Finance and Government Services � Issue No. 70 � Monday, September 17, 2012 (HTML)

Guildford Room, Sheraton Vancouver Guildford Hotel
15269 – 104 Avenue, Surrey, B.C.

Present: Douglas Horne, MLA (Chair); Mable Elmore, MLA (Deputy Chair); Gary Coons, MLA; Marc Dalton, MLA; Dave S. Hayer, MLA; John Les, MLA; Pat Pimm, MLA; Bruce Ralston, MLA; Bill Routley, MLA

2. Resolved, that Mable Elmore, MLA, be elected as Deputy Chair of the Committee. (John Les, MLA)

3. The Minister of Finance, Hon. Michael de Jong, MLA, appeared before the Committee, presented the Budget 2013 Consultation Paper and answered questions.

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

7. The Commitee considered the draft Request for Proposal for audit services for the Office of the Auditor General that had been prepared for Committee consideration and review.

8. Resolved, that the Committee approve the Request for Proposal as circulated and further that the proposal be now disseminated and that the Chair and Deputy Chair provide an update to the Committee on progress as the process unfolds. (John Les, MLA)

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

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


CONTENTS
Page
Election of Deputy Chair	1837
Presentation by Minister of Finance	1838
Hon. M. de Jong
Presentations	1846
S. Williams
A. Huberman
W. Cunningham
J. Murray
P. Legg
L. Stromberg
N. Peirce
L. Anglin
M. Gleeson
E. Model
Auditor General Financial Statements Auditor	1869
Presentations	1870
L. Hepner
R. Jeffery
T. Barton

D. Horne (Chair): I want to wish everyone a good morning. Welcome to sunny Surrey.

I'm Douglas Horne. I'm the MLA for Coquitlam–Burke Mountain, the Chair of the Select Standing Committee on Finance and Government Services as well as the Parliamentary Secretary to the Premier.

This is a parliamentary committee of the Legislative Assembly which includes the opposition, the government and independent members and whose mandate is to include conducting annual public consultations on the upcoming provincial budget.

I welcome everyone in the audience — the massive group that we have out there today.

D. Horne (Chair): Before we get started, we have a little bit of housekeeping to do. The previous Deputy Chair of the committee, Doug Donaldson, is no longer a member of the committee, so we have to elect the Deputy Chair. I'll look for nominations for Deputy Chair.

D. Horne (Chair): Are there any more nominations? Any more nominations? Any more nominations? Hearing none, I'll put the question.

D. Horne (Chair): All right. Mable Elmore has been elected Deputy Chair of the committee.

Actually, I didn't ask you if you wanted to be the Deputy Chair of the committee, but unfortunately….

D. Horne (Chair): We'll move forward. Every year, in preparation of next year's budget, the Minister of Finance releases a budget consultation paper. This paper presents the current fiscal and economic forecast and identifies key issues that need to be addressed in the next budget. Copies of the Budget 2013 consultation paper are available in this room at back.

Following the release of the consultation paper, the committee holds public consultations and invites input from British Columbians on the upcoming budget. On our website we also accept written submissions by e-mail, letter, fax, along with video or audio files.

British Columbians can also participate in the consultation by filing a short on-line survey at the website, which is located at leg.bc.ca/budgetconsultations. There you can find further information on the consultation process, download a copy of the budget consultation paper or learn more about the work of the committee. All of the public input we receive is carefully considered, and the deadline for submissions is Thursday, October 18.

At today's meeting each presenter will speak up to ten minutes, and an additional five minutes are allotted for questions from the committee members.

I'd like to start. We actually have a lot of changes to the committee this year — not only this year but in the last couple of weeks. I'll start, before we call our first presenter, by having each of the committee members introduce themselves and their ridings. I'll start with Pat Pimm.

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

M. Dalton: I'm Marc Dalton. I'm the MLA for Maple Ridge–Mission. It's good to be here.

D. Hayer: Good morning. I'm Dave Hayer, the MLA for this riding of Surrey-Tynehead. Welcome to Surrey-Tynehead. This will be the last time I'm in here as a member of the Finance Committee. I've served here more than nine years.

I hope all of you get a chance to go drive by the widest bridge in the world, the Port Mann Bridge, on the way to Vancouver when you're here.

Enjoy making your presentation, Minister of Finance, and thank you to all of the members that have come to Surrey-Tynehead — and to the Hansard staff.

M. Elmore (Deputy Chair): Good morning. Mable Elmore, MLA for Vancouver-Kensington.

G. Coons: Good morning. Gary Coons, MLA for the North Coast. I live in Prince Rupert.

D. Horne (Chair): As I said, we have a number of new members on the committee, so I welcome all of the new members to the committee. I also would note that Bill Routley has been travelling a considerable amount, so this will add to his travels over the last number of months.

I will now call our first witness. It is traditional that these budget consultations begin with a presentation from the Minister of Finance. So at this point I will in-
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vite Hon. Mike de Jong, Minister of Finance, to make his presentation to the committee.

Madam Deputy Chair, congratulations. I note that the result apparently was never really in doubt. Or someone is a really fast printer of signs.

Anyway, good to be here, one and all. What I thought I might do…. A couple of things. First of all, most of you will have heard about the first-quarter update that was delivered on Thursday of last week. I believe it was Thursday. I suppose it is important for me to emphasize that the work you are doing…. By the way, I believe in the last number of years it has represented a valuable addition to the body of information that is available to the Finance Minister, the Finance Ministry and the government in developing the budget, so I am grateful for the work that you are undertaking.

