2011 Legislative Session: Fourth 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 14, 2011

9 a.m.

Westminster Salon, Sheraton Vancouver Airport

7551 Westminster Highway, Richmond, B.C.

Present: Rob Howard, MLA (Chair); Doug Donaldson, MLA (Deputy Chair); Bill Bennett, MLA; Mable Elmore, MLA; Dave S. Hayer, MLA; Pat Pimm, MLA; Bruce Ralston, MLA; Bill Routley, MLA; Jane Thornthwaite, MLA

Unavoidably Absent: Dr. Moira Stilwell, MLA

1. The Chair called the Committee to order at 8.59 a.m.

2. Opening statements by Rob Howard, MLA, Chair.

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

4. The Committee recessed from 12:05 to 1:04 p.m.

5. The Committee recessed from 3:15 to 3:34 p.m.

6. The Committee recessed from 3:48 to 3:52 p.m.

7. The Committee adjourned to the call of the Chair at 4:47 p.m.

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 14, 2011

Issue No. 57

ISSN 1499-4178

[ Page 1679 ]

FRIDAY, OCTOBER 14, 2011

The committee met at 8:59 a.m.

[R. Howard in the chair.]

R. Howard (Chair): Good morning, everyone. I'm Rob Howard, MLA for Richmond Centre and Chair of this parliamentary committee. I'd like to welcome you all this morning.

Each year, in preparation for next year's budget, the Minister of Finance releases a budget consultation paper which guides the committee's annual consultation process. The budget consultation paper presents a current fiscal and economic forecast. It also identifies key issues that need to be addressed in the next budget.

[0900]

There are well-published international economic events occurring around the world, including the U.S. and Europe, and what we are seeing is that governments who have not been fiscally responsible are being punished. In B.C. we have worked hard to maintain our triple-A credit rating. This will serve us well when it comes to protecting and growing our job base. These challenging times mean challenging questions, and we look forward to your input. Print copies of the budget consultation paper are available at the registration desk at the back of room.

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

This year we will hold 13 public hearings in each region of the province. We have also scheduled two video conference sessions to hear from residents of eight rural communities living in more remote areas of B.C. This is the third time we have tried this consultation method.

We opened our hearings in Vancouver on September 15 and then traveled to Fort Nelson, Smithers, Prince George, Williams Lake, Kamloops and Courtenay before returning to Victoria. This week we've been in Surrey, Chilliwack, Cranbrook and Kelowna, and this is our final day of hearings in Richmond.

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

Committee members carefully consider all public input we receive, whether it's an oral presentation made here today, an on-line survey form, a submission in writing or an audio or video clip. Our deadline to receive submissions is Friday, October 14.

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

Today's meeting is a public meeting, which will be recorded and transcribed by Hansard Services. A copy of this transcript, along with the minutes of the meeting, will be printed and made available on the committee's website. In addition to the transcript, a live audio webcast of this meeting is also produced and available on the committee's website to enable interested listeners to hear proceedings as they occur. An archived copy of the audio broadcast will also be retained on the committee's website.

I'll now ask the members of the Finance Committee to introduce themselves.

D. Hayer: Good morning. I'm Dave Hayer, MLA for Surrey-Tynehead.

B. Bennett: Good morning, ladies and gentlemen. I'm Bill Bennett from Cranbrook, Kootenay East.

P. Pimm: I'm Pat Pimm. I'm the MLA for Peace River North, and I live in Fort St. John.

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

D. Donaldson (Deputy Chair): Good morning. Doug Donaldson, MLA Stikine, Deputy Chair of the committee, and I live in Hazelton in the northwest.

B. Ralston: Bruce Ralston. I represent Surrey-Whalley.

M. Elmore: Good morning. Mable Elmore from Vancouver-Kensington.

B. Routley: Good morning. Bill Routley, MLA for the Cowichan Valley, and I'm here on the right. It has no political significance whatsoever.

R. Howard (Chair): Thank you, Members, I think. Also, joining us today, to my left, is our Clerk, Susan Sourial, and we also have Arlene Carlson, who is staffing the registration desk. And we have Hansard Services staff, Michael Baer and Monique Goffinet Miller, who will record and prepare the written transcript of this meeting.

With that, I'd like to call our first witness. I understand that we have two witnesses coming forward. You've sort of agreed to share your time. We'll give that a shot. We have the Federation of Post-Secondary Educators of B.C. — Cindy Oliver and George Davison; and we have the Canadian Federation of Students, B.C. office, Selkirk College Students Union — Ian Boyko and Zachary Crispin.
[ Page 1680 ]

Welcome. You're going to present together, so I'll give you…. That gives you 20 minutes in total for a presentation. I'll give you a heads-up at that mark, then, and you can stop and take questions. In fact, you can allocate the time how you would prefer to, but 30 minutes maximum.

Welcome, and over to you.

Presentations

C. Oliver: Thank you very much and good morning, and welcome to Richmond. I understand you've been all around the province. I have asked the CFS, the B.C. chair and its communication director to join us in our presentation to the committee, and I really appreciate their accommodating that request.

[0905]

Our times were consecutive, so we thought appearing as a group made good sense. Our two organizations have a lot in common, and we think the committee members would benefit from hearing from our two organizations at the same time.

The Federation of Post-Secondary Educators represents over 10,000 faculty and staff who work and teach in B.C.'s public post-secondary institutions. We also have an active organizing faculty who teach in B.C.'s private colleges and institutes, so we can offer some important perspectives on how parts of the post-secondary system are working in our province.

In late August FPSE released a poll that we commissioned Ipsos-Reid to undertake. The poll sampled the opinions of 822 B.C. voters on a number of post-secondary education issues. We will be providing the Clerk with an electronic copy of the poll, but I thought it would be useful to highlight some of the key results.

For government-side members of the committee, the news from the poll was not particularly encouraging. The majority of respondents — just over 55 percent, which is quite close to the popular vote that your party received in '09 — think that the government is doing a poor job handling post-secondary education. Respondents have some very clear ideas about what's not working.

Ninety-two percent see higher tuition fees as a barrier to accessing post-secondary education. Eighty-four percent think student debt makes it harder to complete programs and degrees. Seventy-eight percent see post-secondary education as a way to improve job prospects for B.C.'s youth but only if government invests more in our colleges, universities and institutes. Seventy-three percent make the connection between better access and affordability to post-secondary education and a high-wage, high-skill economy in B.C.

Those public perceptions reflect the fiscal reality that we see across all of our colleges, universities and institutes. Funding is simply not keeping pace with either the demands from students for more opportunities to learn or from the basic cost pressures of inflation that we see within our sector.

In the 2011-2012 almanac published by the Canadian Association of University Teachers, where the organization uses Statistics Canada data to compare provinces and their investments in post-secondary education, the numbers are not encouraging. For example, between 2001 and 2010 the B.C. government's transfers to colleges and universities on a per-full-time-student basis dropped by just over 6 percent. Because that number does not reflect constant dollar changes — in other words, the full impact of inflation — the real impact of that decline is much larger.

At last year's hearings of this committee, both the Confederation of University Faculty Associations and FPSE estimated that real per-student operating grants in B.C. had dropped by 8.8 percent during that period.

In previous presentations by our federation to this committee, we have stressed the importance of policy and funding changes that address two critical problems in our sector: access and affordability. On the issue of access, we can't emphasize enough the social and economic value that our province derives from greater investments in post-secondary education. Put very bluntly, post-secondary education is the means by which citizens are able to improve their prospects in the labour market.

Higher skills lead to higher lifetime earnings, greater labour mobility and improved productivity — goals that every government, regardless of political stripe, is keen to see achieved. There is a benefit to the treasury when those labour market prospects improve. It comes in the form of higher taxes. In fact, several studies confirm that the rate of return for governments that invest in post-secondary education is positive, ranging anywhere from 3 to 5 percent.

The Canadian Council on Learning has done the most comprehensive research on this issue, and I would recommend that the committee members view the report Canadian Post-Secondary Education: A Positive Record, An Uncertain Future for a more complete discussion of the point.

However, as educators, we see a different calculus playing out in our institutions when those investments are made. We see enormous transformations in our students — transformations that lead to great self-confidence as learners, greater engagement as citizens and more capacity to adapt and innovate in a world that prizes both qualities.

The unfortunate fact, however, is that when funding fails to keep pace with needs, our institutions are forced to do more with less. That scenario differs from one institution to the next, but the common thread we see at a provincial level is this shift to large lecture format modes of course and program delivery, more on-line learning and a scaling back in student support services.

[0910]
[ Page 1681 ]

For our students, these changes can mean fewer course options and longer wait-lists to get into courses they need to complete their program — all of which can either frustrate a person's attempt to access post-secondary education or unnecessarily delay their completion.

Let's not forget the fact that B.C. is in the midst of a growing skills shortage, a shortage that was predicted as we entered the new millennium over ten years ago and one that B.C.'s forecast council has regularly cited as a risk to B.C.'s overall economic growth. Investing in post-secondary education access is one of the most effective ways to deal with that shortage. But if we continue on the current trajectory of chronic underfunding of the system, we run the risk of seriously disabling growth in the future.

I mentioned affordability, and I will leave most of those comments to the Canadian Federation of Students to discuss in more detail. However, I think it's important to stress that access and affordability move in tandem. If we aren't solving both simultaneously, we aren't going to record much progress. Simply put, we can have well-funded post-secondary institutions, but if we put tuition fees so high that students simply can't afford to go or end up swamped by debt, we haven't solved the problem.

The Premier has talked a lot recently about trades training, and we agree on that point. Trades training is absolutely important, and post-secondary institutions play a critical role. Our institutions deliver over 90 percent of trades training in B.C., so our input is important in making that system work effectively.

Unfortunately, the relationship between the Industry Training Authority and our colleges, universities and institutes is not working to its best advantage. The ITA has made a number of unilateral decisions over the last several years about the funding that it is prepared to provide for the programs we deliver. In a number of instances funding weeks for programs have been reduced unilaterally.

But the real challenge comes from the ITA's decision to only fund on the basis of full course or program. If that program or course is less than 100 percent subscribed, ITA claws back the difference. The problem with that approach is that for most of our small, rural colleges and institutes, 100 percent is difficult to achieve. In most cases we press ahead with a program even when it is less than fully subscribed, but the institution is penalized for doing that.

There is serious dysfunction in this approach. It undermines the longer-term objective of full and effective trades training and certainly penalizes small rural colleges in the process. If the Premier is serious about improving the trades-training system in B.C., there needs to be an overhaul in how the ITA works within our institutions — a point that we hope your final report highlights as an opportunity for change in the February budget.

Premier Clark has also highlighted the importance of international education, in both the throne speech and several announcements that she made in September. B.C. has a long history of opening our doors to international students. It's not only good for those students, who are able to access a quality education here in B.C., but it's also good for our institutions and our domestic students, who are able to engage in the diversity that comes from having international students within our classrooms.

We are not so sure, however, that diversity is a driving motivation behind the Premier's interest in international students. Our concern is that there's far too much interest in the revenue potential of these students. The enthusiasm for international revenue has to be balanced against the reality that international students need and deserve additional support if they are going to receive the quality education that has attracted them to B.C.'s post-secondary institutions in the first place.

As any instructor who regularly deals with many of these international students will tell you, the needs of these students are more complex than anyone who is promoting the expansion of international education is prepared to recognize, and therein lies a significant problem.

If there is an expectation that increased international students could provide a revenue stream to offset the chronic underfunding provided by provincial operating grants, that calculation needs to be examined very carefully, because it does not take into account the significant new costs that need to be covered if we are going to meet the needs of international students.

By way of summary, our federation would like to suggest some priorities that need to be strengthened in the upcoming provincial budget.

We need to address the affordability challenges that current students face. Simply capping already expensive tuition fees doesn't address the real problem. We could make a meaningful step in the right direction by reviving the student grant program, which would at least allow those with the most significant financial challenges some relief.

We need to see new money provided to post-secondary institutions to ensure that they have the capacity to restore student services that have been scaled back over the last ten years. Counselling support services, for instance, are an effective way to make sure that students understand all the options and career choices available to them.

[0915]

We need to see an overhaul in the funding relationship between the Industry Training Authority and public post-secondary institutions, which deliver over 90 percent of trades-training programs in B.C. That relationship needs to better reflect the true cost of the trades programs that we deliver.

Finally, the government needs to look at a new funding formula for post-secondary institutions, a formula
[ Page 1682 ]
that will not only guard against the impact of inflation but also recognize the unique cost pressures that various institutions face in providing access to post-secondary learning in their community.

Thank you, and I will be happy to take any of your questions after our next presentation.

Z. Crispin: Good morning. Before I begin, I'd like to acknowledge the Coast Salish people, whose traditional territory we're on today. I would also like to thank the committee for hearing our presentation today and note our appreciation for the opportunity to participate in this process.

My name is Zachary Crispin. I'm a history student at Selkirk College, and I'm also the chairperson of the Canadian Federation of Students, British Columbia. The federation is British Columbia's provincial student organization. We have a college and university, urban and rural, membership of 150,000 students at 17 post-secondary institutions in British Columbia. Our mandate is to unite students in the movement for a universally accessible, high-quality public post-secondary education system.

This year our members have identified several priorities for improving access and quality of education in British Columbia. The first: eliminate interest on B.C. student loans; (2) establish an upfront and needs-based provincial grant program; (3) progressively reduce tuition fees to 2001 levels; (4) restore operating funding to universities and colleges to 2001 levels, accounting for inflation; (5) maintain the commitment to keep adult basic education free; (6) reorganize the Industry Training Authority governance and fund comprehensive trades education and capital equipment upgrades; and (7) increase funding to support the U-Pass B.C. program and service enhancements across British Columbia.

The federation will be providing the committee with detailed support for these recommendations in our written submission. I will now take a few minutes to elaborate on the recommendations, starting with B.C. student loans.

A majority of post-secondary students in British Columbia cannot afford to pay their tuition fees. Those students borrow money from the provincial government in the form of B.C. student loans. Currently, at prime plus 2.5 percent, B.C. charges more interest on student loans than anywhere else in the country.

This revenue from student loan interest to the provincial government is negligible, roughly $30 million. Yet this represents a fundamental inequality to students forced to shoulder the burden of debt. A student who can afford to pay their tuition fees up front pays no interest to the government, but a low-income student who needs a loan will pay thousands of dollars in interest.

This $30 million represents an extra fee charged to those who can least afford it. The combination of inherent inequality and the small cost of eliminating it make charging interest on student loans indefensible. By eliminating interest charged on student loans, just as the Conservative government of Newfoundland and Labrador has, real progress could be made to relieving B.C.'s record student debt levels. In the broad scope of the budget, it would not take substantial funding to rectify this inequality. The provincial government should immediately begin providing interest-free student loans.

Along with action on student loans, students recommend another measure to improve financial aid: grants. After meeting with representatives of the Canadian Federation of Students, the federal government has acknowledged the burden of student debt across the country and implemented the Canada student grant program last year. In contrast, B.C. has the lowest level of non-repayable financial aid in the country.

Financial aid should be used to help those who cannot afford their post-secondary education to enter the system and get a degree or diploma. If aid is distributed properly, students will be able to leave university or college without massive debt and be able to pay into tomorrow's education system through taxes. However, most of B.C.'s non-repayable student financial assistance is administered through the student loan reduction program, which does not provide upfront help for students. Thus, post-secondary education is no more accessible through loan reduction.

However, British Columbia was once a leading province in assisting students through the B.C. student grant program, and the establishment of a grants program would greatly increase accessibility to post-secondary education.

[0920]

Complementary to grants, the reduction of tuition fees would also contribute to accessibility. In the last ten years B.C. has seen a more rapid increase in tuition fees than any other part of the country. Since 2001 average tuition fees for a four-year degree program have increased by roughly $10,000. A study by the Canadian Association of University Teachers rated B.C.'s system of post-secondary education the second-to-worst in Canada for accessibility. Accordingly, B.C. has the second-worst university participation rates in the country, 7 percent lower than the cross-country average.

As the situation of accessibility grows more dire, the need to reduce tuition fees becomes more pressing. Students are recommending a reduction in tuition fees to 2001 levels in order to reverse the waning domestic enrolment at B.C.'s post-secondary institutions and to provide much-needed relief to students struggling to pay the rising cost of higher education.

The most equitable way to finance a widely accessible system of post-secondary education is through the progressive income tax system, where affluent Canadians pay a higher percentage of their income in tax than
[ Page 1683 ]
lower-income Canadians. Reducing tuition fees must be a part of a larger strategy to ensure broad access to post-secondary education in British Columbia, a strategy that must also include provision of adequate institutional funding and student financial assistance.

Moving to the fifth recommendation we're putting forward. The provincial government has already committed to keeping adult basic education free from tuition fees, yet at certain institutions students are raising concerns about the maintenance of this commitment. Camosun College recently adjusted several grade 12 courses to make them 100-level university courses so they could charge tuition fees. As a result, there is now no provision of biology, chemistry or physics 12 for those over high school age in the province's capital. Sufficient funding should be committed to ensure the provision of adult basic education across the province.

In other areas of post-secondary education, trades and apprenticeship training, there is a need for action from the B.C. government. B.C. faces a skills shortage, yet funding for trades training is decreasing. At some institutions, programs need capital upgrades to remain current, such as at Selkirk College, where the archaic equipment millwright students are trained on is no longer even used in the industry.

There are also relatively inexpensive measures the provincial government can take to improve trades training. The Industry Training Authority, the governance body responsible for trades training, does not currently have representation from students or trade unions. Widening representation on the board of the ITA and placing the ITA under the purview of the Ministry of Advanced Education would better position B.C. to provide comprehensive education to trades students.

Another way to ensure comprehensive trades education is to reverse the trend of modularization. Modularization is the process that compresses education into short programs with less content. It turns a well-rounded carpenter into a poorly paid framer, or removes chemical training for aestheticians, for an end result that is worth less to workers and the public. Ending modularization would help redirect trades training from the current trend, which lowers the ability of British Columbians, to end the skills shortage and gain meaningful employment.

Our last recommendation is to improve transit in British Columbia. Students would like to see long-term funding to support the administration of the U-Pass B.C. program. This would prevent institutions from off-loading these costs to students in the form of fees.

Quality of service is a serious concern for students in rural areas such as the Kootenays or the mid- to north Island. Students in these regions have not adopted the U-Pass B.C. program because there's simply not sufficient service to warrant the pass. Infrequent service; long, indirect routes; and sometimes a complete lack of late-night service make the transit system useless to many.

In conclusion, I encourage the Select Standing Committee on Finance and Government Services to listen to the voice of students and the public and to make recommendations to improve post-secondary education in the province.

R. Howard (Chair): Thank you. We have a list of questioners.

B. Bennett: Thank you very much for your submission. Where should we send the cheque?

Not being flippant, but we're at the end of our consultations. This is our last, I think, public consultation, and certainly we could double the budget, at least, after what we've heard over the past month. I certainly don't disagree with the fundamental part of your presentation, which is the importance of post-secondary education, including the training piece.

[0925]

My question goes to what I have been noticing as a disconnect between what business on one hand is telling us, which is that there is this shortage of particular trades and skills in the workplace…. To the point where we're hearing the business community say, "We're going to the Philippines. We're going anywhere to find the people that we need."

You have that on one side. On the other side, some of the student groups that we've heard have told us that they're not finding work. They're not finding jobs after they graduate. Their friends are not finding jobs after they graduate.

That disconnect concerns me from the perspective of: are we actually educating people in the right way? Are we giving them the right skills to match up with what the opportunities are? Any thoughts on that?

C. Oliver: Well, if you're talking about trades training, which I think you were in talking about skills shortages….

B. Bennett: Well, it's certain kinds of engineers and scientists. It's not just trades training.

C. Oliver: Just to try to answer some of your question there. When it comes to trades training, the important aspect of it is fulfilling the Red Seal requirements. That's something that we have worked very hard in B.C. to preserve, because there was a movement a few years ago to try to basically dumb it down and get rid of it — or have Red Seal as an option but not mandatory.

That didn't work. Many people — as you say, business owners, people in construction industry and that — didn't want to take on people who didn't have full Red Seal qualifications. So that whole concept went by the wayside, thankfully.
[ Page 1684 ]

As far as connecting up those who need the skills and those who have them, I would suggest that that's sort of more in your bailiwick.

I think with post-secondary education, we've got to stay relevant. The funding has to be there to keep up. We just heard that at Selkirk College, for instance, the millwrighting program has ancient equipment. Certainly, you know that when it comes to engineering, computer science, nursing or anything, those fields are changing constantly. We need to have the funding in our institutions to keep those skills relevant, up to date and to keep our instructors up to date as well.

D. Donaldson (Deputy Chair): Thanks very much for the joint presentation. Much of the information you presented around trades and some of the other statistics is well presented and is new to us, compared to some of the other presentations. That's very good information.

I had a question for your organization around access and funding failing to keep pace with needs. It has to do with adult literacy, which is within the realm of the Ministry of Advanced Education. The funding part is delivered through post-secondary institutes.

I've heard from community organizations that the grants they depend on, which is the community adult literacy program, are still not out the door yet from the ministry. Here it is the middle of October. If you're concerned about families and you want people getting into post-secondary education, the literacy skills have to be there if you want people accessing the labour market.

These are small organizations that often depend on $30,000 or less. We're over halfway through the fiscal year, and they haven't heard. Have you been hearing anything about those grants and the situation that non-profits, especially, are facing?

C. Oliver: Thank you for that question. Actually, I have heard. I've heard from people at Capilano University who are trying to run the program and have, on good faith, started it but are now having to tell the students that program is not going to be available anymore. They run programs in the Downtown Eastside. These are vital literacy programs.

The program is called CALP, for those interested — the community adult literacy program. It's actually very disturbing that the approval is taking so long. I don't know if it's stuck in the minister's office or where it is being held up, but it's not a lot of money. We're talking maybe $4 million, $4½ million, something like that.

We just heard an announcement I think this morning that there's half a million dollars going off to the Grey Cup. That seemed to be very quickly announced this morning. Yet these people who are in desperate need of literacy training are being told: "Your classes may not be on next week. I'm sorry. We're going to have to leave it."

Some of the colleges and universities have been offering it on good faith that they're going to get it. But because they haven't seen it, they're actually going to have to shut them down. It's disturbing on many fronts. Those are the people who need it the most, for sure.

[0930]

Again, it's that problem with the funding formula we have in our system. We used to have targeted funding, where they would actually say that a certain amount of money is set aside for trades, for developmental education, whatever. Now, with block funding, institutions are able to just distribute it as they wish, and it's usually to the detriment of programs like developmental education and literacy.

J. Thornthwaite: Thank you very much for your presentation. I was just looking at your appendix, and Julian from Nelson, B.C., says: "I'm collecting debt that I hope I'll be able to pay back after school, but in our economy this investment is sketchy. I take a risk."

I'm wondering if you could explain what sort of role your organizations should have in encouraging folks who are going to school, are going to get a degree that actually will give them money to be able to pay back the student loans that they have.

I. Boyko: Our role in doing academic advising?

J. Thornthwaite: Yes.

I. Boyko: We're an advocacy organization whose mandate is to lobby you folks to make the education system the best it can possibly be. Our members haven't identified the need for academic advising as something that should be within our purview.

Having said that, I don't think, necessarily, that you want to conflate training and education. I mean, there are short-run training programs that have a very specific skill in mind and often to meet a very specific role in the labour market. Then there is what is post-secondary education, which has historically been about equipping young people and folks going back to school with a wide range of flexible and adaptive skills for the labour market, ones that will pay returns over the course of a 40-year working career.

I think you're getting onto thin ice trying to micromanage the direction in which people want to ascertain an education in order to have a fulfilling career.

I remember, when I first entered school, computer animation was all the rage, and schools were dumping tons and tons of money into creating spaces for computer animation. Of course, four years later the market was aglut with computer animators, and nobody could find work.

I think the takeaway for me and for maybe this committee is that we shouldn't be obsessed with these kinds
[ Page 1685 ]
of short-term labour market demands but be more focused on providing students with skills that will last them their entire lives.

A lot of the jobs that people in high school today will be taking in 15 years or in ten years haven't even been created yet, so we can't possibly build an education system around positions that haven't even been created yet. We have to provide flexible skills that people can use for their entire life in order to make a contribution over the course of their working lives.

R. Howard (Chair): Listen, thank you to you all. We've run you out of time, unfortunately. We have a long list of speakers or questioners still — Routley here, Elmore, myself and Ralston — so we'll have to catch up with you after the fact. Thank you for taking the time.

Next up we have the Business Council of British Columbia — Greg D'Avignon, Ken Peacock and Jock Finlayson.

Welcome, gentlemen. As you have undoubtedly heard, you've got 15 minutes. At about the ten-minute mark I'll give you a heads-up. You can stop and take some questions or go straight through. Your choice. The microphone is yours.

G. D'Avignon: Great. Thank you, Mr. Chair, and thank you to the standing committee for the opportunity to present today. As you may be aware, the Business Council of British Columbia is in its 45th year. We're the pre-eminent business organization in B.C., representing medium- and large-sized enterprises that are the leaders in every key sector of the economy.

Our members employ almost a quarter of all the jobs in British Columbia, and as a consequence, have a significant impact in terms of capital invested in the province, operation of assets in the province and — most importantly, I think — working cooperatively and collaboratively to make sure British Columbia reaches its full potential.

[0935]

It's with that purpose in mind that we present to the standing committee today. I'm going to turn it over first to our chief economist, Ken Peacock, to review some of the economic background that I know government is well aware of and, certainly, the business community is well aware of in terms of the turbulence and some of the headwinds that the global economy is facing right now and the impacts that it potentially has for British Columbia. Then Jock will finish with a fiscal overview of some policy issues that we believe the standing committee needs to turn its attention to.

Thank you again.

K. Peacock: Thanks, Greg.

I'm going to try to give the whirlwind tour of the economic outlook in three minutes or less to leave as much time as possible for Jock. We usually like to provide a little bit of economic information and backdrop because that sort of sets up our commentary for the fiscal issues and the taxation issues.

Essentially, I think sort of the key theme is that B.C. is set to expand at a subpar pace over the next couple of years. That's not disastrous. It's a 2 to 2½ percent range over the next couple of years, but we characterize it as subpar considering the sort of depth and magnitude of the recession that we're coming out of — somewhat below B.C.'s potential capacity.

Much of the rebound that we've experienced so far has been driven by exports. That's one of the reasons we expect the sort of more muted economic growth going forward, because there's a little bit of a question mark overshadowing the potential for exports, because, of course, of the global economic turbulence, the uncertainty and risk — as we say in our submission, non-trivial risk — that there could be sovereign default in Europe. Of course, the U.S., which is more important in direct terms, is poised to grow at a weak or tepid pace over the next few years.

While there is a potential or possibility that the U.S. could surprise on the outside, we think, for planning purposes, that it's prudent to assume U.S. growth is going to be quite modest for the foreseeable future — the next couple of years, for certain, and likely the next four or five years.

A positive element, of course, is Japan. The rebuilding effort there is going to require more raw materials. Some of those will come from British Columbia. So there's a short-term positive impact there, we expect, from Japan, and then finally China. China is a huge upside, a positive factor in British Columbia. In many ways it's rescuing the export sector for the province. We do note in here, and I'm sure you've seen it many times, that the Pacific Rim is now…. We are now poised to export more to the Pacific Rim than to the United States.

About a decade ago we used to export about a third to the Pacific Rim of what we exported to the United States. Now our exports to the Pacific Rim will surpass the U.S. So it's very difficult to overstate the importance of China and other emerging economies in Asia for British Columbia's economic outlook. We believe that, for the most part, will continue. There are some question marks around China slowing a little bit, but we think the 8½ to 9 percent growth projections that most economists anticipate are the most likely outcome.

Domestically, a positive is the construction sector. Unfortunately, it's a little bit mixed there. The housing market has been slowing and, as a result, housing starts have actually been flat for the past year. On the upside, we think non-residential construction will gradually increase over the next few years. There is a significant amount of upside potential on the non-residential market, and we do look to the potential for many large projects in the
[ Page 1686 ]
northern part of British Columbia to help boost the economy. The gateway is definitely a positive.

One area that's a little weak is consumer spending. It's not entirely clear why, but I think the more muted job growth and consumers hearing concerns about the collapse in the global economy on a regular basis are all sort of working to dampen consumer spending. That is a soft spot in B.C.

Finally, just a couple of comments on the labour market. If you look at the labour market over the past year, it has been weaker. That's notwithstanding the huge and somewhat unexplained jump in employment we saw last Friday. That's a 30,000 increase. Our read on that is that it's a little bit of payback for, I think, unusually weak numbers. But we think it overstates the strength of the labour market currently. The direction is right, but the magnitude is a little off. But we do look for somewhat stronger employment growth in the latter part of the year and into next year.

Bottom line. As I mentioned at the outset, I think for planning purposes 2 to 2½ percent growth for GDP is probably appropriate with most of the risks on the downside when, perhaps, a little bit of risk on the upside…. With that, I'll turn it over to Jock.

[0940]

J. Finlayson: Thanks very much, Ken.

Just turning to the fiscal picture and the government's fiscal plan. Before the recession started the province was in quite a strong position, and that did help us navigate through those choppy waters. But we do need to acknowledge there has been a significant deterioration in B.C.'s public finances over the past 2½ or three years, in common with many other jurisdictions.

The best way, I think, to see that is to look at what's happened to the taxpayer. Supported debt has gone from about 13 percent of GDP, on track to hit a little over 18 percent by the end of the current fiscal plan. That's not a severe deterioration, and we still are in a relatively strong position compared to many other jurisdictions, but it's obviously a trend. We don't want to see it continue, going forward.

With that as backdrop, we do support the government's fiscal objectives of containing the growth in the debt-GDP ratio and bringing the operating budget back into a balanced position by 2013-14. We recognize, though, that that's going to be a rather challenging undertaking for a few reasons.

One, it will be the costs associated with transitioning back to the provincial sales tax. Those not only include the upfront costs, if you will, associated with repaying the federal government and rebuilding the provincial tax administration machinery; it also will incorporate over time the fact that the PST will be a less efficient tax, a less productive tax, from the point of view of the provincial treasury. There will be a lower revenue yield per dollar of spending in the economy than would have been the case under HST. So that's something the province is going to have to absorb in its medium-term fiscal planning, going forward.

The second. As Ken pointed out, there's some downside risk on the revenue side, although I think the Ministry of Finance has used quite prudent economic assumptions built into the first-quarter report issued in September. One thing we have learned since September is there's more downside risk out there, both for the economy but also for commodity markets. There are some inklings coming out of China, in particular, of a potentially faster slowdown in economic activity in that part of the world. If that happens, we are going to see a knock-on impact on commodity markets globally, and that could, of course, have an adverse effect on revenue collections in the province.

Just a quick word on the natural gas sector — a positive story coming out of the National Energy Board approving the Kitimat LNG export permit. We're very pleased by that. Unfortunately, it's going to take several years for B.C. to put the infrastructure in place to be able to access Asian markets for natural gas. So until, certainly, through the period of the current fiscal plan, we're going to be stuck supplying the North American market, which is hugely oversupplied with natural gas right now. I think there's actual further downside risk attached to natural gas prices over the balance of the fiscal plan, and that would be challenging for the province as well.

A third concern is the strong pressure on spending. You no doubt will hear as a committee from all kinds of organizations and interests who will point out that additional government spending would be helpful and useful in a variety of different areas. Unfortunately, the province isn't in a position to accommodate most of those requests. But we do acknowledge and recognize, especially in the health care area, the very significant pressure that all provincial budgets are under, and we just simply have to manage our way through that.

A B.C.-specific concern relates to public sector compensation. About half of the public sector workforce in the provincial jurisdiction has reached settlements, as we understand it, subject to the government's zero-zero compensation mandate. We've had a look at that. We do recognize the need to be competitive, as public sector employers, on wages and benefits, but we do think that the government's short-term, net zero-zero compensation policy is justified for three reasons.

First, public sector employees in the province did get generous settlements in the previous round of collective agreements, including the payment of one-time bonuses, as well as annualized pay increases in the 3 to 4 percent range.

