets at the door and providing security.

I'm going to turn it over now to my colleague David Prentice, who is going to outline some of our views on some of the issues that we think are important to British Columbia.

D. Prentice: Thank you, committee members. Thank you, Alex. I'm sure I'd be preaching to the choir if I said that we're facing, you know, a skills shortage in Canada and in British Columbia, especially in the resource sector. But that's an issue that concerns us as we go forward. The Conference Board of Canada said that they are projecting a skilled labour shortage of 160,000 in B.C. in the next five years, and I'm pretty sure that you're all well aware of that.

Generally, we want to encourage this panel and the government of the day to make sure they don't forget about creating and encouraging a culture in which skilled trades are valued in the high-tech, dot-com kind of world — knowledge workers, the infrastructure and the resource sector. We need skilled tradespeople, and we want to speak to that a little bit.

We have done some forays into the high school education system to profile CLAC and the work of our contractors, especially in construction and mining. We want to know that the government is finding ways to encourage students to look at post-secondary skills, skilled trades work, as a viable option.

Obviously, young people need to be educated about high-tech paying opportunities in skilled trades. It's not a plan B, we don't think, for some of those students and some of those up-and-comers if they're not interested in further post-secondary education. So there has to be an emphasis that this is a great future. Part of that has to do with how the work on developing our resources goes and whether there is a meaningful future for those people that want to select that type of work.

Right now only 18 percent of employers in the skilled trades hire apprentices. We think that is too low, and that is something that should be looked at.

[1415]

The Industry Training Authority is doing good work, but it needs more support and more resources. I'm finding out today that the funding that's coming from the federal government and going to the provincial government here has been received but is maybe not getting passed on to the industry training authorities or the various apprenticeship and trade authorities.

We would ask for not just restored funding, I guess, but increased funding to those departments.

Government also can help to increase efforts to attract, train and help find jobs for those traditionally under-represented in the skilled trades, such as women, aboriginals and new Canadians. Unions such as ours have already begun working with the aboriginal community. We have especially partnered with the Métis B.C. association. We're also currently involved with Women Building Futures, which provides women with skills to succeed in non-traditional careers such as construction.

The second point today is about the role that governments can play in creating economic conditions that create meaningful employment, and I've already alluded to some of that.

In B.C. we're blessed with natural resources, although the forest industry has had its fair share of difficulties. B.C. has a tremendous opportunity to provide economic benefits to all British Columbians because of our mineral resources and our growing mining sector, as well as
[ Page 1086 ]
the oil and gas sector and the shale gas sectors that we are actually involved in also today.

What we hear on the street or through the communications and through the media is that there's lots of overlap. You're all well aware of this, about the environmental permitting that needs to be done on some these mines — Prosperity being one of them — and that's there's duplication between provincial and federal departments. We would encourage you to find ways to reduce that overlap and that inefficiency, and also to improve decision-making timelines so that we don't sit and listen to things about the mine opening for ten, 15 or 20 years.

I think that ties into: where are the young people going to find jobs? If they're going to find them in meaningful trades jobs, then these projects needs to go ahead. They need to go ahead with some consistency so that people can find themselves in a career for their lifelong time, and they don't have to switch careers ten, 15 years down the road.

CLAC has quietly become one of the largest mining sector unions in British Columbia. We have plenty of members working in the oil sands who would love to come back to British Columbia, and we would like to see that happen.

Another sector where CLAC has recently grown is in renewable energy. Our members have helped build run-of-the-river projects at East Toba, Stave Lake and Harrison.

It's critical that the B.C. government continue to take advantage of B.C.'s abundant hydro power resources, the clean energy that comes from them and the jobs that go with that. I imagine there's an extension with wind power and various other clean technologies that produce the energy for us to become sustainable. But with those, from our perspective, what we're concerned about is always about producing good-quality jobs for our members and for British Columbians.

With respect to the biggest clean energy project in British Columbia, the Site C dam which we've heard lots about, at CLAC we have one piece of advice. This is something that we've been advancing wherever we get the opportunity. We would like to see major projects of this magnitude — indeed, all projects where they're contemplating a project labour agreement — not to be built under a monopoly.

Through our experience in the oil sands, where CLAC have partnered with CNRL to create a managed open-site labour agreement, which contemplated our union, other construction trades unions and other unions and non-union workers to work on the same site…. I think that was a $21-billion-plus job and 4,000 construction workers on that site at any one given time, with a fly-in, fly-out process. It was a big job, and harmony on that site went very well.

We're urging you to not create monopolistic labour supply, which we think will be uncompetitive and unfair to both the workers and to the construction contractors.

[1420]

We recommend B.C. Hydro use the model that is in place in the oil sands, which I've just described. We think that'll provide the best flexibility and help to ensure being built on time and on budget.

I think that's really all that we want to say at this point.

J. Les (Chair): Okay. That's great. We do have a few members with questions.

J. Thornthwaite: Thank you very much for your presentation. I learned something, which I always do. That doesn't imply that I don't learn. [Laughter.] Okay, I'm just going to move on.

You're saying that the CLAC offers workers all the benefits of belonging to a union without the negative aspects of forced membership, restrictive hiring practices and workplace hostility. I'm wondering if you could perhaps expand on that.

D. Prentice: In construction our collective agreements are built around what we call a wall-to-wall agreement where all the trades are in the one agreement. In the workplace our experience has been over the years that we can handle construction craft and workers that might be dual-ticketed. They might have a millwright ticket; they might have a carpentry ticket; they might have a pipefitting ticket. They can work on site.

We don't have any jurisdictional issues as long as they're within the confines of the law of the trades, of the apprenticeship model on where they can work and on what is actually unrestricted. You know, a carpenter can screw in a lightbulb and it doesn't shut the job down. That's part of our model — okay? — if that makes sense to you.

A. Pannu: If I can just add to that, Mr. Chair. I think it's important to note that our founders, when they came to this country, were interested in advancing the interests of workers and in social justice, but they weren't comfortable with the style of the unions that were prevalent in North America — you know, very confrontational — so they turned to the models that they knew best, which were the European Christian labour associations. So they tried to have a model where the focus was on trying to create cooperative labour relations, really focusing on principles such as respect and fairness and integrity in the workplace.

That's the model that we advance. It's a model that a lot of our competitors are not familiar with. They don't like it. They make allegations that we're not a real union.

But the fact is that we negotiate collective agreements on behalf of our members. We provide excellent and
[ Page 1087 ]
competitive wages and benefits. We provide training for our members. We provide extras, such as discounts. We do all the things that any other labour union does. We have generally the same objectives as any other labour union, but we do it in a different way.

J. Thornthwaite: I appreciate that, and I'm sure a lot of the other committee learned something about that too.

D. Donaldson (Deputy Chair): Thanks for the presentation. I especially paid attention to the part about the skills gap and the apprenticeships. It's a big concern across B.C., especially in rural areas.

One point you made that really concerned me was around funding of the ITAs. You alluded to the fact that funding may have been received by the province from the federal government but not passed on. Can you elaborate on that a bit? That's a very big concern, if I heard you right on that.

A. Pannu: I think there may be some miscommunication. Essentially, what we're trying to say is that the ITA has been doing a good job, but we note that in the last budget its operating budget was reduced. I can't remember exactly the amount. We feel that not only should those amounts be restored but probably increased because we feel that it's taking a leadership role in what we're trying to accomplish.

Obviously, there are a lot of stakeholders that have to be involved, not just a government agency. A lot of employers must be involved, to be encouraged to hire apprentices. More unions need to be involved.

It's also a cultural thing. As you know, in high school students are encouraged by their counsellors and teachers to go on to university or college. We don't get that same kind of respect for people who are interested in skilled-trades careers. We need to create a culture where people understand that those are great careers.

[1425]

They're really great-paying jobs. They're highly skilled. They require a lot of education. They're not those kinds of blue-collar, metal-bashing jobs that you saw in the past. It's a path that we don't feel is given enough exposure.

J. Les (Chair): Okay, thank you, gentlemen. That's the end of your 15 minutes. We appreciate you coming today and making a presentation to us.

We are now going to go back one step on the agenda here with the Canadian Federation of Students. They have now arrived.

Unfortunately, you have arrived late, and you've cost us a bit of time. We had to take a recess while we were waiting for you earlier, so I'm going to have to cut you back to ten minutes. I'm sure you'll make it work somehow. Okay, dig right in, you guys.

N. Takkar: Good afternoon, everyone. My name is Nimmi Takkar, and I'm the chairperson of the Canadian Federation of Students–British Columbia. CFS-BC is British Columbia's provincial student organization representing 17 student unions, with a collective membership of 150,000 university and college students studying at all levels of post-secondary education. CFS-BC's mandate is to advocate for a high-quality, publicly funded and accessible post-secondary education system in British Columbia.

I would like to start this presentation off by congratulating the government on the first provincial U-Pass program in Canadian history. Students are excited that this program has been built based upon our feedback and participation. The U-Pass enshrines the role of students in the emerging transit generation. This kind of forward thinking and initiative from the government demonstrates the kind of leadership our province can take when students and the government can work together.

Today our presentation will have two parts. First, we'll discuss two recommendations around transit issues for our members across the province and particularly the U-Pass B.C. program. Then we will talk about the key priorities that our members have determined as financial barriers in our current post-secondary education system. So we'll get started.

As students across the province are celebrating their U-Passes, we're also becoming increasingly concerned with the administrative costs being downloaded onto institutions and students. The Premier's announcement was widely celebrated by students across the province because it eliminated TransLink's discriminatory revenue-neutral policy that charged students living in the same region different prices depending on which institution they attended.

The standardization offered by the government's new U-Pass B.C. program is under threat due to differential administrative fees. Institutions are struggling to bear the costs of administering the program and are looking to download these costs onto students. We are recommending that the 2011 budget include funding for the administration of the U-Pass B.C. program.

We recognize everyone's commitment in this room to building a transportation system that would be the envy of all other provinces. We've seen the Minister of Transportation and the Premier commit to the SkyTrain to Langley city and developing other key corridors across the province. As one of the largest stakeholders in the B.C. transit system, students of British Columbia would like to see an improvement and the development of a transportation system that's reflected in the 2011 budget.

Our recommendation is that the 2011 budget include funding for the Metro Vancouver transit system, specifically for the Langley city SkyTrain, the Evergreen line and the Broadway corridor. We would also like the budget to
[ Page 1088 ]
reflect transit improvements in Terrace, Prince George, Castlegar, Kelowna and throughout Vancouver Island.

Now I'll move on to the second part of our presentation in addressing the financial barriers students are currently facing while trying to access post-secondary education.

[1430]

In recent years students' share of the cost of post-secondary in B.C. has increased, and public funding for student financial assistance has been reduced. Our members have prioritized seeking government measures to reduce student debt. Our priorities are to progressively reduce tuition fees to 2001 levels, to restore operating funding to universities and colleges to 2001 levels, to establish an upfront and need-based provincial student grants program and to eliminate interest on student loans. I've provided the committee with information in our written submission that discusses all four of our recommendations.

The B.C. budget consultation paper asks British Columbians: how can the provincial government strengthen the economy and better support the province's community? Well, we have an answer to that, and that is having an accessible post-secondary education system.

At a time when our province is focusing on rebuilding an economy after the recession, it's an opportunity for British Columbia to invest in a sustainable economic plan for our future. As I'm sure you know, three out of four jobs, new jobs, will require some level of post-secondary education, and in the last eight years B.C. students have experienced the steepest tuition fee increases of any province. Students in B.C. are graduating with an average of $27,000 of debt, and that's only public debt. It doesn't include debt that you might have from your bank or with your credit card.

It's clear, then, that there are two detrimental effects of the financial barriers in our current post-secondary system. (1) Fees are a barrier to participation for families from lower-income backgrounds, and at a time when new jobs require some post-secondary education. (2) For many of those who are still able to access education, fees have caused student debt to skyrocket higher than ever before, and at a time when consumer debt has been identified as a major economic problem as well.

Where do we go from here? We would like B.C. to aspire to be a leader in the post-secondary education system in our country and in the world. Since we have determined that upfront costs are the biggest barrier to the post-secondary system, we would like the 2011 budget to include the development of a new B.C. grants program.

Currently B.C. has steadily rising tuition fees, with only 12 percent non-repayable student aid. If you take a look on page 4 of our submission, you can see that we're about 66 percent less than the national average. Moreover, the provinces with comparable tuition fees to B.C. — which are Alberta, Saskatchewan and Ontario — all provide financial aid, of which approximately one-third is non-repayable.

The federal government, after hearing from members of the Canadian Federation of Students, established Canada's first national system of student grants, which took effect last fall. By adopting our fourth recommendation in the 2011 budget, the B.C. government has an opportunity to maximize student aid in British Columbia by establishing its own grants program to complement the new federal program.

Continuing on the subject of financial aid, I'd like to move to the fifth page of the handout. As you can see, when interest is taken into account, those who are forced to borrow to finance their education actually end up paying more than those who can afford it upfront. This means that young British Columbians are starting off in the hole with $27,000 of debt. What does that really mean? It means that young people are waiting to buy a car, to buy a home or maybe to start a family because they have debt to pay off.

This recommendation actually comes with a pretty small price tag. The government estimates have put annual revenue from interest on student loans at about $30 million. We see this recommendation as low-hanging fruit for the provincial government, especially as we are trying to rebuild our economy and retrain communities of people who've been hit really hard.

My personal story, actually, is a story that can kind of relate to this situation. I'm from Mackenzie, B.C., and both my parents work in sawmills. Both of them lost their jobs after the collapse of the forest industry. Now my dad is still unemployed. He's looking for new work, and he's finding that most of the jobs he's looking for require some level of post-secondary, which he doesn't have. He has a mortgage, and he's putting myself and my brother through school — or trying to put us through school.