Also, as a fairly long-term Member of the Legislative Assembly, I understand that whilst this is a beautiful province and any opportunity we have to travel and see all its splendour is a welcome opportunity, it is also time away from home and constituencies as we head towards that shareholders' meeting in the spring, which of course we never speak of in contexts like this. But thank you for taking time away from home, and I hope you enjoy the deliberations and the opportunity to visit some of the places in B.C.

We had the first-quarter report on Thursday. I don't think I'm exaggerating if I state that the single most important fact that emerged in a formal sense…. I'm not sure that anyone that was watching commodity prices would have been terribly surprised, but the quantification of the impact of the drop in natural gas prices was revealed in a formal way on Thursday, and over the course of the three-year fiscal plan, revenues that I believe were estimated to be in the $1.9 billion range have been reduced by $1.1 billion. So that creates a fairly significant pressure and certainly one that will impact on some of the decisions that we're making in compiling the budget today and leading up to the budget in 2013.

You will be, as always, hearing from a variety of different individuals who bring different perspectives to the budget and how it impacts on their lives. You should know that I and the government remain committed…. Notwithstanding the challenges presented by the news you heard on Thursday, I and we remain committed to presenting a balanced budget. That wasn't made any easier by the quantification that you heard on Thursday, particularly as it relates to resource revenues.

Two things that occurred to me as I prepared for Thursday and prepared for today. Most of what we heard as it relates to resource revenues, natural gas revenues, would, I suggest, fall into the category of bad news.

If there is a silver lining as it relates to natural gas prices, I am told there's not a lot of room for them to fall further, unless someone has decided they are going to give the stuff away. I hardly think that's likely. But maybe more importantly than that, it is the benefits that have accrued to British Columbia as a result of trade diversification.

As you embark upon your deliberations…. And I meant to bring this and didn't. But I'll make sure — through the Chair and Deputy Chair and Deputy Clerk, Kate — you have the material that I had last Thursday.

If one of us had suggested to our constituents ten or 12 years ago that exports which were flowing to the U.S. — over 70 percent of our exports were flowing to the U.S. at that time — in ten or 12 years would be reduced to just over 40 percent and the balance of our exports would be flowing to other markets, particularly in Asia and South Asia, that probably would have raised a few eyebrows and been met with some skepticism. Yet that is what has happened.

That, probably more than anything, is what has shielded British Columbia from the worst of what has befallen most of the world. That is a trend that I believe needs to continue, and the government you will see will continue to make efforts to further diversify that trade. Countries like India are squarely in our sights, because that is an example of a market and a potential customer that we have yet to fully develop.

I hear, as I'm sure you do, about how that is a market that is very different from India and how it'll be very difficult. I actually hear the same things we heard in 2001 when we were deciding to step into China in a concerted way.

Today, as I drove — as I walked — down the freeway to get here, many of the wood products that were crawling along beside me were headed for that Chinese market. So I think that is going to be important, and it has revealed itself in remarkably positive job numbers in British Columbia, by any comparison. We set an objective as a government to be No. 2 in the country, thinking that would be realistic. In fact, we have, over the course of the last year, surpassed any of the other provinces and lead the country, according to StatsCan, in the creation of jobs. Now, that's a positive thing.

There are two words of caution that I'd like to take advantage of my time with the committee to point out. One, we are not immune to what is taking place elsewhere in the world. The cycle and the interrelationships in this global economy are very real. Europe goes into crisis. They are the largest market for China. China sells fewer products to Europe. China requires fewer products and fewer resources from us. That pressure — that risk, that uncertainty — certainly exists, and we see it, as do you, every day in watching what's taking place with the sover-
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eign debt crisis in Europe.

The other thing I spoke about and I throw out for the committee to ponder…. I'm sure you will hear from representatives from some of the retail sectors. It is traditional, I expect, for Finance ministers to put the slide up that speaks to consumer spending, which has been pretty healthy in British Columbia and exceeded in the first quarter what the analysts thought it would be. That's the good news.

Here's darker side of that, which worries me and that perhaps the committee would like to ponder. Family debt levels and family savings levels, based on the initial numbers that I've asked for and seen, are headed in precisely the wrong direction. I think the governor of the Bank of Canada has been talking about this for some time, and I think he's right to be sounding the alarm.

Whilst we are obviously interested in promoting commerce, I am certain that you cannot build a sustainable recovery on unsustainable debt levels, whether it's government or it's families. That is a matter that in the time available between now and the tabling of the budget, I will be paying some attention to and seeking some advice. And to the extent that this committee hears and develops some ideas, I will be interested to hear about that.

Now, the last thing I wanted to do is…. I think it's been passed out. My predecessor, Finance Minister Kevin Falcon, commissioned a report authored by the Expert Panel on B.C.'s Business Tax Competitiveness.

I received the report last week. It is chock full of interesting ideas. It was charged with the task of generating ideas and providing recommendations for a business taxation system for British Columbia that balances the principles of competitiveness, fairness and simplicity. The commissioning of the committee took place in the aftermath of the referendum result directing the government to return to the provincial sales tax.