Second, academic research shows that many — not all, but many — people working in the public sector are actually paid more, particularly when you include the
[ Page 1687 ]
cost of benefits, than private sector workers with comparable experience and qualifications. So there is a gap there.

[0945]

Third, we just came out of quite a serious recession, and the economic impact of that fell heavily on the shoulders of private sector workers and small businesses in British Columbia. It did not hit people in the public sector. They were shielded from the adverse effects of the recession. In that context I think it's also fair and appropriate that the government's zero-zero compensation policy be sustained. It's not a long-term solution, but it's certainly, I think, justified in the short term.

A comment on capital spending. We support the fiscal plan targets, which call for actually a reduction in capital spending going forward. Capital spending was ramped up in the recession as part of the province's response to the downturn in the economy. But we would advise some flexibility in approaching capital spending.

If economic conditions deteriorate beyond what we're anticipating, I think there is a case for the province to have the flexibility to dial up capital spending as a way to help support the B.C. economy in the event that things are weaker than we're anticipating.

I would also note, having just come back from two days of meetings in Ottawa, that there is some discussion about the federal government's fiscal stance at the moment. There is a possibility that we will see, coming out of the government of Canada, some additional fiscal stimulus measures in 2012-13 beyond what they've contemplated in their fiscal plan.

If that's the case, I think the province wants to be in a position to access some of those federal dollars by making sure we've got the provincial capacity, in our own capital budgets especially, to come to the table into negotiations. I would flag that as an area where I think the Ministry of Finance and the government need to keep an open mind as we move toward the 2012 provincial budget.

Regarding taxes, we have some material in our brief outlining some of the problems that existed under the operation and administration of the old provincial sales tax. We would urge the committee to look at whether in reinstating the PST some of those administrative problems could be dealt with through changes on the rules regarding appeals and clearer definitions of what's taxable and not taxable.

The PST system — we recognize and accept we're going back to it, but we're hopeful there can be some administrative improvements to it at the back end. Over the medium term we certainly think there's an argument for making further changes to the PST beyond the 2012 budget to try and address some of the adverse effects that it does have on the cost of doing business and the cost of capital in British Columbia.

With that, I will conclude and will be happy to take any questions.

R. Howard (Chair): Excellent. Thank you, gentlemen.

B. Bennett: That's a 30,000-foot kind of view, and that's where your advice is coming from. I certainly appreciate that, and it's useful. But since we have you here, why don't you give us one thing that we could recommend in our report that either would address in some significant way existing expenditures — either cutting them, reducing them or moving the money someplace else — or one thing that we could do that would address revenue? Competitiveness, anything that's going to allow us to position the province in a way that would generate new and increased revenues.

J. Finlayson: Well, particularly in the aftermath of the HST, it would be the need for a robust competitiveness agenda, Mr. Bennett, that would not just deal with tax policy but would be looking at the whole constellation of what government does — on permitting, on regulation, on infrastructure investment, on skill training, all the different pieces — and see whether….

There will be a non-trivial erosion of B.C.'s competitive position for new capital investment as we transition back to PST. And secondly, there's going to be a reputational hit to the province as a consequence of this kind of dramatic bounceback in tax policy.

To counter that, we would urge the province — and indeed we have already done so, and I think Mr. Falcon has indicated that there's an intention to move in this direction — to formulate a sort of competitiveness strategy to really look at where we can move things that will make the province a more attractive place to invest.

Part of that, though, entails sustaining the fiscal advantages that we have as a province that has managed its finances, I think, in a fairly prudent way. We don't want to throw that away. It is a card that we have, and it's an essential one to sustain.

R. Howard (Chair): Just about out of time, but I'm going to try and squeeze one more in.

B. Ralston: You mentioned, in the latter part of your submission, industrial property taxes, and you note that that was identified about a year and a half ago as a priority for the government.

[0950]

In summary, what direction should the government be moving in, in dealing with industrial property taxes? Obviously, there has been litigation by Catalyst, and those solutions haven't been very satisfactory. What would you suggest?

J. Finlayson: We're not involved in any aspect of the litigation by Catalyst.

B. Ralston: I wasn't suggesting that.
[ Page 1688 ]

J. Finlayson: I will say that the system we have in B.C. is unique in Canada. It creates tremendous uncertainty for industrial operators that are in class 4, because municipalities have, really, complete discretion in terms of the tax burden they choose to load up on that particular class of property tax payers.

Our advice to the province is to take charge of the file and, through legislative amendments, institute a new system governing business property tax in the province that will put some limits on the amount of property tax that can be charged to business and industrial taxpayers relative to residents and, second, have an effective appeal mechanism in place, as a lot of other provinces do, so that there is some kind of a recourse, beyond going to the courts, for taxpayers that feel they haven't been dealt with….

We've actually written on this before. I'll send you our letter to the province on that.

R. Howard (Chair): Excellent. Thank you. If you could do that through the Clerk's office, we'll make sure everybody gets it. I'm sorry. We've run you out of time. I know I speak on behalf of the entire committee and say thank you for coming out this morning and taking the time.

Next up we have the David Suzuki Foundation — Ian Bruce.

Welcome, Ian. As you're getting set up, you probably know you've got 15 minutes. At about the ten-minute mark I'll give you a heads-up. You can stop and take some questions or go straight through. Your choice. The microphone is yours.

I. Bruce: Thank you very much, Mr. Chair. For one, I just wanted to thank you for the work that you're doing consulting British Columbians across this great province. I certainly appreciate that.

Today I wanted to talk to you about some of the climate leadership opportunities related to the B.C. budget this year — there are certainly some important policies this year that will have, we believe, a very significant impact on B.C.'s future — as well as identify some potential opportunities to create economic investment, infrastructure spending and a better quality of life for British Columbians.

I just wanted to start out by acknowledging that countries around the world are retooling their economies when it comes to investing in clean energy. Over the past few years China has surpassed the U.S. and Germany to become the number one investor and developer of clean energy technologies, and this is having a really big impact across the world.

You can take, for example, South Korea. South Korea invested 81 percent of its recent stimulus package into clean energy and low-carbon infrastructure, low-emission greenhouse gas infrastructure.

As well, we've seen the clean energy sector grow at about 30 percent on average over the past ten years. This global trend has created tremendous opportunities for British Columbia, especially to be an innovator of some of these technologies and be part of the growing trend for solutions.

I would say that B.C. has shown a lot of leadership when it comes to addressing climate change. Both from the fact of B.C.'s groundbreaking carbon tax to energy policies on clean energy that phase out things like coal-fired power, it has been leading the way.

B.C. is not alone, though. The European Union; California; China; Korea; Australia, which recently brought in a carbon tax and has plans to move ahead with a cap-and-trade system; as well as signals from Quebec and Ontario are certainly leading the way.

One of the things I wanted to talk about specifically…. Carbon tax has been a big issue here in our province, and we've certainly talked about it a lot. Even a country like Sweden has a carbon tax five times the size of B.C.'s when it comes to the price on greenhouse gas emissions, yet it was ranked last year second in economic competitiveness by the World Economic Forum.

I wanted to just highlight that there are countries and there are systems in place where both the environment and the economy can be addressed at once.

[0955]

Our country has been criticized by the Organization for Economic Cooperation and Development for really failing to use more incentives that encourage the development of cleaner sources of energy and cleaner transportation systems and discourage things like pollution. This is certainly a trend that we're seeing globally, and as a country as a whole, we're failing to meet that challenge. However, I would certainly say B.C. is headed in the right direction.

As you've heard from many speakers, and even this morning from speakers, there is a significant challenge in B.C. when it comes to looking at new sources of revenues, especially for investing in important things like infrastructure, whether it's public transit or energy systems within our province. These are very important investments, especially considering the significant population growth, for example, we're seeing, especially in the Lower Mainland, as well as issues around traffic congestion and securing long-term, stable funding overall for an infrastructure.

I would just take an example from the B.C. transit plan. This is in a slide on page 6. B.C.'s transit plan required roughly a $4.7 billion investment over ten years to be on track as far as the infrastructure that was required to meet the growing needs, yet we're only at a third of the investment required really to put the plan on track. So the current B.C. transit plan is not becoming a reality because of the lack of infrastructure investment.

I think there's an opportunity this year with B.C.'s carbon tax. As you are well aware, I imagine, B.C.'s carbon tax plateaus out at year 2012 if there's not further
[ Page 1689 ]
legislation brought forward. There is an opportunity here where we could strengthen the B.C. carbon tax by allocating a portion of revenues to invest in things like green infrastructure such as transit.

We're recommending setting up something that could be like a climate solution superfund that could invest in critical infrastructure by increasing the price on greenhouse gas emissions beyond the $30-a-tonne threshold. So more or less continuing the current pace of the B.C. carbon tax. It does increase $5 per tonne every year.

To date, those revenues have been mainly used to reduce other taxes, but there is strong support — and we're hearing this from both citizens and other organizations — for opportunities to invest those dollars into key infrastructure that helps make our province stronger.

It can be done in a fair approach. We have the data in the province where we could allocate revenues from a particular jurisdiction — for example, the Metro Vancouver or Lower Mainland region. We could ensure that every dollar raised was going back to key infrastructure in that region. Same with interior and northern B.C. communities — to ensure that every dollar raised was going back to infrastructure projects within those communities that have been identified by those areas.

We believe it's a fiscally responsible approach, as it certainly meets the need to invest in critical infrastructure. It also ensures that some of the challenges and problems that pollution and greenhouse gas emissions create become part of the solution. There are certainly a lot of benefits, which I'll touch on later.

One of the other slides I have here is just B.C.'s current carbon tax and the emission sectors that it covers. It does cover the burning of all fossil fuels in the province, whether it's industry, households or businesses. However, there is a portion of industrial process emissions that aren't covered by B.C.'s carbon tax, and we believe a fair approach would be to apply the same standard to those industrial process emissions. Much of that comes from within the oil and gas sector.

On page 10 or slide 10 — just showing the current carbon tax revenues, current and projected, based on the current model that's in place today. These are from B.C.'s budget and estimate forecasts.

The next slide goes to show that by increasing the carbon tax at the current rate it has been increasing over the past five years, we could allocate a portion of those revenues raised into things like green infrastructure. It wouldn't be a significant change from the current process, but just moving forward, we would start to actually have new dollars to invest in the province.

[1000]

One thing we talk a lot about is climate change — certainly in our organization. There are many synergies and co-benefits of taking action on the environment. Certainly, building healthier and more livable communities is a major benefit. That includes congestion management for traffic, improving public health by investing in our communities and making them more pedestrian- and transit-friendly, better air quality.

It allows us to build more parks and green spaces and provides better transportation choice. That's one thing within the province. You know, many of our communities are car-dependent, and citizens don't have access to reliable, fast transit service, and this would certainly be an opportunity to do so.

As well, climate action does spur economic development, whether it's building new infrastructure or leading on innovation. One of the things that was identified: B.C.'s clean tech companies now number over 200 companies, with about 9,000 employees, and are very well-paying jobs. That sector has been growing, continues to grow quickly, even over the last two years when other industries have been hard hit by the economic recession. This has been one area that has not, that has withstood the financial fallout globally. This is a sector that is growing and is robust.

As well, climate action can also make our communities more affordable. By investing in our communities…. As they become more pedestrian- and transit-friendly, from a municipal standpoint, the cost of servicing those communities is much, much less. Whether it's waste collection or providing energy services to homes and businesses, a more efficient community design is also a more affordable design and does lead to huge savings on energy bills.

Per capita, the average British Columbian pays about $2,000 to $3,000 a year on energy bills. For a city like Surrey, that would add up to a billion dollars a year. The city of Surrey, both for businesses and households, spends $1 billion a year in energy bills. So there are huge opportunities by taking climate action, where we can improve energy efficiency of homes and businesses and encourage more conservation, and this has huge payoff in the long run.

In closing, I'll just review some of the recommendations. We'd like to see B.C. continue its leadership on climate change and, certainly, by increasing the carbon price on carbon pollution beyond the year 2012, and to develop a regional carbon superfund from the surcharges that could go directly to supporting solutions, including long-term, stable sources of transit and other green infrastructure in urban areas as well as for interior and northern communities. There are certainly a lot of choices there, including energy home retrofits, business retrofits and locally identified green infrastructure.

We do believe this is very important, and we're hearing a lot from British Columbians about ensuring that there's transparency and accountability for any kinds of revenues and investments that their dollars are making. And we would mandate that the Auditor General should oversee every dollar invested so that it is fair and works towards reaching B.C.'s legislated emission target as well.
[ Page 1690 ]

We believe that the B.C. carbon tax, in fairness, could be improved by expanding the carbon pricing to include industrial process emissions and extending the low-income tax credit in step with the annual increases on the price on emissions. One of the things that, unfortunately, has occurred over the last few years is that the carbon tax has become slightly more regressive. That's to say that it has been putting a bit more burden on low-income households than it was when it was first introduced back in 2008.

As well, there are other opportunities to take action in this year's budget. One of the things that I think is timely is phasing out subsidies to the fossil fuel sector. This sector has had groundbreaking profits over the past few years, and we believe that there's no need for these additional subsidies.

[1005]

Lastly, looking at developing a transition fund to help communities that have been dependent on fossil fuels to transition to a more diverse economy and balance out their economies to create new jobs in the sustainable energy sector.

R. Howard (Chair): Thanks, Ian. We've got two minutes and four questioners, so we'll have to be quick.

D. Hayer: Thank you very much, Ian. Many of the businesses we've heard from so far have said their businesses are not competitive because of the carbon tax in agriculture, farming, greenhouses, cement industry. Other places they're competing with in Canada or the United States do not have a carbon tax. My understanding is that you're asking on page 6 to increase the carbon tax by creating a carbon superfund with surcharges starting in 2014. Is that what my understanding is, or not?

I. Bruce: The current carbon tax has got legislation up until 2012 — so moving forward from 2012 and beyond. That was just one scenario that I have on that slide. There are numerous opportunities, but we would be recommending to start that at the next opportunity, which would be from 2012 and beyond.

B. Ralston: You mentioned on the last slide the phase-out of environmentally harmful subsidies to fossil fuel companies. Can you give an example of that?

I. Bruce: Well, there are several examples. There are many road projects that are subsidized for the fossil fuel sector. As well, currently probably one of the largest imbalances right now is the lack of carbon tax on industrial process emissions. That would be a tax credit essentially. Industrial process emissions from any kind of chemical process or the venting of emissions from the oil and gas sector is not currently covered by the carbon tax.

R. Howard (Chair): Thanks, Ian. We've run you out of time. We do appreciate you taking the time to come out this morning.

Next up we have the Real Estate Board of Greater Vancouver — Harriet Permut and Jim Woolsey.

Welcome to you both. As you probably know, you've got 15 minutes. I'll try and give you a heads-up around the ten-minute mark, and you can stop and take some questions or go straight through — your choice. Over to you.

H. Permut: Thank you very much. We shouldn't go over our time.

Good morning. I'm Harriet Permut, government relations manager for the Real Estate Board of Greater Vancouver. With me is Jim Woolsey, longtime realtor in Vancouver and chair of our real estate board's government relations committee.

We're here today to talk to you about how excessive taxation on homebuyers, sellers and owners is unaffordable and harmful to our economy. We're also making several recommendations which will lessen this tax burden.

First, I'll give you some background about the real estate board. We represent 10,500 licensed residential and commercial realtors in the greater Vancouver area. Our board boundaries extend from Pemberton in the north to Tsawwassen in the south, from the Gulf Islands and the Sunshine Coast in the west to Maple Ridge in the east. We operate the multiple listing service and use MLS data. We produce statistical reports used by universities, economists, business, industry and governments.

The board and its members care about the quality of life in our communities, and realtors are known for their extensive charitable work. We're also known for placing the interests of homebuyers, sellers and owners first and for speaking up on their behalf.

What are realtors hearing in their communities? First, prospective new homebuyers are reluctantly sitting on the sidelines, waiting to see what the harmonized sales tax transitional rules will bring. Taxes on new homes are so high that saving 7 percent tax is significant.

Second, homesellers who want to spruce up their home so they can trade up or down are also sitting on the sidelines, uncertain and waiting for the end of the HST. They also want to save 7 percent on a broad range of goods and services such as energy audits, home inspections, repairs and renovations.

Third, buyers of new and resale homes are finding it difficult to come up with the property transfer tax, and it's no wonder. The tax adds more than $10,000 to a home priced at $628,000 — the benchmark price of a Lower Mainland home.

[1010]

For your reference, the benchmark represents a typical property and is more accurate than an average or
[ Page 1691 ]
median price, which can be skewed by a very few high home prices in a category.

This excessive taxation is making it difficult for ordinary, middle-class families to buy a home anywhere in the Lower Mainland. If you look at our chart on the back side of our handout, you can see that we're not talking about high-end Vancouver west side homes here. We're talking about modest, middle-class family homes in places like Burnaby, Coquitlam or Maple Ridge, which have become so unaffordable that the only type of home a family can afford, even in these communities, is a condominium apartment.

In Burnaby the average family or household income — that's both parents or partners working — is $74,413. That income only qualifies a household to buy an apartment. In Coquitlam the average household income of $82,934 also only qualifies them to buy an apartment. This is the same situation in North Vancouver, in Port Coquitlam, in Richmond and in the Kingsway area of Vancouver's east side, for example.

Where can an ordinary, middle-class family afford to buy even a modest town home? Only in Maple Ridge, Port Coquitlam and Port Moody. If this family wants to buy a detached home, they may be out of luck. There is no community in the Lower Mainland where an average working household can afford to buy this type of home anymore. Taxes are a significant part of this problem.

What happens when buyers sit on the sidelines? Housing starts decline. There are fewer jobs in construction and fewer jobs in all areas associated with home buying and selling, from landscaping to furniture sales. The slowdown spreads across the economy, and government revenues are reduced.

We're now seeing the start of this trend. Have a look at our chart on page 1 and you'll see that, since February of 2011, MLS sales in the real estate board area have declined every month. You will also see that as residential sales decline, so does property transfer tax revenue. This decline is expected to continue as new home sales are forecast to decline 26 percent this year. This forecast is from the Central 1 Credit Union.

Why should this concern all of you? Why are home sales so important to our economy? Real estate is a key economic driver, generating $42,000 and 2.8 jobs every time a home changes hands. Every hundred MLS home sales generate $660,000 in provincial taxes, $300,000 in federal taxes and $32,000 in municipal taxes.

The B.C. jobs plan identifies eight sectors which are vital for growth. These sectors are natural resources, forestry, mining, natural gas, agrifoods, knowledge-based, transportation and international education. Conspicuously missing is the housing, construction and real estate sector.

Our GDP chart on page 1 shows this sector has proven to be the backbone of our provincial economy and a primary engine of economic growth. This omission greatly concerns our industry, and after much consultation, we have developed the recommendations on the reverse side of your handout.

Our first recommendation focuses on consultation. We are asking the government to conduct a major public consultation on the future of the PST and to include a representative from the Real Estate Board of Greater Vancouver on the new jobs and investment board. Construction, real estate and housing need to be represented there. We need to ensure that existing jobs are preserved in addition to creating new ones.

Our second recommendation focuses on the HST-PST transition rules. We are asking the government to immediately remove the provincial portion of the HST on new homes and the provincial portion of the HST on goods and services associated with home buying and ownership, including renovations completed by renovators registered for the HST.

We're also asking the government to provide transitional rules as soon as possible so that buyers of presale homes have more certainty, and we're asking the government to move up the date when the HST-PST changeover occurs, preferably to the beginning of the calendar year — not midyear — to facilitate ease of business transition and budgeting. Most businesses do not operate on a fiscal year like the government does.

Our third recommendation concerns the PST. We're asking the government to implement input tax credits on the PST. Owners of rental apartments can't claim HST input tax credits to provide the rental service. Allowing them to do so provincially would lower costs for those providing rental accommodation.

[1015]

Our fourth recommendation concerns the property transfer tax. We're asking government to increase the 1 percent PTT threshold to $525,000 from $200,000 in expensive markets, such as the Lower Mainland, and to annually index the 1 percent PTT threshold of $525,000.

In closing, I'd like to say that the real estate industry understands that the government has some very tough budget decisions to make, but contrary to what seems to be a commonly held belief, homebuyers, homesellers and homeowners are not an endless renewable resource. Home sales are already slowing, and it wouldn't take much to stall sales even further.

Right now uncertainty about the HST is so acute that our colleagues at the Urban Development Institute tell us that there are over a thousand units in our board area alone, apartment units, that are not being brought onto the market. They're waiting for the HST to be resolved. Projects are not going forward.

This instability is hurting economic recovery and inhibiting our province's ability to grow and to compete on a global scale. We ask that you don't take our industry for granted. The government should rethink the B.C.
[ Page 1692 ]
jobs plan and its priorities. Please don't keep overtaxing an industry that is so valuable to economic recovery. If you do, in the long run it will harm government revenues.

Are there any questions?

R. Howard (Chair): Thank you. We have a question.

B. Bennett: I wonder if you could just flesh out your comment a little bit — at least, unless I misunderstood what you were saying. I get the sense that you don't think that government appreciates the contribution of the housing industry or that we don't somehow or other understand that it's going to play a huge role in our economic recovery.

I know I certainly don't feel that way. I think housing and construction are major drivers in our economy. So where exactly do you get that impression from?

H. Permut: There is no reference to it anywhere in the jobs plan — even acknowledging the position that the housing, construction and real estate sectors play in the economy of this province.

You know, the numbers that we've pulled out come from B.C. Stats. They're not in the jobs plan. We had to pull those numbers ourselves. There's no reference to it, and it's a concern.

Even if it's not a sector in crisis in the same way others are, we appreciate that. But there are a lot of people who work in this sector right now who could lose their jobs, and have in the past, if the economy turns down.

In 2008 there were a lot of jobs lost in our sector. We just want to make sure that there is effort made to preserve those existing jobs and to ensure that the sector moves forward — primarily, that it isn't being ignored. We're concerned about that.

B. Bennett: Well, it's definitely not being ignored on this committee. I can tell you that we've had lots of presentations by different housing groups, and you're going to see recommendations.

H. Permut: Excellent.

R. Howard (Chair): We have another question.

D. Donaldson (Deputy Chair): Thanks once again. Another year for your presentation. My question is on 2(a). Do you have an idea of what that would mean to provincial revenues directly, in removing the provincial portion of the HST on new homes?

H. Permut: Those kinds of numbers are a bit speculative because it depends on the state of the market.

D. Donaldson (Deputy Chair): Based on an average for the last few years?

H. Permut: We could produce that for you, if you like. We've certainly done it in the past. We could, yeah.

R. Howard (Chair): Excellent. Sure, if you could do that through the Clerk's office, then we can make sure the committee gets them.

H. Permut: We will send it to you.

P. Pimm: Thank you. I'm sorry I missed part of your presentation. I was getting an update on my climate information.

If there was one recommendation that you could make on the housing stuff…. I know that there are several different areas, but if there was one recommendation that this committee could take forward, what would be your highest priority — whether it be pre-HST, post-HST, the recovery? Which one would be the most important for you?

J. Woolsey: I think that certainly for the long term, the property transfer tax issue would be it. But in the immediate right now, it's the transition rules for HST that are causing havoc in our industry.

[1020]

R. Howard (Chair): I know that the UDI has done some work around the removal of PTT on new homes and the economic impact. Have you done anything similar for removal of HST? We're looking at a couple of bodies of real estate professionals that are giving us advice. There's much similarity, but there are still some differences.

H. Permut: We've done it in the past. Our previous presentations to this committee have spoken about that. We thought this year we'd focus more on transition because of the circumstances, but we've certainly done that — the impact the HST has had on the cost of homes.

The impact on the market is always a bit difficult, because there are a lot of things that have been going on at the same time. But we've done it in the past. We can try to model it again, if you like. We can bring it up to date — that information.

R. Howard (Chair): Sure. That might be helpful.

All right, thank you both for coming forward today. We appreciate that.

Next up we have the Insurance Bureau of Canada — Serge Corbeil and Lindsay Olson.

Welcome to you both. I'm sure you've heard or you know — 15 minutes. At around ten I'll give you a heads-up if I can, and you can take some questions or go straight through — your choice. Over to you.

S. Corbeil: Thank you, Mr. Chair, committee members. My name is Serge Corbeil. I'm government relations
[ Page 1693 ]
manager with Insurance Bureau of Canada. With me is Lindsay Olson, our vice-president.

Let me begin by thanking you for giving Insurance Bureau of Canada the opportunity to contribute to your work, on behalf of British Columbians, to identify priorities for the 2012-13 provincial budget.

Insurance Bureau of Canada, IBC, is a national trade association representing the private property and casualty insurers, those companies that offer home, car and business insurance. Our members account for over 90 percent of the private property and casualty insurance sold in Canada. Our industry employs more than 14,000 people in British Columbia and in 2009 contributed some $236 million in tax revenues to the province of B.C. and paid $1.7 billion in claims to British Columbians.

That we live in interesting times is by now accepted by all. Even though Canada and British Columbia are faring relatively well from the current challenging situation, the worldwide economic turmoil is impacting us all. It is a reality we cannot escape and one that the insurance industry, being one of the pillars of the financial sector, is certainly keenly aware of.

Evidently we, as British Columbians, are faced with hard choices. Your work as members of this committee is all the more challenging. I'd like to offer a brief state of the industry for the committee members before we move on to our recommendations.

As is the case for the province, the property and casualty insurance industry is not immune to the fragility of the economic recovery. The industry, which usually grows and contracts with the state of the economy, experienced a slight increase in its nationwide return on equity, from 6.9 percent in 2009 to 7.6 percent in 2010.

These results reflect marginal improvements in underwriting results and investment returns. The industry's underwriting income improved from a loss of $160 million in 2009 to a gain of $52 million in 2010, while its investment income improved from $3.4 billion in 2009 to $3.9 billion in 2010.

Current indicators are that challenging times continue to lie ahead. Since most of the industry's investments are in government and highly rated corporate bonds, investment returns tend to reflect yields on the government of Canada's three- to five-year bonds. For the past 20 years the average return on investment has been falling with interest rates, and it seems likely that interest rates will not change materially in the remainder of 2011-2012.

Despite the uncertain economic environment, the industry's prudent risk management approaches and conservative investment strategies enabled it to continue supplying risk management tools and providing peace of mind to millions of people who buy homes, run businesses and drive cars.

L. Olson: I'd like to outline for you our recommendations for your priorities for the budget year of 2012.

We firmly believe that your work as a committee must be framed by a clear sense of fiscal prudence. What's important when looking ahead is to ensure that the government's actions are focused on creating the economic conditions that will continue to make our province attractive to investments, businesses and to retain our workforce.

[1025]

The recommendations in this submission support government's commitment to climate action, economic competitiveness, balancing the budget in 2014 and reversing its decision to increase the corporate income tax rate.

I think it's fair to say that we've witnessed weather patterns that are definitely changing here. The new reality is that we're seeing more frequent and more intense severe weather events. The incidence of extreme floods and windstorms around the world tripled between 1980 and 2010. Globally, insured losses from weather catastrophes increased 49 percent in the last two decades, from $201 billion in the 1990s to $299 billion in the 2000s. That's up to the year 2009.

Canada has not escaped this global trend. On average, annual precipitation has increased approximately 12 percent in this country over the last half century. Weather events which used to occur once every 40 years are now happening once every six years in some regions of the country. By the third quarter of 2011 natural disasters in Canada had already caused more than $1 billion in insured losses. No region in Canada seems to be escaping this phenomenon, and British Columbia is no exception.

These trends in extreme weather show that climate change is real, that it's happening, and that it is vitally important that we adapt to it. This was clearly echoed in a recent report by the National Round Table on the Environment and the Economy. One conclusion the report reaches is that adaptation saves money. As such, industry welcomes government's adaptation strategy, developed as part of its "Climate action for the 21st century" plan.

We were also encouraged by the recent commitment of Premiers at the Council of the Federation meeting to work with the Prime Minister to develop a long-term natural disaster mitigation funding program that contains infrastructure enhancement and other mitigation strategies. We recommend that the government continue in its efforts to bring forward such measures in collaboration with other provinces and the federal government.

We encourage the government to continue to identify the municipal storm and sanitary sewer projects that mitigate damages and improve the sustainability and livability of British Columbia's communities. This, we
[ Page 1694 ]
believe, is a key consideration in creating strong and stable communities where families will want to live without putting their home and loved ones at risk.

A fair regulatory and taxation system. The budget consultation paper poses some important questions about investments and job creation in the province. Everybody would agree with commitments to create jobs and grow the economy. As such, we do concur with the stated goal of the government to create the conditions that will allow the private sector to lead the creation of wealth in British Columbia. We strongly endorse an approach that builds the province's future on a private sector economic foundation.

A key aspect of that foundation is the taxation system. Like many others, we were disappointed with the results of the referendum on the HST, but now is the time to move on. On that front we welcome the government's commitment to review the province's taxation system.

This being said, the insurance industry and, indeed, B.C. families purchasing insurance are, we believe, subjected to one of the most unfair forms of taxation in the insurance premium tax. This tax is applied to insurance premiums that are already subject to non-refundable GST and PST on the inputs for P-and-C insurance business as well as the cost of delivering that insurance to the marketplace.

The result is a double and triple taxation regime wherein consumers pay tax on top of tax. This is an unfair and inefficient method of taxation which, for 2009, has cost consumers $141 million. We recommend that the government commit to a reduction of the insurance premium tax and, over time, eliminate it altogether.

As for the corporate income tax, we note that British Columbia has one of the most competitive corporate income tax rates in the country. In May 2011 the government announced its intention to offset the then proposed HST reduction and other transition measures with a temporary 2 percent corporate income tax rate increase.

[1030]

As announced by the government, the HST changes were contingent on the passing of the HST referendum. Consequently, we anticipate that, given the referendum's result, this pending tax increase on industry will be cancelled.

Creating a competitive auto insurance market. As we noted earlier in our submission, we support government's view that the best way forward for B.C. families is with the development of a private sector economy. As such, there is merit to reviewing what the key functions of government are.

Like many British Columbians we've been hearing from, we don't believe that fixing bumpers and windshields should be a business in which the government of British Columbia — or any government, for that matter — should be involved. One way to spur private sector job creation and create more competition and choice for consumers is to move towards a more competitive optional auto insurance market.

Currently the Insurance Corporation of British Columbia, which has a monopoly on the distribution of mandatory auto insurance coverage, controls approximately 90 percent of the optional coverage market. Sadly, B.C. families are not necessarily well served by this auto insurance system. In fact, at present B.C. drivers pay the second-highest auto insurance premiums in Canada and are largely unable to take advantage of the competitive marketplace to shop around for the best product and the best price to meet their needs.

Our industry welcomed government's recent commitment to have ICBC move to contribute to the national auto statistical plan, in line with its system upgrade, which is scheduled for completion in 2014. Moving forward, though, we urge the government to implement its longstanding vision of promoting competition for optional coverage by fully proclaiming Bills 58 and 93.

That concludes our formal presentation, and we would be very pleased to take any questions.

R. Howard (Chair): Perfect timing. Thank you. We have questions.

D. Donaldson (Deputy Chair): Thanks for the points about the costs of not using the tools we have at hand, like the carbon tax, to address climate action. I know that just this year the extreme weather–related incidents in the northwest part of the province where I live — the washout of bridges and roads on Highway 37A — and in the northeast in the Pine Pass has cost millions, not just to repair but also in economic costs of decreased economic activity. Thank you for those points.

I had a question related to economic development. It has been brought up several times by small operators of businesses that are seasonal — outdoor recreation especially, and also with non-profits that do outdoor recreation activities with young adults — that the cost of acquiring liability insurance for those kinds of activities is prohibitive.

I don't know if you had any suggestions or recommendations around that area of insurance. It has meant a direct impact on economic activity in more rural areas.

L. Olson: Certainly, liability insurance for sporting-type events or activities, outdoors-type activities, guiding and that sort of thing, has over the years been one of the more expensive areas. I mean, it has to do largely with the frequency of losses and the severity of losses that we're seeing in those areas.