We are finding it increasingly difficult to be a part of this economy that we're trying to build in B.C. I have to go to school and my brother has to go to school to make sure that that doesn't happen to us. Then, on top of it, my dad is trying to find some sort of retraining that he can do to make sure that he can pay his mortgage and keep our family afloat.

[1435]

We think that this is a pretty important low-hanging fruit of $30 million that we could celebrate with the B.C. government. I'm not sure if you guys have heard, but very recently the Newfoundland and Labrador government celebrated with the Newfoundland component of the Canadian Federation of Students their one-year anniversary of interest-free student loans. We're hoping that next time when we come to present to this committee that we'll be celebrating with you one year of interest-free loans.
[ Page 1089 ]

The benefits of making post-secondary education accessible are going to be enjoyed by every British Columbian. You might be wondering: "Well, shouldn't students ever pay for any of this?" We believe that it's not a question of whether students should pay for their education but a question of when.

Those with higher incomes as a result of post-secondary education should pay their share in progressive income tax when they can afford to. Such a system would ensure that those who start off from a low-income background are not shut out of the post-secondary system. Rather, they have an opportunity to reach their full potential and then contribute back to British Columbia to their full potential.

J. Les (Chair): Okay, we're going to have to leave it there, Nimmi. We're out of time. I appreciate your coming. Your presentation, which you've left behind — I'm sure we'll be studying it carefully.

The next presentation is on behalf of the Abbotsford Chamber of Commerce — David Hull.

Good afternoon, David. Away you go.

D. Hull: Good afternoon. I won't read absolutely verbatim here because I'm sure you all have a good command of the English language, but with some of the important bits, I will, so that I don't lose track of myself. I would like to thank you for the opportunity for the chamber to present today on this really important item and on what the government's priorities should be for the 2010-2011 budget.

The chamber of commerce represents the business interests of the fifth-largest community in British Columbia. We have about 4,500 businesses with business licences here in Abbotsford. Our chamber of commerce has been in operation for 98 years. We're looking forward to 2012 for our 100th anniversary. We truly are the voice of business.

In addition, our chamber is very, very active with the B.C. Chamber of Commerce. I assume you'll be the ones who'll be listening, if you haven't already, to the B.C. Chamber's comments, which will sound very, very familiar, as there's a common theme through the chamber movement in British Columbia. The B.C. Chamber represents 126 chambers and over 32,000 businesses of every size and sector throughout the province. We're also providing a written submission to this group. That'll follow in a matter of days, before the deadline.

J. Les (Chair): Which is tonight.

D. Hull: It's probably in, then, yes. My staff are on it.

We welcome the good news of the First Quarterly Report that clearly, the roots of the economic recovery are starting to take a grasp and showing some effect in the province. The fiscal outlook has improved by $2.5 billion since Budget 2010. It's this activity…. It's been announced that the government is able to maintain their current spending levels, while there is $2.1 billion available over the next three years for further tax reductions or additional spending.

It's within this context that the province has asked that B.C. comment on their perspective of how this should be used. The questions were, of course: fund new programs and services, cut personal income taxes or reduce debt? We'll address these in that order.

Funding new programs and services. The question must be considered in the context of the comments made recently by the Finance Minister: "Significant volatility still exists in the American and global markets. We need to maintain fiscal discipline." That, we think, is the core, frankly, of all our comments here today.

We agree with that statement. The events of the last years have taught us clearly that as a small, open, trading jurisdiction, British Columbia, even Canada as such, is really at the mercy of the influence of the rest of a very much larger world. There are still grave and massive concerns about the U.S. economy and around the world. To use these funds to increase government spending, with such an uncertain future, is both irresponsible and in fact dangerous to our future fiscal prosperity.

[1440]

The chamber believes that a discussion around increased spending…. Now is the time for fundamental reform in the manner in which government approaches spending and program funding. This is particularly relevant given the fact that we have seen marked increases in total spending over the past six years in B.C. Since 2004 we've seen total spending rise from $28 billion to over $36 billion in 2008, which certainly is an increase that far outstrips the economy or the population increase of British Columbia and the GDP.

The chamber of commerce recognizes that much of this funding goes toward maintaining essential services. The fiscal reality has highlighted the need for all spending needs to have measurable outcomes and avoid unsustainable situations that both increase the deficit and contribute to the provincial debt. Indeed, the fact that the questions of increased revenue have even been raised clearly demonstrates the continuation of an entitlement culture that typifies so much of government spending.

The chamber believes that much of this culture is a direct result of the historic practice — going on for decades upon decades, actually — of ongoing, open-ended program spending that really has no achievable or measurable outcomes. This has led to a sense of entitlement for many recipients of public money, which feeds an unsustainable cycle. Increases in public spending lead to increased expectations, which lead to increased demands, and around and around we go.

This does not mean that the chamber is calling on the government to arbitrarily reduce or eliminate program
[ Page 1090 ]
funding spending to organizations and agencies that provide critical services to the community. Indeed, the B.C. Chamber of Commerce has been clear that provision of services on a cost-effective basis often means that these services should be provided by independent agencies. The Abbotsford Chamber of Commerce unequivocally supports this position.

That said, there is little public information and transparency regarding the renewal provisions of government programs, both in terms of frequency and in terms of measurable outcomes. As such, it seems clear that no discussion should be held regarding increased spending until there is a fundamental reform over the provision of government funding to ensure that the public interest is measured against the public purse's ability to pay.

I am reading verbatim, aren't I? Oh well, it'll probably sound more intelligent that way. I could just babble off in circles.

Looking at some of the areas where we have concerns. Crown corporations. Looking through a taxpayer's lens, the chamber believes that now is the time to address the value to the taxpayer of Crown corporations. The provincial government has recognized the need for review of organizations that provide critical services with a report from the comptroller general on the government's model of TransLink and B.C. Ferries.

The core of the review was focused on the taxpayers' interest and the current structures of these organizations. The chamber believes that this principle should be extended to review all other Crown corporations to review whether the services provided by these entities can be provided more cost-effectively while maintaining service levels and the public trust through the transfer, either in whole or in part, of the public organization into private ownership or operation.

The chamber recognizes that many of these Crown corporations in B.C. provide critical services for British Columbians — insurance being an example. However, the fact that they are important does not necessitate that these services should be provided by a public entity, nor that this entity provides a better, more cost-sensitive or effective approach than could be provided through the private sector operating under agreements or provisions from the province.

For too long Crown corporations have enshrined monopolies in areas that are not the responsibility of government but are rightfully the role of the market to ensure choice, innovation and competition. The chamber believes that the principal tenet of the government must be to focus its activities on providing the services and providing the security that is the inherent transfer of trust and responsibility between the people and their government.

A stark example is the government participating in the retail business and the wholesale distribution of liquor, which does not meet this central tenet and simply reduces choice and open competitive markets, principal philosophies of the current government.

The chamber believes that competitive markets, where various vendors can ensure efficiency by competing on an open basis, best serve the needs of British Columbia's businesses and consumers. If private businesses are obligated to compete with the government-run entities, these government-run entities should not be able to abuse their privileges to distort the competition.

However, the province's Liquor Distribution Branch is not only the government-run vendor of alcohol but is also the entity that can unilaterally set the terms of the industry. The LDB, as the monopolist in terms of sourcing for retailers, sets the wholesale prices for retailers, often at a rate far above what the LDB pays, itself.

Unlike other provincial government–influenced sectors such as ferries or hydro, there is no regulation regulator or overseer that can limit the risk of monopoly pricing. While the LDB's annual consumer visits have fallen 14 percent since 2004, their operating expenses have risen 19 percent over the same time period.

The fear is that the LDB will use its price-making authority to recover its potentially inefficient operating model, making British Columbian consumers and private retailers the most impacted, paying higher than normal liquor prices. Being a rugby player, I can tell you this is a serious concern.

[1445]

Actually, as a quick side note from somebody who travels a lot, it's a real concern to the hospitality industry when somebody comes from even a highly taxed state like Washington State, crosses over to B.C. and goes: "It's $22 for a case of domestic beer?" It really is an issue. It was $4.95 for a case of cold Budweiser in Alabama this summer.

It's all about taxation. B.C. has the lowest tax rates for both personal and corporate income taxes in Canada, which is a direct result of action taken by the provincial government. The chamber is supportive of this initiative and looks forward to 2012, when there'll be a further reduction in this area, as outlined in Budget 2010.

Indeed, by 2012 B.C. will have a personal income tax rate that means that anyone earning $118,000 or less in B.C. will have the lowest personal income tax rates in Canada. If you earn more than that, you'll have the second lowest. That's really good news.

B.C.'s corporate income tax rates will be 10 percent, meaning it will have the combined provincial-federal rate of 25 percent, the lowest in Canada and the joint lowest in the G8 for small business, defined as half a billion dollars or less of annual revenue. The small business tax rate will be zero.

The chamber believes that it is critical that the government not only ensure that these tax cuts are fully implemented within the timetable announced; the chamber does not believe that tax cuts are needed beyond those
[ Page 1091 ]
already announced. That does sound a little counterintuitive, but that's our position when it comes to tax cuts.

If other jurisdictions reduce taxes, then, it's incumbent on the provincial government to take the necessary steps to maintain our competitive example. Should further tax cuts become necessary, the chamber believes it's important that these cuts focus on personal and business income taxes, which act as an impediment to investment, work and savings.

The chamber does not believe that further tax cuts are either fiscally feasible or required to maintain our competitive position. The chamber does maintain that there is a need to fundamentally reform one key area of taxation that's having a significant impact on our competitiveness, and that is the unfair burdening business property tax.

On to spending debt. The chamber appreciates that much of these increases to the provincial debt are derived from the provincial government's commitment to a significant capital infrastructure investment program. The chamber continues to support the need to address the significant investment deficit, the result of a long history of underinvestment in capital infrastructure. However, the current economic climate necessitates that future investment also mitigate costs for future generations.

The provincial debt burden is expected to continue to climb to $42.332 billion in 2010 and to $55.8 billion by 2012-13. Growth in the taxpayer-supported debt burden in excess of 30 percent is a considerable concern to the chamber, especially without a legislative plan to reduce the burden for future generations.

The key measurement of debt is the taxpayer-supported debt-to-GDP ratio. This covers the amount of debt that is borne by the taxpayer in relation to the amount of money that the province earns from economic activity. This will climb from 15.5 percent in March 2010 to 17.9 percent in 2011-12.

Budget 2010 reaffirms a commitment that once the province returns to a balanced budget in 2013, all surpluses will be dedicated to paying down the provincial operating debt. This will be important to reduce one contributing factor to the overall debt but will not have any effect on the total debt itself, which is the main concern of the chamber. Furthermore, waiting three years to begin such payments means that taxpayer-supported debt will continue to rise, mainly due to significant infrastructure investment planned over the next three years.

Our conclusion — six points we'd like to touch on. Hope we're okay for time.

On spending. Starting in fiscal 2011, that the province adopt a smart spending program that includes introducing a coordinated approach to government spending by ensuring increases are within the range of growth of real GDP across government spending.

Continue to review all direct program spending and operating costs on a four-year cycle that does not coincide with an election year, to determine the cost-effectiveness of government spending. I think they call it blacktop politics, don't they?

Introduce a taxpayer lens which will allow government to review, on a cycle that is in keeping with the fundamental planning of the Crown corporation, all the Crown holdings to see whether taxpayers interests are better served by transferring control, in whole or part, of a publicly owned or operated enterprise to the private sector.

Liquor distribution. Consider introducing a new model, or reforming the current model, for liquor distribution and retail in the province that recognizes the effectiveness of a competitive free market. Analyze and clearly communicate if it costs government more to sell liquor itself than have liquor sold through private liquor outlets.

On to the debt. Once balanced budgets have been achieved, legislative requirement that the provincial budget dedicate at least 50 percent of surpluses directly to debt repayment. Further, maintain this requirement until the total provincial taxpayer-supported debt-to-GDP ratio is reduced to 10 percent.

On taxation. Continue with your plans to make B.C. one of the most tax-competitive regions in the world by implementing the plans laid out in Budget 2010 to further reduce personal and corporate income taxes to the rate set for 2012.

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

[1450]

M. Mungall: Thanks very much, David. And you're right to say that we've heard from many chambers of commerce.

Interjection.

M. Mungall: Yeah, we definitely have.

I have found a lot of the presentations, actually, to be quite different — not too much similarity but definitely some similar themes. You do bring up something that is quite different from what I've heard before. It's new to me, and I'm wondering if you can explain it a bit more. It's at the beginning. You mentioned a sense of entitlement and a culture of entitlement around government spending, and specifically, you say: "...ongoing, open-ended program spending."

I'm wondering if you can expand on what you mean by this culture of entitlement and examples of program spending that was open-ended and didn't have any measurable outcomes, as you mention.

D. Hull: A pretty good example, to take something that's near, dear and critical to British Columbians but
[ Page 1092 ]
is a hugely significant portion of our provincial budget, is health. The government, as has been outlined by the Premier and ministers for years now, keeps talking about how much money they've put into health, how much money they've put into health. Yet you hear health authorities saying, "Oh gosh, we're $10 million, $20 million, $30 million over our budget," and we seem to have no answer to it. The doctors, the physicians' organizations, come out and say: "We need more money. We need this. We need that."

It just seems that regardless of how much money you pour into it, it seems to be a bottomless pit. I mean, at the chamber we literally get organizations that say: "We've got a grant to write a proposal to get some money to do this, and then that way we can hire people to write grants, to write proposals." It's a sense of entitlement, that there just is no end to the government money.

I give examples — it's not at the provincial level, but it's the same mentality; I was a city councillor for 12 years — of the police and fire department. Nobody wants to cut them — very, very important, just like health and education in B.C. are. You can pour money into those, and you'll never have the police chief or the fire chief say: "That's enough. We can't possibly spend any more money on this."