I'm not going to say a lot about what is in the report. I wanted you to have the benefit of seeing the advice that was received from the committee. The only thing I would say to the committee, lest there be any question about this, is that the government and I are committed to returning to the PST in accordance with the results of the referendum, in the form that the PST existed prior to the implementation of the harmonized sales tax.

So whilst there will be no shortage of ideas about how to make it different — presumably, ideas on how to make it better — the exemptions that existed at the time the PST was last in place in British Columbia are the exemptions that will be reintroduced and will be in place on April 1. To that extent, I wanted you to know in advance that my predecessor, Mr. Falcon, made that commitment on behalf of the government, and that remains the commitment on behalf of the government — no change there.

Beyond that, consider the report, I suppose, the first written submission that the committee gets. I was happy to receive it.

The other thing I wanted to point out to you. I had a chance to meet with the committee. The chair of the panel that authored the report, Ms. Sarah Morgan-Silvester, has indicated that she will be more than pleased to attend here and answer any questions or engage in a discussion with you about the recommendations that they have included and provide any further information that you may have about the report that they have authored and the recommendations contained therein.

Mr. Chair, that's about the sum of it from me at this stage. Happy to take any questions that the committee may have. I wish you well in your deliberations going forward.

B. Ralston: Thanks for the presentation. A couple of things. In the three-year fiscal plan — and this is set out in the budget — the government proposes receiving $706 million in revenue from asset sales. There was $5 million allocated in from contingency to developing the sales plan for those assets.

I want to quote Mr. Drummond. I see he was consulted, in fact, in this expert report on business tax competitiveness. As you know, he did a very lengthy report for Ontario. But he did speak about asset sales there. I'm going to quote him. I just ask for your comment on that.

"In budget planning, do not count chickens before they are hatched. If assets are to be sold, never incorporate any revenue from such planned sales into a budget before the fact. There is always uncertainty over the timing, the accounting treatment and ultimate market value of any sale. Instead, simply record any sale in the appropriate manner if and when it is completed."

It would seem that in the matter of $706 million in the fiscal plan, the government led by Premier Christy Clark has not followed the advice of Mr. Drummond. I'm wondering whether you intend to revise that target, or perhaps you're in a position to advise what the likelihood is of achieving that goal in the fiscal plan.

Hon. M. de Jong: What I can tell the committee today is that it's obviously something that's tracked very closely. The budget, as you know, represents a document in which the government is obliged to lay out to the best of its ability where it sees revenues developing and how it intends to spend the taxpayers' dollars. To that extent, I would suggest that if a government knows that it is embarking upon a sale of certain assets and has a timeline associated with it, it is obliged to disclose as much information as it can.

I am told, in the slightly more than a week that I've held this post, that starting in January of 2013 we will begin to see some specific activity as it relates to asset sales. I'm not in a position today to indicate whether or
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not the budget will include any adjustments to the estimates that have been set out previously around the question of asset sales.

I can tell the committee that the government takes very seriously, for example, its obligations with respect to First Nations where Crown assets are concerned — the obligation to consult where appropriate. Consult with First Nations and, where appropriate, deal with other compensatory matters. That's something we take seriously.

The last thing I would say about this is that the government — and I as a member of the government over the years — is particularly proud of the record we have achieved for meeting objectives that have been set out in the fiscal plan, with 2008 being a notable exception to that, given what took place — the unprecedented turmoil that existed internationally in economies all over the world. But the government's record, as it relates to being forthright and realistic, I think, is one that will withstand scrutiny.

B. Ralston: Well, I appreciate that the minister is new to the job, but the answer, frankly, is not very satisfying, in the sense of not providing any detail.

This plan was announced in the budget in February. We're now some time down the road. Five million in assets or in contingency funding was allocated for a marketing plan. The full contents of the hundred or so properties were revealed to the bond-rating agencies in New York. They have yet to be disclosed to the public here in British Columbia. There are only three that were given as examples in the budget documents. I'm wondering if the minister will commit to provide to this committee, before our deliberations, a written report advising of the status of those plans.

The numbers in the fiscal plan are very precise. It's $475 million in the next budget year and $231 million in the following year. Now, how those numbers were derived with such precision — given the lack of any direct answers from either your predecessor or yourself — is, I think, something that the public is concerned about. In this fiscal environment, given this wait this might take, will the minister commit to providing a written report setting out the detail of just exactly where this program is at?

Hon. M. de Jong: Mr. Chair and MLA Ralston, I may well be in a position to provide some manner of update relating to the program in general. What I expect…. I will not — and I'm not sure, in fairness, that this is what you're asking for — provide details relating to specific properties — insofar as, as I think the member knows, where negotiations are underway. That would be inappropriate and counterproductive. But there should be an opportunity for me to provide some manner of an update, in general terms, around what is taking place in the program of asset sales.

D. Hayer: Thank you very much, Minister. My question is regarding the Report of the Expert Panel on B.C.'s Business Tax Competitiveness of August 31, 2012. I think on page 5 it sort of stated a couple of things on it. One said, under "PST revenue recoveries": "Apply PST on school supplies," "Apply PST on snack foods" and "Apply PST on basic telephone and cable services."

Did they…? And here you may correct me. You said that when we go back to the old PST on April 1 of next year, 2013, we will be going back to the same system. Are we not looking at these changes? Or are you still considering some of the recommendations that are made on page 3 — specifically these three, maybe?