In terms of your individual constituents, if they do have any issues or any particular questions that they would like to bring forward, we do have a consumer information line, and that consumer information officer is more than happy to investigate some options for
[ Page 1695 ]
them and give them some counsel on risk management in particular. I think we're more than happy at any time, on any subject, to offer that support.

R. Howard (Chair): Serge and Lindsay, I'm sorry. We've run you out time. We have speakers still — MLAs Pimm, Routley and Hayer — that have questions. They'll have to catch up with you outside of this.

L. Olson: I'd be happy to take them.

R. Howard (Chair): Thank you very much. We appreciate your taking the time this morning.

Next up we have the living rivers trust — John Woodward, Terry Tebb and David Marshall.

Welcome, gentlemen. I'm sure you've heard that you've got 15 minutes. At about the ten-minute mark I'll give you a heads-up and you can take some questions or go straight through — your choice.

Over to you.

[1035]

T. Tebb: Thank you for the opportunity, Mr. Chairman and committee members.

I'd like to first introduce our delegation. John Woodward is the chair of the Living Rivers Advisory Group. David Marshall, who is the executive director of the Fraser Basin Council, is one of the delivery partners for the Fraser portion of the program.

My name is Terry Tebb. I'm the operations vice-president for the Pacific Salmon Foundation, and we're a delivery partner in the Fraser and Skeena. Our other delivery partner is the B.C. Conservation Foundation, with the Vancouver Island–Georgia Basin Living Rivers group. They're not able to be with us today.

First of all, the living rivers trust was created in 2006 by the province of British Columbia, and over a two-year period they deposited $21 million with the Vancouver Foundation. This was to be a five-year program. We're now in year 6, but the fund is basically depleted at this point. The fund has been administered by an independent board called the Living Rivers Advisory Group. John is the chairman of that independent group.

When this fund was created, the vision was to create a legacy for British Columbia, based on healthy watersheds, sustainable ecosystems and thriving communities. We have worked diligently to protect B.C.'s water resources, ecosystems and fisheries resources over the last six years. I think it's important to note that the economic contribution of B.C.'s recreational fisheries alone is $2½ billion a year to the provincial economy.

The Living Rivers program, since its beginning, has been fully supportive of the province's Living Water Smart policy, which we feel is one of the best policy statements coming from the province of B.C. in some time.

Our business model is based on environmental health and sustainable watersheds, which are intrinsically connected to healthy and prosperous communities. The program encourages community involvement and is fully inclusive of First Nations.

Our commitment to community-based collaboration throughout B.C. is a good business model, and it's also a delivery mechanism for addressing government priority issues. We have been able to pull very divergent groups together, reduce conflict and get people at the table to work together in a collaborative manner. We all share a vision for B.C.'s children's future, our community's health and the prosperity of the province of B.C.

There's a slide there, just to show you the diversity of the partnerships that we have developed. We have collaborated with government agencies, both federal and provincial, environmental organizations, First Nations, stewardship groups, local governments, consultants, academia, and business and industry. The pie chart just gives you an example of the level of participation of the people that we have managed to collaborate with.

In our package there is a video. As they say, a picture is worth a thousand words. I hope you have the time at some point to take a look at that video. The first video is a summary of our achievements over the last five years. The second one is an example of a unique program building capacity of First Nations, called the Vancouver Island First Nations legacy program.

I'd like to provide you with just a few examples though — because we don't have the video today — of the type of work that we've done. In the Skeena watershed we found that the province's MOE had seven years of data on the status of steelhead stocks that was sitting in boxes. It had never been analyzed because there was no resource to do it. We took that data and analyzed it so we could determine the stock status of the steelhead stocks in the Skeena. Actually, they're doing the best of any of the steelhead stocks in the province.

We used that data and worked with the Department of Fisheries to convince them to include steelhead stocks in the implementation of the wild salmon policy. We've worked with both agencies, federal and provincial, to develop and agree on conservation units for steelhead stocks. So we're contributing to the improved management and protection of the steelhead stocks in the north.

[1040]

Vancouver Island–Georgia Basin — one of their key projects has been the habitat restoration of the Stoltz slide in the Cowichan. We undertook that work with a number of other partners. That is the biggest single habitat restoration project on Vancouver Island in the history of British Columbia.

In the Fraser…. There's a folder in your package which is the highlights of the first four years of the program. I'd just like to bring a few…. We have worked with
[ Page 1696 ]
a number of communities to develop community round tables for watershed planning. One of the latest ones that we've got involved in is the Coquitlam round table, and they've made significant progress. We have the Nicola, where we pulled together First Nations, ranchers and industry in a round table trying to decide how to use and share water resources.

One of our big successes has been the farmland- riparian interface stewardship program, which we engage with the B.C. Cattlemen's Association and leverage money through Agriculture Canada. It's been an education program for the ranchers of how to keep their cattle out of the water so that we don't contaminate the water supply. That group has also worked diligently to restore hundreds of kilometres of riparian habitat.

One of the areas we've been most successful in has been engaging First Nations. We have supported and actively participated in the Salmon Table and the First Nations recreational fisheries coordinating committee, where we have worked and reduced significantly the conflict between First Nations and recreational fisheries people. We've brought together partnerships of federal-provincial, First Nations, commercial and recreational fishermen because we're seen as a neutral body with no axe to grind. And by being in that position, we have been able to encourage and force collaboration and cooperation among the various interests.

The rest of the highlights, I think, are in the video, so to allow time for questions, I'll turn it over to John.

J. Woodward: Just in summary, we were given $21 million to invest. We've leveraged that $21 million to over $75 million by engaging funds and groups and stuff. All that money is at work in B.C. watersheds. Over the five years, more than 450 projects have been completed, involving more than 200 community groups. Over 50 percent of the projects involved active participation with First Nations. There are over 40,000 volunteers throughout the province now working on streams.

British Columbians are concerned that the throne speech made no mention about healthy environments or sustainable ecosystems. This collaborative business model is an effective method to deliver priority programs despite internal government budget reductions. The Living Rivers model is a perfect alternative service delivery mechanism capable of supporting implementation of government programs such as the Water Act modernization.

What we need — what we'd like to have — is a relatively small investment of $5 million a year so we can keep the momentum going in this province. We can do a lot of work in all the communities to ensure our water resources are protected and our ecosystems are sustained.

We'll answer any questions.

R. Howard (Chair): Thank you, gentlemen. I'll start us off. I know we've had some discussion about river governance in the past. I use the Fraser River as an example where there's multi-jurisdictional and multi-First Nations, and there's a government department. To what extent does that get in your way? Or how have you tackled that? What does the future look like there?

T. Tebb: Well, we actually started initially by working with the First Nations to try and resolve some of the differences because upper-river First Nations and lower-river First Nations have significantly different interests. Once we achieved that, we engaged the government agencies, both provincial and federal, and then the users of the resource, typically non-First Nations, both recreational and commercial.

[1045]

It was a struggle in the early going. I don't think the jurisdictional issues were the problem. It was more the self-interests of the various participating groups. But it hasn't been a stumbling block that we haven't been able to surpass because I think the goodwill that's been created has moved us past most of the barriers.

D. Marshall: Just to add to that, we feel one of the greatest achievements of the Fraser salmon and watersheds program is the relationships that have been built. Four or five years ago you were aware of all the different salmon disputes on the river, whether it was Canada-U.S. or sports fisheries versus First Nations, or whatever.

We feel there's been a real coming together, as Terry mentioned — lots of projects being done. But I think the number one achievement is the strong relationships that have been built.

R. Howard (Chair): Good to hear.

D. Donaldson (Deputy Chair): Thanks for the presentation. Thanks for the good work. In my constituency a lot of that steelhead work you mentioned has meant direct impact and benefit to the people that live in the Hazeltons and other areas — in Smithers and all along the Bulkley, in Kispiox and the Skeena system. The watershed governance initiatives that you've put forward and ecosystem-based decision-making I think are very important.

One thing that concerned me is your comment around the seven years' worth of MOE data on steelhead. I think it points to the…. Sometimes you shoot yourselves in the foot when you don't have the resources for those ministries, because the work you did has resulted in economic development in our area as well as conservation measures.

You talked about the $5 million investment and the leveraging that you've been able to do in the past. Do you have commitments from any of the other members
[ Page 1697 ]
of the trust for funding — for instance, Department of Fisheries and Oceans? If we're leveraging our $5 million from the province, do we have commitment from some of the other bodies that make up the trust?

J. Woodward: Well, the Department of Fisheries right now is not doing anything because of the Cohen Commission, so it's a blank wall. We certainly have got some projects, big-scope ideas, to present to the Department of Fisheries, but that's not going to happen till next year.

However, we do have some U.S. funds that have invested quite heavily in the northern Skeena area — U.S. foundations that believe that the province took the initiative. That's how we've managed to partner this. "If the province is with us, we'll put our money in." That's how we've done our leveraging.

T. Tebb: The Gordon and Betty Moore Foundation is spending, on research and stock activities alone in the Skeena, approximately $500,000 a year, which we're managing for them and working with MOE to decide on what projects need to be done.

I think it's worthwhile pointing out that when the living rivers trust fund was created, it was the creation of the trust fund that forced the Department of Fisheries to come to the table. If B.C. had not created that fund, we would not have got the Fraser Basin initiative, which gave $10 million from the feds. They were embarrassed because the province created the fund first.

R. Howard (Chair): Thank you. Time for one last quick one.

D. Hayer: It was a very good presentation. I have the Fraser River in my riding, in Surrey-Tynehead, and I'm surprised that there was so much data sitting but nobody had funds to analyze it. Nobody looked at it. Are there other data sets just sitting around that nobody had the time or the funding to analyze that can help to preserve our fisheries or with other environmental issues? Do you have any examples?

Also, do you work with schools to get them involved in this too? You have a very diverse group of partners who are involved with you. It's good to see that.

T. Tebb: Yes, we do. The first one. I think the northern MOE was the hardest hit with the budget reductions. At the time that we came onto the scene they had one biologist for the northern third of the province, which is pretty slim pickings to not only cover the territory but to analyze the data. So we've worked in close partnership with the agencies.

Yes, we do work with schools. We have the Think Salmon program and the Langley Environmental Partners program that we have supported, which is an education program. About 30 percent of the funding in the Fraser portion of the program has gone to education.

R. Howard (Chair): Thank you, gentlemen. Unfortunately, we've run you out of time, but we really do appreciate you coming forward this morning and presenting to us.

T. Tebb: Thank you for the opportunity.

[1050]

R. Howard (Chair): Next up we have the New Car Dealers Association — Blair Qualey.

Good morning, Blair. As you're getting set up, you probably know you've got 15 minutes. I'll give you a heads-up around ten if I can.

B. Qualey: Appreciate that. Thank you very much.

R. Howard (Chair): The mike is yours.

B. Qualey: Well, hello. Thank you very much for allowing me to appear today to discuss some of the various issues and priorities confronting B.C.'s automotive industry. Before I go into some of those issues, I'd like to begin by providing you a bit of an overview of the industry, the new car and truck dealers of British Columbia.

You should all have been given a copy of the executive summary of a recent economic impact study done by MNP on B.C.'s new car dealers. I wanted to give you a couple of quick highlights just to provide some context for our remarks.

There are some 382 new car and truck dealers doing business in 54 communities throughout British Columbia. They had a total retail sales in 2010 of $9.4 billion, which represents just over 16 percent of all provincial retail sales. Last year they sold a total of almost 157,000 vehicles, of which 43-and-a-bit percent were passenger cars and just over 56 percent were trucks.

New car dealers support almost 34,000 direct and indirect full-time jobs in the province. The average new car dealer employs approximately 40 full-time employees and seven part-time, casual or contract staff. It's interesting to note that the average weekly earnings of a B.C. new car dealership employee are about $488 more than the average weekly retail earnings in the province of British Columbia.

The net provincial GDP generated by our about 382 new car dealers is about $1.8 billion — which, to give you some context, is equivalent to what the 2010 Winter Olympic Games generated over the entire project. Our folks do that in one year.

One in seven jobs in this country are tied to the automotive sector. B.C.'s new car dealerships pay upwards of a billion and a half in taxes to all levels of government. The direct spending by our new car dealer members in
[ Page 1698 ]
B.C. generated a total of almost $450 million in tax revenue for all levels of government in 2010. That's taking out the value of the vehicle sales taxes.

New car dealer members donate an estimated $13 million plus to charitable organizations of British Columbia. I think that's on the low end, as many of them don't really report out on all of the great work that they do. I'm sure many of you are aware, in your constituencies, of all that.

Now, given the economic and environmental challenges continuing to face us locally, nationally and internationally, we believe it's essential that we work with our provincial government to keep the B.C. economy as strong as possible and protect this industry and its valuable jobs. In addition, it's imperative to have a government in Victoria that has sound economic and tax policies in place and one that can provide the strong leadership we need through these difficult and often unusual and challenging times.

As many of you may be aware, over the years government has assisted our B.C. dealer network by raising the threshold on the old luxury tax on new vehicles, reducing a number of what we considered useless regulations and amending the vicarious liability regulations in the province. In addition, of course, the government has reduced corporate income taxes and cut small business taxes as well. This was all great news for our industry and many others.

Now, the new car dealers have always promoted the need for a strong and vibrant economy, of course, because strong economies provide for healthy business sectors, and healthy business sectors provide employment, which is a vital part of serving and supporting thriving communities and families.

By providing jobs and purchasing goods from local suppliers, competitive enterprises like our New Car Dealers members make an enormous contribution to the tax base that government relies on to pay for programs and services that the citizens of British Columbia use on a day-to-day basis.

[1055]

I wanted to just touch on three main areas of what we'd ask you folks to consider in your deliberations.

The first issue is the sales tax on private vehicle sales. Now, we were especially pleased to finally see the removal of the luxury tax last year, which was terrific news, and also the levelling of the playing field for our dealers, with the estimated 8,000 to 10,000 non-licensed — curbers as we call them — throughout the province through the introduction of a 12 percent tax on private vehicle sales.

Since the inception of the GST in 1991, the retail automotive industry in British Columbia has been at a significant disadvantage in the sale of used vehicles when compared to private sellers. Prior to July 1 of last year a used vehicle sale at a new car dealer was taxed at 7 percent PST and 5 percent GST, while a private sale was taxed only at the 7 percent PST rate.

The GST and PST combined on private vehicle sales, introduced in 2010, corrected this almost two-decade-long imbalance between the licensed professional vehicle dealers and unregulated private individuals, including those who make a living selling vehicles to consumers — pretending they are a private citizen when in fact they are an unregulated dealer — known in our industry as curbers.

B.C. is not the only jurisdiction to have levelled the playing field. You need not go any further than Ontario and the Atlantic provinces to find a similar tax, and others are looking at it.

The overriding principle here is a very simple one. If you buy a vehicle from a private seller, you pay tax. If you buy the same vehicle from a licensed dealer, you should pay the same tax. Why should any transfer of a vehicle between two parties not be identical?

With the purchase from a dealer, the consumer, of course, gets a vehicle that has been safety-checked and with a warranty not only on the operation but, more importantly, on the title of the vehicle. Under the old regime, prior to July of last year, private sellers and curbers were not paying their fair share.

The implementation of a full 12 percent private vehicle tax eliminated these tax-exempt transactions, providing much better consumer protection. Our cash-strapped government, of course, gained significant additional revenue from these transactions to continue the important work of social services for the province.

The second item I'd like to mention — and we've raised this with this committee before — is the B.C. SCRAP-IT program. The new car dealers of B.C. want to join our franchise manufacturers, as well as our customers, to play our respective roles in combatting climate change in British Columbia and beyond.

Given that B.C. has the oldest vehicle fleet in Canada, by virtue of our climate and the fact that we don't put as much salt on the roads, it's even more critical to continue the support for a homegrown B.C. program. It has made major strides in renewing the fleet. It's the B.C. SCRAP-IT program.

Last year SCRAP-IT celebrated the scrapping of the program's 25,000th vehicle. Unfortunately, because of the overwhelming positive demand from British Columbian consumers to scrap their old polluting vehicles for more fuel-efficient and environmentally clean vehicles, transit passes and even bikes, the SCRAP-IT program fund is nearly depleted.

As a result, today we are asking the government to continue its strong leadership in this area by providing financial support to the B.C. SCRAP-IT program. In turn, the B.C. SCRAP-IT program provides economic stimulus and jobs, significant benefits, of course, to the environment, and improves the safety of the vehicles on
[ Page 1699 ]
the road by removing some older vehicles and replacing them with more safe vehicles.

Finally, a large proportion of the investment in the B.C. SCRAP-IT program would be repaid through the sales tax on new vehicle purchases. I think it has been estimated that of the $15 million that was granted to SCRAP-IT a number of years ago, based on the resulting new vehicle sales, I think it was a return of approximately $11 million to the provincial government. So it's almost self-funding.

Of course, New Car Dealers of B.C. would welcome the opportunity to work with government and others on the introduction — and this is my third point — of clean energy vehicles to the province. We would welcome the opportunity to work not only with the government and folks like B.C. Hydro on preparations for the infrastructure necessary for the introduction of these electric vehicles, which are here and now available for sale in the province of British Columbia, but in particular to help educate consumers around the technology and the necessary charging facilities and so forth.

[1100]

In addition, the New Car Dealers Association believes that, in addition to the B.C. SCRAP-IT program and things like our industry's Five Steps to Carbon Neutral initiative, it's time for us to work with government and other partners to educate consumers on the options available to them to drive more fuel-efficient, lower-emission vehicles. Furthermore, we'd be pleased to work with government on possible incentives in other related programs to encourage consumers to take advantage of the various clean energy vehicle options available for sale today.

Now, the network of almost 400 new car dealers doing business and serving 54 communities around British Columbia and our Vancouver International Auto Show provide a terrific channel to inform and educate consumers on today's new vehicles, optimum vehicle maintenance and greener driving strategies to further reduce their impact on the environment. We'd welcome the chance to work with ICBC, B.C. Hydro and the B.C. government to develop such a program.

Thank you again for the opportunity to talk about our industry and some of the areas we hope you'll consider.

R. Howard (Chair): Thank you, Blair. We have some questions.

B. Ralston: I was interested in your comments about incentives for clean energy vehicles. There were, in the previous budgets a couple of years ago, incentives on hybrid vehicles. I was looking, just out of curiosity, at the new Chevrolet Volt. I think the recommended retail sales price is about $40,000. They said that in Ontario and Quebec there's about $5,000 or $7,000 in terms of a consumer rebate, but there's nothing here in British Columbia. Is that the sort of thing you're talking about? The $40,000 for a new vehicle of that size — essentially a compact car — does seem a bit steep.

B. Qualey: Well, as you'll find with all new technologies, when they first come out, they're pretty expensive. I usually like to use the example of big-screen televisions. When they first came out, they were darned expensive and not everybody had one, but as time went by and more and more advances were made in the production of them, it was a lot easier for people to purchase one. They are very commonplace today. I think we'll see a lot of that same thing happen.

We would encourage government to consider seriously, as other jurisdictions have…. I know government has been looking at the options around incentive programs and has been consulting with us on the best way to structure those to fully leverage any investment that might be made, and we're happy to play any role that we might play in assisting, providing guidance on how you might do that.

Indeed, with a new technology, there are always the early adopters that will be there anyway, but I think we've seen some of those already in the market. Now would be a good time, I think, to look at introducing something to help nudge a few others in the direction of the tremendous options that are out there, whether it's hybrids, plug-in electrics or combinations.

D. Hayer: Thank you very much for your presentation. I have quite a few car dealerships within my riding.

B. Qualey: You do.

D. Hayer: My question is very similar to Bruce's there. But before that, I want to say that I get lots of constituents coming in who are saying: "Listen, we never paid the 7 percent PST before. When you go back to the old system, make sure we're exempt, so that we're not paying on used car sales if we're buying from a private person." I appreciate your input. It's the balancing act that we try to do.

B. Qualey: Well, there's nothing to go back to. I mean, it's a separate issue from the long debate that we had in this province around British Columbia. The new car dealers in the industry have been calling on government for many, many years to fix this imbalance that was in place. As I said in my remarks, the principle is a pretty simple one. You know, where you purchase a vehicle should not change how much tax you pay. If you buy the same car at a new car dealer, you should pay the same tax if you buy it from Dave Hayer.

D. Hayer: And the clean energy vehicles, like in Ontario or some of the other places where you have electric vehicles…. If we go back to giving incentives for clean
[ Page 1700 ]
energy vehicles, should we be looking at the same type of rates or the credits to buying electric vehicles or look at a different rate? What's your point of view on that?

B. Qualey: I think a number of jurisdictions are in the $5,000 to $7,000 or $8,000 range, and that's likely a good place to start having a look at. We understand governments are strapped at the moment, as are many, but I think a small investment will help move people into considering these cleaner energy vehicles as one of the options they have.

You know, clearly there are other very fuel-efficient vehicles that are still gas-powered out there and are also very good options. But as this is a new technology, government support and help with encouraging people in that direction, I think, would be prudent and well advised.

[1105]

R. Howard (Chair): Thank you, Blair. We've run you out of time. We appreciate very much your coming forward.

B. Qualey: Thank you very much for the opportunity.

R. Howard (Chair): Next up we have Tourism Richmond — Tracy Lakeman and Scott Johnson. Welcome to you both.

T. Lakeman: Good morning.

S. Johnson: Good morning.

R. Howard (Chair): Good morning. You've probably heard by now — you've been sitting there patiently — that you have 15 minutes. At about ten minutes I'll give you a heads-up, and you can stop to take some questions or go straight through — your choice. Over to you.

S. Johnson: Excellent. Thank you very much.

We're here today to talk to you about the additional hotel room tax, the 2 percent hotel room tax that is in place in our community. First I do want to say thank you again for inviting us and listening to us today.

I wanted to go through a little bit of history on the hotel room tax, what it means to our community here in Richmond and how it evolved. Just over ten years ago there was no 2 percent hotel room tax in Richmond. The hotel community got together and, on a volunteer basis, applied to the provincial government for application of the 2 percent hotel room tax to be used for the purpose of tourism marketing in Richmond. That voluntary basis was achieved by, I believe, about an 85 percent commitment of the hotel community here in Richmond, and it has been in place since then.

The result of that collection has really changed tourism in Richmond. We have gone from a membership-funded organization that was really providing pretty minimal services to visitors — an information centre and maybe referrals here and there. We are now an internationally recognized community for tourism. We compete with cities across Canada, across North America, for group and incentive business and have been able to attract significant new business to our community here in Richmond.

The commitment of our industry to the 2 percent hotel tax remains strong today. We are a very inclusive organization. We have representation not only from hotels, restaurants, shopping centres, media, transportation and a variety of others that I'm sure I've missed. The emphasis for the hotel room tax for us has always been that it's a voluntary collection that the hotel community itself supports. The funds are used on an inclusive basis to market Richmond directly. We're continuing that support today and wish to have your support as we move forward.

T. Lakeman: Thank you, Scott.

Just for the record, Scott Johnson is the chair of our board, and I'm the CEO.

I just want to take a little bit of time and tell you our good-news story. Based on the background that Scott has shared with you, we've had a lot of success in Richmond through tourism. If you want to go to the second slide there, you'll notice that I've called our tourism industry "jobs, investment and entrepreneurialism." It's a little twist on jobs, innovation and tourism.

On the third slide. You can see from that slide how we have been able to double the 2 percent hotel tax since 2002. With five months to go, we anticipate that we will surpass our revenue from 2010, which included the revenue in February of almost half a million dollars from the Olympics. That is something we're quite proud of.

We're here today to ask for your support on our request for stable, long-term investment in Tourism Richmond and the DMOs throughout British Columbia. Our organizations, by investing in marketing and sales initiatives, are creating jobs, encouraging investment and growing our economy, all through tourism.

[1110]

Richmond is an excellent example of this, so today we'd like to illustrate how that investment for the provincial government contributes to the provincial budget.

On the next slide. As a DMO we believe that we are one of our province's leaders, and our success as a community can be attributed to a number of initiatives. We believe very strongly in focusing and being the best that we can with what we have.

It's for this reason that we pursued international accreditation. We wanted to make sure that our organization complied with the highest and best standards of destination marketing and management. We also knew it meant enhancing the professionalism, so that our DMO
[ Page 1701 ]
and our staff would become one of the most valued and respected organizations in our community.

Next year we will have been through an entire three-year cycle and will be reapplying for that accreditation again. I'm now on the board of what's called DMAP, the destination marketing accreditation program. My goal is to encourage all DMOs in British Columbia to become accredited. Currently we have four B.C. DMOs accredited, with another four applying by the end of the year. If you were to compare that across Canada, there are only two others. You could say that B.C. is leading the tourism industry on accountability and the best practices in Canada.

This process has also assisted us with achieving a very successful and respectful relationship with the city of Richmond. Formalizing our role as the tourism marketing organization for the city, we certainly work together as a team. We call ourselves Team Richmond. The Olympics were an excellent example of that. You can see the list of industry associations that we actively participate on either as a member or, in most cases, on the board.

We wanted to make sure that throughout the years we were benchmarking ourselves against other DMOs and that we were achieving the most success possible, so we have participated in two DMO benchmarking studies from across Canada. In 2009 and then again in 2011 we participated in the best practices benchmarking study with 18 other DMOs from across Canada through our national association, Destination Marketing Association of Canada.

The objectives of the study were to provide the basis for DMO performance benchmarking across Canada, which takes into account differences in organizational, market-size and funding levels; to provide a platform for DMOs to benchmark their own performance over time using 24 metrics that are relevant to specific needs; and provide a strategic organizational tool that will assist us in business and marketing plan development and in ongoing stakeholder and community consultations.

The result of our study, specifically, was that Tourism Richmond has a higher ratio of organizational funding from hotel levies than other average DMOs our size. What that means is we rely heavily on the 2 percent hotel tax, which makes up just over 90 percent of our revenue. What this told us was that we may want to look at how we can diversify our funding.

The other ratio of organizational funding per available room is lower than the average DMO's. This implied that Tourism Richmond's funding is lower relative to our size and destination. The ratio of destination-hotel-room revenue per dollar spent on sales and marketing investment is higher than average DMOs our size. What this implies is that Tourism Richmond is helping to support higher returns or impacts for our destination stakeholders relative to our peers. In other words, we're spending less and doing more.

On page 6 we start talking about our economic impact study. We've completed two. One was in 2005 and most recently, now, in 2011. We wanted to benchmark our growth, so this second economic impact study helped confirm the significance of the tourism industry to our community, the province but also nationally.

Tourism is a major contributor to Richmond's economy. Over the last 15 years there has been a 123 percent growth in available hotel rooms in Richmond, increasing from just over 2,000 rooms to 4,600 rooms today.

[1115]

Following this growth in the accommodation sector, there has been a parallel increase in the amount of hotel tax collected from the visitors, which has doubled from $1.3 million in 2000 — which was the first year we collected a full year — to $2.7 million in 2010, and we expect to surpass that this year in 2011.

Visitor spending in Richmond is estimated to amount to over $250 million annually. For example, a non-local visitor staying in one of our hotels spends approximately $61.85 per person per night on retail, food and beverage, and transportation. In Metro Vancouver it compares to just over $65.

In terms of taxation impacts in tourism, in Richmond the overall tax revenue contribution to all levels of government generated by the employment impacts and visitor spending impacts of Richmond's tourism sector is over $135 million.

The federal government received more than $76 million, which was 57 percent of the total, while the provincial government received nearly $44 million in tax revenue, which was approximately 32 percent of the total tax. Over $15 million is estimated to be collected by the municipal government, which includes the hotel tax of $2.7 million and an estimate of residential and business property taxes. So this $44 million is helping our province fund health care, education and social services through tourism.

In terms of jobs, as you can see by the chart on the slide on page 8, there's been significant growth in tourism related to employment. It's up 27.3 percent compared to 2005. In 2011 the total direct impacts of Richmond's hotel, other tourism industries and visitor spending amount to close to 6,200 direct person-years of employment — or over 7,400 jobs — earning nearly $220 million in wages, generating over $350 million in GDP, and so forth. I won't review the multiplier effects. I think you can read indirectly how that has affected us.

If you go to page 10, all we're asking for is stable and direct investment in tourism. It's not funding. It's an investment.

Currently we renew our 2 percent hotel tax through the city of Richmond. They are the eligible entity. Our best practices are in place. Our industry partners are clear that they want us to manage the funds, and tourism growth is very positive in Richmond. So why
[ Page 1702 ]
shouldn't we receive the funding directly and be the eligible entity? It's difficult to do long-term planning, and it's not guaranteed with the current process in place. We have the ability to be entrepreneurial and deliver the programs best suited for our community to continue and to achieve growth in tourism revenues for British Columbia.

Any questions?

R. Howard (Chair): Thank you, Tracy. We're going to have to be quick with the questions.

D. Donaldson (Deputy Chair): I'll be quick. Thanks for the presentation and congratulations on your work.

We had a presentation earlier in Surrey from Tony Gugliotta from the Vancouver Airport Authority. One of the recommendations was a million-dollar investment by the province in a tourism marketing strategy that they want to undertake. Is that the kind of direct investment that you're speaking of? What's the kind of input you have into that kind of marketing strategy at YVR, which is right here in the neighbourhood, a part of Richmond?

T. Lakeman: I'm aware of Tony's presentation to the committee. We would support that, absolutely. There is no doubt that Richmond's success as a tourism community is sustained by YVR and the business they bring directly into our community. It's why we have the number of hotels that we have in our community. So we would support their ask to you.

We work very closely with YVR on a number of areas, whether it be just greeting large groups or visitor servicing. Recently I went on an invitation with Tony, actually, to China with China Southern Airlines and to help that relationship strengthen. So yes.

R. Howard (Chair): Well, thank you both. We've run you out of time, so my question will have to wait. But I know where your office is, so I'll catch up to you.

[1120]

Next up we have the AMS Student Society of UBC — Katherine Tyson.

As you have heard, you've got 15 minutes. I'll give you a little heads-up if I can around ten. The microphone is yours.

K. Tyson: Thank you for having me today. The Alma Mater Society of the University of British Columbia Vancouver is the student government at UBC's Point Grey campus and represents over 48,000 students. The AMS is the second-largest student society in the country and represents more than a third of the university students in British Columbia.

Our mission statement is to improve the quality of educational, social and personal lives of students at UBC. Attached as appendices to this budget submission are a comprehensive report prepared by the external office of the AMS addressing our concerns on student financial assistance and accessibility, a UBC line key fact sheet and a child care report.

The AMS sees that there are significant challenges facing British Columbia in the near future that can only be combatted with smart policy initiatives around post-secondary education. A significant portion of B.C.'s workforce is on the brink of retirement, and within the next ten years an estimated 75 percent of all jobs in B.C. will require a post-secondary education.

The government has been trying to prepare for this new reality by opening new schools and increasing the number of available programs and seats. But increased enrolment is changing the student demographic and creating new problems in terms of affordability and accessibility.

In order to overcome these challenges, the AMS is asking the province for targeted investment in post-secondary education, child care and the transit system infrastructure that will make British Columbia competitive in the future as the workforce retires and new industries come to B.C. We have summarized our recommendations into three main areas: student financial aid, child care funding and rapid transit infrastructure funding.

With student financial aid, we have three asks: that you review the cost-of-living assessment and maximum loan amounts to reflect actual market costs and tie it to inflation, expand the eligibility criteria by reclassifying non-liquid assets and decreasing expected parental contribution, and reduce the interest rate on student loans to government's cost of borrowing plus the cost of administering the program.

In the last few years there has been a movement across Canada to reform student financial assistance. In 2009 the government of Newfoundland and Labrador eliminated interest rates on student loans, while the governments of Alberta, Ontario and Saskatchewan have all implemented plans to reduce the interest rates on student loans.

In addition to reducing the interest rates with students, these provinces have also joined the federal repayment assistance program. Interest rates now vary from zero percent in Newfoundland to 1 percent plus prime in Ontario, making B.C.'s 2 percent plus prime the highest provincial interest rate in the country. British Columbia has significantly fallen behind in its financial assistance to post-secondary students.