I'm sure when you came to the hospitals and the health authorities and the Solicitor General and all these very, very important things…. Education. The Vancouver School Board. I mean, "We're $20 million or $30 million over" — whatever the number is — "and it's not our fault. It's the provincial government. If they didn't fund us, we wouldn't have a problem with our budget." At some point there's no sense of entitlement or reality.

In the business world we deal with thousands of our members who every day have to balance income and expenditures. They have to balance their payroll and have to make it work. And at some point there has to be accountability, where the tap has to run dry. We cannot continue to plunge our province further into debt, throwing a massive burden onto generations — my children, my grandkids and beyond — because we haven't got our spending under control now.

J. Les (Chair): Okay. I feel a debate coming on, David, and we're flat out of time, unfortunately.

D. Hull: I can go on for the rest of the afternoon.

J. Les (Chair): Yeah, I know you can. I sense that pretty strongly, but we'll have to leave it at that for now. Thank you very much on behalf of us.

D. Hull: Well, thank you. I always enjoy these things.

J. Les (Chair): You bet. So do we.

Our next presentation is from the Fraser Valley Brain Injury Association. Mr. Epp is not yet here, so please welcome John Simpson, Julia Zarudzka and Carol Paetkau.

C. Paetkau: Good afternoon. Thank you for the opportunity to present to the committee. My name is Carol Paetkau. I'm the executive director for the Fraser Valley Brain Injury Association here in Abbotsford. This is John Simpson from many, many years of case management in our field — very renowned and very well respected. This is Julia Zarudzka, who is the president of the B.C. Brain Injury Association.

Acquired brain injury, if you're not familiar with it, refers to any injury to the brain that occurs after birth that results in changes to permanent function. This includes both traumatic injuries sustained from a force to the head as well as non-traumatic injuries from something like a stroke or an aneurysm, anoxic injury, toxic exposures and infectious diseases such as encephalitis and meningitis, so it covers quite a range.

Acquired brain injury is often referred to as the hidden disability because most of the problems aren't visible or may not appear to be that serious. You can walk into a room and not notice who the one with the brain injury is versus anyone who doesn't. It's the changes in personality, behaviour and cognition that present the greatest challenge as these individuals try to get back into some level of pre-injury function.

Our organizations are here today representing an estimated 22,000 people per year who sustain a traumatic brain injury in B.C. and the estimated 160,000 British Columbians who are living with a permanent disability from acquired brain injury. If you want the statistics, those are on the bottom in a blue box.

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Not all of the individuals who sustain an acquired brain injury will require extensive care, but those who do will have a significant impact on health care and social support systems in our province.

Acquired brain injury can result in a multitude of physical, behavioural and cognitive difficulties resulting in social isolation, loss of employment, family breakdown, increased risk of homelessness, multiple brain injuries, drug and alcohol use, involvement with the criminal justice system, mental health issues and suicide. All of those increase after a brain injury.

Brain injury is often misdiagnosed or ignored in the acute stage and is severely underfunded and underserved at the rehabilitation and community living levels. Bob's story, which I've included here on the first page, illustrates how systemic gaps in health care services contributed to a Chilliwack man's gradual loss of function, ultimately resulting in his placement in a long-term residential care facility at a cost of $130,000 per year as the result of multiple brain injuries. Bob's story didn't have to end this way if the appropriate supports and ser-
[ Page 1093 ]
vices were in place early and consistently throughout his recovery.

In sharp contrast — the next box — Bill and Marilyn, who are also from Chilliwack, received early intensive rehabilitation through ICBC for their brain injuries. Although they were severely injured in separate motor vehicle crashes, they are now both functioning very independently in the community. They work. They own their own home and are proudly celebrating 15 years of marriage in December, against all odds and all advice, and their current cost of care is minimal.

These two situations demonstrate the long-term benefits of early intervention, effective rehabilitation and ongoing monitoring. They also illustrate the glaring differences in potential outcomes for those that have funding for services versus those who do not.

Health authorities throughout B.C. have the responsibility for providing services for acquired brain injury as the provincial brain injury program was eliminated and its responsibilities delegated to the health authorities in 2002. Guidelines for Planning Brain Injury Services in British Columbia — it's a document developed for the health authorities during this process — recommends that services should be coordinated, best practices should be developed, and people should have access to the best care possible in a timely manner.

Unfortunately, these guidelines have had limited impact. There are still significant issues with program delivery and access to services throughout the province due in part to lack of commitment from health authorities as well as insufficient resources. This has resulted in tighter eligibility criteria, long waiting lists and gaps in the provision of care. In Fraser Health Authority individuals have regressed in their recovery due to long waiting lists, delayed transitions between services and inappropriate residential placements.

As the ability of the health authorities to meet the demands of this population are increasingly compromised, people turn to their local brain injury association, such as ourselves, which are already understaffed and under-resourced, with an estimated budget of $5.2 million per year to serve thousands of people throughout the province. You can see the details of that in appendix C.

It's essential to recognize the long-term cost savings of supporting this population. If rehabilitation and community-based programs are not adequately funded, individuals invariably cycle back into the acute care system or into the justice system, quite frequently. They are also at an increased risk of subsequent brain injuries, mental health issues, homelessness or residential placement.

As you can see from the chart on the left, the annual cost for a person with an acquired brain injury can range from $55,000 per year if they're homeless, $70,000 per year for incarceration and up to $130,000 per year for specialized long-term residential care treatment, in the case of Bob. The average life expectancy for people with acquired brain injuries is the same as you and I, so costs over a lifetime at that rate can be significant. Prevention, early intervention, rehabilitation and community support are the most effective means of diverting these individuals from more costly systems of care.

Brain injury organizations are using evidence-based practices to develop cost-effective programs that reduce health care, social support and incarceration costs over the lifetime of a person with an acquired brain injury. We are an essential part of the continuum of care.

J. Simpson: In 1986 representatives from the brain injury community began discussions with various representatives of government regarding setting up a system in which surcharges on traffic fines would be used to fund uninsured people with serious injuries — brain injuries, spinal cord, amputations, etc. A more detailed history is included in appendix A.

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These discussions were well supported until a change in ministers occurred. However, a few years later the neurotrauma fund was assented to on May 26, 1997, with funds being administered by the Rick Hansen Foundation. After some negotiations the brain injury community was able to access a portion of this fund through community grants. Recently we were given a unilateral notice that this funding will no longer be available for brain injury services as the Rick Hansen Foundation has reassessed its priorities.

Historically each year $350,000 from the $2 million provided to the Rick Hansen Foundation from traffic surcharges was provided to seven to ten organizations for community-based brain injury prevention, education, reintegration, employment and family support serving thousands of people annually. This is a tremendous loss to our community, and it will have significant impact on the already overburdened services throughout the province.

The population is seriously marginalized by cognitive, physical, emotional and behavioural issues and has difficulty advocating for themselves. Reducing their access to already limited resources will only serve to increase the impact on acute care, social support, residential care and the prison system.

Now, the brain injury community is already under-represented in government funding compared to other disability groups. Yet the incident rate far exceeds many of the well-recognized causes of injury and disease. If you refer to the chart on the left, for example, traumatic brain injury alone occurs over a hundred times more than spinal cord injury, yet it receives a very small portion of funding in comparison. Statistics from ICBC rehabilitation department are consistent with these findings, as well, and I refer to appendix B.
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J. Zarudzka: In order to address these issues, we are asking the committee to consider the following recommendations. The committee recommends an amendment to the British Columbia Neurotrauma Fund Contribution Act to provide an amount equal to the current neurotrauma fund of $2 million to be granted annually to the brain injury community, as the longstanding $350,000 from the current neurotrauma fund is no longer being distributed to community programs.

The committee heard a presentation from Doug Rankmore of BrainTrust Canada in Vernon, B.C., regarding the acquired brain injury innovation fund for British Columbia. We are in support of this proposal.

The funding would provide desperately needed programs and services such as a public granting program for projects that have a direct impact on the development of services for people with acquired brain injury; funding of applied research for determining incidence and prevalence rates and homelessness rates; as well as for developing effective strategies for people with brain injuries that are homeless, determining rates of brain injury in prisons, developing best practices for intervention and rehabilitation models, and determining the impact of prevention measures.

It would be for development of effective prevention, educational and enforcement strategies in order to reduce brain injury in high-risk groups; creation of a fund to assist the B.C. Brain Injury Association in developing a provincial acquired brain injury strategy; and encouraging and stimulating primary and continuing education about acquired brain injury in the humanities, social and health services.

Secondly, that the committee recommend that the Minister of Health undertake a review of the implementation of the guidelines for planning brain injury services in British Columbia by the health authorities to ensure a consistent continuum of care from the point of injury that will follow the individual through rehabilitation all the way to their reintegration into the community. Thank you, again, for the opportunity to present these recommendations.

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

N. Letnick: Thank you very much for your presentation. I have the opportunity during the winter to volunteer at Inn From the Cold, Kelowna, where I see a lot of brain-injured people — and other reasons as well — who come to a homeless shelter. You know, it breaks my heart to see these people year after year. So thank you for the work that you do in our communities and around the province.

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Dollars and cents. You're asking for $2 million. So that's the input. What measurable outcomes are you proposing that the ministry will be able to measure over the years to show that the $2 million is actually purchasing a service that will reduce the cost to the treasury overall?

You say that there's a cost for Solicitor General; there's a cost for health care and other areas. Is there any research that you can show in other jurisdictions where a $2 million investment in the services that you provide actually end up, in a measurable way, reducing those costs?

J. Zarudzka: I think part of the proposal we have is actually that we would create outcome measures along the way that would monitor this process of funding that comes through to us. Is that what you're asking?

N. Letnick: Well, what I'm asking is: have other countries or other provinces gone along the same road that you have or that you're thinking of going, which have already done the measurements that you can then use to show government? "Look, invest $2 million. You will actually save" — whatever the number is. It's not just: "We think you're going to save." There's actual evidence to show that there's a direct savings. The dollars are marginal — right? Whether we — on a marginal analysis basis — give it to you or give it to somebody else, we want to get the biggest bang for our taxpayers' dollars.

So the question is: can you show that your $2 million will be a bigger bang for your buck than putting it in health care, for example?

J. Simpson: There was a private study done in the States last year, I think, 2009, which showed that with quick rehabilitation and return to work, the money being invested by the insurer was saving…. I can't remember the exact figure, but I know another one where they say that for every dollar invested, they save seven. Now, this is for private insurance companies where they're looking at their bottom line, obviously, like anyone should, and yet they were providing a tremendous service with care and return to work. I have a synopsis of that report. So it can be done.

Maritime Life also did a study, and they showed clearly that for every dollar invested, seven were saved. I think another insurer — I can't remember the name — also showed…. So it can be done. The private companies are doing it. There's nothing to say it can't be done with public money too.

J. van Dongen: Just a question to John.

John, the notice from the Rick Hansen Foundation. Did they talk to you at all, or did you just get a letter? My understanding is that you were getting that money, the $350,000 to all organizations, for about 13 years. It was the same amount of money every year.

J. Simpson: I'll let Carol answer that, because I haven't had any direct dealings with Rick Hansen for a long time.
[ Page 1095 ]

C. Paetkau: Certainly, the $350,000 was historical for a number of years. I think it stopped for a short period of time while the B.C. Brain Injury Association was restructuring. But we got a letter stating that "our priorities are in a different direction, and you will no longer be receiving the $350,000" for the brain injury community support programs due to priority changes. I believe that their intent is to partner with the Brain Research Centre in Vancouver, which at this point doesn't do anything with brain injury at all.

J. van Dongen: And they didn't talk to you about it?

C. Paetkau: No, there was no discussion prior to.

J. Les (Chair): Okay. Thank all of you very much for coming this afternoon. We appreciate what you do.

Our next presentation is from the Denominational Health Association. Arthur Enns is here.

Good afternoon.

A. Enns: Good afternoon. Thank you very much for the invitation. I would like to, by way of introduction, mention that my day job is as CEO of the campus of care here in Abbotsford called Menno Place, but I'm speaking today on behalf of the Denominational Health Association, or DHA, which represents all of the faith-based hospitals and care facilities in the province. My current role with DHA is as past president. The current president is Dianne Doyle, who is CEO of Providence Health Care, which includes St. Paul's Hospital and other facilities.

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I wanted to just begin with a disclaimer. In thinking about today, I couldn't help but remember some times past, even going down to the 1980s. Some of those years I was serving as a board chair of an acute care hospital. I remember making trips to Victoria with the executive director, where we would advocate for increased funding because, as everyone knows, there is never enough funding for health care. Some things never change.

This is just to say that that's not the purpose of my presentation. However, if you do detect a subtle reference to funding, I trust that you'll just attribute that to habit or perhaps as an invitation to add resources to a part of the system that I think is working well and, because I think it's value-added, is a good area where scarce public dollars can be stretched.

I just want to address three quick questions. What is DHA, what can we offer, and what can government do for our sector of health care?

Just to refer briefly to the facts and figures handout, it gives you an idea of the makeup of our organization. I didn't list every facility, simply because there are 59 of them. They're owned and operated by a total of 23 non-profit societies, most of which have been around for a number of decades.

In fact, health care in B.C. was started in 1858 by the pioneer convent Sisters of St. Ann in Victoria. That was the beginning of health care in B.C., and faith-based health care is still going strong.

Our membership includes organizations from 12 denominational or faith groups: Anglican, Baptist, Hope Reform, Jewish, Lutheran, Mennonite, Pentecostal, Plymouth Brethren, Roman Catholic, Salvation Army, Seventh-Day Adventist and United. A few years ago when some of us met with someone who was then the new Deputy Minister of Health, one of the things he said was: "How do you guys all get along?"

I was glad to be able to assure him that we actually got along very well. Having been on the board for probably half of the last 15-year history of the DHA, I can attest to that personally.