Hon. M. de Jong: Let me say again — and thank you for the question — that the government's commitment, and the one it intends to abide by in the strictest sense, is to return to the PST as it existed at the time the shift was made to the HST. That is not to say that organizations and individuals may not have their own ideas about a preferred model or an adjusted PST, but the government's commitment, and the one it intends to keep, is to return to the PST as it existed when it last existed.

J. Les: Minister, you referenced the debt levels that exist currently in the province of British Columbia as an issue of some concern, and I would agree. We saw about five years ago now how debt levels in the United States, without the assets behind them, led to considerable collapse in the economy, not only in the U.S. but throughout the world, ultimately.

The nature of those debt levels…. What drives that? Has there been any analysis done in the province of British Columbia, whether it's people just piling up debt on their credit cards or whether they have attractive mortgages to historic levels? Has there been any work done to analyze that and figure out what's happening? What kind of consumer behaviour is driving that?

I note that the federal government has taken action to rein in some of the more exuberant behaviour in terms of mortgaging, ratcheting that down — amortizations from as much as 40 years back down to, I believe, 25. I'm just trying to get a sense of what's going on out there and what's driving that debt accumulation.

Hon. M. de Jong: Some of that work has been done, and I've asked for it and want to review it. I want to ensure, as well, that in sounding the alarm I am not being unnecessarily alarmist. But intuitively, I think there is a problem. How much of it is credit card debt? What causes that? I think that today I have more questions about it than, perhaps, answers, although I'm happy to share with the committee what I do find out.
[ Page 1841 ]

There are a couple of things that we probably need to be aware of in analyzing this. One, in the aftermath of 2008 I think a lot of people who were impacted drew down on savings. And to the extent that savings are there for the rainy day, it was pretty rainy. So that is understandable. The other aspect that I am told already can be a little bit unique to British Columbia with an aging and aged population is that, by definition, they are more likely to draw down on savings than, perhaps, younger people. So that also can have an impact on the savings side.

Here's what really worries me, and you kind of put your finger on it. My sense is that people and families are overly leveraged.

This is not meant to be some sort of Finance Minister prediction based on some inside knowledge. I don't have a crystal ball or information that will suggest this is going to happen in the next year, but I don't think interest rates are going to stay this low forever. If they move up two points, which if you think about it…. Six years ago if there'd been a prime rate of 3 percent, we'd have thought that was the equivalent of free money. If it even goes back there, what is the impact going to be on families who are pretty heavily levered right now?

That's what worries me, and that's why we've sort of begun the process of analyzing those very questions.

J. Les: Just in response: if interest rates were to go up 2 percent, I wouldn't worry only about families. I think governments around the world would have similar difficulties to families. With the debt levels that not so much ourselves and maybe not even the Canadian government but the American government, for example…. The debt that it's carrying right now — a couple of extra percentage points would be a killer. So we're not immune from those impacts either.

I think we're probably good for a couple of years in terms of the interest rates. Mark Carney and others are certainly signalling that. But you're right. You and I remember 1981. If that kind of scenario were to revisit us, we'd all be bust, frankly, with the debt that's been accumulated in the meantime.

D. Horne (Chair): Is there anyone else who wants to be on the list who's not right now? Okay, MLA Pimm.

P. Pimm: Thanks, Minister, for your presentation. Obviously, I just got a quick look at this report from the expert panel on business tax competitiveness. The question I have is…. Their mandate was to look at this under the lens of going back to the PST system. You have something in place now where they're looking at the competitiveness due to the carbon tax. When do you expect some sort of a report on that?

Hon. M. de Jong: Quickly, and if it is in any kind of form that can be shared…. The committee as it has operated, I think successfully, in the past is presented with ideas and opinions and suggestions and then tries to draw some conclusions and make some recommendations of its own. So my view with respect to the committee is the more information you can get on what the options are, the better.

If I can, I'll work with the Chair and Deputy Chair and Clerk Kate, and if additional information becomes available relating to ideas around taxation policy, I'll be happy to share it.

I wonder if you could comment on capital spending plans. I know in the past decade we've seen great expansion as far as health care, hospitals, education, transportation infrastructure. Do you foresee a significant ratcheting down on this, or where are things at right now?

Hon. M. de Jong: Well, debt-to-GDP, of course, is one of the key indicators that we examine and that people and analysts examine to assess the health and stability of our economy. Over the course of the last ten or 11 years we have seen the debt-to-GDP ratio reduce and stabilize to levels that we as a government were comfortable with and actually modestly proud of.

In the aftermath of 2008, as many governments in certainly the western world did, we saw an acceleration in capital spending. I guess "acceleration" is one of those terms you use when you…. I guess the right word is "increase" in capital spending.

I'm checking. I think our debt-to-GDP is hovering around 18 percent — 18.3 percent, I think. I don't foresee it going much above that. In fact, the objective is to see some slight reduction.

We've seen a lot of infrastructure built in this province — transportation, hospitals, schools, seismic upgrades. We managed to do it capitalizing on a pretty vibrant economy, 2008 notwithstanding, and it has served us well.

I understand. I've been around long enough to know the dynamics of partisan politics. But you know, in quiet moments when members of the committee are travelling, perhaps not just within B.C. but travelling outside British Columbia….

We are struggling to balance the budget, and the dis-
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cussion revolves around challenges involving admittedly hundreds of millions of dollars. Virtually every other jurisdiction of note is struggling with problems that flow into the billions of dollars, and I'm not even sure which term they use for south of the border now.