With the highest interest rate in the country and the out-of-date interest relief program, repayment has become increasingly difficult for British Columbians. The AMS would like to see a reform of the repayment structure to reduce the default rate. The AMS would also ask that the interest rates be adjusted to the government's cost of borrowing, as has been seen in other provinces.
[ Page 1703 ]

The province of British Columbia also has significant differences in the costs of living depending on the region. The current cost-of-living assessment does not accurately reflect the regional differences in rent, transportation or other expenses and gives a student in Vancouver the same as a student in Prince George. The problem is that both of these students receive the maximum of $573 per month for rent. While this might be enough in Prince George, there are very few places in Vancouver where this cost is enough.

The average two-bedroom apartment in Vancouver, the standard measure used by StudentAid B.C., is over $719 per person, while the maximum loan is $573. Furthermore, the $573 is only valid per each month of study, which translates into a budgetary shortfall of approximately $1,248 on an average academic year. This is provided that a student can find housing in a transport-accessible area — which is even less likely, given the low vacancy rates of Vancouver apartments, which drives up costs further.

A remedy for this severity of housing burden on students would be to review the costs of living and determine loan amounts by the region. This regional amount should also be annually adjusted for inflation, as rent increases by 2 percent every year in B.C.

[1125]

Another consideration the AMS asks is to tie the maximum loan amount to inflation. In the Canadian student loan program 38 percent of those loans are at the maximum loan amount, and the figure is projected to reach 50 percent by 2015. This number should remain stagnant or drop if the maximum is indexed to inflation.

Also, as students reach the maximum funding limit, they are more likely to have unmet need — both recognized and unrecognized, as previously stated in the cost-of-living assessment — and fall short of the actual cost of living while going to school in Vancouver. Increasing the amount of funding a student can receive will reduce the stress of having to take out private loans or seek alternative funding.

Currently a student is also considered a dependent of their parents until they have worked for a full two years or have been out of high school for four years. This means that many post-secondary undergraduates in B.C. are classified as dependents of their parents. As a dependent, a student's parents' income is considered when determining their eligibility for provincial and federal student loans as well as the amount they will receive.

The idea that a parent would pay for their child's education might have been a reality at one time, but the current costs of education are considerably higher, and many families simply cannot afford to support their children. The largest problem with expected parental contribution is that a student's parents' assets are considered liquid, so families that own a house or a business but have little in the way of disposable income will find that their child has been denied a student loan.

The result is the creation of unmet need on the part of the student. A third of all students who are considered dependent do not receive assistance from their parents. The AMS would like the province to review the classification of liquid assets and reduce the expected parental contribution to reduce the pressure on families who cannot afford to finance their child's post-secondary education.

In regards to child care, we have three main asks: that you dedicate capital funding to increase the number of child care spaces available at post-secondary institutions and in the greater community, that you expand the operational grants program to help lower the costs for families, and that you adjust government low-income subsidy rates and reassess the student loan ceilings for child care expenses to better reflect the actual market costs.

From 2001 to 2006 the B.C. government dedicated capital funding for child care expansion throughout the province. This initiative was aided by the federal early learning program and allocated by B.C. government to areas of greater need. The federal funding ceased in 2006, and we have not seen any more investment in the province since. This lack of investment has hurt student parents in B.C. who try to complete their education and take care of their families.

In 2004 there was a licensed child care space for only 13 percent of children in B.C. from infancy to 12 years of age, and a recent survey of some B.C. child care indicates that the waiting lists are up to two years. This is especially prevalent on UBC's campus, which boasts the largest child care program of any university in Canada but still has more than 1,600 children on its wait-list, equivalent to two-year waits.

However, while capital funding will decrease wait-lists and increase access to child care at post-secondary institutions, it will not guarantee its affordability. The current funding levels through the child care operating fund are barely enough to keep existing facilities in operation, and significant investments still have to be made to ensure affordability in child care, in addition to access.

This is particularly true for UBC, where parental fees accounted for 67 percent of the cost of running UBC's child care program in 2006. They are now up to 80 percent of its operational budget. From 2010 to 2011 UBC's child care program revenue can be broken down as follows: 80 percent, parental fees; 12 percent, B.C. grants; 5 percent, grants for utilities and repairs from UBC; and 3 percent, maintenance subsidy from the UBC housing and conferences.

These numbers only represent UBC's but can be seen as a trend in the entire region. Students are already one of the lowest income demographics in the province. Since 2006 child care costs have been increasing much faster than government low-income subsidies and student loan assessments. Both of these need to be
[ Page 1704 ]
reviewed to better reflect the actual costs of child care in the province.

At UBC the monthly cost for an infant is $1,055 while the maximum low-income subsidy is $750, leaving a $300 shortfall. In addition, the Canadian student loan program gives a maximum of $788 per month, while it's still $1,055 to actually have children in care. This is another $300 shortfall. In total, this costs a student more than $2,400 over the maximum financial assistance and creates a massive amount of unnecessary hardship.

Our last ask revolves around rapid transit. We are asking three things: investment in a rapid transit line along the Broadway corridor all the way to UBC campus; ensure the timely completion of the Evergreen line connecting the Tri-Cities to UBC; commit to investing in rapid transit to communities south of the Fraser, connecting Fraser Valley to UBC.

[1130]

The AMS and UBC implemented the first universal transit program in British Columbia in 2003. Since the start of the U-Pass program, transit ridership has become the preferred mode of travel among all UBC commuters, accounting for more than half the trips to and from the Point Grey campus.

At the moment there are more than 100,000 trips made each week along the central Broadway corridor, which makes it the most used corridor in North America. Ridership is projected to grow rapidly. In March of 2000 Vancouver city council recommended that the Millennium SkyTrain continue west from Vancouver Community College via the False Creek Flats and Broadway to Granville Street as part of the Millennium Line construction program, with a rapid bus transit expansion to UBC. However, after the implementation of the U-Pass B.C. program in 2003, ridership exploded, and the program was amended to continue the SkyTrain line all the way to UBC.

This will help meet the existing demand but will also account for future growth in Vancouver's west side and the University Endowment Lands. At the moment UBC is the second-largest transit destination in the region's transit network, with downtown being the first and the central Broadway business district, also along the Broadway corridor, being the third.

The Broadway corridor serves more riders than either the Millennium Line or the Canada Line each day, and the opening of the Canada Line has increased the usage of the Broadway corridor.

The 99 route currently has thousands of pass-ups and huge fluctuation in times and poor passenger experience. Vancouver has a goal of increasing its ridership to 50 percent of all people in Vancouver; as well, TransLink has the same goal. If we are to meet this 50 percent ridership hope, we need to be able to expand transit into the highest-use corridor, which is the Broadway corridor.

Thank you for your time, and I'm open for questions.

M. Elmore: Thanks for your presentation, Katherine. In terms of the issues specifically around child care and the challenges of not only adequate spaces but affordability, can you talk about the impact on students who happen to have families and also the impact on the ability of masters or PhD students to access programs at UBC and faculty?

K. Tyson: Well, graduate students have a bit better access than undergraduate students, if they have families, because often it's more expected that graduate students will have a family. They are an older demographic, and there's housing allotted to them that's more familial.

It's still very hard for them to have their needs met. They often have one parent who can only be studying at a certain time while the other one is working. That's usually what ends up having to happen. You see parents doing their PhDs at different times.

At the undergraduate level you're seeing a lot of part-time students who have families, because they can't afford to be a full-time student. So they're taking eight or nine years to get their undergraduate degree.

R. Howard (Chair): Thank you, Katherine. We're just about out of time. Thank you so much for coming forward today.

Next up we have Fraser Basin Council — David Marshall and Bob Purdy. Welcome back, David.

D. Marshall: Okay, we know the ground rules, so we'll go. We'll save ten seconds. It's good to be back. David Marshall, the executive director of the Fraser Basin Council. With me today is Bob Purdy. I'm sure you know Bob well. He's our director of external relations and corporate development. I'm very pleased to be here today, and thanks for the opportunity.

Our purpose today is to ask the province, through your committee, to reinstate the $350,000 annual funding commitment to the council that was initiated in 1997 as part of a tripartite agreement with local governments and the federal government. It lasted until 2009, at which time it was suspended.

We'll start our presentation with a brief overview of the council, the accomplishments to date and its future direction. We'll then summarize the strong case for a renewed government of B.C.–Fraser Basin Council partnership. The council, as many of you know, is a not-for-profit organization established in 1997 as an unprecedented collaboration of federal, provincial, local and First Nations governments working together with the business community and civil society to develop practical solutions to complex interjurisdictional sustainability issues.

We started with a focus on the Fraser River Basin, an area nearly the size of California, and are now active throughout British Columbia. The council is not a typ-
[ Page 1705 ]
ical non-government organization; nor are we a special interest advocacy group. Our board of directors includes senior-level federal and provincial government officials, First Nations chiefs, local government elected leaders, business representatives and community interests from all walks of life and regions.

[1135]

Our past chairs — the Hon. Iona Campagnolo, Dr. Jack Blaney, Patrick Reid — are all respected and accomplished British Columbians. Our current chair, Dr. Charles Jago, an Order of Canada recipient, past president of the University of Northern British Columbia and current chair of Northern Health, has earned the respect of people from throughout the province.

By harnessing the diversity on our board, we do our work in such a fashion that achieves results that would simply not be possible if individual agencies, sectors and interests acted in isolation of each other. For the 14 years of our existence we have been the glue that bridges silos in this time of fiscal restraint, and we continue to find creative and cost-efficient solutions to tough problems.

Today's challenges, from climate change to community economic resiliency, are sustainability challenges replete with interrelated economic, social and environmental issues and opportunities. The council's specialty is setting safe tables for multiple stakeholders who care about these issues and opportunities to find and participate in the delivery of practical and enduring solutions — solutions that by virtue of how they were developed are broadly supported over the long term. It's a really good way to tackle extremely contentious issues throughout the province.

I'm now going to turn it over to Bob to talk about some of the specific accomplishments.

B. Purdy: Thank you, David.

Good morning. Thank you for the opportunity to speak. I'll start with a few of our early projects and end with some of our most recent and ongoing work.

First of all, the council played a pivotal early role in the remediation of North America's worst acid rock drainage problem at the site of the former Britannia mine. We have been a key facilitator, educator and conflict resolution agent in helping B.C. communities with flood hazard management, including work in the Fraser Valley, Prince George and Naver Creek, as well as interface fire planning and related measures — for example, in Williams Lake and Quesnel.

We developed the strategy for and created B.C.'s first council on invasive plants, which has received national recognition. David Marshall, on behalf of the council, led a panel of independent experts, resulting in B.C.'s first legislation on drinking water protection, and the council spearheaded Canada's first provincial Green Fleets program. One key element of that program is the offering of performance reviews and ratings for transportation fleets through the E3 Fleet national rating system, which is under our leadership.

We launched and continue to contribute to the Shuswap Lake integrated planning process that aims, among other goals, to address the serious water quality issues in the lake. We've published four comprehensive sustainability snapshot indicator reports and several sustainability reports for the Fraser Basin and in B.C., raising awareness and encouraging action across sectors on economic, social and environmental issues.

The most recent snapshot report, released in 2009, is in your package. But unfortunately, due to the suspension of the $350,000 provincial government contribution in 2009, we're no longer able to do a fifth report.

David Marshall chaired the first-ever board advisory committee on sustainability performance for the Vancouver 2010 Olympic and Paralympic Winter Games. I see Chair Howard and Mr. Hayer. You will be well aware of this issue. The council prevented the closure of the critically important Fraser River debris trap for over 11 years, preventing at least $8 million in annual downstream damage. We also brokered a rational governance and funding mechanism for the ongoing operation of the trap.

We have worked and continue to work with over 100 local governments and 26 First Nations across B.C. on community sustainability planning and climate change adaptation, helping them prepare for the economic, social and environmental challenges and changes ahead.

We are now championing a new collaborative watershed governance accord across sectors. The intent is to encourage positive action on water by both public and private sector leaders.

Now I'd like to briefly share where we're going from here as an organization. Our board of directors recently and unanimously approved the council's second five-year strategic plan. There are four themes for action going forward, one being focused on building our financial stability as an organization — hence our request here today. The three other themes are taking action on climate change and air quality, supporting healthy watersheds and water resources, and supporting sustainable and resilient communities and regions.

Now I'd like to pass the baton back to David, who will provide some closing remarks.

[1140]

D. Marshall: Thank you, Bob.

I'd like to touch first on why the province supported the Fraser Basin Council since 1997 with its annual contribution of $350,000. This allocation remained steady until its suspension two years ago. The degree to which this funding has been leveraged has increased significantly over the years from 3 to 1 in 1997 to over 15 times in 2009. The budget went from under $1 million a year in 1997 to over $6 million in 2009 with the province's
[ Page 1706 ]
contribution staying at $350,000 over that period of time, not taking into account inflation.

In this time of fiscal restraint the council has a cost-efficient mechanism for leveraging resources through working partnerships. It's particularly important we deliver on provincial goals and priorities in a more cost-efficient manner than if agencies acted alone. Until 2009-10 the provincial government's $350,000 contribution to base funding of the council has been unwavering.

From 1997 to 2009, with contributions totalling $3.85 million, $350,000 a year over that period of time has provided the resources critical to the council's key functions, regional presence and networks — we're now located in seven locations throughout the province — and ability to develop initiatives proactively and also secure funding through other sources.

The suspension of the provincial government's annual contribution forced us to reduce our staff in the last 18 months by 25 percent and cut core programs like our regular snapshot report that Bob just referenced a few minutes ago. But more importantly, I regret to advise you that because of the suspension of the annual contribution, the council as a viable partner with the provincial government is at risk.

Key functions will no longer be possible, investments in relationships and programs will be lost, and other funding partners may withdraw their support. Right now we get close to half a million dollars of contributions from the local governments throughout the Fraser system.

Again, the council is not just yet another non-government organization. We are partnered with the provincial government. We are a proven and cost-effective partner — including First Nations, private sector and civil society — and are uniquely positioned to tackle complex interjurisdictional issues collaboratively. The partnership is possible only if the provincial government is at the table and supportive.

It is important to point out that the provincial government helps shape the council's work. Provincial government representatives, with two of the three representatives on our board of directors, are deputy minister level. They have direct involvement in setting strategic direction and priorities as well as monitoring progress, so you can see the difference. In other NGOs, the province would not have a representative on the board of directors and would not have a direct effect on its programs and implementation.

Current priorities are directly aligned with provincial priorities, as they are with all of our partners. We believe that our request is justified and warranted, especially when one looks at our track record. We continue to perform by tackling tough issues throughout the province.

We believe the provincial government has benefited from the very partnership that it helped create in 1997 and has invested in annually since then. As such, we are seeking a renewal of the province of B.C.–Fraser Basin Council partnership under the terms of a results-based agreement that will deliver unique value to all of our partners and, for that matter, all British Columbians.

Thank you for your time. We look forward to your questions.

R. Howard (Chair): Thank you, David. We have a few questions.

D. Hayer: Thank you very much, David and Bob — a very good presentation. You do a very good job at the Fraser Basin Council, and you have my full support on that.

Have you had a meeting with the ministry to just find out where they're sitting on this for your request for the funding? Also, do you have many volunteers who also participate to help you in the effort there? How many hours per year do they volunteer in your organization?

D. Marshall: Maybe I can answer the first question, and Bob can do the second one. Yes, we have. We've made various presentations to the various committees within the government. In February we met with ELUC. At that table there were five ministers and five deputy ministers. Since then we've met with the new chair and vice-chair of ELUC and put forward our case.

We're constantly talking to the two deputy ministers on our board — Cairine MacDonald, Deputy Minister of Environment, and Doug Konkin, Deputy Minister of Forests, Lands and Natural Resource Operations. All are very sympathetic and recognize the value of the council and are doing what they can. But they've also encouraged us to take advantage of opportunities such as today to try to ensure that that message is broadened, not just restricted to those particular venues.

[1145]

B. Purdy: With respect to volunteers, great question. Since our inception we've had several volunteers in the form of our board, with 12 regional directors plus three basin-wide directors that work on an entirely volunteer basis. As well, with respect to our task committees and various types of committees of the board, there are citizen representatives who put their volunteer time and their hearts into the work of the council.

In the last couple of years we've really stepped up the use of volunteers for some of our core operations, but it still falls far short of what we need. In fact, just now we've got a couple of volunteers working out of our Vancouver office, and we also take advantage of student internships wherever possible. It's helped but certainly isn't where we need to be in terms of the funding for the core work of the council.
[ Page 1707 ]

D. Donaldson (Deputy Chair): Thanks again for the presentation. I'm familiar with the Sustainability Snapshot, so I know the good work you do. The 15-times leveraging in 2009 is phenomenal.

My question is: back two years ago, when the $350,000 annual funding was cut, what was the rationale — the reasons given? Were you given an opportunity to retool your objectives, if that was why the $350,000 was cut? Or was it a matter of the government not believing you were delivering on your mandate? What was the reason?

D. Marshall: It was quite the contrary on that last point, because we did meet with the then Finance Minister, and he said we were held in very high esteem. He felt, though, that with discretionary funding being cut, we were never really in the aid-based budgeting. We were always given the contribution through year-end funding, and then when discretionary funding was cut we were cut.

It was interesting, because I had a brief chat with the Minister of Environment at the time, where the money flowed through. We were at a function, and he said: "Are you ready for another haircut?" And I said: "Minister, what do you mean? You cut us by 100 percent last year." He was thinking 10 percent, so he wasn't really aware of it either. It was unfortunate, but that's what happened.

B. Purdy: I think it's fair to say that it certainly wasn't anything to do with our performance as an organization. It was really part of the consequences of the 2008 financial meltdown and the need for significant belt-tightening. It was just unfortunate that all grants and contributions at that time across the provincial government system were basically cut.

R. Howard (Chair): That's certainly my understanding. It was just part of the fiscal restraint that was happening at the time.

D. Marshall: We would have loved a 10 percent cut at the time.

R. Howard (Chair): Gentlemen, we've run you out of time. Thank you very much for coming forward.

Next up we have the B.C. Association of Farmers Markets — Elizabeth Quinn and Jon Bell. Welcome both. You probably know you have 15 minutes. I'll give you a little heads-up around ten, if I can. You can stop for questions or go straight through — your choice. The microphone is yours.

E. Quinn: I'd like to introduce Jon as our president of the association, and I'm the manager. We were here last year, and some of the recommendations that we offered were adopted and have been a benefit to us, so we're here again. So thank you very much.

Who here has been to a farmers market? Have you? Yeah. So you know about farmers markets. I won't go into it too much. Anyway, we're the B.C. Association of Farmers Markets, and we appreciate the opportunity for input into the B.C. provincial budget.

The BCAFM represents 100 farmers markers and is an organization that interfaces with a very broad group of farmers, food processors, artisans, various ministries — Health and Agriculture — and the corporate world. If you look at our brochure, on the back you'll see that one of our sponsors is Overwaitea.

We are a voice for 3,000 small businesses, including 1,000 farmers from across B.C. A 2006 economic impact study by the University of Northern B.C. revealed that farmers markets generated $65 million in direct sales and a combined economic impact of over $118 million, and that was five years ago. I'm sure it's grown since then.

[1150]

Last year we appeared before this committee outlining our position within the marketplace and some challenges that we faced. Your recommendations for municipalities to become more involved with farmers markets and assist them in finding permanent locations have paid off. Some municipalities are assisting markets with rezoning issues and market sites. Thank you for your support.

With the theme of this year's budget families first, we'd like to share where the BCAFM fits into the community. In 2009 approximately 175,000 consumers shopped at farmers markets, for a total of four million visits. These consumers represent families' households, so using the provincial multiplier of 2.5 persons per household, over half a million people benefit directly from their local farmers markets.

Today's farmers markets benefit families and the B.C. economy by supporting food security, creating a demand for locally grown food, providing fresh, healthy fruits and vegetables to 175,000 families and contributing to healthy communities, generating economic benefits to rural and remote communities. Direct sales provide retail prices for 1,000 farmers and provide markets for 2,000 small business owners in addition to farmers.

Food sales at farmers markets impact human health and well-being for both the consumer and the vendor. Economic insecurity is a very potent determinant of human health, and this insecurity is frequently found in small farm and artisan communities. The ability of small business to sell directly to the consumer improves their financial status and also improves local economic stability. As a new food movement sweeps across Canada and B.C., consumers want to know the source of their food, who grew it and how safe it is. Especially with what was happening in Japan and the nuclear fallout, people are very concerned. They wish to reconnect with the producer.
[ Page 1708 ]

Small farms, often near urban centres, benefit from the extra cash flow and pride themselves on producing a good value product. Farmers are very proud of what they do. Farmers markets are springing up across North America as the public embraces the new concept. Last year in the U.S. over 1,000 new farmers markets were started. The same is happening in Canada as markets gain in popularity.

How can we as Canadians and B.C.'ers leverage this new energy and interest in food? We are the perfect location to educate the public about local agriculture products, teach new food preparation skills and act as a springboard for new startup companies. That's what Christy Clark is all about — business and helping business. And it's a great place for businesses to experiment with their product.

A recent success story is a Sunshine Coast food producer selling Holy Crap cereal. I don't know if you've heard about it. They went before Dragons' Den, and they were supported there. Anyway, they went from selling at a farmers market, like any of the vendors you've met there. They're on the Sunshine Coast, and they've become a multi-million-dollar operation in three years. That's from starting at a market. There are many, many examples. I'm not going to let you know all of them, but that's a very interesting one.

The Canada food guide encourages us to eat ten servings of fruit and vegetables each day, and two to three servings of meat or alternatives. Farmers markets encourage a culture of local and healthy eating. Consumers who visit farmers markets shop primarily for fruits and vegetables. I mean, we're all trying to eat more fruits and vegetables, so that's the culture we're supporting. Many B.C.'ers are unaware of proper nutrition or are overweight and lack skills to prepare food, so they're taxing our health care budget — which I know is a great concern to this government — with diet-related risk factors.

BCAFM has, with the assistance of the provincial government, trialled a farmers market nutrition and coupon program. The B.C. government funded that — a program to assist low-income families to obtain fresh food in 16 communities. The public benefited by having access to fresh, unprocessed foods, and farmers also benefited with additional sales. Over 2,500 low-income families with children, from communities as far north as Fort St. James to the Kootenays and Vancouver, participated. First Nations, new immigrants and single mothers benefited from receiving $15 per week to shop at B.C. farmers markets. For some families this represented 25 percent of their weekly budget — it was so sad to hear that — so it meant a lot to those families. It's unbelievable that people can be so poor, but it's a fact here in B.C.

[1155]

BCAFM frequently gets pleas from the public to reinstate this program. Our funding ended. It wasn't cut; it just ended. It was a three-year program. But we'd like to resurrect that program.

At the close of the program the BCAFM took the initiative to create a nutrition and coupon program resource kit. I've got the CD. We just finished it this week. Yay! Any community group can create their own program and assist those in need.

We've been told that government-funded programs that assist low-income families when they have this coupon program…. The participation in their programs is very steady and increases. It just helps. Those community agencies do not need any administration fee to process this program, so it's a very inexpensive program because they're using what they're already doing — the money they have.

This type of program could also be incorporated into the schools to build on agriculture in the classroom, which is another successful program, providing children with coupons to take their families to the local farmers market to purchase fresh fruits and vegetables. This type of action makes a difference, since kids can teach their parents about eating healthy by shopping at B.C. farmers markets. Everybody knows that we all learned about recycling from our children. They taught us. It's the same sort of thing with healthy eating. The kids will teach the parents.

The BCAFM has produced a training manual and handbooks and has worked with the Ministry of Health to create a MarketSafe certification program similar to FoodSafe, all in an effort to make farmers markets a food-safe, community-based environment.

We would like to move further into assisting B.C. families to learn about their local food supply, develop healthy eating habits and, at the same time, support agricultural communities because agriculture is very underfunded in B.C. So this is one way to help farmers.

To create new programs requires new funding. The BCAFM has been very fortunate to partner with a B.C. corporation on some new initiatives, so we are helping ourselves through partnering with Overwaitea. A major grocery chain funded Farmers Appreciation Week, because we're trying to raise the profile of agriculture and farmers. This happened in 25 communities this year. Last year it was five. This year it was 25. So there's a real interest in promoting farming and farmers.

Vancity Community Foundation is presently supporting farmers markets by creating tools to assess the impact of farmers markets in their community. That's a brand-new initiative. We've just been meeting with Vancity in the last month.

Our previous program, the Buy B.C. program, a Ministry of Agriculture program, encouraged the consumption of B.C. farm products. Over 1,000 B.C. farm families are currently using farmers markets as a marketing channel, thus receiving retail prices for their products. Instead of 10 percent or 50 percent, they're
[ Page 1709 ]
receiving 100 percent. A renewal of the Buy B.C. initiative would benefit B.C. farmers as more British Columbians would increase their shopping at local farmers markets.

For example, what's the potential? The per-capita spending in Ontario at farmers markets on locally grown food is $46 per year per person, whereas in B.C. it's only $18 per person per year. A 2½-fold increase to Ontario consumer spending levels at local B.C. markets would be approximately $100 million kept in B.C. in small communities — right? — and not going elsewhere to pay for imports into B.C.

B.C. families would be helping to support the tree fruit growers, the cattlemen, the vegetable growers, the poultry producers and so on by buying their products through a local farmers market. Markets provide a location for bridging the urban-rural divide and help consumers learn about food, and they reconnect with producers.

Our recommendations. Allocate funding towards a farmers market nutrition and coupon program to increase the consumption of B.C. fruits and vegetable by low-income families. I've noticed that the B.C. Ministry of Health has ads now encouraging people how to eat properly, so they're really getting into social marketing. This would fit right into many ministries' new mandate to help curb the rising cost of health care.

[1200]

Allocate funding towards providing coupons to school-age children to encourage them to take their parents to shop at the farmers market. I was talking to the Minister of Health, and that was his idea. I talked to him at an event. Anyway, I thought it was a good one.

Renew a Buy B.C. program to encourage the consumption of B.C. products.

We appreciate your efforts to consult us for input into the 2012 budget, and beyond, our hope is that you will support and help improve what's working, such as B.C. farmers markets, keeping B.C. food on B.C. plates.

R. Howard (Chair): I think, Elizabeth, we just have a few minutes for a couple of questions.

D. Donaldson (Deputy Chair): Hi, and thanks for your presentation. We have very vibrant farmers markets in the northwest and growing ones as well. I think it's not just a matter, in our communities, of extra cash flow. It is the cash flow to keep the local producers going — through the farmers markets.

I'm very concerned that agriculture wasn't mentioned in the throne speech. We did make a recommendation last year about Buy B.C. as well, I believe. That wasn't implemented.

My question is around the trial program of the farmers market nutrition and coupon program. What was the analysis on that trial? Was the funding ended because the program didn't meet the intentions? Is that the word you got back about why the…?

E. Quinn: No.

D. Donaldson (Deputy Chair): What was the rationale? It seems like it would save money in the long run as far as health.

E. Quinn: It would. It was end-of-year funding as well. We were given a lump sum of $750,000, and we used that funding over a few years.

No, the program was very successful, but that was the agreement. We were told it would only be end-of-the-year funding, and we know this was a terrific program.

Actually, the redemption rate for the coupons was 97 percent. The usual redemption rate in the States is something like 60 percent. Our program was probably the best, the most successful in North America, and it had an incredibly low administration cost. It had nothing to do with whether it was successful or not. It was really because of the economic meltdown in 2008.

The Ministry of Healthy Living and Sport was considering funding it again, and then…. I'm not sure. Something happened, and they changed their priorities. So everybody knows it's a good program.

R. Howard (Chair): Thank you. One last question.

P. Pimm: Thank you for your presentation. We also have a great farmers market in our area.

One thing I've always been curious about in the farmers markets is: do the societies actually go out and actively promote their product to the large grocery chains and that sort of thing? How does that work? I've never really understood that process.

E. Quinn: The actual societies themselves, the little farmers markets, don't tend to market the products for the farmers. The farmers would have to do that themselves. Farmers markets are just one of many marketing channels used by those farmers, so the farmers usually have to pitch to the grocery chains themselves.

J. Bell: If I could add. As a grower, I can actually sell my produce in a farmers market at 100 percent retail price. If I take it to a commercial store, then I'm down at least 50 percent.

With the farmers markets really being such a great place to sell, right now I see no benefit in my personally going and selling to a supermarket. I'd just have to take less money for the product. But remember that I'm a small grower, not a large commercial enterprise, so I don't have the economy of scale.
[ Page 1710 ]

R. Howard (Chair): Thank you, both. We've run out of time. We appreciate your coming forward this morning.

E. Quinn: Thanks very much. Does anybody want our resource kit?

J. Bell: If you'd like it for your community, by all means.

R. Howard (Chair): Sure. If you want to distribute copies to the committee, do you mean?

E. Quinn: Yeah, but only if you want them.

R. Howard (Chair): Okay.

E. Quinn: Yeah, you do? Okay. I'll give you one here.

R. Howard (Chair): Thank you.

We'll recess now and reconvene at 1:05.

The committee recessed from 12:05 p.m. to 1:04 p.m.

[R. Howard in the chair.]

R. Howard (Chair): First up, we have Mr. Hector Bremner.

Welcome, Hector. You've got 15 minutes. At about ten minutes I'll give you a heads-up. You can stop and take some questions, or you can go straight through. Your choice.

H. Bremner: I've timed this. I think it will take me seven minutes and 21 seconds to say what I'm going to say.

R. Howard (Chair): Perfect. We'll have lots of time, then.

H. Bremner: We'll have lots of time for questions afterwards.

R. Howard (Chair): The microphone is all yours.

H. Bremner: Thank you, once again, to the esteemed members of the committee and to the Office of the Clerk of Committees for allowing me to speak here today. It's a real honour.

It should be noted I'm not going to distribute any materials, but I have submitted, of course, the text of what I'm saying here today and links that are sort of referencing some of the items that I'm quoting today. It is there digitally for you, so the office will be able to provide you with that.

[1305]

My presentation today focuses on a question which I feel is on the minds of a lot of British Columbians today, and that is: how can B.C. invest in job creation for today and tomorrow's generation?

There are, of course, many schools of thought on how to approach the solutions this questions raises. However, I was compelled to report here because I believe there is a chorus of voices that are left unheard. These voices are calling for the end of 20th-century solutions to 21st-century challenges. They are calling for bold yet practical leadership. They are calling for a partnership between the government and the private sector to develop the infrastructure needed for the next industrial revolution.

In short, there are a lot of folks out there who can see the answers; they just need their government to listen. Today I have two commonsense-based, shovel-ready solutions for Budget 2012, which will put the government in position to broker with and support the private sector and which would have tremendous impacts, not only on the short- and long-term economic development impacts but would also be proud social and environmental legacies.

The first opportunity comes to us right below our feet. According to the Geological Survey of Canada's recent report compiled by leading authorities in Canada's resource sector, British Columbia, Alberta and the Yukon Territories are sitting on a hot opportunity — a 187 degree to 233 degree Celsius opportunity, to be precise.

Essentially, boiling hot water, superheated by the earth's core, is at depths in our province which are within very practical ranges to tap and to create geothermal power energy opportunities. Their report, published this past summer, states that Canada's in-place geothermal power exceeds one million times Canada's current electrical consumption.

The national geothermal energy program, which ended in 1986, sought to find viable sites for such projects. Meager Mountain, just 150 kilometres from where we are now, was found to have tapped water wells which were in excess of 270 degrees Celsius. Some natural gas operations in northern B.C. are pulling only 2 percent natural gas out of a well but 98 percent 187 degree water.

The report also notes that geothermal has distinct advantages over not only fossil fuels and nuclear energy but also wind, solar and biofuels, as it has few practical limitations. Geothermal is also free of the greenhouse gases generated by coal-fired electricity plants, and it also sidesteps the challenges that nuclear energy presents, which of course is just a fancy way of boiling water.