Two of our key purposes are to strengthen understanding and cooperation between denominational health care facilities and government…. Of course, that's important, not just because of the dollars involved — as you see on the fact sheet, there's over $1 billion involved in operational funding each year — but also because the system continues to evolve. We like to think that we can be part of the answer, not part of the problem, in terms of some of the things we encounter in health care over time.

Second is to ensure that the multicultural and spiritual needs of our patients and residents are adequately provided for.

What can DHA offer? I believe we can offer a holistic approach to care. That's because illness, frailty and disability affect not only the body but also that part of us that thinks and feels and interacts with others. Those who receive care in our facilities often speak of the compassion and hope they experience, which is a significant part of healing and wholeness.

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We also offer a strong volunteer base. That applies to the board members as well as hands-on volunteers. A lot of that comes from the faith base of the organization, but not strictly. We have many, many people who work as volunteers in our facilities who are part of the community and see this as a good, healthy place to be involved in.

I also think clear values helps an organization stay on course in the midst of major change. Having your values clear is really important in this kind of field. I particularly like the tag line that Providence Health Care uses, which is "How you want to be treated." Of course, it's a double inference there in terms of "treated," because it has to do with medical treatment but also how we're treated as people.

That's extremely important when it comes to our experience, because normally when we need the system, we are at a very vulnerable state, and how we are treated by people at such a time makes a huge difference.
[ Page 1096 ]

Experience. Most of our members have been in operation for over half a century and, as mentioned before, some more like a century and a half.

Then last and probably not least, in terms of finance, is the capital investment in land and buildings that has been made over the years. That's no small thing when it comes to the cost of health care, which is borne by the founding societies.

So then what can government do? The first thing I put down was: "Ensuring a level playing field." Sometimes we simply use the term "equity." There are many of our members who feel that funding often isn't equitable, and it's hard — well, it's not hard; it's impossible — to please everyone, as we know.

One of the things that makes that particularly difficult is that health authorities are funders as well as operators of facilities, and so when it comes to those facilities that they own and operate, sometimes the perception is that they're treated a little differently from those that are contracted service providers.

Secondly, I put: "Encouraging a user-friendly environment." As our Chair knows, we've been working on a service provider agreement, a new one, for I think about six years now, and we're still in the process.

In fact, next Friday we're meeting yet again with representatives of the Ministry of Health and the health regions — when I say "we," I'm speaking of the DHA as well as the B.C. Care Providers — to see if we can come to terms, because the format and the wording of the proposed agreement are such that it doesn't present a particularly user-friendly approach. It's perceived as very one-sided. We're coming close, and we'll see if we can get through that particular hurdle after all these years.

Fostering an effective partnership. As I thought about it, you know, the term P3, public-private partnership, has been used in a very specific way about certain projects. But I think it also has a generic sense in which our facilities have been doing public-private partnership for many years and doing it very effectively. I think it's an outstanding example of how it can work and work well.

How am I doing for time? Still okay?

J. Les (Chair): Yeah, you're good for about another five minutes, Arthur.

A. Enns: Okay, I'm coming near the end.

J. Les (Chair): But I've got a few people who have questions too.

A. Enns: One of the things that I've noticed in the last several years is that as older facilities come to the end of their normal life and it's time to replace them, there was a time when government grants were available, etc. They were often a very partial grant — maybe a third, sometimes less than that. That seems to have disappeared.

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One of the consequences is that, particularly in long-term care, we find those that are either very large non-profits or fairly large multinational companies that provide long-term care…. They seem to be the only ones able to replace the older buildings.

I think that should be a matter of concern simply because there's the danger of losing out on something of value when some of the very good service providers cannot continue doing what they're doing.

Two more points. Recognizing a good investment. I couldn't help but think of how one sector of the federal government provides matching grants to those non-profits who do a particularly good job in doing foreign aid very effectively.

I couldn't help but think of…. If you see something working well, where dollars are being stretched, where things are being handled in a responsible, accountable and very effective way, that's where you want to invest, because that's where the dollars go further.

Lastly, just a couple of points from our members, as we polled them for some input. One of them said:

"The only thing I could add would be a request to see more funding for B.C. Housing. They had a $30 million decrease in their budget last year. Since the government cut the B.C. Housing budget, we've had numerous clawbacks, 50 percent reduction in replacement reserve funding and difficulty in achieving inflationary increases to cover shelter costs. Most of the seniors discussion may be on the care side, so I think that shelter may be ignored."

That's one comment.

The other is from my colleague Dianne Doyle. She'd love to see government announce the long-awaited funding for planning, developing and renewing of St. Paul's Hospital.

With those comments, I'll bring my presentation to a close and invite your questions.

J. Les (Chair): Thank you, Arthur. We probably have time for two questions.

D. Donaldson (Deputy Chair): Thanks for the presentation. I'm aware that the United Church Health Services Society operates two hospitals in B.C. I just wanted to confirm if they're members of your organization.

A. Enns: Yes, they are.

D. Donaldson (Deputy Chair): Then my next question is: is it a mishmash of operational agreements between these various facilities and the provincial government on funding, or does the funding generally occur in an agreement directly between the associations and the Ministry of Health? Or is it a health authority that gets involved? Can you quickly describe that?

A. Enns: Yes. Back in the mid-'90s it moved from the ministry directly to the health authorities. The reason why we're having discussions with the ministry over the
[ Page 1097 ]
service provider agreement is because there is a desire, I think on both the health authorities' part and our part, to see a standard agreement used throughout the province. The government is trying to facilitate that.

The funding does come directly through the health authorities and to the service providers.

N. Letnick: Thank you for your presentation and for the work of your organization throughout the province. Two quick questions. You talk about equity. My first question is…. Activity-based funding has been announced by the government. We call it patient-based funding. Are your hospitals able to participate in that?

The second one, if you have time, is: does that mean your hospitals are also able to provide services that are deemed medically necessary in a British Columbia context to exterior markets for profit?

A. Enns: I believe that so far the activity-based funding has to do directly with the acute care side. Dianne Doyle could speak to that more specifically. I have no doubt that if she were here, she would say yes; they can provide services to those outside the province zone. They have excellent resources, world-class resources, in certain areas.

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On the long-term-care side, what has been introduced in the last few years is something called interRAI. It's a program that is designed to have an objective approach to evaluating the care needs of residents.

I understand that in time that system will also be used for funding, and so funding will go along with the assessments. That would be a wonderful initiative as far as we're concerned, because what we've seen is a gradual and sometimes not even so gradual rise in the acuity level.

Many of the people who are in long-term care now used to be in the acute care hospital, and many of the people who are now in assisted living and also even in independent living used to be in the long-term-care side. So there has been this huge shift over the years, and that's simply accelerating right now.

J. Les (Chair): Thank you very much, Arthur. Appreciate you coming this afternoon. I'm sure we'll see you again soon.

At this point we'll take a short recess. The next delegation that I'm expecting is from the Abbotsford board of education. So we'll stand recessed for a brief period of time.

The committee recessed from 3:26 p.m. to 3:34 p.m.

[J. Les in the chair.]

J. Les (Chair): All right. We will reconvene. The representatives from the Abbotsford board of education are now here. Let's welcome Cindy Schafer, Shirley Wilson and Julie MacRae.

C. Schafer: Good afternoon. I've actually invited our acting secretary-treasurer, Kevin Godden.

J. Les (Chair): Certainly, his name is not Shirley. I can tell. [Laughter.]

C. Schafer: Our superintendent here, Julie MacRae. And yes, I am Cindy Schafer, chair of the Abbotsford school board. Thank you very much for taking the time to hear us this afternoon.

Hon. Chairman, members of the committee and guests, on behalf of my colleagues on the board of education of the Abbotsford school district, I would like to thank you for the opportunity to address you today. I think it would be wise on our behalf to just mention that the Abbotsford school district has a long history of working cooperatively with our local MLAs and the Minister of Education to resolve our concerns. We know that they work both diligently and constructively on our behalf.

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You should also know that our school district has historically been a very well-managed school district through good governance and prudent fiscal management. We have been able to provide a quality education experience with lots of choice for our children and our community.

That being said, there are a number of challenges in the current approach to funding school districts that do not serve Abbotsford students and their families that well, in our opinion, and we would like to bring three of the most significant of these challenges to your attention today.

The reason I've asked our acting secretary, Kevin Godden, and our superintendent, Julie MacRae, to sit here is that if you have any clarifying questions, we would be happy to try and address those for you, because our presentation is quite brief.

The first issue that the board would like to raise is the tangible and intangible costs associated with the current approach to determining class size in the province.

The introduction of Bill 33 and amendments to the School Act that require administrators to consult with and obtain consent from teachers now means that much of the first month of each school year is devoted to documenting and reporting interactions between and among adults rather than to the planning and delivery of quality education instruction to students. The lost instructional time devoted to this school organization process needs to be both quantified and recouped as soon as possible.

More importantly, there's a second aspect to this, the requirement under section 76.1(1) of the School Act for the calculation of class-size-aggregates needs to be re-
[ Page 1098 ]
viewed, in our opinion. The requirement for this calculation predates the specific requirements of Bill 33, which amended the School Act to establish the finite class sizes and the requirements for consent and consultation. In effect, it creates a double jeopardy situation for boards of education, where there are two different targets to be met simultaneously.

As an example of the impact of these two requirements coexisting, as they currently do, the Abbotsford school district this fall was forced to create nine new elementary school classes at a cost of approximately $900,000 to meet the mathematical constraints known as the aggregate class size, even though there were no oversize classes in any of our elementary schools. Similarly, 4.5 extra classes, at a cost of approximately $450,000, were created to meet the aggregate class sizes in the 2009-2010 school year even though the actual class-size limits had been met.

Another major challenge for us is the current policy that prohibits the disposal of surplus school property without the express approval of the Minister of Education. Abbotsford school district has had an exemplary record of either repurposing our surplus properties or using the proceeds from their sale to offset the cost of new capital projects.

The current policy is inhibiting our ability to move forward on several badly needed projects while simultaneously forcing us to hold on to deteriorating assets that are surplus to our needs. We understand the need for prudence with respect to the disposition of public assets, but the current policy seems to be unnecessarily restrictive as it does not take into account either local economic conditions or the track record of individual school boards.

Finally, our third concern has to do with the distribution of CommunityLINK — that is, learning includes nutrition and knowledge — funding. Abbotsford has the highest number of children in care in the Fraser health region, at approximately 11 percent, and 27.8 percent of its incoming kindergarten students are vulnerable on at least one of the scales on the early development indicators, the EDI indicators — that would be education terminology — yet the Abbotsford school district receives less CommunityLINK funding than several other districts on a per-capita basis.

We did include a chart, which you can't see because we only brought five copies. We didn't actually do our homework; our apologies. If you would like these five copies, we would be more than happy to give them to you at this time, and we would be more than happy to follow up with an e-mail with further information. I should have done this at the beginning. My apologies.

I think I'm having a case of the nerves. I guess that happens. I will resume.

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Given the level of need within our community, it is difficult to understand, and even harder to explain to our constituents, why this discrepancy exists. It is vitally important to our board that the basis for these allocations be reviewed and rationalized so that we can continue to support our neediest students with more of the basic resources they need to achieve success.

Page 2, at the very bottom there, is that chart. If you would like to take a moment to look at that, you can compare. We have Abbotsford, Chilliwack, Maple Ridge, Mission and Langley, with the number of vulnerable students, the per-pupil dollars and then the CommunityLINK dollars that are associated. That just gives you a little bit of a comparison to take a look at. Then the head count is so that you understand the relative size of the school districts.

In closing, I'd like to express again on our behalf our board's appreciation for the opportunity to address you today. In light of the many competing priorities that government is required to fund, the board continues to be appreciative of the importance given to the education funding among those priorities. The board is confident that with some re-examination of some of the current allocation guidelines and policies, we can continue to prepare our students to become literate, socially responsible citizens who are well equipped for life in the 21st century.

J. Les (Chair): Thank you very much, Cindy. First question is from Norm.

N. Letnick: Thank you very much for your presentation and all that you do for our province. Also thank you for your balanced approach today. What you gave us was really refreshing. It's nice.

Another issue, which you didn't bring up, is the transition from high school into college and university. What are you doing in your school district to help students who are maturing — grade 11, grade 12 — transition into college and university, transition well, so that it's accessible as well? With the semester system, there might be a barrier there where I think you can graduate at the end of January, but the semester starts in January. So if you can talk a little bit about that.

Also, year-round schooling — if you have any knowledge about going to year-round schooling and how that would help or hinder students transferring into post-secondary.

K. Godden: We have a number of partnerships with post-secondary, in particular at the University of the Fraser Valley, where we have students who can gain simultaneous credit at the university while they are in high school.

A perfect example of that, for instance, are CTC programs. There are students who are in carpentry programs, automotive programs, welding and several others where they are taught by university instructors in grades 11 or
[ Page 1099 ]
12 and are given a leg up, if you will, as they transition into university. The credits that they gain while taking university classes are double-coded so that they receive high school credit as part of their graduation program and an opportunity to transition smoothly. Those students do particularly well.

We have in virtually every one of our high schools some kind of opportunity like that for kids to connect with university courses and to assist with the transition. In addition to that, obviously the grad program speaks to….

The grad transitions part of the program does provide students to put together a plan around what their transition would look like. That's a part of the work that's done with them with school counsellors. So every student, really, as a part of their program, does have a look at that, but we do have things in place to allow specific students to transition and begin to get themselves ready for post-secondary.

N. Letnick: On the timing issue, being able to get your 80 credits by the end of January, for instance, in the school?

K. Godden: In some cases there are students who do graduate early. That happens. I'm not sure if your question relates to whether they are able to transition into university at that time.