It's not easy getting there, and it won't be easy crossing the finish line. The temptation to deliver more in the way of infrastructure is always there. Maybe I'll end with this. We're probably at that point where projects will continue, but spending levels are not likely to increase much beyond where they're at today.

B. Ralston: I believe in the quarterly report itself the prediction and the plan is that the capital plan will be reduced in the next three years in the fiscal plan. But that wasn't my question.

The minister has spoken of the natural gas price — and that, indeed, was the focus of the quarterly news conference — and, I think, has attempted to dismiss that as something that was no surprise.

I know no one likes someone who says "I told you so," but this was in the budget. I did raise it with the minister in estimates, and based on the advice available to me — nothing like the advice available through Treasury Board and the economic council and the sources of advice available to the government — my view was that the natural gas price in the budget was set too high, and it was likely not to be realized. Yet the previous minister was resistant to that and maintained that position.

Given what the minister now says, that it was so obvious…. If it was so obvious, why was it put in the budget when a lowly opposition member with meagre research resources came to a similar conclusion some time ago?

Hon. M. de Jong: Whenever forecasts are incorrect, it is legitimate to ask the question: "For what reason is the forecast incorrect?" I think it is incorrect to characterize my comments as saying: "It was obvious." It became clear at some point, as the price paid for natural gas continued to fall, that it was going to have an impact on the budget.

I suppose the question…. Since we are in this discussion, Mr. Chair, I will put the question, although it may not be appropriate for the member to feel obliged to answer.

The forecasts that are contained within the budget are the product of a methodology that relies exclusively on advice from experts. In the case of commodity prices and in the case of natural gas prices, the advice is sought from a variety of sources — the private sector. There is an Economic Forecast Council that includes eminent economists from around the country with whom the minister meets and the ministry staff consult.

The point I am making is we have happily evolved well beyond the point where the minister picks a number that might be politically convenient to defend. So the question is: is the member suggesting that in circumstances where all of the advice from those officials points to a certain conclusion…? Is it the member's view that the minister, armed with the authoritative statement of a member of the Legislative Assembly, should substitute his or her view of the matter and impose a number of their choice?

It's an interesting proposition. In the past certainly one suspects that…. As one watched budgets consistently fail in the 1990s, one is inclined to surmise that that is perhaps what happened in those days.

Yet what I want to assure the committee of is that the process by which government relies on and embraces the best advice available to it from credible sources, from a forecast council, will continue. I would suggest that by and large it has served the interests of the taxpayers very well to know that the numbers which appear in the budget are based on the best non-partisan advice available and not the product of political manipulation.

B. Ralston: If I might respond, I think that…. I mean, I find the answer…. Well, I'll decline comment on the answer, in that sense.

What I was suggesting was that advice available to me and also gleaned from reading the sources is different from the advice given to the minister, so the result based on the result the minister got, or the result based on that advice, was wrong.

Has the minister gone back….? He still hasn't offered an explanation as to why that advice was wrong. I'm certainly not suggesting — as the minister is trying to insinuate, I think unfairly — that there is somehow some effort on my part to impose a political number on the budget process.

Clearly, the expert advice was wrong. Has the minister gone back to his officials and asked for an explanation? If he hasn't, why hasn't he, and if he has, could he provide it to the committee?

Hon. M. de Jong: Mr. Chair and to MLA Ralston, I don't purport to possess some extraordinary level of sophistication. When I get a job like this and the first thing I'm confronted with is a report that says that revenue from a particular source is significantly below what it was anticipated to be, guess what the question is from the new minister: well, why is that? Not, I suspect, terribly different from the question the member has just asked. I am pointed to the predictions and the body of evidence presented by those groups at the time the budget was finalized.

I can also tell the member that upon closer review it strikes me that something of a trend has developed around, specifically, natural gas prices. As natural gas prices have risen in the past, the private sector seems, in my view, to have underestimated the degree to which those prices would rise and has been reluctant, in my
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view — or has been, I guess a more accurate phrase, slower — to recognize the heights to which gas prices would rise.

The same trend seems to reveal itself of late with respect to falling gas prices. Although in a commodity with historical price volatility a 25 percent variance might not be unreasonable, that trend is there notwithstanding.

To what extent that should be factored into the methodology by which ministry officials finally decide upon a number and recommend that number to the minister and the government I think is a fair question. I think that is, based on the trends of late, an appropriate question to ask.

The last thing I'll say to that, and I'll take advantage of the opportunity here, is it's pretty obvious, based on what's happening to the price of gas and what has happened to the price of gas on the continental North American market, that there is an added incentive and added imperative for us to develop the capacity to ship liquefied natural gas out of the continental North American market.

Members of the committee I don't think will be surprised to hear that there will be continued emphasis on developing that infrastructure in British Columbia to allow us to capitalize on prices that are significantly higher for that product elsewhere in the world and promote the development of a new industry here in B.C.

J. Les: I guess the preceding discussion was a bit of a lead-in to my question. We've seen enormous changes in the perceived realities of natural gas in British Columbia. I think it was about seven or eight years ago there was actually work going on to import liquefied natural gas into British Columbia. Technology evolves, and we now find ourselves awash in natural gas. The Minister of Energy, I think, indicated that we may have as much as 300 years' worth of supply in British Columbia. The problem is that it's stranded, essentially, given current infrastructure.