Of course there are potential environmental impacts of geothermal energy; however, there are standards and practices that can be implemented to mitigate this issues to nominal levels. Any risk must be juxtaposed against the report's estimate that as few as 100 geothermal energy projects could meet Canada's entire energy needs for decades.
[ Page 1711 ]

Today there are geothermal projects being developed in B.C. and in Western Canada; however, these projects are small and will generally be left in the shadow of 20th-century projects, like traditional hydroelectric dams.

The second opportunity that presents itself relates to how people in the 21st century will transport themselves. To be sure, urban and suburban areas will benefit greatly from public transportation investment. However, personal conveyance is not likely to disappear. That said, the personal transportation vehicles of the next 40 to 50 years will most likely use a variety of power sources, one of them being electricity.

Earlier this year the provincial government of Ontario fostered an opportunity to develop the required infrastructure to make electric vehicles possible. It was a 3P initiative initiated by the Ministry of Economic Development and Trade, local electricity distributors and an Israeli firm called Better Place.

This company developed and deployed an electrical vehicle charging network plus a consumer education program for the province of Ontario and has successfully rolled this out. Better Place has quite a bit of success in implementing their out-of-the-box EV infrastructure products in Australia, China, Denmark, Israel, Japan, California as well as several EU nations.

As warm and fuzzy as going green with your car may sound, it's important to remember the practical economic impacts of innovation. EVs will need to be designed and built somewhere. Ontario is working to make sure they are that somewhere.

[1310]

However, given B.C.'s existing hydrogen highway agreements with America's western states, including the lucrative California market and B.C.'s positioning as a port, it is reasonable to conclude that B.C. has a realistic opportunity to attract the investment from manufactures to build the cars of tomorrow here today — so reasonable in fact, that Mercedes-Benz chose Burnaby to manufacture its hydrogen fuel cells for future clean energy vehicles.

The cost to taxpayers to implement either of these initiatives varies on whether one believes in social strategies or more market-based, private equity solutions. I support the latter: having government broker and guide these investments and only stepping in where private investment falls short. We know that in both opportunities I presented private capital is available. That said, some of the investments are large and require a certain degree of assurance that only a government can provide, especially considering the current global economic condition.

In any case, we know that nearly $8 billion is being considered to create at least one energy development project in this province. We know that other Canadian markets are making investments like I am suggesting and are finding them responsible and reasonable to manage.

To leave you with a succinct message: the jobs of tomorrow require public leadership today. Henry Ford may have put a car in every family's driveway, but it was the public's investment and leadership in the creation of the necessary infrastructure which made the auto industry possible. Today government can bring industry to a common table, identify realistic goals, help plan and prepare, and then support the implementation for a successful result.

Now, 2012 presents a challenge to B.C., one that asks if we are ready to win the 21st century, one that asks if we are prepared to be leaders, one that asks us to live up to our potential. I think we are ready to do all of this and more, and we can start by investing in the 21st-century economy today.

R. Howard (Chair): Thank you, Hector. Could we have a few questions?

D. Donaldson (Deputy Chair): Thanks, and I look forward to the links that you're going to provide in the report that you're sending us, especially around geothermal.

I have a question on geothermal. I have acquaintances who have installed it, as far as a household system goes. I know the village of Valemount is working on a different kind of geothermal where they're hoping to partner and go down three kilometres to where the water source is in the temperature range I'm sure you've described.

What is the scale, in your research, of a geothermal project that would be required to generate the kind of megawatts that we see, like 50 megawatts or whatever? What kind of land mass? Can you give me an idea of some of the scale?

H. Bremner: Sure. The practical implementation. In terms of acreage or square footage, how much land this is going to take, I wouldn't have, necessarily, the answer specific to that. But I can answer that in terms of power production, in a comparison to impact both on land and resources, it is going to be considerably less than if we are going to look at typical run-of-river power.

Site C is projected to flood 5,400 hectares of land. Geothermal would have a footprint existing where the plant stands. One would imagine that would be maybe ten, maybe 20 acres. Then that plant would exist there. We're also in a particularly unique position.

I first became sort of interested in geothermal power. I have friends who were developers, and they were leading the edge on LEED platinum residential units. They've done a project. I think it was a 32-storey-unit building in Yaletown. They said they would never do that again, and then they started focusing on four-storey structures, always using, depending on the property, either closed-loop or open-loop — there are two types of ways of doing geothermal — systems.

In North Vancouver they did a system. They were projecting to have to dig down a kilometre. They got down, I think, 100 metres, and they hit pay dirt.
[ Page 1712 ]

The neat thing about B.C. is that we don't have to drill too far, too deep, to hit the kind of aquifers that we need to hit. The energy is there. The thing that I like to stress is that the earth's core is essentially a continuous nuclear reaction. It's continuously going on, and it's there. All nuclear energy power plants or coal-fired power plants are…. All you're doing, at the end of the day, is boiling water, channelling it into steam, running it through turbines. You generate electricity. That's how it works.

[1315]

This is a really tremendous opportunity, which I think will have a much smaller footprint in terms of greenhouse gas emissions. Resources input, like building a dam…. It's a tremendous amount of concrete, steel, land that these projects take.

Again, if we're considering right now an investment of…. I think it's projected right now at about $7.9 billion to look at Site C. If you're going to give me nothing or Site C, I'll take Site C. But given the realities of geothermal energy and its promise….

This study caps off, I think, 40 years of other studies. It proves once again that there is an impetus to seriously look at this beyond small-scale, residential site-by-site implementation — really looking at how we're going to make B.C. energy-independent, how we're going to create jobs in the future. These kinds of projects can be done.

I'm sure another question would be: how long would it take to do this? This report, the federal Canadian geological survey, found it would take about five to seven years to get projects on line. So that gives you an idea of the timeline.

R. Howard (Chair): Great. Thank you, Hector.

P. Pimm: Certainly, I've been on record as supporting all energy of any description, pretty much. Obviously, we want to get down to a little greener. I have a little bit of a problem with our whole CO2 thing, but that's not a discussion for here.

My question is similar, along with a follow-up to MLA Donaldson's. How much per megawatt hour — that kind of thing? How does it compare with hydro? How does it compare with future building costs of different things, and how will that affect the B.C. Hydro rates?

H. Bremner: Good. Thank you for asking the question again, because I did skip over something that MLA Donaldson asked me directly in another question.

Talking about megawatts is sort of an interesting factor here. As I mentioned in this here, they suspect that Canada-wide, but predominantly in western Canada, we have about a million times Canada's current megawatt usage. So there's quite a bit of energy resource there.

Specifically, to equate it to traditional projects, we know that Site C is going to be somewhere around the 1,110-megawatt production range. This study said that there are about 5,000 megawatts of geothermal potential energy in B.C. Again, I don't have the answer in terms of how many projects could generate that.

They're saying as little as a hundred to meet Canada's entire energy needs, so logical deduction would mean that you could probably look at a tenth of that in terms of facilities needed. These facilities still would be relatively small in comparison to other…. It would be similar in size to, let's say, a coal-fired plant. It's not going to be any bigger than that or cost much more than that to build. It's going to create about as many jobs.

The point of my suggesting these two items here today…. Another one is trying to attract the investment for the manufacturing of electric vehicles as well.

My overarching point here is that there is an industrial revolution coming. We are going to shift the way we transport ourselves, the power sources that we use. These are all going to require brick-and-mortar, practical items — technology and innovation. Someone's going to have to build it, and we can be those builders. We can create those jobs.

R. Howard (Chair): Thanks. Time for one last quick question.

J. Thornthwaite: Thank you for your presentation. Are you suggesting, then, that the geothermal suggestion is to fund the extra electricity that is required to fulfil your suggestion on electric cars? Is that what you're suggesting?

H. Bremner: That is an element of it. Definitely, a key point that you're bringing up is that we need to, obviously, develop our electricity to production. We need to remain energy-independent. We need to make sure that if we're going to attract manufacturing to British Columbia, we're going to have to have, essentially, abundant, cheap power, because that's what they're looking for.

At the end of the day, we are geographically and economically situated to produce 21st-century products, like EVs. Or maybe it's like what's going on in Burnaby, with Mercedes-Benz producing hydrogen fuel cells.

We have the building blocks to do this. Now what we need is for the government to quarterback this, bring industry to a common table, put some specific guidelines, foster the research that needs to be done to get shovels in the ground and then underwrite and support this initiative. Private equity will be able to fund a lot of this, but just due to the magnitude of it, it still will require support.

[1320]

R. Howard (Chair): Excellent. Thanks, Hector. We've run you out of time. I appreciate your coming forward.
[ Page 1713 ]

H. Bremner: I appreciate it. Thank you so much for letting me speak.

R. Howard (Chair): Next up we have CHC Helicopter — Michael Nagel and James Cantwell.

Welcome, gentlemen. As you're getting set up, I'm sure you've heard we've got 15 minutes for you. At about ten minutes I'll give you a heads-up. You can stop for questions or continue through — your choice. The microphone is yours.

M. Nagel: Good morning, hon. Members, ladies and gentlemen. My name is Michael Nagel, director of business development at CHC. As an intro, I've worked for the company for the last six years and in an earlier career as a helicopter pilot in the Okanagan, working for Okanagan Helicopters. Based here in Vancouver. Live here in Vancouver.

J. Cantwell: My name is James Cantwell. I'm the CHC key accounts coordinator, also based here in Vancouver. I'm a 2010 graduate from the UBC Sauder School of Business with a bachelor's degree in commerce, and I've been with CHC ever since.

M. Nagel: Again, thanks for the opportunity. In our remarks today we'll talk about CHC and our sister company, Heli-One, based here in B.C. We'll close with a short intro or a pitch on a SAR, or search and rescue, hybrid project.

Allow me to give you a little bit of an update on CHC Helicopter. We're a company of about 60 years young. We started in Penticton with a two-seater helicopter, and today we have 250 commercial helicopters in 30 countries with a turnover of about $1.45 billion. We're well known from Lagos to Stavanger, Perth to Bangkok — a company that hires and recruits the best talents, such as my colleague James.

J. Cantwell: Thanks, Michael.

I've been with CHC now for about a year and a half. I was recruited, like many university students from UBC and SFU, to participate in a work experience program, which often leads to permanent employment, which is my case.

On a global basis, though, we employ roughly 4,400 people worldwide; 700 of those jobs are based right here in British Columbia, with about 300 at our corporate and flying division headquarters here in Richmond and 400 jobs at our Heli-One facility.

M. Nagel: Heli-One is an MRO, or repair and overhaul, facility with worldwide headquarters in Delta, B.C. Like CHC, there are 95 percent export of services, with customers worldwide. Heli-One provides good technical jobs, primarily for Canadians based here in B.C.

On the federal side we've enjoyed a good partnership with the Canadian Commercial Corp, or CCC, and EDC in these export services. In the last two years we've worked harder to build our profile further within governments and strengthen these critical relationships.

As recently as last month James and I presented to the federal-B.C.-Yukon caucus to reaffirm our relationship and ask for continued support. Most recently we hosted the provincial MLAs at CHC.

As the largest helicopter operation in the world servicing the oil and gas industry and the largest MRO facility in the world, we think it's a good story to tell — revenue growth year over year; solid export product; and jobs, direct and indirect; plus numerous services that we purchase locally here in B.C. and locally in Canada.

That brings us to our SAR story and an ask.

J. Cantwell: CHC is a world leader in helicopter search and rescue, or SAR. Operating in government and private sectors worldwide, we have a long history, proven skills and demonstrate performance to the highest standards. A snapshot of several of our long-term contracts includes the United Kingdom, where helicopter search and rescue is a joint responsibility carried out by the Royal Air Force, the Royal Navy and CHC as contracted through the coast guard.

In Ireland CHC is responsible for all of the nation's helicopter search and rescue. CHC performs this service for the fighter jet ejection seat training in Australia for the air force there. Other contracts in Australia include the Victoria police, the New South Wales Air Ambulance Service and several others.

M. Nagel: I'm here to tell you that we are talking to the federal government, from the SAR secretariat to Industry Canada and the DND, to consider a SAR hybrid model. These are exactly the type of proven models for public-private partnerships that we use abroad.

We are pitching the opportunity for an alternative model to address the lack of capacity of coast guard services; to show our colours from B.C. to the Canadian Arctic; and to demonstrate an efficiency with clearly new-technology helicopters, with a predetermined budget and clearly defined performance indicators. This is a proven model.

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J. Cantwell: Citing the Irish Coast Guard as our example, search and rescue was first outsourced to the private sector in Ireland about 20 years ago. This was done as a temporary measure to bring expanded SAR capability into service more quickly than was possible at the time through military provision. The solution was outsourced to the private sector for a short period to allow the military to upgrade an aging fleet of short-range SAR aircraft. It was later decided to continue the outsourced service
[ Page 1714 ]
in parallel with the military provision, as it had proven to be quite efficient, reliable and robust.

Over the next decade the military SAR provision in Ireland was gradually phased out, and today Ireland has a fully civilianized service. The operation maintains the benchmark for world-class SAR performance yet also provides for the economically optimal solution.

Over the next two years we'll be upgrading the current fleet of Sea King helicopters in Ireland to new technology, the Sikorsky S-92 aircraft, similar to what we did in the U.K.

M. Nagel: We can deliver this economic performance in Canada and B.C. as well. Our model removes the requirement of the federal government to invest in assets and possibly an aged workforce — all capital investments provided by the contracted operator. The model helps government to lower costs and deliver reliability in budget and in service.

J. Cantwell: We create sustainable jobs. Our civilianized SAR model has been proven to create valuable employment in the communities that surround our search and rescue bases. This also grows capacity in the repair and overhaul sector, such as the case of Heli-One in Delta. Adding these jobs, of course, contributes back to the government in terms of tax revenue.

CHC currently supports suppliers in Canada such as CAE, our training partner; Pratt and Whitney; SkyTrack; L-3; and of course, as Michael mentioned, the Canadian Commercial Corporation and Export Development Canada.

M. Nagel: We can play a role in achieving a balanced budget. SAR, by its very nature, is largely made up of unplanned and random safety events. We're experts at driving efficiencies in this type of a program and making sure that associate costs are not unplanned and/or random. We offer a very stable economic model and provide our customers — be it the Australian RAAF, the U.K. maritime or Irish search and rescue — costs that are forecasted and budgeted.

To close, an outsourced model, as we currently perform, offers an opportunity to address gaps in the service; add new capacity to new regions like the north; upgrade the technology; and arguably, provide a better service more effectively while growing jobs in B.C. We need your support with our federal colleagues.

I thank you again for your time.

R. Howard (Chair): Excellent, for that. We have a few questions. I'll start us off. Do you have any idea how many jobs, what the scale is here that you're talking about?

M. Nagel: No. The past history in this kind of a development from a government SAR operation to a private or 3P partnership typically starts off with a hybrid model. That has not been defined yet, but over the last two years this has been in the public an awful lot. So we would forecast that in a particular location, yet to be defined, it would likely be 50 to a hundred jobs to operate that SAR operation with a couple of helicopters.

D. Donaldson (Deputy Chair): Hi. Thanks for the presentation. The model in Ireland, for instance — is that where the Irish government contracts with CHC to provide SAR services? Okay, you're nodding your head, so I think that's right.

Then I assume that you're proposing this because you believe that it would lend itself to an upgrade of technology and aircraft without an immediate upfront cost to capitalize from the taxpayer. Are there models where governments lease those services from a company like CHC rather than contract? So they lease the aircraft and then provide their own crews and mechanics?

M. Nagel: Yes. The preferred model would be that the operator would provide a full turnkey operation. However, we do have models where some of the employment is actually government or military personnel, and/or some of the aircraft or other infrastructure is also government assets, as it were.

To pick up on your previous question, though, this started about two years ago when there was an unfortunate accident on the east coast. About a year ago the federal government and all other stakeholders got more involved to try to understand what the gaps were in those particular services and, consequently, had contacted CHC abroad in these numerous examples that we do have to ask how we do it abroad.

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The irony is that this all comes from this homegrown product here in Canada, and we perform it in, actually, eight different countries, be it government and/or private.

P. Pimm: I was just wondering what kind of percentage you do right here in British Columbia or in Canada. What kind of numbers have you got? I didn't catch that part.

M. Nagel: That's a good question. Our operation is currently for offshore oil and gas, because that is our sweet spot or our niche market. It's in Halifax, serving the offshore oil and gas industry there. We have a little bit of an operation in Alberta currently, in the tar sands, servicing the onshore.

All the operations that support that worldwide are from our corporate head office in Richmond and also the repair and overhaul facility in Delta. We have very little flying operations, of the 280 aircraft that we do have, in Canada.
[ Page 1715 ]

R. Howard (Chair): Did I hear you say 4,400 people worldwide — 700 in B.C.?

M. Nagel: Correct.

R. Howard (Chair): Right. Thank you, gentlemen. Appreciate you taking the time.

Next up we have Susan Anthony.

S. Anthony: Good afternoon.

R. Howard (Chair): Welcome, Susan. As you may have heard, you'll have 15 minutes. At about the ten-minute mark I'll give you a heads-up, and you can either stop for questions or you can go straight through — your choice. The microphone is yours.

S. Anthony: Thank you very much. Good afternoon. I'm actually the vice-president of the Burnaby Association for Community Inclusion. That's a grass-roots, non-profit organization that has dedicated over 50 years to providing innovative services to children, youth and adults with developmental disabilities, and their families.

Community Living B.C., CLBC, the government agency that pays for programs for adults with disabilities, has finally, recently, publicly released figures showing that more than 2,800 people with developmental disabilities are waiting for services across the province. Of these people, 750 receive no help at all from CLBC. The other 2,100 people receive some help but not enough to meet their needs.

In the ten minutes I have with you today, here is what I want you to understand and be thinking about — that for the individuals with disabilities turning 19, and their families, the cost to taxpayers is now, and will continue to be, infinitely higher than the figures they released if something doesn't change. This can be rectified and avoided in the future if the government listens to families.

Today you are going to hear very personal stories of families in crisis due to a lack of support from CLBC for their transitioning teens. These kids didn't stop having a disability when they turned 19, but the current system dictates that their needs can no longer be supported. I'm the parent of one of these teens. My son Jake is a person with autism, and he turns 19 this month.

After years of intensive early intervention and hard-fought-for behavioural support, he is on his way to being employed and, perhaps one day, living semi- independently. But that investment in my child will not continue into adulthood. CLBC states that while he is eligible for these supports, there is simply no money.

I'm a two-time breast cancer survivor in failing health, about to lose the supports that enabled us to manage as a family. I don't know how we're going to cope.

I hope that we're able to illustrate to you today that while family caregivers provide care without charge, it's not the same as without cost. When families don't get the services they need to support their young adult with a disability, it costs society and is why CLBC needs to stop their endless restructuring and recognize that their greatest resource is the practicality and expertise of families.

Without the proper support, these young adults won't be able to contribute to society and, in many cases, will strain the resources of the medical and criminal justice system. Without the proper support, their families in many cases have to quit their jobs to care for their young adults, accept income assistance and also tax the medical system.

What I'd like you to think about today is not only that this lack of support is morally reprehensible. In the long run, it is financially irresponsible.

The first parent letter I'm reading today is by Katy Kwong of Richmond. Because families are part of finding the solution, Katy knows what her family needs, but no one at CLBC is listening.

"My developmentally disabled daughter is 22. When she turned 18 in 2007, we applied to CLBC for individualized funding. We were informed that there was no money, but the plan was accepted.

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"Despite the great pressure and turmoil that my 75-year-old husband and I are facing on a daily basis for the special needs and care of our daughter, we have been waiting patiently for four years. In the interim, we received $233 per month of respite funding, and zero service.

"In the past year we faced tremendous stress and pain due to some incidents that befell our daughter. It took a huge toll on our health as well as bodily safety. I was at the brink of taking my own life, but when I thought of my elderly husband and family, I urged myself to brace in the storm and be strong and move on.

"Two months ago I wrote CLBC about our precarious, urgent situation. However, this person replied that he was no longer in charge of our daughter's case, and he was not sure where the file was or who was in charge.

"I wanted to express our deepest frustration in this entire process. First of all, the wait is indefinite, and then there are no funds, and the file was lost, and nobody was in charge, and the excuses are never-ending.

"I hope that the government will heed the stress signals from needy families. Do not wait until disaster strikes. Families are broken and lives lost, and then everything is too late. Thank you for your attention."

The second letter was composed by Judy Yee. She's Corey's aunt. Judy knows that families are part of finding the solution, because she has provided respite and advocated for Corey for more than ten years.

"Corey Yee Melhas is now 21 years old. He was diagnosed with autism when he was five. Corey has been spending his weekends and holidays with me in Vancouver for almost ten years, while living at home with his immediate family on weekdays.

"Corey was reassessed at 13 and considered robustly autistic. When Corey turned 19 in September 2009, we were told by CLBC that there were no funds or services available to him at that time. The agency was going through some changes, and he would be put on the emergency wait-list as high priority for support services.

"The only service Corey has received since turning 19 has been a life skills program from 9:30 to 2:30 weekdays. Corey continues to need 24-7 supervision.
[ Page 1716 ]

"In the past three years there were incidents of him striking out at me, his mother, his younger sisters and at random strangers in public. Self-harm is also an issue. Three police departments have responded to incidents more than once. Requests for social supports and/or alternative housing arrangements for Corey's future have been met with silence.

"We love and support Corey and have tried to advocate for him as much as possible. Interpersonal relationships have suffered and been stretched to the breaking point, and we've used so many resources or diverted them from other areas, such as savings, housing, full-time work, travel, etc.

"While my commitment is strong, I truly feel we are no longer doing our best by Corey and his needs. When he last happened to land a more-than-effective blow to my head, I felt sick and old, ineffective and out of control. I'm truly disheartened and frightened for him and his future. I'm angry and saddened that the system we expected to be in place to allow us to take a step back and to help Corey settle into the uncertain future is not there for us."

I'd like to introduce Kathy Martin. As a parent, her personal story will illustrate to you that families are part of finding a solution because they know best the needs and the potential of their young adult.

K. Martin: Thank you for giving me the opportunity to present today. Perhaps you saw us on Global News or CTV News a while back this spring.

These are desperate measures for desperate times. I cannot say how desperate a situation our family is in. This is my son Jonathan, and this is Heather, his caregiver. Jonathan graduated last June and is now at home with us all day, every day.

Jonathan loved school, as it provided him with the social life he needed. Jonathan needs full-time, 24-7, one-on-one care. He has Down syndrome, autism, is hearing-impaired and is severely mentally challenged. He needs help with toileting, getting dressed. He needs supervision during all meals to ensure he doesn't choke on his food. He is essentially non-verbal and unable to communicate his needs.

The effort to meet Jonathan's needs places a tremendous burden on our family as we try and cope with the demands of work and home and, most importantly, try to provide Jonathan with some meaningful activities to break up the monotony of his day.

CLBC needs to step in and provide funding so that Jonathan can have a life after high school. We make every effort to get Jonathan out of the house. But too often this is little more than taking him on errands. Jonathan spends too much time in his room listening to music or playing the few computer games he understands.

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We feel an unending sense of pressure, if not anxiety or guilt, to do more for him. But there is only so much we can manage.

We had to cancel therapeutic horseback riding sessions after four years, because Jonathan's $500-per-month autism funding was cut to nothing at age 19. We lost $197 per month respite care money to pay a caregiver so I could grocery shop or make dinner or care for my family. He needed respite while he was still in school, but now he needs respite funds more than ever, as we lost full-time school programming.

Out of his money allocated for food, shelter and clothing, I have to pay a worker $500 a month to care for my son when I work day shifts. CLBC has communicated to us that they would like to see Jonathan attending activities in the community, and we would dearly love to see this happen. But they need to provide us with the funding for the caregiver to help him participate in these activities. He cannot go alone. He requires a one-on-one worker to help him participate in community programs.

Yesterday I took him to a special needs event at the YMCA, and the staff there said I could leave and that they would make sure Jonathan was taken care of. However, when I arrived an hour later, Jonathan had wandered off, and the staff didn't even realize he was missing.

I am a nurse at Children's Hospital, and my schedule is almost exclusively graveyard shifts. This means I have to try and watch Jonathan on minimal sleep when my husband is at work. I have had to resort to catching a little sleep while Jonathan watches a video on his computer in a dark room with me. While Jonathan would be unlikely to leave the room if his video had ended before I planned to get up, this is a desperate measure and is not safe.

I don't see how I can meet the demands of work, home and caring for Jonathan, and I worry about making a critical mistake at the hospital from fatigue and stress. I drove through a red light for the first time last week, endangering myself, Jonathan and those on the road. That tells me I'm not okay, and this is more than I can take.

My husband feels a terrible burden for Jonathan. He hates the thought that Jonathan may be bored, unhappy or worse — regressing due to lack of stimulation. He doesn't feel the freedom to relax if he gets any spare time, which he rarely does. Weekdays are work and Jonathan. Weekends are consumed with caring for Jonathan.

My husband is sleep-deprived and struggles to stay positive or feel effective with the students he teaches. We would both like to continue to be productive members of society. Carrying on like this is burning us both out.

For those of you who are parents, I encourage you to remember what it was like when your children were toddlers. Now imagine that kind of life as you are nearing retirement.

Jonathan loves people and very much enjoys social interaction. Currently there is limited opportunity for this — bits and pieces of activity separated by long stretches of isolation do not make a life. Jonathan needs and deserves so much more than this.

Our family needs funding to allow Jonathan to participate in a day program to address all of these issues. We would like funding so Jonathan can be part of the Daily Endeavours day program at the B.C. Centre for Ability. We have met with the coordinator who tells us
[ Page 1717 ]
that they have the staff and can provide the service, but they need the funding from CLBC to do so.

We cannot cope with this current situation. This lack of commitment for funding for my son and many others is unacceptable.

S. Anthony: I'd like to thank these family members for having the courage to share their stories.

In the past few years CLBC has cut supports and programs. They've hired analysts with MBAs who have created a labyrinth bureaucracy of forms and contracts. They micromanage service providers who, in most cases, despite having their budgets slashed, have to hire extra administrative staff to deal with the stacks of CLBC paperwork.

In 2009 they changed legislation that removed the requirement for the CLBC board to have a majority of members who were either family members or persons with developmental disabilities. They stopped listening to families.

Now that you've heard what happens when families don't get the services they need to support their young adult with a disability and the resulting repercussions on our health care, social welfare and correctional systems, now you know why CLBC needs to stop their endless restructuring and recognize that families are a part of finding the solutions and that the investment now in our young adults with disabilities is the only fiscally responsible option that makes sense.

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R. Howard (Chair): Thank you both. We have a question.

J. Thornthwaite: Thank you very much for your presentation, and thank you for your courage. Specifically, what are you asking us for, for Jonathan now that he has turned 19, in comparison to what he had when he was going to school?

K. Martin: Well, because full-time school programming took up Monday to Friday, I'm asking for funding for a day program, and this day program….

J. Thornthwaite: How much would that be? Do you know? Do you know how much that would be for a day program?

K. Martin: I know that this program pays their workers about $17.50 an hour and that they can provide as much care as is needed as is provided for by the funding.

J. Thornthwaite: Okay. Maybe you could leave that information for us.

D. Donaldson (Deputy Chair): Thanks very much for a very strong presentation. The question of trying to work while your children have turned 19 is an incredible story and burden. Could you expand, Kathy, first of all, on how you foresee being able to continue employment?

Susan, I think you mentioned that you're about to enter this situation. Can you describe what you feel the repercussions are going to mean on continuing to participate in the economy?

K. Martin: Well, I'm hoping for a change in my circumstances, but if I don't have a change, and if no funding is allocated, I presume I will get tireder and tireder. I presume that my mental health will start to decrease, and I will struggle with a very low mood because I won't be able to cope. And that could lead to circumstances in that I wouldn't be able to work.

You know, I'd like to be able to participate in my community and society, and this is what's happening to parents all over the place. We're having to give up our own lives. And we would, of course. We're parents. That's what we'll do, but we need the funding so that we can continue on and be productive members of our society.

S. Anthony: In my situation I think that the advocacy work that I have been doing I will no longer be able to do if Jake doesn't have the supports that he needs starting next Thursday. What worries me most is respite. Living with a young adult with special needs can be extremely challenging. We have had police called on occasions and things like that.

I'm not sure how well my marriage might survive, to be honest with you. I'm not sure that…. I've been off work for several years because I have had breast cancer twice, and I now have lupus as a result of some of the medications I was given. I've been hoping to get back to work. That dream is evaporating in front of my eyes.

R. Howard (Chair): Thank you, ladies. We've run you out of time, but we do appreciate your taking the time to come out today.

Next up we have the Retail Council of Canada and Shelfspace, the Association for Retail Entrepreneurs — Shafiq Jamal and Mark Startup.

Gentlemen, as you are getting set up, I'm sure you've heard we've got 15 minutes for you. At about the ten-minute mark I'll try and give you a heads-up. You can stop for questions or go straight through. Your choice. Over to you.

S. Jamal: Well, thank you, ladies and gentlemen and members of the committee, for giving us this chance to present our submission here today. My name, as Rob has mentioned, is Shafiq Jamal, and I'm the VP for western Canada for the Retail Council of Canada.

The Retail Council of Canada represents over 45,000 storefronts of all retail formats across the country, including department, specialty, discount and independent
[ Page 1718 ]
stores, as well as grocery and on-line merchants, and we have a significant representation here in B.C.

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M. Startup: Good afternoon, hon. Members. My name is Mark Startup. I'm with Shelfspace, the Association for Retail Entrepreneurs. Many of you, or some of you, will remember us as Retail B.C. We changed our brand a couple of years ago. We represent primarily independent retailers in British Columbia and Alberta. It's our pleasure to be here today co-presenting the retail industry's thoughts on the upcoming budget with our colleagues at RCC.

S. Jamal: Quick context. Retail is the biggest source of jobs in British Columbia and a key provincial economic driver representing over 12 percent of the province's total labour force and directly employing more than 300,000 British Columbians. Retail success in British Columbia is driven by increased investment, strong consumer demand and sensible and focused policy and regulation by the provincial government.

It's often overlooked that the retail business is still essentially small business. The majority of retail businesses in British Columbia employ fewer than four and have sales of less than $500,000 annually.

Instead of following the presentation you have in front of you verbatim, which you can read at your leisure, we thought we'd take our limited time with you to highlight some of the more significant challenges facing our members and leave some time for questions.

Retailers are looking to the provincial government to provide stability and certainty to B.C.'s economy. They're also looking for stimulus to the retail sector, which is our province's largest employer and a key driver of the provincial economy. I just want to highlight some of the key things that are challenging our members.

The first issue would be the transition back to the PST-GST following the outcome of the HST referendum. What's often overlooked is that there is significant cost associated with the return to a dual-tax system. While the costs vary depending on the size of the retail establishment, our larger members are estimating that their costs could be well in excess of half a million dollars each.

This is a cost that they incur. They incurred the cost when we transitioned to the HST by adjusting their point-of-sale systems, their admin and other requirements, and they're having to do that on the return. Some retailers sell over 100,000 different products that all carry a different bar code. Additionally, many of the products have different tax treatments under each system, so they have to reprogram and undertake a whole host of issues related to the return to the dual-tax system.

What this does is create huge financial and human resource expenses that retailers would far rather invest in job creation. Accordingly, we're specifically recommending that the government of B.C. reinstate the PST commissions that used to be available to retailers who sold goods at a certain threshold, which was, I believe, about $519,900 in sales.

We want to see tax and administrative credits to retailers to help mitigate against the burden and impact of adjusting the point-of-sale and other systems from the HST and moving back to the PST-GST. There was also a whole host of inefficiencies, confusion and complexities that existed in the previous system as far as things like school supplies, youth exemptions and other such issues that we would like….

What we find encouraging is that in the recent announcement from the government of British Columbia, commonsense administrative adjustments will be made as we return. We're hoping that some of these burdens can be cleared up.

As you can probably appreciate, you take quarter 4 for every retailer. It's the most critical time of the year. That's why in the U.S. it's called Black Friday, and here it's pretty much similar in that this is the all-important quarter in which retailers can make up for a lacklustre year.

If they're focused on delivering value and service to customers, it's very difficult to be able to ask a 19-year-old salesperson to ensure that they're checking off the correct identification on things like school supplies or youth exemptions. It's a very difficult challenge where they're all focused on stores.