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We don't necessarily right now have things in place to allow those students to get into university early, if that's what your question is, but we have the capacity to certainly graduate students early, and the university has the capacity to take them. Again, a lot of those students that I just referenced do make that transition early. But it's not something, at least at this point, which occurs that frequently. It's perhaps one of the things that we need to do to make the experience a little bit more personalized for students, but the capacity exists, and there are students who do make that transition early.

J. Thornthwaite: Thank you very much for your presentation. I do appreciate your comment at the beginning about cooperation with the provincial government as well as your local MLAs. That's very much appreciated.

I know from my background on the North Vancouver school board that we have very similar comments about Bill 33. We have had quite a few presentations from other school boards, including the BCSTA. I'm wondering whether or not your comments about Bill 33 are more universal than perhaps where we've been getting presentations from. Do you happen to know that, from your communication with other school boards?

C. Schafer: I wouldn't presume to comment in that regard other than to say that our observation of…. Really, our dilemma is the double-jeopardy part of Bill 33 as well as the class-size-aggregate component. It's not just a comment on Bill 33.

J. Thornthwaite: But it's putting it into total practice.

C. Schafer: And I would be audacious enough to assume, if it's a dilemma for us, certainly, that that double-jeopardy situation is very likely a dilemma for other districts.

D. Donaldson (Deputy Chair): Thanks for the presentation. I have two quick questions.

One is specifically on your first recommendation. Maybe the superintendent can answer with some more specifics on that, but exactly what is the situation, and what are you recommending as the solution to that aggregate class-size question?

Secondly, how have you been working towards the legislation around carbon neutrality in your school district — the implications on your capital budgets of that and, therefore, the implications on what happens in the school?

J. MacRae: I don't have a specific recommendation other than that the existing legislation be reviewed in terms of the two sections of the School Act that appear to create the dilemma for us. I believe it's simply a matter of one section of the act having been enacted prior to the other.

On the second piece, the amendments that arose out of Bill 33, perhaps the consequences of that were not fully anticipated with respect to how it would interact with the two previous sections of the act.

I just think it needs someone with a good set of skills in and around legislation to take a look at whether that mathematical construct — the aggregate calculation, which was part of a former settlement with our unionized employee groups — still serves the purpose or whether in fact it is still necessary with the new amendments to the act that occurred subsequently.

With respect to the move to becoming carbon-neutral, we're quite proud to have a district that had initiated a number of projects in that direction before they were mandated. Yes, there are costs attached. There are costs attached to most things that we take in order to try and improve our society and our planet. I would defer to my colleague Mr. Godden in terms of the specifics around some of the actual numbers around that, but we have been working slowly at it over a period of time.

We were one of the first districts in the province to acquire a hybrid bus. We are also one of the few districts across the province that actually has an energy conservation manager, and we managed to preserve that position through the last round of budget developments. So we're quite pleased.
[ Page 1100 ]

J. Les (Chair): Okay. Well, we're going to have to leave it there, because we're out of time. Sorry, Kevin.

C. Schafer: Chair, I'm just wondering. I know that there was the one question with regard to year-round schooling, and I don't know if you wanted an answer.

J. Les (Chair): Yes, we do. Maybe you could e-mail that to the committee later on this afternoon.

[1550]

C. Schafer: Okay. We can do that.

J. Les (Chair): I say that clearly, because our input deadline is today. So if you could, when you get back to the office, just send us an e-mail on that. It'll be distributed to all the committee members.

C. Schafer: Thank you for your time.

J. Les (Chair): The next presentation is from the B.C. Wood Specialties Group — Brian Hawrysh and Sean Greenhill.

B. Hawrysh: Mr. Chairman and members of the committee, thank you for the opportunity to appear before you today. My name is Brian Hawrysh. I'm the CEO of B.C. Wood Specialties Group, and I'm joined today by Mr. Sean Greenhill, who's the export manager for Masonite International Corporation. Sean is also a member of B.C. Wood's board of directors. We're here today to present to you on behalf of the value-added wood products industry in the province.

The B.C. Wood Specialties Group association, better known as B.C. Wood, is a not-for-profit association representing British Columbia's value-added wood products manufacturers.

When we speak about value added, what are we talking about? Primarily, from our perspective, that's anything that's non-commodity lumber. Commodity products would be 2-by-4, 2-by-6, 4-by-4 material that goes into house construction.

B.C.'s value-added producers manufacture a broad and diverse range of products. These products include log home and timber frame packages, prefabricated homes, engineered wood products like the laminated beams that you might have seen at the Richmond skating oval. They include windows and doors, cabinets, mouldings, flooring, furniture — pretty much anything other than the non-commodity items.

I would like to mention that the value-added industry makes a sizeable contribution to B.C.'s economy. There are over 700 value-added manufacturers scattered throughout the province in over a hundred communities. As the name infers, the value-added industry creates more value per cubic metre harvested and provides an opportunity for high-paying skilled job creation.

In B.C. the value-added industry employs over 19,000 British Columbians. The sector is estimated to process approximately 25 million cubic metres annually, which is about a third of B.C.'s annual harvest.

While there are many value-added manufacturers in British Columbia, most are small or medium-sized companies. In fact, 60 percent are sales under $5 million annually. Collectively, however, these companies account for almost $4.85 billion in sales annually.

The structure of the value-added sector is, without a doubt, very diverse. It has small or medium-sized companies, very different product lines and spread throughout the province.

I would maybe ask Sean to tell you a little bit about Masonite. His company has a plant in Yarrow, not 15 minutes away from here. It's a good example of one of the companies we work with.

S. Greenhill: Good afternoon. As I entered the room, I did a check to see if you could actually see the facility from the window, but it's just a bit beyond your view.

J. Les (Chair): It's in a very good riding though.

S. Greenhill: Absolutely. I was about to say the same thing.

It's on the road to Cultus Lake. It's a 180,000-square-foot facility that employs about 130 full-time at the moment. We manufacture approximately 8,000 interior doors a day there.

Our export business has been quite successful for many years. It is primarily to Japan at the moment, but we have shipped to places such as the National Convention Center in Hanoi, Vietnam. Those doors were made at Yarrow. And there's a hospital in Turkey that also has doors that were made in Yarrow, B.C.

B. Hawrysh: I appreciate Sean's comments. I mean, visions of the forest industry are big 2-by-4 mills, but B.C. Wood and its member companies are quite a bit different from that.

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Our job is really to assist companies entering new markets. Our mission statement is to help create a globally competitive value-added wood products industry in British Columbia by lowering the risk of entering new markets. Most companies really lack the in-house expertise to engage in these activities on their own, and this is where B.C. Wood plays an important role.

To help these companies in export markets, B.C. Wood has offices in Japan, China, Korea and representatives in the United States and Europe. These offices help value-added manufacturers seek out buyers for their products under the Canada wood export program. B.C. Wood also coordinates the participation of member companies in over 20 international trade shows that connect
[ Page 1101 ]
B.C.'s value-added wood products manufacturers with qualified buyers.

Each year B.C. Wood also invites buyers from around the world to travel to B.C. and participate in an annual Global Buyers Mission. This event, now seven years running, is held in Whistler, and it's a cost-effective, in-market show that has grown, as I say, over the past seven years and is now the largest wood products show in western Canada.

This year we hosted over 750 participants from 15 different countries who met nearly 100 value-added manufacturers that had their products on display. It is expected that the GBM this year will generate close to $25 million in incremental sales to the companies that participated in the activity. This is a 40-to-1 return on the invested dollars from the province, the federal government and industry itself.

We also help companies build business capacity through the Business Innovation Partnership. It's a partnership of B.C. Wood, an organization called FPInnovations and UBC's Centre for Advanced Wood Processing. These organizations help companies develop their marketing business skills. They help them develop new products and improve their manufacturing efficiencies.

Finally, through B.C. Wood's partnership in the new Wood Enterprise Coalition, which also consists of Wood WORKS! B.C. and FPInnovations, we are helping to implement the government's wood-first legislation by encouraging the use of more wood in non-residential construction in the province. This is a domestic market that we know is significantly underutilized. The total value of the non-res market in the province is worth about $4 billion annually with less than 20 percent of this market currently going to wood structures — a figure that could easily be doubled or tripled in the foreseeable future.

All of these programs are possible with funds available from Forestry Innovation Investment, the matching dollars that the federal government provides and contributions from the industry itself.

Our primary recommendation is to provide ongoing funds to FII to help advance marketing of value-added wood products, the capacity building in the sector and the development of the wood-first culture in the province. Without these funds, it's difficult to see that the value-added industry is going to continue to grow.

Last year the funding for FII was reduced due to budgetary constraints, and we would ask that at least, at the very minimum, the funding from last year's levels would be maintained and perhaps look for ways to actually grow this funding pool.

We've provided five specific recommendations, but in summary, I would just like to say that we would like to see continued support with funding for the expansion of the Business Innovation Partnership that provides a foundation, a mechanism for delivering capacity-building services in the value-added sector.

We would ask you to encourage the federal government to renew their commitment to a cost-sharing partnership with the Business Innovation Partnership and allow us to look at longer-term funding horizons. We would also suggest and ask that there be a renewal of multi-year funding through FII to the partnership of the very successful Canada wood export program and encourage the feds to renew their commitment to this same program.

Fourthly, continue to find resources to encourage the use of wood in non-residential construction in the province and fund initiatives such as the Wood Enterprise Coalition.

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Finally, I would ask that the government would make a commitment to the future of B.C.'s forest industry and understand that the whole face of the industry is changing. New products and businesses are now being created here in the value-added industry. B.C.'s value-added industry has a bright future. It's proving that the forest industry is not a sunset industry in this province.

Instead, the forest industry is certainly going through some transformations where companies that can create new products and find new niche markets will continue to play an important role in supporting the communities and the people that are working in the forest industry today.

That is the end of my comments. I would invite any questions that you might have.

J. Les (Chair): Certainly. Thanks, Brian.

First question is from Bruce.

B. Ralston: Thanks very much. I had a question, actually, more of Sean. I just wondered if you could give a sense of what the source of your timber was and how that might have changed in recent years.

Secondly, what benefit have you received from, say, the Forestry Innovation Investment corporation or any of the other programs that are referred to here?

S. Greenhill: Certainly. To answer the second one first, we've been a member of B.C. Wood for, I think, about 17 years and have no presence ourselves in places such as Japan, particularly, and Korea. Those offices do act on a fairly regular basis on our behalf in introducing potential new customers to us.

I've also had the B.C. Wood Tokyo office in particular look into some details of fire rating requirements in Japan that are quite difficult to research from this side of the water, and helping that product development side.

In terms of our source of timber, we have…. One thing that comes to mind is that there was a significant supplier within B.C. that was making particle board that is no longer, in Grand Forks, and that's unfortunate. But that's a reflection, I think, of the general level of saw-
[ Page 1102 ]
mill activity. We hope that in the future those kinds of producers will be able to survive and be suppliers to us, more so than that particular case.

B. Ralston: All your wood comes from within British Columbia, then, does it?

S. Greenhill: No. Our work is primarily assembly, and we do source from within British Columbia and various geographic sources for different products.

D. Donaldson (Deputy Chair): Thanks for the presentation. I agree with the intent of needing value-added. That's the only way we're going to survive in the province around the forest industry.

My question relates to incentives. I had a person recently describe a situation to me. He's a partner in a value-added business. I believe it's in Armstrong. Anyway, they were expanding and found that Ontario provided a much more favourable climate for incentives around taxation to expand their business.

I note that FII is a good tool, but it's primarily around marketing. Do you have any recommendations around tax incentives to keep B.C. value-added businesses in B.C. and enable them to expand that way?

S. Greenhill: I would say that I really don't have many recommendations in that area. I know my colleagues — we work as part of Canada Wood — have been very active in making recommendations to government. Basically, their views have been put forward that a more favourable tax regime would support increased value-added manufacturing in the province. I'm specifically referring to the depreciation write-downs on equipment. I'm sure I'm not using the correct terms — accelerated depreciation on investments in equipment.

B. Routley: Thank you for your presentation. I was wondering if you could give us some insight on whether there has been an increase or decline in the number of value-added manufacturers that are part of your organization, say over the last five or ten years. Has there been a larger number today, or less?

[1605]

The second part would be fibre supply issues. I come from the Cowichan Valley, and I've talked to some value-added producers where the issue is fibre supply, but there's no mention of that. I just wondered if your organization has any issues about fibre supply. Or are you kind of flush with fibre supply?

B. Hawrysh: I'll answer your first question first. The value-added industry has been surveyed three times over the last 20 years. The last one was in 2006, and there was an increase of, I think, about 10 to 12 percent in the overall numbers of value-added manufacturers in the province at that time. We haven't done a survey in the more recent years, and actually, now's the appropriate time for us to try and engage in that process.

I would suspect, anecdotally, that we have got growth in certain sectors, like engineered wood products, cabinetry, millwork, log home and timber frame sectors and, I would say, probably in the reman sector, where you're simply taking a larger cross-section of lumber and remanning it into a smaller cross-section of lumber. That sector has seen some declines — probably significant declines — in the last two to three years. That's probably due to significant overseas competition, primarily China, Vietnam — those types of locales.

J. Les (Chair): Okay, we're going to have to leave it there, Brian, because we're out of time. We'd like to thank you for coming today.

B. Hawrysh: Thank you. And Bill, perhaps I can send you a response to your question around fibre supply. I'd be happy to.

J. Les (Chair): That'd be good.

Next we're going to hear from the ALS Society of British Columbia — Wendy Toyer.

W. Toyer: Good afternoon.

First of all, I'd like to thank you for your efforts in travelling throughout British Columbia over the past month to hear recommendations on finance and government services from my fellow British Columbians. I realize that this is Friday and that this is the last day of the hearings. I'm one of the last speakers, so I'm hoping you feel that we've saved the best for last.

My name is Wendy Toyer, and I am the executive director of the ALS Society of British Columbia. You've just received a written submission of some of the points I'm going to be going over today.