We're now embarked on the liquefied natural gas strategy in British Columbia. To the point of this committee's work, do you have any projections as to the economic impact of that on the province? I know this is going to be longer term, but I'm interested in what kind of investment levels and, ultimately, what kind of upside in terms of revenue to the Crown might accrue as a result of that opportunity.

Hon. M. de Jong: The number, MLA Les, that analysts within the ministry have presented me with…. Now, lots of contingencies associated with this, and you have correctly highlighted the degree to which the landscape can change, sometimes very quickly. The potential with a fully developed liquefied natural gas sector up and running and shipping into those markets, based on us securing customers sooner rather than later because there is a competitive aspect to this…. I am told that revenues to the Crown, as opposed to employment numbers, over a ten-year period could be as much as $30 billion.

M. Elmore (Deputy Chair): Thanks for the presentation, Minister. With respect to the declining revenue from natural gas anticipated and the shortfall to the budget, there is an indication that services would be cut or the cuts would have to compensate for that declining revenue. Can you comment on what areas you anticipate you're looking at in terms of making those cuts?

Hon. M. de Jong: I think that's an important question and certainly a timely one, something that I expect the committee will wrestle with in terms of some of the choices. Let me restate the obvious for the record. Budgets are about choices, and the value in the committee's work is to present and act as a conduit for some of the choices that it believes British Columbians would make.

What you heard me say last week is in general terms a desire, in bridging that gap or addressing that gap that has arisen, to avoid to the greatest extent possible reductions in front-line services to British Columbians. That will be a guiding principle.

Now, where does that take us if that is to be the approach? Government is a big operation, and there are lots of components to it. You heard me speak last week about an external hiring freeze. You heard me talk about a freeze on wages for excluded staff, managerial staff.

You heard me talk about severe travel restrictions. In circumstances where, in the past, perhaps three or four officials might have attended a federal-provincial-territorial meeting, we'll have to ask whether the agenda is such that anyone should go. And if anyone is going to go, it's going to be one or two people.

I don't want to leave the Deputy Chair the impression that I think these measures on their own will be sufficient to bridge the gap. I don't think they are, in fact, which means we're going to have to look at some other areas as well. I hope what I've done is convey my preference that we would be dealing with internal government operations, as opposed to front-line services to British Columbia families.

B. Routley: Thank you for your presentation today. I know an often-commented-on situation was the advice that was clearly given to government, which government passed on to the people of B.C. In the pre-election period prior to 2009 there was a particular emphasis on "$495 million and no more."

There's been lots of debate about that, and of course, we all know that the results of those estimates came in not just a little bit higher. It was by a factor of four or more times larger.
[ Page 1844 ]

So I wondered if the government, obviously knowing this information in a pre-election period…. The people of B.C. would be particularly interested in whether or not there had been any steps taken by the minister to ensure the reliability of the estimates in the material that we're given. Are there any new kind of fail-safe messages that have been taken or any new steps to ensure the reliability of the information?

Obviously, that trust issue becomes a real concern to the good people of B.C., in that a lot of people felt that somehow they just didn't get — obviously didn't get — the correct information in the lead-up to an election period. We're now in that same kind of phase. So have you given any thought or consideration to some way that we can have measures in place to ensure the reliability of the information that's given to the people of B.C.?

Hon. M. de Jong: Actually, a great deal of thought in the last few weeks. I do think it is important that people feel they can rely…. It's their money. I like to talk and think about it in terms of the respect we show to the taxpayer. Candidly, I believe the greatest respect you can show the taxpayer is to not spend more of their money than they send to us. That is not without challenges, particularly in light of what's happening around the world.

I hope the member will take some comfort from some of the safeguards that have been built into the budgeting system, which are designed to enhance that credibility — whether it is the Economic Forecast Council and the advice it provides and the fact that that advice is accounted for and disclosed in the actual budget documents and, I believe, individualized. I believe the members of the council are…. The advice they give in key areas is particularized to the members of the council.

The statutory obligation to provide the kinds of updates in the format you saw last week ensures that people are in a position to see the trends develop as we see them develop — legislation that compels the government, in this case, to table a balanced budget.

I think the member's question, in fairness, relates specifically to the reliability of the information. Whilst I can certainly appreciate why the member would want to focus on 2009 — and I do understand why the member would want to focus on 2009 — at the end of the day, I would suggest that the greatest measure of comfort that the public can take comes from the track record.

That year was an anomaly — not one that the government is pleased about or proud about but certainly an anomaly that is explained in the unprecedented pace of change that took place in the aftermath of Lehman's and the other failures that occurred. It doesn't make it any more satisfactory. It doesn't make it any more palatable.

When leading economists, one after another, are on the record as having described that as an unprecedented event for which there was no comparison, then I think it is possible, fairly and reasonably, to distinguish what took place as unique. The government continues to take great pride and to exercise great caution around ensuring that the budget and the budget numbers and the expenditure of taxpayers' money are laid out in a responsible and accurate manner in the budget.

D. Horne (Chair): I'll go to MLA Coons, and then MLA Hayer will wrap things up here.

G. Coons: Thank you, Minister, and thank you for your presentation and submitting the report of the Expert Panel on B.C.'s Business Tax Competitiveness.

I think we've covered the challenge of the revenues, of the natural gas royalty not being where we thought it was going to be. You commented on the cuts to services or programs, but in what we've seen, there's also going to be a hiring freeze, and you've looked at cutting staff going out travelling.