I used to work at Best Buy Future Shop in the corporate headquarters, and from October 15 to January 15 it was called MTH — "Make the holidays." Anything that was not focused on delivering sales and value to customers was off the table, so you can imagine how much pressure there is on retailers. Also, we'd like to see that we take this opportunity for clarity and consistency on the exemptions and on various categories.

The other issue that, while from a public standpoint certainly sounds very great, is the introduction of the 11th statuatory holiday in B.C., which we understand is coming February 18, 2013, and will be referred to as family day. This comes at an inopportune time for many members as the increased cost of a family day is not offset by the perceived return on investment in the form of additional consumer traffic that is perceived to come through the stores or on line.

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It will create significant challenges for retailers, especially when this results in having to pay 2½ times, because you pay for the additional day off provision plus time and a half. It comes in quarter 1, when consumers are still dealing with post-Christmas expenditures, so they're not as likely to want to go out and purchase new goods and products and services. It also comes in the middle of — albeit we have good weather here for the
[ Page 1719 ]
most part…. But it comes in winter, so that's a disincentive to many consumers to necessarily go out and shop in stores.

As you referenced earlier, most of our establishments employ fewer than four people. They're not necessarily going to get the benefit of a family day because they have to now make a decision as to whether they go and open the store. Many of them are restrained by covenants. For example, if you're in a mall and you're a small operator, your covenants demand that you will have to stay open whether you like it or not. So in effect, you are staying open. You might be employing staff at an added labour cost, and you're not seeing the necessary traffic coming through from the public.

RCC and Shelfspace recommend and urge the government of B.C. to engage in further consultation and dialogue before the holiday comes into effect. We've got some ideas on innovative approaches that we see would help reduce the impact on retailers.

Some suggestions that we are putting forth and we'd like dialogue with government on is to perhaps consider making family day a tax-free, exempt day — a tax holiday for retailers in order to provide a catalyst and boost to encourage sales in the first quarter; maybe undertake a formal and comprehensive review of all statutory holidays in B.C. and look at the requirements for how to compensate employees on these days. So maybe lighten the burden. Don't just stop at family day. Let's take a whole look at all the statutory holidays and maybe come up with what Mark and I have termed — Mark actually came up with it — stat-lite. You know, maybe you don't have to pay 2½ times. Maybe you reduce the burden that way.

Before I hand the rest of the presentation to Mark, I'd like to say that this is a very challenging time for retailers. They have to contend with a redefined consumer landscape following the global recession. The challenge has been exacerbated by having to deal with cross-border shopping, a 25 percent spike in the minimum wage in B.C. in less than a year and a half, and multinational manufacturers who charge higher prices to Canadian retailers, not to mention inflation, gas prices, import taxes, competitive pressures and the significant cost of transitioning back to the PST-GST. These are significant challenges that burden and impact retail establishments.

Despite these challenges, retailers would like to be committed partners with government and engage in dialogue to find ways to help government achieve its objectives while helping businesses remain significant and active contributors to the economy, adding jobs, investing in people and their businesses, and continuing to support the local communities in which they live.

Thank you, ladies and gentlemen. I'll hand it to Mark now.

M. Startup: Thanks, Shafiq.

I'll briefly conclude by focusing in a little more detailed manner on two issues: the transition back to PST in specific relation to the youth and school supplies exemption; and the training tax credit.

On the youth exemption front, we think the government has an opportunity to do a minor tinkering, if you will, or perhaps a regulatory approach rather than a policy approach, and keep the youth exemption on the garment or on the clothing, rather than switch back to what was in place before, which was a declaration wherein the consumer would declare at the point of sale that they were purchasing the goods for someone under the age of 15.

That regulation requires no end of fraudulent transactions at the retailer's point of sale. It causes a delay at the retailer's point of sale because the regulation requires sales associates to obtain the signature of the person purchasing the clothing, and it creates essentially a fraudulent market wherein the government is not collecting PST on those purchases.

So we would very strongly urge government to keep the exemption on the clothing, on the size of clothing, which is the case with the HST, rather than going back to the previous system.

I could quote one of our members in the school supplies category, a member that sells school supplies to over 50,000 customers. Under the PST regime there is a series of complicated and hard-to-understand exemptions that relate to school supplies.

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Unlike the youth exemption, previously under the PST, the school supply item is what attracts the exemption. The use of an item — in other words, is it being used for school, or is it being used for commercial purposes? — will determine whether the item is taxable or not.

In speaking to one school supplies retailer with 50,000 customers after the transition of HST, they did not receive one complaint from one customer over the loss of the exemption on school supplies. So retailers who sell school supplies products would urge you to continue to tax all school supplies rather than reverting back to the previous PST regulations.

The other item that the retail industry would urge you to consider is the training tax credit. We would support extending the training tax credit to non-apprentice occupations such as the service sector and the retail sector. For example, in Quebec there is funding available to employers and employees for training, which we feel would mitigate the higher cost of training here in British Columbia.

I might add that in the past couple of years there has been government funding available through a couple of programs, which was made available to small employers. It was a highly successful program. It was overspent. There's an appetite for British Columbia's small business
[ Page 1720 ]
community to receive this funding. The details are in our submission.

I will conclude by thanking you and asking if there are any questions.

R. Howard (Chair): Excellent. Thanks. We're just about out of time, but a few questions….

J. Thornthwaite: I think you actually answered my question that I had. Just to confirm that you are requesting, with regards to the youth exemption and the school supplies, to maintain the system that was with the HST.

M. Startup: Yes. Ideally, in a perfect world, many retailers might agree that you tax all clothing and institute an income tax credit at tax time to mitigate for the loss of the exemption at the retailer's point of sale. So you remove all of that confusion at the retailer's point of sale, and you deal with that by offering tax credits to those families that would appreciate having that.

D. Donaldson (Deputy Chair): Thanks for the presentation. I have a question that is not directly linked to your material you've provided. It's around trying to create shelf space for B.C.-made products in order to support the B.C. economy in a bigger way. I assume some of the owners of the stores you represent actually sell some of their own product in their stores too.

I'm wondering if you have discussions with Mark's organization to discuss how to make shelf space available in larger retail outlets that aren't independently owned for the products that are produced in B.C. Scotland, for instance, has this kind of stipulation in some of their major grocery retail stores. Scottish products get a certain amount of shelf space.

S. Jamal: Yeah, it's a really great question. I think our representation, if you will, extends from locally homegrown, B.C.-based companies like Lululemon and London Drugs through to the multinational organizations — oh, and Best Buy is local as well — through to the Wal-Marts, Costcos and whatnot of the world across the country.

A lot of our members, Best Buy being one example, have what's called a private label program, where they manufacture their own electronics. They source out local influence as much as they can. There's another example. Canadian Tire a few years ago found an innovative product that two brothers had developed for pesticide control. It was out in Kelowna. They engaged in discussions, and the product made it onto the shelf. Wal-Mart is known for doing this as well.

So yes. First of all, our members are cognizant and consciously aware of doing that and strive to incorporate that into their best practices. I share office space with Mark, so we're in constant contact and dialogue. We collaborate a lot on those kinds of areas.

M. Startup: Mr. Deputy Chair, may I add that I love the reference to Shelfspace, indicating to me that you really embrace the brand that we've implemented here in British Columbia.

D. Donaldson (Deputy Chair): There's just a space between that word.

[1405]

M. Startup: I would also add that there are many B.C. merchants that strive to find B.C. suppliers to put inventory in their stores. Many, many retailers strive to do that.

R. Howard (Chair): Thank you, gentlemen. We've run out of time. We appreciate you taking the time to come out this afternoon.

Next up we have Sport B.C. — Jessica Doherty and Tim Gayda.

Welcome, Tim. You probably understand that you've got 15 minutes. I'll give you a heads-up, if I can, at ten.

T. Gayda: Tight schedule.

Thank you very much for giving me the opportunity to come talk to you today. My name is Tim Gayda. I'm the president and CEO of Sport B.C. We represent the 64 organized sports — the provincial sport organizations that help facilitate sport in the province of B.C. Underneath them we represent over 4,000 clubs and over 600,000 individuals who take part in sport, whether it's an athlete, official, coach or just a volunteer trying to help make sport happen.

The province of B.C. has been a huge supporter of amateur sport. We want to recognize that and thank you guys all for the contributions that our ministry does make to organized sport to make things happen in the province.

We also want to recognize the work that was done on the gaming grant review. Mr. Triplett did an unbelievably great job engaging our sector, especially, across the province. I know we've given our views on recommendations. I guess all we can ask of the government is to take those recommendations seriously, because it really is the view of the sector — where he's going. So that's a request we can make, but we just want to commend the work that he did do.

There are a lot of challenges going on in our communities in sport that are a lot different than when I was growing up. Largely, as kids growing up, we facilitated our own sport. We went out with our own friends and figured out the game and picked teams, and off we went.

Kids nowadays — I have two of them — are so overstructured. They're driven to school. They don't know how
[ Page 1721 ]
to walk out into a field and pick teams and play a game. Everything that they do is now in structured activities.

I don't know if we parents have gone crazy and that's just the way of the world, but that really is truly the way these kids have gone. So we're ever more reliant on organized structure. Whether it's in parks and rec activities, cultural activities or sport activities, it seems to be the way of our future.

We're also up against an unhealthy diet, and we see that in the growth in spending on health. We're battling the whole digital world and the world of gaming. It seems to be that they're more interested in playing soccer on line than they are actually wanting to go play soccer.

Then you couple that with the inactivity that we're seeing, almost, in the schools at the early ages. We see the kids coming into high schools with not even the fundamentals of sport, and that is largely because of the stuff that's going on in terms of getting that education instruction in early days.

It sounds like all bad news. The world's coming to an end. But we like a good fight in sport, and there are a lot of good people, in terms of volunteers, in all these communities that are actually making this happen.

Really, if it wasn't for the funding that is provided, these volunteers wouldn't be able to do what they do. They rely on the provincial sport organizations to provide the coaching support, the officiating support, the leagues, the provincial championships to drive those athletes up to a national level. So it really is critical for our sport to have that level of funding, and we definitely appreciate it.

The two asks I have — we have asks, apparently, to come here — are really, when we look at the commitment made to support the 2010 sport and arts legacy fund…. We're in the second year of a three-year commitment with that, and there's concern about what happens at the end of that commitment. It would be a serious impact to our sector should that go away.

One of our requests to this committee is to see that continue on as core funding for the ministry. We believe it is doing great work throughout the province of B.C. for both sport and culture. We strongly would like to see that continue.

Then the other request that we do have, largely, is on the nature of multi-year funding. We talked a lot about that in the gaming grant review, and it's critical. Right now our sports live year to year.

[1410]

They never really know what the funding model will be for the next year, but they have to make commitments to programs, to coaches, to officials to drive sport in the province. It's very, very difficult to do that when you're really unsure what the funding is going to be like starting in June and July, when they find this out.

We know you can't commit a hundred percent of what that funding may be year after year, but even to make a partial commitment to ensure that a program can continue from one year to the next or that the coach can stay on…. That commitment, in a varying level of degrees to a multi-year model, would have a massive effect in helping us achieve our objective, which is to get B.C. healthy and involved in sport.

I want to just thank the committee for listening to us, and we hope you will listen to some of our recommendations.

R. Howard (Chair): Thank you, Tim. We have a question.

J. Thornthwaite: Thanks a lot for your presentation. So did you put in a presentation to Skip Triplett in the community gaming branch?

T. Gayda: We sure did. We actually had a consolidated ask from all of the sport, which was from all the multisport organizations and the provincial sport organizations. We also had the opportunity to meet as a group with him individually, and it sounds like he's going in the right direction with that one.

J. Thornthwaite: Good.

D. Donaldson (Deputy Chair): Yeah, I agree with some of your opening comments around kids, although mine are much older now and knew how to play. But structured play is getting more and more predominant in our culture, for sure.

We had a presentation from PacificSport in Kelowna, and we've had another presentation from them. It seems their mandate is attempting to get young people more involved in sport. They have some different focuses, or foci. What kind of focus do you have that's different from PacificSport?

T. Gayda: To give you a sense, we've actually created the Sport Alliance — which is made up of Sport B.C., B.C. Games, Canadian Sport Centre Pacific and Legacies Now — to come together to ensure that we're working together for the benefit of sport. We've actually started up a new B.C. sport agency, which is meant to start trying to streamline our sector. There are a lot of multisport organizations, and the idea is to try to kind of bring them together more into one.

CSCP has been a great partner, and their focus really is on the high performance, once that athlete becomes a carded national athlete. They're really there to help support the provincial system to get those targeted athletes who are on that rise to the national system identified and get them the services that they might not be able to get.

They're one part of the puzzle, but largely, those athletes have to come out of a system, and that's the provincial sport organization system. Once they reach that
[ Page 1722 ]
kind of pinnacle in the provincial system, then the national guys take over. But we like to let them know that they did come from B.C.

R. Howard (Chair): Okay. Thank you, Tim. Appreciate you coming forward.

Next up we have the Alliance for Arts and Culture. We have Nancy Noble and Amir Ali Alibhai.

As you've probably heard, you've got 15 minutes. I'll give you a heads-up around ten. You can take some questions or go straight through. Your choice. The mike is yours.

A. Alibhai: Good afternoon. My name is Amir Ali Alibhai, and I'm the executive director of the Greater Vancouver Alliance for Arts and Culture. With me is Nancy Noble. She is the president of our board. She's also the CEO of the Museum of Vancouver, which is one of our members. We have more than 300 member organizations and individual artists in greater Vancouver that are members of the alliance.

I'm going to make an oral submission. You have a written submission that I sent in previously, and I provided copies again today. There are a couple of extra footnotes. I do hope you have a chance to read it.

Now, I want to thank you for this opportunity. I can't imagine what this task must be like, and I want to thank you for the time that you have to put into listening to all of us talk about the things that are important to us and what we believe is important to our communities as well.

[1415]

You know, I'm happy to say that each time — this is the third time that I've had the privilege of being able to speak to this committee — this committee has made recommendations that we've been quite happy with as a sector. The advice has not always been taken, but I'm really happy that even prior to the three years when I was here…. In fact, one of these select standing committees made a recommendation that funding for the B.C. Arts Council be increased to $32 million by 2012, and if you looked back at the service plan for the ministry at the time, indeed, by 2012 the budget was supposed to be $32 million. In fact it's half that right now.

We understand that the economic context has really changed since the time when that recommendation was made, but I also believe that that recommendation wasn't arbitrary. It was based on a perceived need in the community at the time. It was based on what was seen as an investment that would yield returns at that time. So it's a number that sticks in my mind, because the amount…. Again, I recall that at the time I was part of a coalition of organizations. It was called Arts Future B.C. There was a really extensive report that was submitted at that time to this committee.

Now, the written submission that I've put in goes into more detail, and it really focuses on the economic value and interests in investing in the arts. The reason we took that approach is because that is the stated objective of the current government in Victoria, and that is — and it's true — that we need to deal with the jobs and the economic challenges that we're facing in the province.

You know, we're here to help. We're not here to come with our hands out but to say that an investment in the sector is actually…. There are a lot of economic returns on it, but there are also social ones.

In the past we've said that the arts and cultural organizations, artists across this province contribute profoundly to the identity, quality of life, health, education and social cohesion in communities across the province. And they do this in many different ways: at the professional level and also at the community-based level.

We're fortunate in this province that there are two sources of funding for the arts and cultural sector. One is through the B.C. Arts Council. The other is through the gaming grants that are provided. But what seems to have happened is this kind of misunderstanding about eligibility and who really contributes to the community and who doesn't, and I think that the gaming review that's underway might be able to tease out some of those challenges that we face in terms of the gaming grants.

Now, the gist of the submission…. It's called An Easy Cut to Make? That was the title of the submission. We believe that arts and culture often become the target for funding cuts during times of restraint because I don't believe that their role and their impact is fully understood.

Part of that blame lies in the cultural sector itself for, maybe, not communicating well enough in our communities and to our elected officials about what's going on in our communities and how we impact. So we take some of the responsibility for that, but we're trying to work hard to remedy that.

I think that if the arts were better understood, they would be considered an essential investment for governments rather than a frill — their public good, we believe, in support of democracy. We made that case last time we submitted — the right to access culture, public access.

If we look specifically at B.C., besides our natural resources, one of our greatest assets is our diverse people — the fact that some of the communities in B.C. have the highest per-capita number of artists in the country. At the same time we have the distinction of being the lowest per capita in terms of funding and support for arts and culture.

[1420]

I tell my colleagues in other sectors, like in tourism and in business, that the amount of funding that has been cut since 2008 from the arts — through gaming, mostly, but some from the B.C. Arts Council — is about $14 million, and then I tell them what that impact has been in the community — organizations shutting down.

I believe thousands of jobs have been lost. We are certainly seeing a brain drain and lots of people leaving. In
[ Page 1723 ]
terms of our membership, our membership went down largely because people couldn't afford their $10-a-month membership dues. It's pretty bad at that level.

I say this to my colleagues, and they are astounded. They think that it's quite misguided. It's like cutting off your nose to spite your face, especially when you hear news like the B.C. Lottery Corporation spent $7 million on buying furniture for their new building. I mean, give me a break. And $9 million was cut from gaming grants. The impact was huge, and you've got, you know, this news. It's just hard to take that — right? Or $500 million is spent on a new roof for a stadium.

You're kind of going, "Okay, we were told we were cut because health and education needed support," and here we are. It's kind of hard to comprehend. Okay, $14 million. I'm sure that that…. Well, it makes a difference. I really shouldn't be too pat about that.

I'm just going to quote from the end of the written submission. In fact, one of our board members, Jonathan Kassian, helped me write the end of this, and I thought he did a good job of summarizing:

"Investing in arts and culture goes a long way, and the physical as well as human capital infrastructure in the industry really matters. Dollars invested in economic development always have an unknown element. Roads and bridges produce many jobs at a high cost per person-year, but dollars invested in the arts go to a sector that takes survival-level wages and leverages them to turn communities into desirable places to live, to raise a family, to follow a dream. Further, communities can see how those dollars are spent."

This means money goes much further in the arts than otherwise assumed. They see the shows. They see the festivals. They participate. It's actually quite a visible investment.

The numbers of creative workers are growing fast. We know this globally and across the country and in B.C. In fact, they were growing fast. Again, in our sector there have been damages. The infrastructure is vital to helping those people find work and relevant skills, and that infrastructure is human as well as buildings. It's vital to help these people find work and relevant skills and to connect different artists, industries and groups in ways that create new projects, ventures and businesses.

The economic climate is leaving fewer dollars to be spent on the arts. While organizations in the arts community are responding to this with courage and creativity, it's also requiring many of them to cut to the bone. That bone, when it starts to erode, that infrastructure bone, is costly or impossible to replace. The cost of replacing what is being lost right now is, I think, going to be huge.

We made three recommendations. One was to maintain or increase funding to the B.C. Arts Council. I think that if you want to sustain and maintain the jobs and the economic activity and the viability of the sector, it needs to at least be maintained where it is right now. But if you really want to grow the sector, if you want to make a good investment that will give high returns, then I think increase the funding to the B.C. Arts Council, and remember that $32 million.

Restore eligibility criteria and funding levels through the gaming revenues for arts and culture to the '08-09 levels at least. I think that the gaming review might produce some recommendations regarding that.

Then finally, provide support for training programs. When I was writing this, putting this together, it became clear that there was a need in the community. Many of them are small- to medium-sized enterprises, individual proprietorships and things. Entrepreneurial skills training programs would go a long way to support the sector and allow its growth so it can contribute.

R. Howard (Chair): Thank you. You're at about ten minutes. We have some questions.

J. Thornthwaite: Thank you for your presentation. I just wanted to ensure that you had also done a presentation to the community gaming grant review as well with Skip Triplett.

A. Alibhai: That's right. It's a great process.

[1425]

J. Thornthwaite: Yeah, okay. So my question is: which do think is more valuable — blanket funding to the B.C. Arts Council so the Arts Council can distribute that money as they see fit, totally unrelated to government, or through the gaming grants? I assume you are saying it's kind of a crapshoot because you don't know what you're going to get and what you're not. What would you prefer?

A. Alibhai: It is. There are two different processes. I don't know if I could say which I would prefer, but I would say that the B.C. Arts Council having adequate funding is really quite critical. I believe the gaming review that Skip is chairing right now…. He's really done a good job of listening, and I think that his recommendations will probably be in the interests of the arts and cultural sector as well.

They are two different ways of funding as well. There are advantages. There are certain things that the B.C. Arts Council…. Some groups never, ever have access to funding in that meritorious kind of way that grants are given out, whereas the gaming grants are very egalitarian. Really, if you do your…. If you can make your case, you're not sort of judged or penalized because you're not at a certain level.

D. Donaldson (Deputy Chair): Thanks for making the effort once again to present in front of the committee. It's much appreciated.

Something we heard about in 2009 — I've been a member of the committee for three years now, and
[ Page 1724 ]
many arts groups presented it then — was what you referred to as the brain drain. The potential that these cuts created in losing a lot of the structure that it has taken decades to build up in B.C. by increments, and now that being lost quickly….

Can you elaborate a bit more on what you've seen in what you typified as the brain drain, due to the $14 million in cuts in the last two years? What is the potential to draw those people back and re-establish the organizations and the vibrancy if we can turn this funding situation around quickly?

A. Alibhai: If any of you want to jump in…. I personally know many artists that have left town — members of the alliance, organizations like Kidd Pivot dance. I think I mentioned them in the past. I'm actually….

A Voice: He's leaving. That's the greatest brain drain right there.

A. Alibhai: I'm leaving town because there is an opportunity in Toronto that I can't pass up if it becomes real. I need to do that. There's a certain…. I've been discussing with some of my colleagues…. Somebody just left — Sue Porter. She may have made a presentation in the past from the Greater Vancouver Professional Theatre Alliance. She's leaving her job in the arts to take a job at SFU that is related but is not anymore in the sector.

We were talking about how there is in our province a certain level after which there is nowhere to go, so it becomes necessary to leave if one wants to develop one's career or to gain new experience. They're not huge institutions in our province. That infrastructure isn't there. But there are organizations, I think, that are ready to sort of move there.

I think one of the things that needs to be done to bring people back and to draw that back, besides the core funding, is to really, seriously think about ways in which larger…. Think big. There are big investments that could be made in this sector that could really build on what has been built, but at the moment, I guess, we've been kind of in crisis mode. It's like, "Please let's save what's there" — right?

R. Howard (Chair): Thank you both. We've consumed all of your time. Appreciate very much you coming forward this afternoon.

Next up we have the Richmond Society for Community Living — Bob Robertson, Janice Barr and Gail Bains. Welcome to all three of you. As you're getting set up, you probably know we've got 15 minutes. At about the ten-minute mark I'll give you a heads-up if I can. You can stop and take some questions, or you can go straight through — your choice. The microphone is yours.

J. Barr: Great. Thank you very much for having us. We appreciate the opportunity to speak to you.

I want to introduce myself. I'm Janice Barr. I'm the executive director of the Richmond Society for Community Living. I'm here with Gail Bains. She is a parent of a 20-year-old daughter that is waiting for day services and respite. Her daughter Ravneet is right there with us.

[1430]

I'm also accompanied by Bob Robertson, who has a 36-year-old daughter, Sue, waiting for residential services. I'm also accompanied by Aaron Grill, who is waiting for supported child development services for his son.

I have a written presentation that I'll read, then we're certainly open to questions.

The Richmond Society for Community Living is a non-profit organization that serves children, youth and adults with developmental disabilities. Through our programs and support services offered to individuals and to their families, RSCL assists more than 1,100 people with developmental disabilities to participate and contribute fully as valued members in the Richmond community. As the largest non-profit service provider, RSCL recognizes the unique abilities of all individuals and is dedicated to the promotion of a community of inclusion that sees beyond disability to ability.

During your tour of the province I am sure that you have heard from many people that have spoken about the growing crisis in community living. Indeed, we have come to add our voices to the many that have spoken about the increasingly desperate plight of people with disabilities and their families in our province.

Over the years RSCL has advocated for people with developmental disabilities and their families. After the closure of the major institutions for people with developmental disabilities in the 1990s, an appropriate array of services was created. These services helped to promote child development in the early stages, support families to raise their special needs children at home and to facilitate the inclusion of children and adults with a developmental disability in community life.

Unfortunately, over the last number of years we have seen a steady erosion of this continuum of services. Increasingly we see children and adults being left behind and excluded from typical family and community experiences because the necessary supports are not available. It is not because these services do not exist in community, nor is it because community is unwilling. It is because people are languishing on wait-lists in hope of getting the opportunity.

In the last 20 years I do not recall a time in our field that so many people, at every life stage, seemed to be underserved. Today I am accompanied by families that represent the numerous children and adults with developmental disabilities and their families waiting for service in Richmond and all over the province.
[ Page 1725 ]

Let me begin with the early years. The research is unwavering in its support for early intervention services for children at risk of a developmental disability. The benefits to the child and the state are clear. Children that receive early intervention services have an increased likelihood of meeting their appropriate developmental milestones and a corresponding decreased need for future care and service.

Understanding the importance of early intervention services makes this reality all the more crucial for the families that know that their son or daughter is not getting the support they need to grow and thrive.

So if we understand this to be true, we must ask ourselves why we have wait-lists for early intervention services like the infant development program, the supported child development program and early intervention therapies. The wait-lists for early intervention services in Richmond grow every year with little or no reprieve. Many years have passed without any increase in funding for these essential supports.

For example, the Richmond supported child development program operated by the Richmond Society for Community Living currently has 114 children and families waiting for service. Aaron Grill represents one of those 114 families waiting for services for his son.

The supported child development program helps parents, families, with a child with a disability access typical child care, including preschool. Can you imagine being a parent of a three- or four-year-old that has a developmental delay and is unable to access the very basic early intervention services — preschool?

Can you imagine watching other parents in your neighbourhood taking their preschooler to the local community or child care centre and knowing that you cannot enrol your child because there is not enough funding to provide the extra support through the supported child development program so your child can be accepted?

[1435]

Preschool is one of the most basic early intervention supports that most parents take for granted. Do we really want any child in this province to be prevented from attending preschool?

The situation is no less concerning as the child becomes an adult. We now see many families every year where adulthood is not marked by celebration and increased independence but by the loss of school without support to replace their daytime activities; the loss of respite, which is often the essential support that keeps their families from the brink of exhaustion and crisis.

Gail Bains is here with me today. She represents one of those families where her daughter graduated from high school without any additional supports — no replacement for school and no respite services.

The loss of these essential services does more than just prevent an adult with a disability from participating in the community and contributing to society. It places people and families at risk. Can you imagine being a parent that has to choose between the well-being of their son or their daughter and the economic viability of their family?

For most families, two parents are required to work outside the home to financially sustain a household. This reality is no different for parents with a child with a disability. However, one of the main differences is that families that do not have a child with a disability are able to leave their youth or their adult child at home unattended. This is not the reality for parents with an adult child with a disability.

Therefore, when school ends and services are not available to replace these daytime hours, families are forced to make difficult decisions. Either one parent must quit work, or they must leave their son, daughter at home unattended, bored and at times at great risk.

As children age, so do their parents. This is one of the final stages that should be marked by rest and enjoyment. Unfortunately, for many aging parents with a son, daughter with a disability, this time is marked by the worries of: "What will happen when I'm not here?" Increasingly, we see families every year for which timely services are not available to ease their worry and support the smooth transition for their son or daughter.

Bob Robertson and Sue Robertson are here with me today. They represent this group of families of aging parents that have no plan for their son or daughter and no hope of receiving service for that smooth transition.

Can you imagine caring for your child well into their adult years, not enjoying the luxury of reduced responsibility, leisure and rest that we all expect in our twilight years? Then, after years of sacrifice, unimaginable cost savings to the province, you reach an age that you must ask for help. Tragically for families in this situation today, they are typically placed on wait-lists with little or no hope of receiving service for their son or daughter.

These are truly trying times for so many families that have a son or daughter with a developmental disability. RSCL endeavours to use the funds we receive from the provincial government to support as many people as possible, and we fundraise to make up the shortfall and to enhance services, but this is no longer enough.

The time has come. The provincial government must reinvest in supports and services for people with a developmental disability and their families. The province must put families first.

R. Howard (Chair): Thank you. We have some questions.

D. Hayer: Thank you very much for your very moving presentation, because we have heard…. Almost every
[ Page 1726 ]
town we went to, we heard similar types of stories. I commend you for helping out the members of the family who need the help.

My question is…. I will listen to your input. Over the last ten years has it been getting worse every year, or has it been stabilized, or was it always bad anyway and it's been sort of the same regardless of which government was in power? That's what I'm trying to find out.

J. Barr: Interestingly enough, I've been working in this field for about 25 years, and as I said, when the major institutions closed, there was a good array of services developed. It has been a steady decrease, I would say, over the last ten years, and certainly, the last four to five years have been increasingly more desperate for families.

[1440]

We assumed the supported child development program — it served, last year, 369 families waiting for child care across the range of child care age — five years ago, and we have not had an increase in that period of time. We've gone from serving 150 families in that program to 369, with now a wait-list of 114. So it is increasingly desperate.

Actually, up until these last two years I have not seen families at the juncture that Gail and her family and her daughter are at — that at 19, when children actually graduate from high school, there's absolutely nothing. The children's services that they did have — like respite, because that's provided through the Ministry of Children and Family Development, and school, of course — are eliminated, and they are left with nothing. It is only in the last two years that I have seen it that bad.

But truly, you have been offered nothing.

What it means for families — and I don't want to speak for Gail, because she can certainly speak for herself — is that truly, families have to quit work. I do know many families that have to leave their son or daughter at home, at risk. I don't know what I would do. I have to work.

G. Bains: I have a question for all of you. Why does…? Why do…? I'm sorry. It's a bit hard. Why do these children have to be put on a waiting list when they're born like that, through no fault of their own or their parents? Why do they have to be on a waiting list when the government is aware that they're going to be of age pretty soon? I would like an answer to that.

R. Howard (Chair): Thank you, Gail. We have some more questions.

Janice, I know that the governance structure of CLBC has…. At least, some feel it has migrated a little bit. I wonder if you could just touch on that, on the record. Also, do you have a sense for how the potential or possible governance challenges get us where we are today?

J. Barr: Certainly. Yes, CLBC…. The original intentions, as you may, if you were involved at all…. The change came as a result of a grass-roots request to have a system that was governed by families and people in receipt of service. Those families would then be able to speak and govern an agency, much as non-profits are governed.

The board of directors that I report to is over 50 percent families and people in receipt of service. It keeps me very honest and the delivery of service very honest.

That has changed over time. It certainly is a financial issue, as well, in terms of the delivery. I would say we might disagree on how we deal with budget shortfalls. There has been a lot of late in terms of decisions about how to deal with the shortfalls with CLBC. That has been to address services to existing families.

It has not been my experience in community living that people are overserved. I think that we have long since moved away from the days, if there were, where people receive more service than they need.

I appreciate CLBC's direction with respect to disability-related needs, but the reality is that people — children and adults with a developmental disability — do not live on an island. They do not live on an island with their disability. They live in the context of their family and their community, and their needs are often dictated by such.

Bob Robertson has had his daughter live with him till she was 36 years old, has been on the wait-list for 11 years for residential services. The services that Sue needs are both related to her disability but also related to the needs of her family, because they continue to care for her.

[1445]

Some of the decisions that have been made in terms of the direction of CLBC I would say I disagree with. I also think it may be related to governance, but it is certainly related, as well, to a financial shortfall.

R. Howard (Chair): Thanks, all of you, for coming out. I know it's not easy. We've consumed all of your time, but we really appreciate your coming out.

Next up we have Touchstone Family Association — Michael McCoy.

Michael, you've got 15 minutes, as you know. I'll give you a heads-up around ten.

M. McCoy: Thank you very much for holding this committee. I'm actually quite pleased to be here. Before I begin, I always want to re-emphasize, when I talk…. A lot of times I think, as a committee, it's sometimes very difficult to hear the positives.