ALS stands for amyotrophic lateral sclerosis, sometimes referred to as Lou Gehrig's disease. ALS is a neurodegenerative disorder that affects a person's motor neurons that carry messages to the muscles, resulting in weakness and wasting in arms, legs, mouth, throat and elsewhere. Typically, a person is immobilized or deceased within three to five years of diagnosis.

ALS is a disease that demands urgent attention. Its devastation is wreaked on the person diagnosed with ALS, the family, the caregivers and the health care system. When ALS hits a family, the focus turns to provision of care, equipment and emotional support to the person living with ALS. In the latter stages of the disease the person with ALS often cannot speak, swallow or move anything other than his eyes. But the mind remains intact. It is a very cruel disease.

The impact on the family is powerful. As they struggle to cope with the prospect of advancing disability
[ Page 1103 ]
and death, ALS consumes their emotional and financial reserves. ALS is a costly disease in its later stages, demanding both extensive nursing care and expensive equipment. On average, the cost per patient during the course of the illness is about $137,000 just for equipment. On the broader scene, the health care system has been pushed to the limit and is usually unable to cover the cost of care.

In B.C. at any given time there are 300 people living with ALS. These numbers, sadly, remain static, as each day that someone is diagnosed, we lose somebody. So the number never increases or decreases.

The ALS Society of B.C. was founded by ALS patients, their family members and health care professionals to meet the physical and emotional needs of people with ALS and their caregivers. For over 29 years the society has helped thousands of families by providing direct support services, information and equipment.

[1610]

The ALS Society of B.C. has three principal objectives. We provide direct support to patients, their families and caregivers, including our equipment loan program. We have an inventory of over 2,200 pieces of equipment that we loan out to patients in British Columbia at no cost to them. We raise funds for patient services and research, and we want to increase the public awareness and understanding of ALS.

Our total annual budget at the society is approximately $1.7 million a year. Over 95 percent of this is raised by fundraising and donations, and $110,000 is provided by the B.C. direct access gaming grant.

The ALS Society works closely with health care professionals at the ALS Centre at G.F. Strong, and today my focus is going to be on that centre. The ALS Centre team is a multidisciplinary provincial outreach resource team providing comprehensive, consultative services to people living with ALS in B.C. The team is composed of full-time and part-time clinicians in social work, nursing, occupational therapy, speech-language pathology, dietitians and physiotherapy. In addition to this, the team also has consulting physicians and physical medicine in rehabilitation as well as neurology.

The ALS Centre has established a working partnership with the ALS Society of B.C., the provincial respiratory outreach program and technology for independent living.

In 2003 and again in 2008 the ALS Centre team received national recognition as the recipient of the ALS Society of Canada's exceptional support services award. We are very fortunate in British Columbia to have the best of the best working to assist people living with ALS. This is not the case in all provinces in Canada.

The ALS Centre has been funded by the Vancouver Coastal Health Authority, which is now faced with budget shortfalls that will affect the funding at the ALS Centre. We have been told that this is approximately a $130,000-a-year shortfall.

When the initiative to establish the ALS Centre was developed in 2002, the Provincial Health Services Authority was approached to fund the centre. At that time the PHSA suggested that as the centre was to be located in Vancouver, in the Vancouver Coastal Health region, they should be approached for funding.

Of the 300 patients living with ALS in British Columbia, only 55 are located within the Vancouver Coastal Health region. Nonetheless, the funding was secured, and the ALS Centre opened in 2005 with an annual budget of $608,000. At that time $478,000 was contributed by Vancouver Coastal Health Authority, and the additional $130,000 was to be raised through grants and donations. Unfortunately, money through research grants is generally strictly apportioned to support the costs of research, not clinical care, and potential donors did not wish to donate toward basic medical care.

The additional $130,000 annually was not realized. Vancouver Coastal Health forgave this shortfall each year but now, due to budget constraints, can no longer forgive a $130,000 shortfall.

We are concerned that this will result in the reduced services and support to people living with ALS in B.C. The ALS Society of B.C. funds $1.7 million annually for patient services and research. This also includes $30,000 to partially fund the neurologist at the ALS Centre, which enables her to increase non-direct time with patients — for example, through e-mails and phone contact with patients, caregivers and health care professionals.

Another $50,000 is provided to cover the cost of travel for people living with ALS outside the Lower Mainland to attend regular appointments at the ALS Centre. We found through a confidential survey that patients were not being seen regularly, which is recommended to be every three months, because of the costs of travel, so that $50,000 goes to getting them the best care at the ALS Centre.

For those patients who can no longer travel, we have a further budget of $5,000 to cover the costs associated with ALS mobile clinics which we hold in various locations throughout the province with the patients that can no longer travel. The ALS specialists from the ALS Centre travel to these communities on our behalf.

ALSBC is committed to continuing this financial support to ensure that no matter where you live in British Columbia, you'll be provided the same level of care. We cannot do this without the ALS specialists at the ALS Centre. It is a crucial partnership.

We are asking the province of B.C. to provide financial assistance in the amount of $130,000 per year to sustain the current services provided at the ALS Centre. This will ensure fair, equitable health care support for people living with ALS in B.C. and will provide people living with ALS the opportunity to continue to live independently at home, saving the B.C. health care system millions of dollars annually. Please help us.
[ Page 1104 ]

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

[1615]

J. Thornthwaite: Thank you very much for your presentation. In my other life I was a dietitian, and I did do some relief at G.F. Strong with ALS patients. So I do know, personally, what that disease is.

You're basically asking for the $665,000 to be directed to the Provincial Health Authority because the percentage of patients is not just, obviously, from the Vancouver Coastal Health jurisdiction. It's from the entire province.

Is that basically what you're saying?

W. Toyer: Correct. Ultimately, the money will be coming from a provincial source as opposed to a regional source. Vancouver Coastal Health, at this time, still continues to contribute. But our biggest need right now is that $130,000 to ensure that we don't lose any of our specialists…

J. Thornthwaite: At G.F. Strong.

W. Toyer: …at G.F. Strong.

J. van Dongen: Yeah, I think it's important, Wendy, that the committee knows that it's $130,000 of additional money you're looking for.

You mentioned the numbers. How many of the 300 people that you're serving are outside the Lower Mainland? Tell us which communities you've done the mobile clinics in, because I think that's a very important part of your service to people all over the province.

W. Toyer: Absolutely. There are about 245 people living outside of the Vancouver Coastal Health region. We have conducted mobile clinics this year in Victoria, Prince George and Kelowna. We are looking at doing an additional one in Nanaimo.

How it's decided is that where we have patients that are at a stage that they can no longer travel, and there's a group of patients, we will actually fly in — or, in some cases, drive — the ALS Centre specialists, who quite often are doing a lot on their own time as well, to go and see the patients in their community.

At the same time, the specialists take the initiative to reach out to the health care professionals in that community, to give them in-service training as well. So they're very effective ways of providing that service to the communities throughout the province.

B. Ralston: Thanks very much. I think it might be useful to tell other members of the committee — I mean, I think we met at a fundraising event in Surrey — the steps that the organization has taken to fundraise on its own. I think that if you look on the last page, there are some very impressive personal donations, where various physicians have donated $100,000 of their own money for this organization to continue delivering this service.

I think that gives a sense of the measure of the sincerity of your request, given that you have made these efforts to fundraise on your own.

W. Toyer: I will say that my entire board all contribute financially, as do all my staff. Dr. Briemberg, who is the current neurologist at the ALS Centre, has just contributed $30,000 to see us through this storm till we can get the additional funding.

J. Les (Chair): Great. Thank you, Wendy. I appreciate, first of all, what you do and, secondly, your being here today.

Our next presentation is from the B.C. Association of Family Resource Programs. Pam Kacir is here.

P. Kacir: Hi, I'm Pamela Kacir. I'm with the B.C. Association of Family Resource Programs.

Is anyone familiar with family resource programs? Yes? On the front of your package you'll find a family resource program in your constituency or in your riding. I've never presented here before, and I think I just have way too much information.

What I'm here to share with you today is something that I and thousands of other B.C. residents care about and believe in, that are essential in our communities — our family resource programs. On this side of your presentation package there are some slides, if you want to follow along.

We commend the provincial government for moving towards a prevention, early intervention and strength-based family development system for children, youth and families in B.C. We feel family resource programs are positioned to be a huge asset to the province in this ongoing approach.

I'd like you to have your MCFD hats on. I know that Ministry of Education, MCFD, Ministry of Healthy Living and Sport are all working together to create a framework for early child development in British Columbia.

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Family resource programs represent 264 programs located throughout all five regions of British Columbia. This represents hundreds of staff working in 88 communities, providing supports to thousands of vulnerable families. Since 1975 family resource programs have been actively engaged in prevention and early intervention supports for vulnerable families in B.C. without secure funding.

If you look at this map, there have been some current changes in the MCFD regions. Now in the MCFD regions there are 37 FRPs in the Fraser Valley, 55 in the
[ Page 1105 ]
Interior, 31 in the north, 93 in Vancouver coastal and 48 on Vancouver Island.

Family resource programs believe in an individual's inherent strengths and assets and support capacity-building and increased resiliency. I think the most important part for me to share with you today is that family resource programs are a community mechanism that can catch a family before they potentially fall through the cracks.

Family resource programs are the level of support before apprehension, and family resource programs are a prevention model that supports that parent, that child, that family and that community from being a statistic within the MCFD caseload. Family resource programs provide the gateway to services for vulnerable families.

Now, I had a slide here regarding the Mount Pleasant Family Centre. I just wanted to give a brief overview of a family resource program. This is a family resource program located in the heart of East Vancouver. It's been supporting vulnerable families since 1976. It's a stand-alone family resource program. It serves 500-plus vulnerable families annually. They also operate a satellite program that is off-site for an extremely vulnerable population that doesn't really leave its community, and they serve 30 different families.

They administer a StrongStart program. They are the lead administrator for a Five Family Places partnership with MCFD which was created several years ago in an effort to reduce contract administration, which has seen contract cuts.

Just to share with you, the next slide is about our five core areas of service. The B.C. Association of Family Resource Programs provincial standards and best practices continue to reflect five core areas of service: family support, play-based learning, early learning and literacy, parent education and workshops information and referral. All family resource programs are shaped around these five core services, but specific programs and supports reflect the needs and diversity of individual communities in the 21st-century family.

I just want to share with you a participant's quote. When we think about the 21st-century family, the quote is: "My husband is the primary caregiver. Without this program, he would have trouble finding support for this non-standard family choice."

So 88 percent of parents say that their parenting skills have been positively impacted by attending a family resource program, and specifically, they have better relationships with their children and understand the importance of consistent, positive parenting practices. One participant quote is: "I feel more confident bringing my kids out in public, knowing that I'm not judged here. I get help with discipline information when needed."

The reason why I'm bringing this to your attention is that family resource programs haven't had secure funding. They have been growing in communities across British Columbia for 35 years, and what we're trying to do is state the case for the current framework that has been evolving for the last four years.

If you go to the slide of MCFD, "Strong, Safe and Supported," which is on page 6, the Ministry of Children and Family Development's Strong, Safe and Supported: A Commitment to B.C.'s Children and Youth sets out five pillars for healthy development outcomes. These five goals represent commitments to the Treasury Board and cabinet.

Upon a review of this evolving process to create an integrated framework for children and youth in British Columbia, it seems family resource programs are positioned to be an asset to the government as the framework achieves collaboration. We feel that family resource programs are embedded in these goals due to utilizing a holistic approach focusing on providing a combination of supports and interventions to meet the needs of a parent, a child, a family and their community.

A defining feature of family resource programs is that they are open-access parent-child interactive centres for families with children zero to five. Vulnerable families attend these programs because family resource programs do with and not do to the participants of their programs. Family resource programs are a universally accessible prevention model which provides the environment for participants to want to bite into individualized supported services. Family resource programs serve as a mechanism to connect families and break down isolation barriers.

Another of the pillars and goals for the government is to place a primary focus on preventing vulnerability in children and youth by providing strong supports for individuals, families and communities.

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Family resource programs are grounded in the belief that consistent, positive parenting practices and secure, healthy child relationships are vital, fundamental factors in all aspects of healthy child development and in promoting family and community engagement.

Family resource programs support families in a myriad of ways that range from supportive counselling to family crisis intervention. For those families experiencing crisis or high levels of family stress, family resource programs are the gateway to extensive family supports.

When you look at the other report that's come out that's shaping this framework with the Ministry of Children and Family Development, it's the CAPP report. The CAPP report is building towards encompassing community strengths and assets.

I quote from that report:

"Transformation and practice change are not limited to child protection. Child protection is only one component of services available to children, youth and families. Other components include child care, early child development…special needs…addiction challenges…mental health…and youth justice. The best interests of the child and achieving the best outcomes for
[ Page 1106 ]
the child are fundamental to our work with children and youth, regardless of their particular array of needs."

We feel that family resource programs are mechanisms for support and community integration as the CAPP transformation continues.

So the government, in effect, has built family resource programs, has given small, little tidbits of money. The last bit of money came through Linda Reid, the Minister of Children and Family Development. Then she became the Minister for Child Care. Now she's Deputy Speaker of the House. So really, in effect, there's no minister for family resource programs. The last funding that came through was a million dollars. Those funds were allocated specifically looking at regional incongruencies, and a lot of the funding went to the north.

When you look at — I'm sorry; I'm kind of jumping all over the place — the regional overview on page 5, you'll see that there are 37 family resource programs in the Fraser Valley, 55 in the Interior, 48 on Vancouver Island, 93 in Vancouver Coastal and 31 in the north.

When you look at the most disproportionate populations that are vulnerable, which are aboriginal families, immigrant-refugee families and single-parent families, there are currently two aboriginal family resource programs in the Fraser, two in the Interior, three on Vancouver Island, one in Vancouver Coastal and nine in the north.