But there was also mention of a review of the bargaining mandate for union employees. I'm just wondering if the minister would comment on where he thinks this is going to go and what the review might bring up.

Hon. M. de Jong: Yeah, I also think that's a fair question, because it's something that I've mentioned.

I hope the member, MLA Coons, won't think me being evasive in terms of my answer, because I'm cognizant of the fact and believe fervently that negotiations should happen at the negotiating table. I don't want to use the committee as some kind of a surrogate for sending messages, but I'll tell you why I mentioned that on Thursday.

When I leave not just this post but as MLA — voluntarily or involuntarily, as the case may be; by the way, I know that you have made a decision recently, and this is as good a forum as any for me to thank you for your service to British Columbia — one of the impressions I will leave with is how dedicated and hard-working public servants are.

You want to acknowledge that, and you want to reward it not just in words but in a tangible way. You actually want to pay employees a fair and reasonable wage and signal your support and the degree to which you value that work by providing appropriate increases.

The challenge or the tension is when the amount of money available to do that is as limited as it is today. To what extent this is going to impact on those discussions and negotiations, I can't quantify for the member today. But I thought it would be unfair to lay out the information last Thursday and not at least acknowledge the obvious, which is: in the lead-up to what we hope will be the negotiation of fair and reasonable settlement agreements, it certainly has the potential to have an impact on those discussions.

I hope negotiations will resume quickly and the parties
[ Page 1845 ]
will be able to sit down and hammer out agreements. It's never easy. Nothing I disclosed on Thursday, I'm afraid, makes it any easier, but I didn't want to pretend that there wasn't the potential, at least, for some impact here. What's pretty clear — I said it on Thursday, and I'll say it again — is that there's not some big bucket of money somewhere that's available to pull out of a hat. If there is, I haven't found it.

D. Hayer: Thank you very much, Minister, for giving your answers in great detail.

Another question is…. I received a couple of calls after this issue was discussed on CKNW — I think a few days ago, three or four days ago. It was raised that B.C. became a have-not province in the year 2000, but it wasn't until about 2004 or '05 that it became a have province. Why was it a have-not province for so long after the year 2000? Why weren't you able to change it right after that?

That was the question asked on the radio. I got some calls about it, and I said: "Well, the minister is coming to the Finance Committee. Maybe I'll ask him the question and get his perspective as the Minister of Finance, who's been here since about '94, serving this province as an MLA."

Hon. M. de Jong: Yeah. Look, I've been an MLA long enough to know how to characterize a pitch when I see one. I'm also cognizant of what the mandate of the committee is.

British Columbians are going to have an opportunity with this committee to lay out some ideas, highlight what their concerns are and highlight for the committee some of the choices that they believe government should make, and the committee will have the opportunity to compile a report and forward that to all MLAs, myself included.

We have come through a period of great economic growth in British Columbia. We have weathered very, very challenging international circumstances remarkably well. Now, that doesn't mean there aren't families who have been impacted. One of the things we are going to try and address in this budget relates to the affordability factor for families — that's not just taxes; that's some of the fees that people pay — and try to improve upon that question of family affordability.

Here's what I know, and this is not as an economist. I know this. In order for a community and families in a community to prosper, there need to be two essential ingredients. There need to be educational opportunities, and there need to be economic or job opportunities. And as important as they are individually, one without the other will condemn a community to difficulty and condemn the families within that community to difficulty.

I am lucky to live in a province that I believe can lead this country. Maybe Laurier got it wrong by one century. I actually think the 21st century, in many ways, belongs to Canada. And I believe that within Canada this province's time to step up and lead is upon us — because of what we see happening in other parts of the world; because of the fact that we are the gateway; because of the fact that we can position ourselves to take advantage of some of the linkages that already exist — China, Japan, Korea, India — and the growing capacity that exists within those countries.

We cannot, as some have done in the past, think of ourselves as a walled-off island. If we do that, as a population of four million people, we will not be able to maintain, let alone improve upon, our standard of living.

We are a trading nation. We are a trading province. Let us develop the educational opportunities, the training opportunities for our young people, and let us enhance, cultivate, develop and exploit the economic opportunities that exist, which we are blessed with, based on the abundance of natural resources that we have and our global positioning vis-à-vis those growing economies.

Those are the opportunities that we have available to us. If people are suspicious or believe that the political parties that vie to govern will do that differently, I expect they're right. But they will have an opportunity — the people, that is — to test the theories we bring forward.

They have had an opportunity to assess the performance of the present government. And what I hope, in the course of the debate that takes place between now and May, is that they will have an opportunity to compare the choices that we are making with the alternative, or an alternative.

It's easy to criticize. It's easy to say: "I wouldn't to that." To be fair, the more complete answer is: "I wouldn't do that. Instead, I would do this." It's only in having that complete set of information that people can make a choice.

But the committee has a difficult enough task ahead of it going forward, and that is to entertain the views of British Columbians as you embark upon your tour of British Columbia.

I have enjoyed the opportunity to exchange ideas and views with you today and to provide whatever information I could to help guide the deliberations going forward.

D. Horne (Chair): Thank you, Minister, for your presentation this morning. Thank you for presenting the Report of the Expert Panel on B.C.'s Business Tax Competitiveness. Your presentation really gives the committee a good foundation and a good place to start from, and I thank you for your time this morning.
[ Page 1846 ]

D. Horne (Chair): I understand that our next witness, the South Fraser Community Services Society, is actually here as well.