I have been in the child welfare business for 40 years. I have contracted with many, many governments, and I want to say to you that I believe my organization now
[ Page 1727 ]
and the organizations in the past have historically appreciated and enjoyed a really good contractual relationship. It's in that context today that I'm going to speak of what I think is a major issue facing not the contracting sector in particular but with MCFD.

My board of directors also wanted me to note that they are not, not here out of lack of interest. There are five of them that are still working, one that is very sick and three that have children that are getting out of school today. So I'm it for Touchstone for today.

I am the executive director. I'd like to note to the committee that we are not just a non-profitable charitable organization, but for all intents and purposes, we'd like to be recognized as a small business within our community that employs 42 people, and in doing so, we are an integral part of a community economic infrastructure.

We have been providing services in Richmond since 1983. Our services are primarily focused on family preservation and intervention with youth and children in our community. Our mandate is strengthening the social health and independence of families and children through effective intervention and support services — important because we believe that family is the first community that we belong to.

I'd like you to know that within the 28 years of service here in the community we have supported and provided service to 25,000 families and children. We have seeded with independent funds $900,000 in maintaining services that have been cut back and in creating programs when we have seen necessary emerging needs.

In the past five years we committed to raising $120,000 to develop and fund the Front Porch project to provide barrier-free services to Richmond and families.

I would note that in this great country we live in, we can qualify unconditionally for $350,000 open-heart surgery, but a family in crisis has no alternative if they can't pay for themselves. So we have decided to start this Front Porch initiative to at least try and provide families with barrier-free service, because it's more important when they identify the problem, not when the ministry has to intervene.

In 2009 we created a partnership with the Richmond foundation, where we invested and established a quarter-of-a-million-dollar endowment fund, whose interest and donations will be used to support and create a bigger and more innovative barrier-free service.

More importantly, the board of directors has, over 28 years, contributed 134,800 hours of volunteer time and, averaged at a very conservative $20 an hour, has provided the ministry and the community with a very frugal figure of $2.764 million worth of expertise and skill.

I'm coming here today because I've been in this field for 40 years. In the last decade I have seen what has been a perceptual and attitudinal shift within government, that being community services organizations are interested only in taking from government, and I hear and see the minimizing or ignoring of what we give back to communities and governments that we work with.

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We very often augment services and grow services so that we're able to provide an even more comprehensive way of working, increasing efficiency and efficacies of service.

We have an escalating concern over the ongoing breakdown of the professional contractual relationship that we used to have. We are experiencing the abandonment of sound business practice and the very necessary contractual arm's-length relationship, exacerbated by a position of non-negotiating real budget costs.

We don't know, and we can only surmise, that perhaps this is a position or direction that has been given to the ministry by treasury or by the government caucus or by the senior managers. Irrespective of the source, it is a position, in my opinion, that has led to a whimsical, Alice-in-Wonderland approach to fiscal accountability that government demands from me as a contractor. We have seen arbitrary percentages assigned to cost items such as administration and an outright refusal to discuss very real and present operating costs.

I share with you a memo that we received last year from contracted services from the regional executive directors. In the memo it stated that there would be no across-the-board percentage reductions in funding for community services, that direct services to children and families will remain a priority and that consideration will be given to unique community needs.

We thought this indicated a change in direction — actually, a move backwards — which we thought was really, really positive. The end result? We got an across-the-board 8 percent cutback with no discussion on service, which in our opinion, lent little substance to the value declared for the priority of children and families.

Seeing the course stayed again, and after years of budget reductions, service redelivery design and a loss of dollars for children and families, we would today like to provide an overview of what we believe has contributed and still contributes to sustaining a chaotic economic and service environment. We would ask you as a committee to take these musings seriously.

I want to begin with CSSEA, the Community Social Services Employers Association. In 1994 the then government created an employers association for the MCFD-contracted sector, with compulsory membership. The intent: providing cost savings and addressing inconsistencies in the areas of salary and benefits. In so doing, it completely compromised our ability, as individual contractors or business entities, to negotiate our own settlements, which for years we had been doing successfully.

Of note, this intent has never been accomplished. I'll give you a very clear example. Our employees were getting 41 cents a kilometre, and we decided that we would
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appeal to CSSEA that we needed to readdress the kilometre issue. I sat in a room with the union, which was asking the same thing, and had CSSEA defend the 41-cent kilometre rate while CSSEA was getting a 51-cent kilometre rate. I don't understand the lens, and I don't understand how an employers association in fact could do that and not defend their employers.

CSSEA has created a bargaining panel of employer members but remains now the government advocate in the bargaining room for terms and conditions. This has cumulatively proven disastrous over the years, because CSSEA has no authority or mandate to secure any terms of the collective agreement, leaving employers and, more importantly, boards of directors with unfunded cost and liability issues.

The Munroe accord. In 1999 the Munroe terms of settlement, with a number of accords attached to an agreement, was developed by the mediator. The contractors or employers soundly and loudly objected to it, as it was an affront to employer rights and free market principles. CSSEA again, in collusion with the government of the time, aggressively promoted the accord. We were happy to see the accord rescinded in 2004 by the new government with the introduction of Bill 29.

While Touchstone Family Association and many other employers supported this necessary move by the government, the collateral damage already done to staff morale and union-management relations was significant, and it is still significant today. It has compromised what used to be, for us, a fairly respectful negotiation process and labour relations environment into one that is, at minimum, antagonistic.

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In 1999, after a lengthy strike in the community service sector was ended under the recommendations by Don Munroe, one of the recommendations from Don Munroe was that all unionized members of the Community Social Services Employers Association purchase group insurance benefits for unionized employees through something called the health benefit trust. Member agencies of CSSEA again had no choice but to comply.

Touchstone Family Association aggressively fought this, along with several other organizations, especially around what we knew was going to be an issue of unfunded liability. However, we were forced to leave our long-established partnership with our carrier and forced to join the HBT.

In 2002 the then government passed legislation that established a process whereby agencies could withdraw from the health benefit trust and purchase group insurance benefits elsewhere. Touchstone Family Association, having expertly managed our disability claims over the years, had no unfunded liability. We withdrew. Many people are still in it.

Case in point to prove my issue. In 2002 the health benefit trust had an unfunded actuarial liability of $198 million. The total unfunded liability increased to $261 million by 2003. Long-term disability losses were steadily increasing, averaging approximately $60 million a year.

At this time Deloitte and Touche was retained to undertake an independent review of the HBT, and a report was submitted by January 2004. Suggestions were made to adjust contribution rates, establish deficit recovery strategies and improve claims management. In addition, the plan was changed from being a multi-employer to a multiple-employer plan, and each health authority that joined formed its own sector.

HBT was then able to recover that unfunded liability associated with the health care sector on an annual basis from the health authorities, which draw on a tax base to address these costs. On the other hand, the community social services agencies did not and do not have a similar agreement and bear the full costs and risks of their unfunded liability. Government has not addressed the fundamental issue. Instead, there has been an off-loading of financial responsibility onto the community agencies through increased contributions and surcharges.

The municipal pension plan. In the 2006 round of collective bargaining, the union's bargaining association was committed to a pension plan in the sector. The employers' bargaining team directed CSSEA that the employers would not under any circumstances sign any collective agreement committing to a sector pension plan without a commitment from government that funds would be available.

CSSEA induced the employers into the agreement, and government also provided the employers with a ministerial written and verbal assurance from the then government acting Deputy Minister of Finance, and the CSSEA CEO signed the letter saying funds would be made for the plan.

In the context of the collective bargaining process, where tenets of good faith and one's word are cornerstones in the process, they secured my and every other employer's cooperation. It became a compulsory part of the collective agreement. Government then, on March 16, 2010, two weeks before the pension plan was to go in, stepped up and said they would not fund the plan. It was written in the collective agreement. It was not optional for us. However, I'm glad to note that government did step up and fund the plan.

However, now we're being told that we owe $63,000 back to the municipal pension plan. Doing our due diligence and being financially responsible, we asked for their figures. All they can do is give us the formula. They can't tell us how they arrived at the figure, and they won't consider budget considerations.

More importantly in all of this…. I want to finish up, because this is very important to me. That is all financial stuff. But let me tell you what I think needs to happen. There will always be the tension between contractors and
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government. But what's been meaningful for me in my 40-year career is a meaningful dialogue. I think we have to return to a negotiating dialogue that includes the fundamentals of both explicit and tacit knowledge.

The explicit is easy for government and easy for businesses. It will yield hard information that we can get through all kinds of systems in the contracting environment, and we can use this to our advantage — and I mean our advantage — in determining good fiscal strategies and approaches.

On the other hand, tacit knowledge is the one that makes up 80 to 85 percent of any organization's or system's knowledge assets. It is much more complex in nature, because it comprises insight, judgment and know-how. It requires skill and strategic thinking and relies much more on interpersonal interactions and relationships in order to sustain a community of management improvement practice that puts children and families first.

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Relationships are the cornerstone of fostering this knowledge, and these relationships require, on all of our parts, transparency, accountability and, above all, good faith and one's word. As the commercial says: priceless.

I'm going to conclude by saying: establish an evaluation of the cost of maintaining, and the rationale of, a sector's employers association; re-establish the necessary arm's-length relationship on real budget discussions; and provide clear policy that any sectorwide funding project is a predetermined expense before you force employers into signing contracts.

R. Howard (Chair): Thank you, Michael. You consumed all your time. Do you have hard copies you can leave?

M. McCoy: I don't have hard copies, but I will e-mail this. I unfortunately am a last-minute person. It's wet ink right now, but I will e-mail it.

R. Howard (Chair): Okay. We'll make arrangements to get it through the Clerk's office, then.

M. McCoy: Sure. You will. I'll e-mail it today.

R. Howard (Chair): Thank you for coming forward.

Next up we have the B.C. Salmon Farmers Association — Mary Ellen. Welcome. As you probably know by now, you've got 15 minutes. I'll try and give you a heads-up around ten.

M. Walling: That's okay. I think I'll be fairly brief because I wanted to allow some opportunity for some questions if you had them.

On behalf of the B.C. Salmon Farmers Association, I'd like to thank the provincial government and Members of the Legislative Assembly for providing an opportunity for public input into the budget.

We were formed in 1984 as a way to provide a unified voice to our province's vibrant and growing salmon farming industry. A lot has changed in that time period, but as our industry has grown and matured, so too has our organization.

Our members, and there are 65 of them, include farmed salmon producers, feed companies, processing plants and many of the companies that provide services and supplies to those larger companies. Our association office is in Campbell River. We represent men and women who live and work and raise families up and down B.C.'s coast, from Port Hardy to Port McNeill, to Duncan, Tofino, the Sunshine Coast and everywhere in-between. Working with our members, we provide public information about salmon farming, we coordinate industrywide activities, we support research, we have a lot of committees, and we do a lot of community events.

At the very heart of our work is our commitment to environmental sustainability. We are committed to maintaining the highest professional standards, and we live our commitment to protect the safety and well-being of our employees, the natural west coast environment of British Columbia and our farmed salmon stocks each and every day.

We're very proud of the fact that our member companies take this commitment very seriously. This speaks to the longstanding goals of our association to farm responsibly; to play a stewardship role in protecting B.C.'s aquatic environment; to produce wholesome, high-quality B.C. salmon; and to ensure the viability and progress of an industry that provides family-supporting jobs.

Our members operate in the traditional territory of many First Nations, and we have worked hard to develop strong relationships based on respect and understanding. We're very proud of the opportunities that our farm companies have created for aboriginal employment and aboriginal businesses to thrive.

In British Columbia the salmon farming industry has continued to see robust growth and activity, driven by strong demand in the United States and, increasingly, the Asia-Pacific. Farmed salmon has been B.C.'s largest agricultural business and largest agricultural export for several years. We contribute $800 million to the provincial economy on an annual basis. We support 6,000 direct and indirect community-sustaining jobs.

Those numbers are important. In Vancouver they're, maybe, less important, but I want to tell you that these are high-wage, family-supporting, year-round jobs right in local coastal communities. At a time of uncertainty for many who live in B.C.'s coastal communities, employees of the salmon farming industry are able to make a good living, provide for their families and contribute back to their communities.
[ Page 1730 ]

In Campbell River, for example, where I live and work — and have for the last 20 years — our mill closed in the last couple of years, and I can tell you that without the aquaculture industry in Campbell River, we would have seen much more devastation in the business community.

Recent announcements by the Premier and other ministers make clear the province's interest in ensuring that British Columbia weathers the ongoing global financial troubles and emerges stronger than ever. In laying out the government's job agenda during the week of September 22, the Premier indicated her government's focus on the agrifoods sector as a key area of strategic growth for the B.C. economy. We stand ready to work in partnership to make that goal a reality.

While the position of the B.C. salmon farming industry remains strong, there are some challenges to continued success and attracting further investment. Along with those challenges, though, is an opportunity to work in partnership to mutually tackle obstacles to further job growth and revenue generation for local communities.

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As committee members may know, recent changes to aquaculture regulations have placed responsibility for licensing salmon farms with the federal government. The responsibility for the tenures rests with the provincial government. There's a slow pace to moving forward right now. Tenure applications are being considered for several new farms, and this does represent a significant risk to both industry advancement and the job creation goals of the government.

These delays threaten to allow competitors to edge ahead and bring related benefits to their local communities instead of ours. Specifically, Chile, Norway and the east coast of Canada are aggressively seeking to meet the growing international demand for farmed salmon. Delays restrict our province's ability to compete for these important marketplaces.

The potential of a more dynamic and environmentally sustainable salmon farming industry — and the multiple billions of dollars that make greater contributions to the provincial economy — that could provide up to 12,000 family-supporting jobs and help rebuild beleaguered coastal communities is possible.

Action by the provincial government to address delays with tenure applications and, I think most importantly, to work cooperatively with the federal government will assist the industry to make this a reality and will complement other important efforts undertaken by government to strengthen the province's economy. Continuing to express support for B.C.'s world-leading salmon aquaculture industry in discussions with other levels of government is an important contribution to achieve this goal.

The recent re-imposition of the PST and GST represents an opportunity to revisit important discussions with our industry and colleagues in the fishing and agriculture sectors that were started in 2006 and then not acted on. We urge that this be revisited now. There were components of the system that were difficult to interpret. They were vague. They were cumbersome.

The list of exemptions for aquaculturists needs to be reviewed and enhanced to better support the industry and put us on equal footing with other primary food-production industries such as farming and fishing. It is our opinion that there are significant reforms needing to be undertaken for PST for aquaculturists, and we look forward to working with you on this.

In these times of global uncertainty, it is important and appropriate to consider the advice and expertise of British Columbians who are actively working on the ground, contributing to the economic health of our province. We're proud of our longstanding partnership with the province of British Columbia, our local communities, First Nations and our workers to do just that.

Together, we have accomplished a great deal, but there is more to do. By addressing today's challenges, we can ensure a brighter future for people in coastal British Columbia through increased employment opportunities and ongoing investment in the communities that they call home.

We look forward to our continued work with the provincial government to support these efforts. Thank you for the opportunity to provide our input.

R. Howard (Chair): Thank you. We have some questions.

D. Donaldson (Deputy Chair): Thanks very much for your presentation. I have a question around plans the association is making to address uncertainty. I know many of your members are innovators and entrepreneurs. So what preparations is your association taking to move away from open-net finfish farms, if that's the direction that the society provides to government?

M. Walling: That's a very interesting topic of discussion within our member companies. As you might know, we're world leaders in recirculation technologies. These are land-based hatchery facilities. We grow our fish for the first part of their lives in these land-based recirculation facilities. So we consider ourselves quite expert in the technology.

One of my member companies, PR Aqua, for example, constructs completely closed recirculation facilities all over the world, mostly for enhancement opportunities. Lots of activity in Alaska. And as Chile rebuilt their industry, the hatchery side of the business increased.

We feel that both technologies are sustainable, but there are challenges and limitations to closed technologies to grow salmon to market size. There are a number
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of pilot projects that are underway right now. We are watching those very closely. One of our member companies, Marine Harvest, is looking at a pilot to grow the salmon beyond that smolt size, where we would plant them into the sea pens.

We're continuing to look at technology improvements in the ocean, where we have the natural ocean wind, wave and solar energy that sustains those systems.

You may have seen recently, through the Cohen Commission, that we have released almost ten years' worth of data on a farm-by-farm basis. So that's all of the sea lice data and all of the fish health data.

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The conclusion from the experts that were hired by the Cohen Commission to look at all of that information was that they could not find a reason to conclude that farmed salmon — given the voluminous records that were released and the assessment of those records — were having any kind of effect on wild salmon populations. So we felt quite heartened by that, because we've worked very, very hard to make sure that the fish in the sea pens are well cared for. A lot of investment in vaccines. So those kinds of technologies have also assisted us.

I guess, to sort of sum up my answer, it's a technology that we're interested in, and we're invested very heavily in it because we grow our fish in these technologies. But the technology's not there to be able to grow the volume of salmon that we're producing. Remember, we're 5 percent of the world's supply to be able to achieve that success. So from our point of view, we feel both technologies are sustainable, and we'll continue to look at the investments as we move forward.

J. Thornthwaite: Thank you very much for your presentation. You said you're 5 percent of the farmed salmon market worldwide? Is that what you mean?

M. Walling: Yes. That's right.

J. Thornthwaite: What are the other, say, one or two top…?

M. Walling: The big ones?

J. Thornthwaite: Yes, the big ones.

M. Walling: Norway and Chile. Chile's just rebuilt their industry from the ground up over the past three years. They're now at $3 billion gross sales right now. They're our biggest competitor in the U.S. market. So it would be Norway, Chile, United Kingdom. Tasmania's coming up, and then British Columbia.

We're the largest in Canada. We're starting to see quite a lot of growth on the east coast of Canada. New Brunswick is kind of capped out at about 45,000 metric tonnes. Nova Scotia has a number of new licences, and there's quite a lot of interest right now in Newfoundland. So Newfoundland is starting to see opportunities increase there. And Skretting, one of my feed companies, is actually supplying a number of the Newfoundland companies with feed. It's a very, very competitive market, but we're a small part of it.

D. Hayer: Thank you very much for your presentation. I'm happy to hear that your industry contributes over $800 million per year to our economy and creates more than 6,000 jobs directly and indirectly to our province.

But in my constituency I get, many times, people who are either for salmon farming or who are against salmon farming, but I had more people who have misinformation. Is your organization going to provide some information to the public so they can get the facts, either the pro and con, both sides, so they can make a decision? I mean, I get some people who love salmon farming and other ones who are totally against it. But they do seem to have a lot of misinformation.

M. Walling: Yes. That's, I think, a very good question. We've been investing quite heavily over the last two years in a very active campaign to address misinformation, particularly on the Lower Mainland where a lot of the population lives but never has an opportunity to visit a salmon farm. We have our farms that are open for tours from June to September. Every Thursday is tour day. If you have anyone who is in Campbell River who would like to come out and visit a salmon farm, that's an open invitation, and to all of you as well.

We've been running newspaper ads, television ads. We've set up a website called bcsalmonfacts.ca, and that's a website where you can look at the misinformation, some of the questions people have, and then we have an open dialogue there. It's not one of those websites where you have to sign up, and they approve you and so on and so forth. You can just directly post a question, and someone from the industry will respond, in a fairly short turnaround time, to the questions.

As well, the TV ads that are running right now — they'll run through December. It's our second suite of ads, and these ones are providing little snippets of fact for people on some of the most interesting questions and some of the most frequent questions that we get asked.

We participate annually at Eat Vancouver, which is the everything-food-and-cooking show at the convention centre. It's moving back to B.C. Place, so I'm hoping they have the roof fixed by then. This is a very good thing for us to do. We also are at Eat Fraser Valley, and we go into the Okanagan and into Victoria to food shows there as well. But Eat Vancouver is about 30,000 people. We cook in the booth. We have our farm companies representing the product in the booth, but really what it is, is a forum for communications. People can
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come. We're quite approachable, happy to talk to people and provide them with information.

Those are just some examples of the kinds of outreach that we're doing.

R. Howard (Chair): Thank you, Mary Ellen. We appreciate you coming forward today.

Members, we will take a five-minute recess while we wait for our next presenter.

The committee recessed from 3:15 p.m. to 3:34 p.m.

[R. Howard in the chair.]

R. Howard (Chair): With the committee's consent, because we have a bit of a gap in the scheduled presenters, but we do have at least one and maybe two open-mike presenters who happen to be here, we'll move our schedule around to accommodate the open-mike presentation.

If you would like to come forward. If you could take the middle seat there, it would be great. Is it Marianne?

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M. Brophy: Yes, it is indeed.

R. Howard (Chair): Welcome.

M. Brophy: I'm happy to tell you that Jane is my MLA. I'm very happy to unexpectedly be here. I'm attending the breastfeeding conference next door and know that this is such an important opportunity to speak to this very important committee.

I come wearing national and provincial and personal hats to tell you about the importance of breastfeeding not in only maternal-child health but the health of every person in our province, because of course we all start out as babies at some time. We're not really looking at a particular sector. We're looking at the importance of health in our province.

In B.C. we have the highest breastfeeding initiation rate in the country at about 98 percent, compared to still less than 60 percent when you get very far east in the Maritimes. What we find when we look at the national data — for example, from the Public Health Agency maternity experiences survey — is that across the country the exclusive breastfeeding rate at six months — which Health Canada, the Canadian Pediatric Society and the World Health Organization recommend should be 100 percent exclusive breastfeeding to six months — is about 14 percent. This means that the very low initiation rates in the east are retaining more mothers breastfeeding than we are, and this is a dose-dependent positive effect.

We've done excellent social marketing in B.C. Our moms want to breastfeed because they know it prevents chronic illness and disease, so we have a lot less acute infections, to the point where…. There's a very interesting study from the U.S. government where they predict they could save $13 billion annually if they could increase the breastfeeding rates because it would keep patients out of the system down the line. I'm happy to send you that reference. Unfortunately, it's not in my memory to call to help.

Not only are we preventing acute illnesses, but we're preventing things like obesity and diabetes. This is particularly important in our more vulnerable populations, like our aboriginal populations, where this is now an endemic problem.

We also are preventing injuries — for example, from toxic chemicals like BPA, which are endocrine disruptors. Also, we'll be keeping many babies out of emerg, coming in through mismixing of formula. If it's too concentrated or not concentrated enough, babies can go into seizures and they land up in emerg. This is one of the highest incidences of babies coming to emerg — through incorrectly prepared formula.

We also know that powdered formula is not sterile, and babies may potentially get all sorts of bacterial infections from that. We also know that 40 percent of Canadians can't access the information on medicine bottles because of their low literacy level. This is why we have such errors of preparation — because parents are just not able, especially if they're second-language speakers, to follow those tiny little instructions.

Apart from the health and the dental benefits, we see enormous social benefits. A very important study out of the U.S. showed that there was a huge reduction in maternally perpetrated abuse and neglect if the mother was breastfeeding. This is, again, protective of our vulnerable populations. Babies who happen to be breastfed and less abused also have the benefit of a seven- to eight-point IQ enhancement over babies who are not breastfed — and, of course, great motor skills, which we're sure will land them all in the NHL down the line.

You can see that moms know about these benefits, and they want to breastfeed. So why are we not seeing the duration rates that we hope to see to maximize the benefits? That's where the social determinants of health come in and the support piece. We know from research that the political and social environment is what impacts on shifting those determinants of health.

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Parents cannot change those by themselves. We need to set up a policy environment that's going to be supportive of bringing about these important changes.

We are very well situated in B.C. Our most recent Ministry of Health service plan had breastfeeding deliverables in there, so we are really hoping that we will see these again, when the new service plan comes out.

Now I'm speaking wearing my hat as co-chair of the B.C. Baby-Friendly Network, which the government has
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recognized as the implementation body for the Baby-Friendly initiative in B.C.

We have, from our ministry, Carolyn Solomon sitting on the breastfeeding committee for the Canada-provincial-territorial group — which we think will become an FPT group because the Public Health Agency and the First Nations and Inuit health branch are looking to join that group, because across the provinces and territories we're finding that implementing the Baby-Friendly accreditation program is providing standards and continuous quality improvement.

While we are well set up here to support this very important upstream activity in our health, we are faced always with the fact that public health is underfunded. All mothers need support, over the first six weeks especially, to overcome the hurdles.

We might think that breastfeeding comes naturally. I'll tell the story about the gorilla in the Chicago zoo.

R. Howard (Chair): Sorry to interrupt, but you're at five minutes, so I'll give you one minute to wrap up.

M. Brophy: Oh, one minute. Okay.

I'll tell you about the gorilla, because she's amazing. Her first baby, by artificial insemination, she threw away after birth. She didn't know what to do with it, and it wasn't such a great first date. She didn't enjoy it.

For her second pregnancy, they invited the local breastfeeding La Leche League group to feed their babies outside her enclosure, and as soon as her baby was born, she put her to the breast.

So if even the most instinctual primates are not getting it without that support and modelling, that's what we need to do for our moms by funding our public health nurses to be able to visit and support and by funding social networking groups to support mothers, especially in the early postpartum period.

I thank you for having me, unexpectedly. It's been lovely to be with you.

R. Howard (Chair): Thank you so much, Marianne, for taking the time.

Next up to our open mike is Tina Revai.

As you know, Tina, you have five minutes. I'll try and give you a heads-up just before it's over so you can wrap up.

T. Revai: As you know, I am also one of the attendees — or maybe you don't know — at the breastfeeding conference next door. I will probably be echoing a little bit of what Marianne says and maybe talking a little bit more from a front-line perspective.

I work on the Island in a small community, in a resource-based town. I'm a mother, and I work a lot with mothers. I think one of the features of the town that I work in is that there are a lot of issues with poverty, with people not having work and with people who are, to use a term — I can't think of a better term — the working poor. Definitely, finances are an issue.

I think for folks like you who are making decisions around money in times of economic strife, it's a challenge of where you put your money. So I think that's probably one of the issues at hand here.

I'm struck by the work of Aleck Ostry, who is one of the professors — and I believe he does health research — at University of Victoria. I remember him saying on CBC how, in times of economic downturn, it's a really good opportunity to have an increase in lots of healthy behaviours. So we see things like smoking reduction. We can see an increase in breastfeeding rates. So it's a really opportune time to have some leadership and, I think, a lot of bang for your buck in terms of where you put your money.

I really do think this is an area where, for a relatively small cost, you can effect very large changes. So I'm very heartened by some of the initiatives that I'm hearing coming down through Health in terms of public health, particularly the Nurse-Family Partnership, which is public health nurses that are focusing on our higher-risk families.

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What I am sad to see is that really, this is coming at a cost to a lot of our universal programs. What we are seeing is that because the Nurse-Family Partnership hasn't been given or tagged with any new moneys, health units are having to cut back on a lot of these universal services. This really is an issue for folks who are the working poor, who really fall through the cracks. While it's great to work on families that maybe have some higher risks, this middle group is really sort of missed.

I guess I would just like to say that we really do need to continue to have universal public health nurse visits for families and for mothers. We have increasingly short stays in hospital. Marianne spoke very eloquently about the supports required around breastfeeding, but it comes from a whole different thing. There's a whole bunch of reasons that we need to have a public health nurse there, in the first week of life, really, and that it be offered every single time — things like reductions in jaundice and readmission for infections. Those things are caught by public health nurses who actually go to the home and don't just do an assessment over the phone.

I think it's also important that we consider somehow a mandatory requirement for both community facilities, maybe hospital facilities, to pursue Baby-Friendly accreditation. I think that's always out there, but it's definitely something that we need to make room for and to continue to promote that accreditation — the World Health Organization accreditation.

I think we also need to think about increasing access for the working poor, making sure that they have access to maternity leave. Those are issues for families who may
[ Page 1734 ]
not have enough hours in order to get their maternity leave, and those families are really families that need to be supported to be doing their healthy behaviours.

I just think if this happens, then we will definitely be at perhaps the tipping point where we're going to see some increase in some really key and important health behaviours, some real upstream health behaviours that will affect infants and families.

R. Howard (Chair): Thank you so much, Tina. Appreciate you coming forward.

We'll just take a three-minute recess while we try and sort out who's next.

The committee recessed from 3:48 p.m. to 3:52 p.m.

[R. Howard in the chair.]

R. Howard (Chair): We're still waiting for some presenters, and we are fortunate enough to have Jean Kouba with us, who will do an open-mike presentation.

If you'd like to come forward, Jean. You've got five minutes for an open-mike session.

J. Kouba: I've got five minutes. Okay, I'm a speed talker.

Thank you for allowing me to talk. I'm representing the Canadian Lactation Consultants Association, and I do believe a few of my colleagues have spoken earlier.

A couple of years ago I was invited to a round-table meeting in Ottawa. The people that were invited were professionals in…. Well, actually, the title of it was "Meeting of Child Health Experts." The experts that turned up were all from mental health in children, dentistry for children, diabetes in children, child abuse, education. It went right across the board — general children's health. I was there to represent breastfeeding.

It became absolutely clear to me within 20 minutes of being there that every disorder in childhood is impacted by breastfeeding. Breastfeeding goes right across the health spectrum. We know about the components of breast milk. There are over 200, and more, stem cells. There is all kinds of stuff in breast milk, and it is a wonderful liquid.

But it pales in comparison to the action of breastfeeding, because breastfeeding itself bonds mother and baby, forms the palate healthily so that babies can breathe well. A baby who breathes well, sleeps well. If you sleep well, you are healthier. So when people think, "Oh well, a breastfed baby is healthier," it's not just about the breast milk; it's about the whole relationship between the mother, the family and the way the baby's palate and head is formed. I wanted everybody to understand that.

Okay, you're going to be inundated, I suppose, today because you happen to be right next to our conference. But this is a great opportunity just to have our five minutes worth in outlining the value of breastfeeding. I'm sure you've heard it earlier today.

The support in Canada is lacking. Women and families know the value of breastfeeding. You'd have to be in a hole somewhere not to hear that message, of course. It's out there. The promotion of breastfeeding has been done. People know it is the natural, healthiest way to feed a baby, and the initiation rates are pretty high in certain provinces. I don't know how high they are in B.C. I would say maybe 83 percent but generally around about that. There are some areas, like Northwest Territories and places, that are a little bit lower.

But the duration rates are pretty low. They all drop off within six weeks, and that is where the problem is. There is a general lack of support. There's very little funding for support of breastfeeding. I feel it's very, very shortsighted because breastfeeding itself protects against long-term illness. It protects against adult illness.

[1555]

There are so many things I could tell you about. Human breast milk is very high in cholesterol, and this availability of cholesterol in human milk actually protects children in adulthood against cardiac disease because there is a sensitivity towards how they process cholesterol as an adult.

I just feel we've got a resource here that's really not being utilized. It's so into health prevention, and unfortunately, health prevention does not get funding. I feel that breastfeeding is the best health prevention Canada-wide that we have. Moms know it now, but there just isn't enough support out there. So if there is money found for support of breastfeeding, I think we would have a healthier nation down the road.

The experts on breastfeeding are lactation consultants. We need more lactation consultants in the community. We need them as part of family medicine health care teams. We need them in hospitals. Every time there's a cutback in a hospital, the breastfeeding clinics close, and it's shortsighted.

Have I gone over my five minutes? I'm trying to talk really fast.

R. Howard (Chair): You're right there, so I'll have to cut you off, but thank you very much for taking the time.

Now I believe we're ready to go with the Tourism Industry Association of B.C., formerly the Council of Tourism Associations of B.C. — Stephen Regan.

Welcome, Stephen. As you're getting set up, you probably know you've got 15 minutes. At about the ten-minute mark I'll give you a heads-up. You can stop for questions or go straight through — your choice.

S. Regan: Fantastic. My chair, Lana Denoni, who is just covering the taxi fare right now, is going to join me.
[ Page 1735 ]
We do have some slides, some visuals. We will send that to you immediately after this meeting, and we'll just kind of hit the high notes. When Lana joins me, she can slot right in.

The Tourism Industry Association of B.C. has been around as an association in various forms going back into the '80s. We were formalized as the Council of Tourism Associations in 1994 and recently, as of April this year, we reset the name of the organization to the Tourism Industry Association of B.C.