The federal government regards programs serving aboriginal participation of 10 percent or greater high. When you look at the numbers of aboriginal populations being served by non-aboriginal-run family resource programs, these percentages are very high — in the Interior, 25 to 30 percent of aboriginal participants; on Vancouver Island there's 10 to 25 percent of participants; and in the north there are 25 to 60 percent participants.

What we're trying to show to you and to try to get a commitment on, either a budgetary commitment or a commitment to ongoing support, is that family resource programs are kind of sitting out on their own right now, and there has never been any commitment towards secure funding.

These programs are doing a part. They're the level before apprehension. They are providing a very important part of our society in British Columbia. We're looking to this table to share with us how we would move forward in terms of regional funding or securing that regional funding that is currently going to family resource programs — that that will remain.

I'm sorry. I'm getting a lot of very curious glances.

J. Les (Chair): Well, don't be put off by that. Are you ready for some questions?

P. Kacir: Yes, absolutely.

J. Les (Chair): Okay. Jane has a question.

J. Thornthwaite: Thank you very much for your presentation, and also thank you very much for your personalized folders. It's very nice to know.

As you can probably appreciate, we've received numerous presentations from numerous different groups focusing on various topics, but a lot of the topics are very similar to what you're saying with regards to early learning and services for children and family and youth. I'm just wondering if you could just…. We had one, actually, this morning — the B.C. Association of Child Development.

[1630]

My question, rather, is to kind of get my head around all of these different services. Is there a possibility that there could be redundancy of services and that we would be better served as a government looking at all of these different service groups and making sure that we're covering more people to prevent any kind of redundancies — if there are all these different groups asking for different money coming from different sources?

P. Kacir: You know, that's a really good question. In terms of that, I think there really hasn't ever been some type of asset-based approach to listing all of the different services in British Columbia. There was one done many years ago, and I think it was done by First Call.

I'm not sure how to answer that, but I can say that the government has supported these 264 family resource programs. They have been in communities for 35 years. If you look at the one that I highlight, Mount Pleasant Family Centre, that's been operating for 34 years. They are providing essential services for vulnerable families, and they continue to do so. I'm not sure how to state my case better than that.

J. Thornthwaite: No, no. I appreciate what you're saying, and obviously, we appreciate the work that you do and that everybody does for these family resource programs. I just kind of wanted to get my head around all of these requests, because if we are going to — and we will — be putting recommendations forward to the Minister of Finance, we want to make sure that we're targeting the folks that need it the most and that we're not missing people out or a redundancy of services. That's all I'm saying.

P. Kacir: Absolutely. Well, these programs are serving the most vulnerable populations. If you look at, inside your folders, the directory of listings. They're done by region so that each one of you can see within your region where these programs are and where they're serving. You'll notice that they are, especially in the north, in very vulnerable populations, in aboriginal populations.
[ Page 1107 ]

J. Les (Chair): Thank you. The next question is from Doug.

D. Donaldson (Deputy Chair): Thanks for the presentation. Being from the northern part of the province, I can testify to how important the centres are for a variety of purposes in rural communities.

My question is around page 9, the first four bullet points about where funding is cobbled together from. I'm quite well aware of the inefficiencies of trying to cobble together funding from a number of different sources and all the applications that takes and the administrative duplication.

Many of these areas have been cut. I know Success By 6 was cut and then some funding returned, gaming grants.

Do you have an idea how much was cut in those different areas as far as family resource programming centres are concerned and how much would be the ask to restore that funding provincewide? That's what I'm interested in — and the services that that's caused a decline in.

P. Kacir: I don't have that answer for you, but I can get it for you.

Another reason why I'm just here today is that over the last four years family resource programs have moved along. The money that went to the regions…. Four years ago there was a million dollars that was disseminated out through the B.C. Association of Family Resource Programs, and most of that money, those dollars, went to the north. That was $10,000 and $20,000 grants. It's not a big amount of money, but those tiny little programs in those isolated communities — that's 8,000 population or less — are kind of the only focus or strong community development initiative happening for families to get together.

What we don't know is that regionally…. If our dollars are cut in a region, are those dollars going back to the main pot, or are they going to stay in that region to support other early child development initiatives?

J. Les (Chair): Thank you for coming this afternoon, Pam.

If you're going to send us more information, Pam, be sure to get it in today. I know that might be a bit of a challenge, but please try to do that.

P. Kacir: I've learned a lot from today. No expectations for the future. It was lovely to meet you. Thank you so much.

J. Les (Chair): David Sheach is here from Big Brothers Big Sisters, and he has five minutes.

[1635]

D. Sheach: Good afternoon. Thank you for making time for me and for making time to listen to what our thoughts are. I have a submission that you're receiving, and I'm just going to sort of read my way through it, because I've spent some time trying to think about it.

Thank you for your time for this consultation. My comments reflect my experience in an executive position in the charitable sector, particularly over the last ten years.

Currently I am the executive director of Big Brothers Big Sisters of Abbotsford, Mission, Ridge Meadows, and we work closely in a new partnership with Big Brothers Big Sisters of Upper Fraser Valley. Combined, we are a medium-sized charity with an approximate annual budget of $750,000 and ten full- and part-time staff.

Our service area reaches from Pitt Meadows to Boston Bar and excludes the Langleys. In 2010 we are serving over 300 children in one-on-one and small group mentoring friendships. That also includes 300 volunteers and 300 families. There are 70 children who have applied to be a mentor and who are waiting for a match. We provide services to families across the Fraser Valley equivalent to the population of a typical elementary school.

Of late I'm concerned about the policy change to community gaming grants. My first concern is the elimination of the multi-year affiliation program, which was an agreement with charities. One of the wisdoms of the gaming grant program has been its understanding of and capacity to provide multi-year funding agreements.

Charities, as you may know from personal involvement, are both fragile and fundamental. The time spent worrying about funding and program health or operational survival is a disadvantage to the fabric of our society and to government. Even in the depths of the most severe recession government does not need to withdraw from the charitable sector in the way that it has with the policy shifts to community gaming grants.

I've been following the government/not-for-profit initiative, a dialogue between government and the ministries of Housing and Social Development, Public Safety and Solicitor General, Children and Family Development and the not-for-profit sector, and I've participated in the summits.

In the November 2009 summit one of the issues touted was a move to multi-year agreements. At the exact time that the Ministry of Housing and Social Development was celebrating the dialogue between government and the not-for-profit sector, the gaming policy and enforcement branch was dismantling multi-year grant affiliations. This signed agreement is attached and is at the link that I've provided. It's signed by the deputy ministers of those three ministries.

It's not that we don't understand the issues of fiscal health and risk; we do. We are feeling the effects of the recession now more than we did when it first hit. With
[ Page 1108 ]
a funding base, charities are more secure and, therefore, valuable to communities.

Charities provide substantial cost benefit to the gaming grant that we receive. On top of the fiscal benefit, they provide volunteer opportunities and front-line community services to constituents. We provide them efficiently, effectively, out of commitment and with passion. Don't take advantage by drawing down on the social capacity of the voluntary sector.

There has been a substantial lack of information about the facts of these changes — the revised amounts and the timing of the shifts. We've communicated with our program officer, with the assistant deputy minister, with the executive director, with the minister, with our MLA. Information is published on the webpage, but who knows when, and frequently it's a riddle in multiple parts.

After more than a year in this process here is what I know, and you'll forgive me if it's hard to follow. We will get no more than 60 percent less than this year. It will be remitted in the last quarter of my next fiscal year — next year. The next payment following, if eligible, will be five quarters following that if it fits the yet-to-be-published parameters of the program.

There is a perception that an organization affected by this policy is reliant, and there is concern that recipients might have a misplaced sense of entitlement. I suspect this is what ultimately makes this difficult decision palatable.

To the other side, this is bred in 30 years of history in the relationship between the government and the charitable sector and gaming. It also stems from how we have been used in the recent process to convert bingo halls to community gaming centres. I've done this twice, in two towns, under two organizations.

We were told by all parties — the department, the bingo association and the gaming hall owners — that as recipients we needed to convince our city councils to allow this shift, with the threat that they would lose the capacity of the charitable social network in their towns. We swallowed our pride and our personal opinions. We cajoled our directors to compartmentalize their personal convictions from their fiduciary responsibilities.

[1640]

We stood before our councils and our communities and convinced them that this decision was good for their town. We did the deed of government and facilitated expanded gaming in British Columbia.

Now that gaming is wildly successful and reasonably palatable, there is a revenue stream to envy. Charities in British Columbia have stewarded gaming to what it is today. The decision to terminate the multi-year funding program in favour of an annual cattle-call grant, which is the way my experience is with the direct access program, is regressive and contrary to years of dialogue with the sector. It's contrary to the words of the deputy minister and the government/not-for-profit initiative.

It restricts the ability of this sector to provide service and lever the grant in community giving, restricts the resilience of the sector and its capacity to meet emerging needs, restricts services and downloads costs to lower- and middle-income citizens.

Press releases are promoting this change as being in the interest of fairness. It is not about fair. In my experience with the direct access program, it is unreliable in the amount of funding that it provides. It is inconsistent and unpredictable from year to year. In many cases to get less — which is often what happens — than what's requested is to make delivery of programs difficult and risky. Often it's better to get nothing than not enough. It's that much worse when it comes late.

I appreciate your time. I've put a lot of time into thinking about how to present this. Honestly, these, I think, are very legitimate, non-partisan issues. We're both on the same page. I'm not here with a sense of entitlement. We do get an enormous amount of gaming money, and it will affect us significantly. But that's not my issue.

I'm not here to tell you that you should give me what I always got. I'm here to say that this needs to be a dialogue, it needs to be a consultation, and it's your responsibility to talk to us about it. The $40 million that was withdrawn from gaming money is not a substantial amount in the spectrum of things, and it's going to have a substantial impact.

J. Les (Chair): Okay, I promised you five, gave you seven, so we'll leave it at that. Thank you very much.

We have one more open mike to come, but our final scheduled delegation is Dr. Paul Kershaw from the Human Early Learning Partnership at UBC.

P. Kershaw: How are you doing this afternoon? I imagine you've had a long day.

J. Les (Chair): It has been, but we're still bright-eyed and bushy-tailed.

P. Kershaw: Fantastic. So let me tap into some of that bright-eyed-and-bushy-tailedness.

Let's start with a bit of standing committee participation — hands up. After all that you've heard today and over the past month, who among you would like to be able to contain health care expenditures so you can address some of the other priorities you've been hearing about over the last month? Okay.

Who among you would like to reduce crime?

Interjection.

P. Kershaw: No? Fair enough. You know, there's always an odd woman out.

Who among you would be keen to see the graduation rate improve by more than a third? Okay.
[ Page 1109 ]

Who among you would like to promote family values? Okay.

You see, the hands are all up for those issues, so the key thing I need to tell you about is a strategy to get us there. And the strategy is simple. We need to solve the following problem. In British Columbia almost 30 percent of our citizens reach the formal school system vulnerable.

When I say vulnerable, I mean they're much more likely to become ill over their lives. They're much more likely to go to jail. They're much less likely to succeed in school and, as a result, much less likely to be job-ready when they graduate.

Now, you might be thinking: "Thirty percent of kids — that's a lot of kids. I didn't know we had so many poor kids." No, the reality is that the majority of kids who are vulnerable today reside in middle- and upper-income households and neighbourhoods. They don't live in a particular region. They're not from a particular ethnocultural group.

How do I know this? Well, because actually the government of B.C. has done a number of things well in terms of promoting research. Some of that research includes watching not a random sample of kids but the entire population of kindergarten children move their way through grades 1, 2, 3, into 4. Then we watch our population — not a random sample but the population — move from grade 4 to grade 7, and then we follow them again from grade 7 all the way to either incarceration or grade 12 and onward.

Looking at how a population moves over time takes a lot of the guesswork out of how vulnerability in the earliest years relates to later outcomes in achievement.

[1645]

So we know — and articulated in a report commissioned by the Business Council of B.C. — that were we to take our current vulnerability rate of 30 percent and drop it down to 10 percent, where it ought to be, we could cut crime in the province by a third. We could increase by a third the share of students who earn the kind of grades that let them go to university. Whether they actually go to university and have the pleasure of taking my class, I don't care, but it signals the quality of the labour supply that we will be producing.

Why does that matter? Well, as we move into our so-called information and knowledge economies, moving forward, education is going to matter as much and probably more than it has over the last four decades.

We've been able to calculate how much economic potential we are throwing away by tolerating kids not being ready for school in kindergarten and then that translating into poor school achievement and poor grades in grade 12.

So let's have a bit more audience participation, shall we? Guess for me what we're throwing away right now by tolerating so much unnecessary vulnerability.

Interjection.

P. Kershaw: No, no. I mean dollars and cents, hard numbers. This is multiple choice, or we can start and work our way up. Do I hear $10 billion?

Interjection.

P. Kershaw: Higher. How much higher?

Interjection.

P. Kershaw: No, it's billion. We're in billions here.

Interjection.

P. Kershaw: Not even one. I started at ten. I need you to keep going.

Interjection.

P. Kershaw: Higher.

A Voice: Two hundred.

P. Kershaw: Double the 200, and you'll be bang on. Bruce, you heard me before. You're cheating, I think.

The reality is that we know that so long as we tolerate 30 percent of kids coming to our formal school system vulnerable, we are throwing away 20 points of GDP over their working lives. So 20 points of GDP over their working lives just in British Columbia. Forget the rest of the country.

British Columbia is throwing away $401.5 billion. That is eight times more than the cumulative provincial debt, which means that people on this committee, your Finance Minister, citizens generally and definitely the business community have eight times as much reason to worry about the early vulnerability debt as they do the fiscal debt.

The question becomes: why do we have so much early vulnerability? Am I expecting every kid in kindergarten to be the next Einstein or Mozart? The answer is no.

We want kids to play well and have age-appropriate characteristics and age-appropriate benchmarks at age five. Things as simple as: can they hold a pencil? Can they climb the stairs around a school? Can they follow instructions a reasonable amount of time from an adult? Can they get along on the playground? Do they know just ten letters of the alphabet? These are the kinds of characteristics with which almost 30 percent of British Columbia's population is struggling as it transitions at age five into kindergarten.

Why? Any guesses? I'll tell you one reason. We all go to Tim Hortons too much. That's not meaning that we eat too many doughnuts but that we all get used to
[ Page 1110 ]
what a doughnut looks like. When you go and you buy a doughnut, there's a hole in the middle of the doughnut, and that's perfectly fine for a doughnut.

But when we think about social policy and our plan for public policy, a hole in the middle of our policy plan is just bad policy. Yet that is what we tolerate in Canada. It's not until age six when we put in place a population-level approach. We call them schools, K-to-12, and then we have a post-secondary education system that's well-regarded internationally, and a health care system and a pension system — all of which is population level.

But before age six there's really no system of supports. At best, there's a patchwork, and a lot of kids and families are falling through it — at least 30 percent. Don't just take my word for it. UNICEF, that controversial international organization, ranks Canada last amongst 20 affluent countries, and so does the OECD. And regrettably, B.C. is below the Canadian average.

So because we have this hole, this Tim Hortons approach to our public policy, we leave not just a few families but the majority of B.C. families struggling with three kinds of poverty, two of which you don't talk about enough, one of which we have a difficult time solving.

The first is time poverty. Why does so much vulnerability stretch into the middle- and upper-income households and neighbourhoods of our communities? Because British Columbia families with young kids feel time-stretched. And when they feel time-stretched, they need to make compromises, and sometimes those compromises, particularly for dads, come at the expense of time to care personally.

[1650]

When families try and mediate that time poverty, they go and look. "What kinds of services might be out there to help me with my parenting and to help me synchronize earning and caregiving responsibilities so that I can both pay for and care for my family?"

The reality is that they run into a second kind of poverty: service poverty. They can't find a range of services, including early learning and care services. There is only enough for one in five families, and those that can find it equate the cost to a second mortgage — for just one kid, let alone if they have more than one. That work-life tension that results from our time and service poverties is exacerbated for a minority in our community, who then suffer income poverty.

So what have we got to do about it? The answer: we need to fill the hole in the middle of our social policy plan. A hole may be fine for Tim Hortons, but we don't want a Tim Hortons approach to public policy, and that means putting in place policy changes to close that hole, to address the time poverty, the service poverty and the income poverty.

In the lovely blue folders before you, you have a range of paperwork. On the right-hand side you have in one page the six recommendations put forward last year as part of the Business Council of B.C.'s 2020 outlook series. They say something like this.

In order to address the time poverty, we need to improve our parental leave. In order to address our service poverty, we need to make sure parents have access to healthy child and parent check-ins on about a monthly basis, especially during the first 18 months of a kid's life. And we need to put in place, after leave ends, a system of early learning and care that facilitates those who want or need to be in the paid labour market to be there and to know that their kids are in quality environments.

We need to address the income poverty for the minority of the population. That means making work pay and actually double-checking whether we're sufficiently generous when people are just outside of the labour market entirely.

On the left-hand side of your blue package you have a report card about how we've done in the last year in making progress on those recommendations. You'll see that we put in place 150 million new dollars in some combination of federal and provincial funding. This is not small, but when you have to fill the middle of your social policy plan, when you've had a Tim Hortons approach for decades, incremental change is not going to be sufficient.

Some combination of federal and provincial dollars — either created anew or reallocated, or God forbid, we deficit finance it — in the order of about $2.85 billion will now be required to solve the problem. If you break that down for adults in British Columbia, it's less than the cost of a Tim Hortons doughnut and coffee per day.

I'll stop there.

J. Les (Chair): All right. It's always good to reduce it down to something that you can wrap your mind around.

J. Thornthwaite: Thank you, Dr. Kershaw. Your presentations are always very entertaining as well as extremely knowledgable, so I very much appreciate that.

My question, then. One thing that you didn't mention but you have alluded to in your documentation here is…. Everybody that's come to see us over these last few months is basically on the same page with regards to early learning and the focus on what we've got to do, but when we ask where the money's going to come from, that's when things start to change. In your particular document here, you've said from new public expenditures — i.e., higher taxes.

As you know, we're right in the middle of a year to go for a referendum on a tax initiative. I'm just wondering if you could help us be able to explain to the public in the next year or so how taxes are connected to services as well as the type of investment that you want us to consider in the next decades.
[ Page 1111 ]

P. Kershaw: It's a great question. Thank you very much. To be clear, I'm open to new revenue generation through taxation — I'll come back to your question — or reallocating, including from things as controversial as reallocating from a disease fetish in medical care to trying to promote health, using our health care dollars differently. Or we ask the business community to do more — things like improve the minimum wage. Or God forbid, we deficit-finance, which has been the baby boomer way for several decades now.

Your question about new tax revenue is a really challenging one for any politician regardless of what party you're part of, because we live in a society right now where we have a great deal of misinformation about taxation. Some political commentators have suggested that: "Wow, the anti-HST campaign has been so good for British Columbia's democracy."

[1655]

I would argue that that's really quite rubbish. The anti-HST campaign has definitely got citizens out, but it has tapped into citizens with what they are opposed to. A good citizen, engaging in intelligent dialogue, needs to say what they are simultaneously in favour of.

If we are going to go forward…. I don't care whether you favour the HST or not, but if you don't, then you need to say what tax, if not the HST. And if no tax, then what are we willing to do without? Right now we're willing to do without a fair start for children and the health promotion and the economic growth it will generate.

M. Mungall: Thanks very much for your presentation. It's clear that your expertise certainly lies within early childhood learning. On that note, I also had a question.

Yeah, that maybe wasn't too subtle, eh?

On that note, though, I found your presentation incredibly fascinating. When you talked about time poverty, I thought it was great. I see that all across the board, especially amongst lower-income families but also, like you said, middle- and upper-income.

One of the questions it made me think of is…. Something that I'm becoming more and more familiar with, with young parents — particularly among my peer group — is that instead of sending children to child care, because there are no child care spaces, a parent will stay home and work from home. But they're still working, and the child still isn't getting the early learning opportunities that they need. I'm wondering if there's any research around that.

P. Kershaw: The idea that we can have people telework and that that telework solution is part and parcel of a strategy for good family policy — is that the question? Did I interpret it correctly, within my narrow range of expertise about early childhood?

M. Mungall: Yeah. I just disagree with you on taxation; that's all.

P. Kershaw: The research is pretty darn clear. Telework is not going to be a solution for synchronizing and reconciling work and family life. If you're going to be doing decent work through telework at home, you're going to be focused on your computer or your telephone conversation, etc. Quality, nurturing environments need far more attention than that will typically provide to a young kid.

So that is why we need to have early learning and child care services as an entitlement, much like we do for schools for kids aged six onward — not a mandatory one. It's not as if people who don't choose or want to use them need to, but it needs to be available so that people have the choice.

That's enormously important, both for child development and for the economy, because it frees up additional labour supply, which will be critical as the baby boomers retire, and will generate the equivalent of 11,000 new employees, 10,000 of whom are working full-time. That's more than the number of people in B.C. who work in the oil and gas industry.

J. Les (Chair): Okay. We have time for one quick question from John.

J. Rustad: This may take a little bit for the answer, so I'd be happy if you could e-mail it to us. Thank you for your presentation.

The question I've got for you is around the cost of $3 billion that you're suggesting. That represents about a 55 percent increase to personal income taxes, if that's where it were all to go to. I assume the $400 billion is over 40 years. So over 40 years, that's $120 billion — plus, of course, compound interest.

The question is: as we saw with higher taxes in the '90s and the economic opportunity that was choked off from the '90s, what is the economic impact of raising $3 billion in additional revenue, assuming we've got to keep everything else on, as opposed to the benefit that it would have to our overall economy?

P. Kershaw: The $401.5 billion is the net present value. Several decades out, the value out — then we're talking trillions. So it's $401.5 billion and all the interest it would accrue at 3½ percent. That's what we're talking about right now.

The evidence is quite compelling on how tax cuts do or do not shape additional GDP growth. We've been in an era, particularly since 1995, in Canada of prioritizing tax deductions over other social policy decisions, both federally and provincially. In B.C. we have now the lowest personal income tax rates, below — what is it? — $105,000 of….

Interjection.

P. Kershaw: Thank you very much for clarifying.
[ Page 1112 ]

The key that you're asking is: will the kind of stimulus that might come from some additional tax cut or the kind of economic growth that might be stymied by some modest additional income tax increase be on par with the kind of economic growth I'm projecting by not allowing a third of the population to be vulnerable? The answer is explicit: no.

[1700]

There is no doubt that by making sure we are growing a population that can be as intellectually adaptable, as innovative as possible, to create the kind of green economy we need here and, better than that, adapt all the good ideas from elsewhere…. That kind of economy can't depend on poaching the best and brightest from India and China after the fact. We have to not let the average ability of our own population deteriorate.

So if you look at that first page on the right-hand side, and you turn it over and look at the range of business leaders who are speaking about it…. Just take the top and the bottom. Virginia Greene, until very recently the president of the Business Council of B.C. and a deputy minister not that long ago in the British Columbia government. You look at the bottom. Tamara Vrooman, CEO of Vancity now, not that long ago B.C.'s own Deputy Finance Minister.

It may be worthwhile ending by having one and two of you each read what these people are saying — leaders of our business community — so that it gets into the notes. Their words bear mentioning in the minutes today. They are arguing that it is time for us to recognize that smart family policy is a smart human capital strategy. It's a smart strategy to reduce crime. It's a smart strategy to prevent illness. It lets us have those family values that we want to have and maintain.

J. Les (Chair): All right. We're going to have to leave it at that, Paul. Thank you for coming. We appreciate the effort you took to get here.

With the committee's indulgence, we have one open-mike presentation from Lynn Perrin, who has been waiting patiently for a little while this afternoon. So we will give Lynn five minutes to make her presentation.

L. Perrin: Thank you very much, Chair. What I'm going to say is backed up by documents in this binder, which I'll be submitting to the Clerk at the end of my presentation.

I'll read. I think you've got my document — three pages. I'll be as quick as I can. I'm sure you want to get out there in the beautiful Friday evening weather.

After 18 years on this case I'm making this submission on behalf of Omineca Enterprises in their support of the Fort Nelson council's July 21, 2010, submission regarding the shortfall to services in the Horn River region.

By the way, just so that you know what kind of money we're talking about here, two parallel cases were just awarded by the courts: Carrier Lumber, $75 million; South Yukon, $80 million — okay?

Omineca is a small Fort Nelson forest company that has been in a dispute with the Ministry of Forests since the wrongful suspension of their TSHLs in 1980. This submission is a follow-up to the one that I made to the Select Standing Committee on Finance and Government Services in October of 2008. I have included my former oral submission from Hansard in this binder and all of the supporting documents in the submission.

On December 18, 2009, I wrote a follow-up letter to Attorney General de Jong and the Attorney General critic, MLA Leonard Krog, and copied MLAs van Dongen, Hawes and Routley, who have been members of the Select Standing Committee on Finance and Government Services.

In the letter I assert that announcements to improve the civil court system in British Columbia were made by the former NDP government on January 16, 2001, asserting that mediation is an effective way to settle disputes by bringing people together before their cases go to trial.

The current Liberal government, on July 7, 2009, said that to ensure expedient and fair justice…. In spite of these policies, lawyers representing the government of B.C. refused to agree to a third party to mediate this dispute. Contrary to both of the announcements, Omineca's dispute remains unresolved since a 1985 decision by Supreme Court Justice Ruttan.

In 2008 negotiations between Omineca and Stephen Antle, the lawyer contracted by the Attorney General, ceased. There were a few exchanges between Omineca and legal staff from the Attorney General's office over the past few months. While Omineca has tried to be flexible, this has not been the case in response on the part of the representatives of the government of B.C.

[1705]

Regrettably, the situation remains the same, if not worse than in 2008. In fact, the economic circumstances of forest workers in Fort Nelson are much the same as they were in 1980, when Omineca's problem started for non-payment of their annual rental invoice, which in fact suspended their two timber sale harvesting licences. This does not meet the purpose of the ministry, as noted in the 2010/11–2012/13 Service Plan or in section 4(e) of the Ministry of Forests Act.

I am certain that many forest companies in B.C. are currently having difficulties paying both their annual rental and stumpage for their tenure. I sincerely hope that they are not being treated in the same manner of inflating their Ministry of Forests stumpage and rental accounts in order to make the ministry's bottom line show a surplus at budget time. This has been the case, without
[ Page 1113 ]
any documented proof of debt, that Omineca has suffered for 30 years.

I hope that the Ministry of Forests revenue and timber harvesting branches are complying with the language in rental invoices and the contracts, especially clause 7.5 and the Forest Act, section 62. If this had been the case in July of 1980, Omineca would not have had its TSHLs illegally cancelled. Instead, they could have provided employment for forest workers and many others in Fort Nelson and beyond if the Ministry of Forests had used their TSHL deposit for rent, as was stipulated in their contract.

J. Les (Chair): We are going to have to leave it there, Lynn, because we are now well over the time that we were going to adjourn today.

L. Perrin: Okay, fine. I just wanted to let you know that there are now three generations of the Peterson family who are suffering negatively because of this dispute not being settled.

J. Les (Chair): Sure. Thank you for bringing it forward today.

L. Perrin: Okay. I'll be giving this to the Clerk.

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

With that, we adjourn the meeting for today.

The committee adjourned at 5:07 p.m.

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