A couple of reasons for that. One is that the environment has changed for us. Tourism is a very significant sector in the economy. In addition to having an association structure supporting us, individual businesses and enterprises were also very keen to be part of the policy development process and part of how the industry is viewed by government and the media and other stakeholders.

It's been a lot of work for us over the past year, a very exciting time for us, as we've gone through the Olympics. Now we're on the other side of it where we're very excited to be working with the Minister of Jobs, Tourism and Innovation, Pat Bell. He's been very supportive of the changes we've made. We've talked to Spencer Herbert on the NDP side, and he's very interested in what we're doing and how we've developed our policies. So we feel like we've got a good model going forward. That's just by way of who we are.

One of the graphics — we'll have it to you electronically. There's quite a simplified system. If you can imagine visitors sort of at one end of the spectrum and residents at the other end of the spectrum, kind of bookending it, we've got three policy areas that we pay attention to that kind of turn the economic engine of tourism.

The three policy areas are marketing, transportation and access and, underneath that, the business environment. I'll provide examples of what we mean in each of those. When we get those three policies working well, they feed into what is the economic engine of tourism.

Tourism's GDP number this year — B.C. Stats just released the number — is $6.5 billion. That's based on a revenue in the tourism system — and we were up slightly in 2010 — of $13.4 billion. This is the cumulative number that B.C. Stats puts together that's a portion of economic activity in all the sectors that make up tourism.

Before I go any further, just a quick introduction to Lana Denoni, the chair of our association.

Lana, you know, I think, a number of people on the committee.

L. Denoni: Yes.

S. Regan: We're doing a verbal presentation, and then we'll be e-mailing the PowerPoint slides to you immediately after.

[1600]

So the GDP number is fairly significant. The revenue numbers are very significant. Lana's job — my job in part — is to herd the cats. A lot of that activity takes place really in four pies. If you imagine a wheel, about a third of that wheel is a combination of food and beverage. It makes up about 35 percent of the GDP that tourism generates.

Another big part of that, about 35 percent of the GDP for tourism, is made up in the transportation sector — airports, ferry service, port facilities, cruise ships, etc. There's a retail component that's about 10 percent, so all of the — even from RV purchases — souvenirs and other kinds of activities in the retail side. It's about 10 percent.

And then other services. Those can be attractions — you know, Grouse Mountain, Butchart Gardens, ski passes, those kinds of things. That makes up another approximately 19 percent.

So that pie, or that wheel, spins around and around, day in and day out, churning out economic activity and supporting jobs. The job number from B.C. Stats for tourism now is…. We slipped a little bit from 2009. In 2010 it was estimated at 127,000 individuals and the wages out of the tourism sector total about $4.4 billion.

So there's a lot of activity. In order for that activity to be optimized, to really sustain those jobs and sustain those revenues and to spin out the tax revenues that come, marketing, transportation and access, and the business environment all need to kind of work together. We've got a couple of thoughts on each of those that we'll share with you.

I guess I'll say one more thing about the economic activity. As that wheel spins out the jobs, B.C. Stats estimates the tax revenue — all levels of government — is about $2.5 billion out of the tourism sector. When we did a comparative, we just looked at the B.C. number, the provincial tax numbers and fees and other things. That number was pretty close to $900 million last year. When we looked at estimates and looked at what the provincial investment is, for example, in higher education, it's about the equivalent of the provincial government's investment in SFU, UBC, UVic and the University of Northern British Columbia combined.

So that kind of gives you a scale of…. When the economic system that's tourism is working, it can support a lot of tax revenues that help us deliver higher education and other kinds of things.

L. Denoni: Okay. Sorry for the delay, but we have some tourism issues with some of the cab drivers.

S. Regan: We're working on that.

L. Denoni: Yes. We're working on that.

Part of our policy development process is also to understand issues that affect our members' broad base
[ Page 1736 ]
all over British Columbia. We also know that for government, we need to make those issues not huge and try and pull them down into a smaller set that can be manageable to be dealt with, the ones that are most important, because there are lots of issues that face our industry.

We sent a survey out to our members in late December of 2010, January of 2011, and we've come up, through that, with a 3-by-3 matrix of the issues. The three major issues were (1) marketing, (2) transportation and access, and (3) business environment.

Marketing, by far, had the biggest pull from our members, who said: "Please work on this area." That regarded the community destination marketing funding, the provincial destination marketing funding and structure — which was formerly Tourism B.C. and has been melded into the ministry — and then the regional destination marketing, which are the six regions that flow through into the provincial sort of thing.

Marketing, they felt, was really, really important. We want to be competitive in the marketplace. We've got a terrific product. We've had the Olympics here. Everyone felt we were poised on real success, and we want to see the best method of making that success happen.

So we're happy to say that Minister Bell is working very hard with us now on this provincial marketing structure to see if we can come up with something that will again bring us back into the leading category in North America for our destination marketing.

Transportation and access. We broke that down into three areas: air access, ferry service and access to the regions. We need to get people here through the airlines. We need to have ferry access to bring them to Vancouver Island and to move them around the province that way. Then access to the regions — our highways and our transportation structures need to be supportive of that so that we can move people around.

[1605]

What we do know is that if people spend more time in British Columbia, the revenue is there. So we want to promote not just one-day, two-day or three-day stays, but where we really see the revenue go up is when we get five-day and seven-day and two-week stays. We get that a lot from the international traveller.

Where we're losing it right now is we're losing some of that access to the U.S. because of cost. We're not competitive right there right now, so we're having to be creative, and we're trying to do our very best. We really appreciate the fact that the provincial government is working with us, because we know that the federal government has to do some things. But it's very, very important on us being competitive.

The third one was business environment, and that revolves around tenure security. We had HST mitigation on that front. Now it will be, I guess, what happens with the PST and GST going backwards in that. Then resident awareness, making sure that the people in the province are aware of and supportive of the tourism industry and seeing it as a huge revenue generator that it does.

S. Regan: Just with the minute or two left of the ten, a couple more examples. Our members told us those were the priority issues. They fit nicely into the three policy streams, so hopefully it's fairly easy to get your head around how to support the tourism system.

Marketing — the key for us on a provincial scale is to make sure we've got a provincial marketing regime that the industry can be part of and that government can support. That work is ongoing, and we don't have a specific submission at this point. We've got that work being headed up by a task force and vice-chair of the Tourism Industry Association of B.C. You'll know who this is. Dave Butler is working hard doing the heavy lifting and the spadework to build some consensus and to build the right policy framework.

The second area of transportation and access — two or three examples. The elimination of the 2 percent jet fuel tax that was announced earlier — just to see that come through is a big thing. Mr. Howard and I would know, going back to Ottawa and speaking on issues about all the taxes and fees and regulations on the air side. It's fantastic that B.C. has taken the lead on eliminating some of those. It's a small piece, but it all adds up, and it's going in the right direction. So a tip of the hat to that decision.

We don't have a very easy answer for this next one, but B.C. Ferries affordability — we know it's a big issue. We know it's a challenge with our members. We get the same thing you get, which is that it's an extension of the highway system in the marine environment. We hear back that extension of the highway system in a marine environment is a bridge. But we've got ferry service that is acting as that conduit, and it's critically important that we somehow find the right balance between user pay and safety and reliability and affordability for passengers. We're hearing from more and more coastal communities that it's a real struggle to get people to come and stay.

The third area. It's questionable whether it belongs in the land use side or the transportation side, and that's another area where you're quite active. It's resource roads — you know, the maintenance, the program around that. I know the Resource Road Act. There's going to be additional thought, effort and legislation put towards that.

We just ask that the commercial recreation users — small commercial — do have the access to the back country, the back lodges, those high-value recreation areas. It's very difficult for these operators to be able to afford to be part of an elaborate maintenance schedule for some of these roads. We're involved in that process, but it's just kind of a watching file. No specific ask yet.

We're just about wrapped up. In the business environment, just three examples. That's a bit of a catch-all for
[ Page 1737 ]
taxation and land use. But tenure security and compensation are the strength of those tenures. It's absolutely critical for these small operators and tenure holders to be able to access modern financing. I guess the joke goes: why has a guide-outfitter never gone bankrupt? Banks won't lend them any money. It's tough to get the financing if you don't have the security in your tenure and a compensation formula.

[1610]

You'll hear a presentation from the B.C. Lodging and Campgrounds. We are bleeding resorts. We are bleeding some of the small lodges, and there is a mechanism under the Tourism Accommodation (Assessment Relief) Act. There is a piece of legislation there that could provide some relief. We'll draw your attention to that.

Then, as Lana says, we ended up supporting HST at 10 percent and moving in that direction. But now we have to deal with the smooth transition back to PST-GST. Those are just samples of policy areas we'd like you to consider.

R. Howard (Chair): Thank you. We have some questions.

D. Donaldson (Deputy Chair): Hello, and thanks for the presentation late on a Friday. I hope we looked like we were paying thorough attention to your words.

L. Denoni: It's a long day.

D. Donaldson (Deputy Chair): A question around Tourism B.C. Of course, we've heard from previous presenters saying it was doing a good job and recognizing that it's gone now, but there's a gap there especially when you talk about marketing and lengthier stays for an international traveller.

What we've heard is arm's-length, industry-led…. Some kind of organization in that regard that's focused on destination marketing for the international traveller — is that one of the recommendations that you're looking at as well?

Secondly, did I hear you say 120,000 individuals working in the industry in 2009 — that slipped a little bit? I find that curious, because didn't we have the Olympics in 2010? So what was the impact there?

S. Regan: So 127,000, and that's the estimate from B.C. Stats. Maybe it was 127,600, down from 128,400. Part of that is made up in…. Some of the small operators…. You know, where you could control your costs, as we were coming out of the recession — people were doing that. There were a lot of people doing more with less. In part, that's where that slippage was. People were, I guess, quite mindful of their hiring practices with controlling costs.

Our goal, of course, is to create an environment where people are really looking to hire, fill positions, fill the hotels and the restaurants and the taxis.

Lana, do you want to talk to the Tourism B.C.?

L. Denoni: And very much on the provincial marketing system, both the Premier and Minister Bell have said that they are willing to look at a new structure which can be something that is arm's length but still connected to government through…. We have a task force right now that is working on that. We've gone through several meetings and consultations, and we will have something to bring forward in the next three to six weeks.

B. Bennett: I'm glad to hear that last comment. I know there's been lots of work done, and I'm pleased to hear it's coming forward in the next few weeks.

Just a heads-up on the resource roads file. If you haven't heard from Steve Thomson's ministry yet, you will very, very shortly. The industry will have an opportunity to consult with government on the new natural resource roads act.

As you know, I have a particular interest in that and have worked really closely with Steve on that. I'd be more than happy to assist in any way. Tourism's position with regard to the use of resource roads is actually unique. It's different than forestry, different than oil and gas, different than mining. So we need to have legislation that allows for smaller operators to continue to utilize those roads without huge financial obligations.

R. Howard (Chair): Excellent. Thank you. We've run you out of time. We appreciate very much your coming out this afternoon.

L. Denoni: Thank you so much. Sorry for our delay.

R. Howard (Chair): That's all right.

S. Regan: It's terrific to be here in sunny Richmond.

R. Howard (Chair): Is it sunny out there? We didn't know. We've been in here all day.

Next up we have the Canadian Media Production Association, B.C. producers branch — Brian Hamilton and Rob Bromley.

Welcome, gentlemen. As you've undoubtedly heard, you've got a total of 15 minutes. At about the ten-minute mark I'll try and give you a heads-up. The microphone is yours.

B. Hamilton: Good afternoon. As the chair of the CMPA-BC and also co-owner of a local film and television production company, Omni Film, I appreciate the
[ Page 1738 ]
opportunity to address the committee, along with my colleague Rob Bromley.

[1615]

R. Bromley: Good afternoon. I am the past chair of the CMPA-BC and one of the owners of Force Four Entertainment that has brought B.C. stories like 65_Red Roses, The Cupcake Girls and Human Cargo to markets around the world.

B. Hamilton: We're here today to talk to you about implementing a joint action plan to build a competitive B.C.-owned television, film and interactive sector. The policies and investments by the government to date have created an established and growing production service sector. However, we're very far from realizing the full potential and revenues available by investing in and growing the domestic, or B.C.-owned, side of the production industry.

B.C.-owned film and TV production in B.C. has experienced a significant downturn in recent years, as illustrated by the chart on page 2 in the document in front of you. In 2007 B.C.-owned production totalled $408 million and since has declined to $243 million in 2010 — a 40 percent decrease in just four years. This alarming drop in production volume calls for immediate action by both industry and government in order to maintain existing jobs and create new job opportunities in British Columbia.

What does doing nothing mean? Doing nothing means the loss of well-paying, knowledge-based, green jobs in B.C.; a drop in production volume resulting in decreased investment and spending; a decline in export revenue due to decreased sales of B.C. creative content around the world; leaving federal dollars on the table — not properly leveraging the available federal funding to support the development and production of B.C. content; also, undermining the industry's and government's efforts to develop a fully integrated production centre, which is characterized by both production services and B.C.-owned sectors independently contributing.

Finally, an increased dependence on foreign service production makes B.C. more vulnerable as a production location. We're vulnerable to the currency fluctuations. We're vulnerable to tax credit differentials and that sort of thing. That puts jobs and infrastructure at risk.

R. Bromley: We also want to let you know what we at the CMPA are doing and what our industry is doing to address the situation. We have documented a number of these initiatives in our paper and want to address a few of those highlights.

We're expanding international sales and partnerships in foreign markets. We're doing this through a program we're calling the L.A. market accelerator program. CMPA-BC organized an accelerator program to provide market research and preparedness for 15 B.C.-owned film and television companies seeking to expand business opportunities in the Los Angeles and Hollywood market.

We're investing in B.C. talent. Through the national mentorship program, CMPA coordinates a highly successful mentorship program, which pairs B.C. emerging producers with established industry mentors for a six-month internship placement.

We're expanding the digital and interactive opportunities. CMPA-BC organizes an annual digital convergence conference called Merging Media, which we'd love you to come and drop in and take a look at. It offers world-class speakers and case studies on emerging digital business models and practices.

We're building B.C.'s creative economy. B.C.'s film and television industry is a cornerstone of the province's emerging creative economy. To that end, CMPA-BC has partnered with the Association of Book Publishers of British Columbia, Music B.C. and the Magazine Association of B.C. to develop a cross-sectoral strategy for growth across those creative industries. The discussion document will be released later this fall.

B. Hamilton: Industry is stepping up. We are looking to partner with government, but we are doing a lot on our own to jump-start the locally owned production sector. Here's the part where we'd like to see government work with us. We're requesting action on three points that will assist our industry-led initiatives to further improve our competitiveness.

Action 1. When B.C. reverts to PST, define digital, film and TV production and post-production as manufacturing for the purposes of calculating the PST. This will create jobs by putting B.C. employers on an even playing field with other provincial jurisdictions.

Action 2. Further to the Premier's recently announced commitment to trigger a competitive review of business taxation for the film and TV and digital sectors, immediately strike a working group bringing government and industry together to complete this review as a priority.

[1620]

The working group could consider a number of administrative tax credit adjustments to improve the investment climate and competitiveness for new projects to be developed and produced in B.C. We've noted a number of those changes in our paper.

I want to focus on one change that does not represent an additional cost to government. That is to accelerate the payment of Film Incentive B.C. tax credits paid to B.C.-owned employers to enhance their competitiveness vis-à-vis other jurisdictions.

The third action that we're urging government to take is to implement a repayable B.C. production investment fund of $2 million a year over five years to enable private sector employers to jump-start projects, create jobs, hire more graduates from our expanding higher education
[ Page 1739 ]
sector, retain intellectual property and work towards a fully integrated production centre here in B.C.

R. Bromley: What will be the resulting benefits? Predictable annual investment expenditure will benefit government's fiscal planning. This plan will also trigger immediate production and provide certainty to private sector financiers that B.C. is a stable and predictable jurisdiction for investment.

It provides new support for B.C. producers and content entrepreneurs across all platforms to retain control over intellectual property and, in turn, secure profitable revenue streams. It'll attract new projects and encourage co-venture partnerships with international companies, including in the Asia-Pacific.

It leverages federal dollars that would otherwise flow to competing jurisdictions across the country where more competitive and aggressive public funding programs currently exist. It ensures the sustainability of the industry overall by creating production activity at times where foreign production volume is also in decline, and it levels the competitive playing field with other jurisdictions, notably Ontario.

Thank you for your attention and consideration of these action items. We look forward to working with you on executing them, and we would love to take any questions if there are any.

R. Howard (Chair): Thank you. We have a few.

B. Ralston: I'm looking at action 3. You suggest an annual investment of $2 million. You describe that as repayable. Could you explain just how that might be repayable and on what terms? The federal funds that you've got on the same line there — is that speculative? Or is that a strict matching according to programs that already exist? If the $2 million was invested, would the $13 million flow from that automatically?

B. Hamilton: Thank you for those questions. I'll take the first question. Can you repeat the…?

B. Ralston: You called the $2 million repayable, so I'm just wondering on what terms it would be repayable here.

B. Hamilton: Okay, repayable. Well, there is a case study in the handout that talks about a project of ours called Ice Pilots. The notion of a repayable investment…. In the case of this case study, for example, the $25,000 that was advanced as part of that development R-and-D funding would have been repaid from the revenue that resulted from the first successes of this project, which has now generated more than $30 million in revenue.

The money that is collected back from projects that move forward can be reabsorbed into government revenues. Does that clarify your question in terms of repayable?

B. Ralston: I see what you mean.

B. Hamilton: A reinvestment.

I'm sorry. Your second question, around the $13 million?

B. Ralston: On the same line, you have $13.16 million. Is that meant to suggest that if $2 million were invested, $13 million would automatically flow from programs that already exist? Or is there a speculative element to that?

B. Hamilton: It's based on past history, but the pattern is there and researched by B.C. Film, which is the agency that supports local film and television.

R. Bromley: Basically, yes, this is saying that this is the amount of money that would come to British Columbia from federal sources, federal tax credits and also CMF, the Canada Media Fund, which also invests in Canadian-made projects.

[1625]

That's money that British Columbia is missing out on right now by not having domestic production increase here in B.C. So the money is sitting there for projects to be used.

B. Hamilton: If it doesn't go to B.C., it'll go to another province.

J. Thornthwaite: Thank you for your presentation. Assuming that Ontario is our biggest competitor and that we will be referring back to the PST, your suggestion that we define your sector as manufacturing…. Is that assuming that before Ontario adopted the HST, they were not defining your industry as manufacturing?

B. Hamilton: B.C. is unique in Canada in considering film and television as not manufacturing. The other jurisdictions have always recognized that what we do is build things. We make things. Yes, it's in the creative realm, but it is putting things together. It's a manufacturing process.

R. Howard (Chair): Thank you, gentlemen. That's all we've got. Appreciate you coming forward this afternoon.

Richmond board of education, school district 38. We have Donna Sargent, Ross McLuskie, Byron Stevens and Al Klassen.

Welcome, all. As you know, you've got 15 minutes, and at about the ten-minute mark I'll try and give you a heads-up.
[ Page 1740 ]

D. Sargent: Okay. Thank you very much for hearing us this afternoon. And a special hello to Rob, our MLA in Richmond.

With me this afternoon I have Ross McLuskie, CUPE president; Byron Stevens, president of the Richmond District Parents Association; and Al Klassen, president of the Richmond Teachers Association. We'll be doing a tag team.

On behalf of the parents, trustees, administrators, teachers and support staff to whom is entrusted the education of almost 22,000 students in school district 38, Richmond, we want to thank you for the opportunity to present our views on the importance of the K-to-12 public education system. We are especially pleased to make our presentation in Richmond, to a committee chaired by a Richmond MLA.

The statement of philosophy for school district 38 reads: "The Richmond school district is dedicated to providing opportunities for all students to develop the attitude, skills and knowledge which will enable them to enjoy a productive and satisfying life and to be positive, responsible participants in a democratic society and the global community."

As trustees, administrators, teachers and support staff within the school system, we share this mission with the students, parents and community whom we serve. It is the teachers, administrators and support staff who create opportunities for and provide assistance to students, and it is their knowledge, skill, energy, creativity and compassion which support and nurture our young people in the process of education. Their success, however, is dependent upon the existence of a common vision, which results in collaborative action on the part of all concerned.

We are here at the presentation together representing the board of education, Richmond District Parents Association, Richmond Association of School Administrators, Richmond Teachers Association, CUPE Local 716 and the management staff of the district because we are all deeply invested in public education and committed to providing the best possible learning opportunities for the students in our diverse community. And we have representatives behind us this afternoon.

We hold the common vision that strongly supports an inclusive culture of collaboration and positive relationships with all our stakeholders. Together, our focus is on the learner.

[1630]

Just a little bit about Richmond. Richmond is the fourth most populous municipality in the greater Vancouver region, with a population that has grown to just under 200,000, as indicated by the most recent estimates done by the city of Richmond. According to the population growth estimates, between 2006 and 2011 growth citywide has averaged 3,300 people per year. Over the next 30 years the population is projected to grow about 280,000.

Richmond's population is diverse, with only 45 percent of Richmond residents who are Canadian by birth, 54 percent who are landed immigrants and 1 percent who are living here on work permits.

Thirty-nine percent of residents speak English as their mother tongue, but close to 53 percent say that English is the language used most at home. On the last census the city had the lowest percentage of households speaking primarily English in B.C.

Despite a high average family income, about a quarter of the families in Richmond live at or below the poverty line. According to data gathered for the human early learning partnership, children in Richmond face the same range and severity of socioeconomic and educational challenges as those in other Lower Mainland municipalities.

Early development instrument results indicate that 30 percent of kindergarten students score below the vulnerability threshold on at least one domain assessed.

The Richmond school district has an enrolment of approximately 22,000 students and is the fifth largest of the 60 school districts in the province. About 28 percent of our students — 6,200 — are ESL students. A further 700 — 3 percent — are students with special needs in a category for which the ministry provides additional funding. However, we also have 800 students with a special need identified according to ministry guidelines who receive no substantial supplemental funding.

Except in very extreme instances, all students in Richmond are fully included in all aspects of the educational program and school life, regardless of their needs, abilities or background.

Our students are high achievers, and 91 percent of them graduate six years after entering grade eight. This is one of the highest completion rates in the province and is noteworthy given how diverse our community is in terms of languages, backgrounds and incomes.

A. Klassen: Education is a budget priority. The Ministry of Education, in its parents guide to personalized learning in B.C., begins with a quote from author Michael Fullan that states: "Everyone, ultimately, has a stake in the calibre of schools, and education is everyone's business."

We would like to reaffirm that statement today as your committee ponders the difficult decisions that come with making budget choices for the province.

Education is everyone's business. Every dollar that is invested in the public education system is a dollar that works towards reducing future health care and justice system costs. Every dollar invested in our children's education is repaid many times over as they grow into skilled and productive members of the workforce who are able to absorb new information, acquire new skills and familiarize themselves with new technologies.

As noted in numerous economic studies of education levels and economic capacity, every dollar that is
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invested in public education is a dollar that will pay off in future economic growth and a strong, democratic society.

We continue to appreciate that our role is an important one — namely, to develop each child's sense of individual worth and social responsibility. As a result, we firmly believe that the public education system in B.C. is of such strategic importance to the province that funding protection alone is not sufficient. If we want our province to compete globally for economic resources, we will need to ensure that we fund a system that ranks globally in excellence.

Moving on to our recommendations. We have four recommendations for your committee to consider.

One, ensure that public education receives adequate, stable and consistent funding. In recent years we've had to significantly reduce our budget allocation for resource teachers, teacher-librarians, educational assistants and custodial staff — all of which has had a noticeable impact in the classroom. We are challenged to provide adequate support to the most needy of our students, but the loss of resources means that other students feel the impact of the fewer available specialized resources.

While we recognize that the allocation of funding among school districts is not a specific mandate of this committee, we would like to draw your attention to the Ministry of Education's funding formula that is undergoing review.

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We have attached a letter sent to the BCSTA as appendix 1 to this brief, because we believe that it speaks to possible solutions that would result in more stable and consistent funding to all school districts. However, we continue to look to you to help address the adequacy of our funding levels.

R. McLuskie: Recommendation No. 2: commit to fully fund the annual facilities grant. The annual facilities grant, which for Richmond amounted to approximately $4 million, was eliminated for the 2009-10 school year and restored to 50 percent of its former level in 2010-11. We're appreciative of your recommendation made by the standing committee last year to restore the AFG to its full amount, as funding for 2011-12 was restored to the approximately $4 million level.

Our list of deferred maintenance projects now amounts to close to $12 million. See appendix 2. These are projects that affect the operation and maintenance of our facilities that we have not been able to undertake due to insufficient funding over the years. We suggest that AFG funding be increased to help with reducing the deferred maintenance list, as we are concerned about updating our facilities to current health, safety and operating standards.

At a minimum, however, we recommend that this important funding source for the maintenance of our schools' infrastructure continue to be held at this level next year and that a commitment to multi-year AFG funding be affirmed so that districts can adequately plan for infrastructure maintenance projects.

Number 3: reinstate a capital plan for facilities. An aging infrastructure in most school districts, along with specific concerns with respect to seismic upgrading and building envelope deficiencies will need infusion of capital funding. Currently, school districts prepare capital plans that set out school infrastructure requirements, but because the ministry capital plan has not been funded for several years, there is no indication of when projects that are on district capital plans will be funded.

Attached as appendix 3 is a list of the projects that are on the five-year capital plan for the Richmond school district. Our projects reflect our need to replace an aging school with a newer, larger one and, as well, to address the need for expanded capacity in a number of schools in the city centre, where the population growth in Richmond is expected to result in increased enrolment.

B. Stevens: Recommendation 4: consider district needs and provide support for proposed new initiatives in education. In the throne speech the government stated its commitment to modernizing the education system, stating that it believes school boards and parents are seeking flexibility and choice in order to provide our students with an education that is second to none.

The Ministry of Education is also promoting a focus on personalized learning as a major new initiative. It reaffirms that students learn differently and bring different experiences and motivations to the classroom. This will require even more time and attention and will mean additional demand for staff, resources, and training and technology.

There is much literature that supports the concept that a needs-specific approach and transition support are fundamental to successful change management efforts. We ask, therefore, that the changes that are being contemplated as part of the government policy not be undertaken on a one-size-fits-all approach and without adequate support for school districts.

Conclusion. As a district that places great value on our collaborative and consultative approach, we would be pleased to make ourselves available for future consultation on educational initiatives that the provincial government might wish to implement.

We would like to conclude our presentation with a quote from Confucius that we believe to be particularly apt as the government sets the direction that our province will be taking. "If your plan is for one year, plant rice. If your plan is for ten years, plant trees. If your plan is for a hundred years, educate children."

R. Howard (Chair): Excellent. Thank you. We have some questions.
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J. Thornthwaite: Thank you very much for your presentation. It's nice to see the group of you from many stakeholders that are there all presenting at the same time.

My question is about the letter that you sent to your president of the B.C. School Trustees Association. It appears…. Not negating the request for a review of the funding formula, but the majority of your other asks are to do with timing. So if the Finance Committee was to recommend your top requirement, given that timing seems to come in about four paragraphs, would that be your number one requirement?

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D. Sargent: Predictable, stable funding is our number one request, and we all agree with that because it's very difficult — I'm sure you're aware — to receive hold-back money halfway or three-quarters through the year when we've already, perhaps, laid off some staff, rejigged programs — things that aren't happening for students — halfway or three-quarters through the year.

Predictable, stable funding, adequate, is really…. We can't say enough about that. We know that's important to you as well. I'm sure you've heard that in your own districts. It's very difficult. If you were to compare it to a business, you really need to have predictable, stable funding to do what you need to do. So yes, timing is very important.

A. Klassen: If I could add to that.

R. Howard (Chair): Sure.

A. Klassen: While the board has said the stable funding needs to be there, I would also emphasize the "adequate." That has to be…. I thought that you might be asking that question: is there a difference between the two? I would say no. We want adequate funding, as well, and right now the message is that it's not adequate. Funding needs to be increased to levels that it was previously. We're losing lots…

There's lots of money that is necessary to make a world-class system — or keep it at a world-class system. It is a world-class system, but there's lots of money that needs to be put into the system to keep it there. Then the stability of the funding needs to be there as well.

M. Elmore: Thank you very much for your presentation, and also I commend you on a very strong presentation, I think, due to your collaboration of the different organizations. I take note of your points in terms of falling behind with your infrastructure deficit and your recommendations to reinstate the annual facilities grant and also the capital plan for facilities.

I'm interested, in particular, in your experience, noting the demographic challenges in Richmond and your high level of immigrant families and English not spoken at home, in terms of the challenges to meet that and ensure that those families and those children are adequately integrated into the education system. Can you talk about that a little bit?

D. Sargent: Certainly. We also have our superintendent here. She may be able to add some to that as far as the teaching and learning. ESL for Richmond, as of the last 12 to 15 years, has been incredible, and the things that we have done in this district create students that can learn and be successful. It's really an integrated plan.

One of the things that we're very happy about is our SWIS workers because, as you know, not all the learning happens within the classroom. They've been incredible, so any advocating you can do with the federal government and yourselves, I think, would be really helpful around the SWIS workers.

I'm wondering if Monica could step up for a minute and speak about the teaching and learning.

M. Pamer: Thank you for that question. As you mentioned, Richmond school district is somewhat singled out in terms of their proportion of English-as-a-second-language learners. I have to say proudly that our kids do amazingly well. They are very resilient, and they work very hard to pick up the language, but it does require a lot of extra infrastructure and resources.

It's a fact of life for us and certainly a very important investment, but it is something that we always have to consider with Richmond. We have that add-on of having families — that means parents and children — who need a lot of support acquiring language, which is a whole basis for learning. We appreciate you bringing up that aspect. It's a reality for us but a really important one.

D. Hayer: Thank you very much — a very good presentation, to see everybody working together as a team.

My question is that newsletter you had given to us. On the back page it says "non-instructional days by date for 2011 to 2012." What is that? What are those dates? What do they really mean? I'm just trying to figure that out.

M. Pamer: Non-instructional — what it means is they are professional development days for teachers.

D. Hayer: So there is no school that day?

M. Pamer: The school is not in session, though the teachers are engaging in workshops, etc. The children aren't coming to school, so it's really important to publicize those dates. Each school does that individually. That's why they're there, too, just to make sure people are aware.
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D. Hayer: This newsletter goes to each student's home or someplace where parents can read them?

M. Pamer: Those are distributed to all the schools, and many of the schools send them home. We also put them as inserts into our local news — continuing education and newspapers.

A. Klassen: All school districts have those non-instructional days, the same amount. They may vary from district to district, though, and that's why it's important that parents in our area and our district get the dates ahead of time and know what the dates are.

R. Howard (Chair): Well, we're right up at your time. Given the fact that there's a dozen of you here, you're probably our most efficient group to date. I just wanted to come back, if I could, quickly to the funding formula that MLA Elmore discussed or at least referred to.

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I always worry that in a world that deals with averages, Richmond is without peer when it comes to our diversified base. Did I understand that Richmond was plugged into the rethinking that's happening to the formula?

D. Sargent: Well, the board, along with our staff, put together the letter that you have that's gone to BCSTA, which has struck a funding formula committee, and from there they will be making recommendations to, I assume, the government.

R. Howard (Chair): Does Richmond have representation?

D. Sargent: Not on the committee, but we have, as noted there, presented our case, our thoughts, and that will be amalgamated into the BCSTA presentation.

R. Howard (Chair): Thank you. We appreciate you taking the time to come out late, or later, on a Friday.

D. Sargent: Can I just end by saying I wanted to thank everyone who came with us this evening. This isn't a one-night show. This is how we work in Richmond. You know, sometimes it's hard, but we get down to business at the table with all of us.

Rob, I know you know that.

This is indicative of how Richmond works. We just think it's fantastic that all of us came out today to present to you.

R. Howard (Chair): Good stuff. Much appreciated. Duly noted.

Committee members, we will now adjourn and reconvene next Wednesday in the report-writing phase in Victoria.

The committee adjourned at 4:47 p.m.

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