Thank you, gentlemen. The way that the meeting works, as you weren't here earlier. You'll have 15 minutes for a presentation. Given that we have fewer presenters this morning than perhaps we might normally, I'll give you all 15 minutes for a presentation. We may take a brief session of up to five minutes for questions afterwards, but you have 15 minutes, starting now.

S. Williams: Good morning, everybody. My name is Shayne Williams. I'm the executive director of South Fraser Community Services Society. This is my partner, Wes Everaars. He's the director of development for South Fraser Community Services Society.

I'd like to thank you all for the opportunity to speak to such a prestigious group. Thank you for your consultation and the important work that you're doing for the upcoming budget.

We're here today to talk a little bit about what South Fraser Community Services does for the community. Some of the problems that we see lie within not only our community but perhaps the region, when it comes to the community's most vulnerable individuals. Typically, our agency sees up to 300 to 350 people per day that have a range, a multitude, of health and homelessness concerns and varying backgrounds — anything from chronic illness to mental health or addiction concerns.

We operate on a harm reduction platform, recognizing individuals where they're at and attempting to help them remain alive long enough to start making better choices. This is very important work in our community, and it has an impact on every citizen within Surrey.

I personally sit on the Vancouver regional shelter strategy as well, so I can speak a little bit about some of the Metro Vancouver concerns. Also, I've been a member of the homelessness steering committee for some time.

To start with, I think there are probably three different things that I really want to push. Number one is the need for affordable housing across the region, in Surrey in particular.

We have the most unsheltered individuals in all of the Lower Mainland in Surrey in particular. The supported housing that currently is utilized here in Surrey is inadequate. Certainly, there's a wait-list. It'll take some time for individuals to access the services that they require.

Not only is that an issue in Surrey in particular, but looking at a recent exposé on some other service providers in the region, I think it's across the board — safe, affordable housing for the community's most vulnerable individuals.

Once they're safe and sleeping, you have a real opportunity to make long-term changes, which will affect the overall health of the community and, certainly, free up policing services, hospital services and other integral services across the board. So the investment in this affordable housing initiative is paramount as far as we're concerned.

The second thing I'd really like to talk about is our homeless services building. It's located here in north Surrey. It's a retrofitted apartment building and not designed for the population of the individuals that we see.

Like I said, we see up to 300 people a day, and it just doesn't have the capacity to reach or meet the needs of some of our more vulnerable individuals. We've included in the package that you all have in front of you some pictures of the building.

We run a 365-day-a-year drop-in, 24 hours a day, allowing anybody in the community to access services. As you can imagine, this is an array of individuals with an array of different issues coming in at any time during the day to talk to people, to get a cup of coffee, to have a shower, to do laundry, to find housing, to gain referrals to essential services.

Currently the drop-in has a seating capacity of 45, which can be very challenging because we often have lineups.

The drop-in provides 6,000 to 6,500 meals a month. Unfortunately, for each meal we have a lineup outside of the drop-in to facilitate three different feedings. So people are actually waiting in the outdoors to come in and access food services. Without this, they would go hungry, amplifying social unrest and creating a really unhealthy community.

The homeless services building has no housing attached to it, so it's very, very difficult to cascade people from directly off the street into some housing — where they've been supported, where they're getting used to being off the street — and move them forward into being a productive member of society and reintegrated within our community.

The homeless services building, because of its lack of capacity, also can be burdensome to other community members, who are fearful of the congregation of some of our clients that are very ostracized and so present as a little bit intimidating to the average citizen.

There are local schools nearby, and as certainly has been brought forth by the downtown business improvement association, we're attempting to try to be positive neighbours. But without the capacity to store buggies and to give individuals a spot to sit outside, there's a lot of congregation in front of and around our buildings.
[ Page 1847 ]

We've put some interim plans into addressing the local situation. Hopefully, that'll rectify things in the interim. But really, the long-term plan, I think, for our community and our agency is to look at a purpose-built building that has appropriate measures around safety — CPTED building and those kinds of things. We've got the support, I think, of B.C. Housing and Fraser Health Authority, two of our largest funders, and want to keep the conversation alive and bring this idea to this very prestigious committee.

The third thing I'd like to highlight is Surrey's basic demography of one-third of the population being under the age of 19 and how crucial it is to invest in the future leaders of our wonderful province.

There's an inherent lack of youth services, if you look at that demography and at how saturated current services are. Not investing in these individuals and trying to give them the skills they need to succeed tomorrow is building us further problems down the line.

As the minister highlighted, the training and education is wonderful, but it needs to start on a life skill basis, especially for our youth of today that sometimes have been overlooked.

We've got a really creative youth solution that I'd like to highlight and that is in your package — the fourth page, I believe. It's called the CKNW Orphans Fund youth program. I'm sure many of you, or several of you, are already aware of this project.

Matt Johnston, our youth programs director, is a registered counsellor with the province of British Columbia and has a multitude of tools in his toolbox that he's able to utilize to garner a quick rapport and trust with some of the fragile youth in Surrey North, in particular. He has a massive wait-list, and unfortunately, we've only secured $30,000 to date for funding. He's been operating on this meagre number for the last five years in our community, Surrey North in particular.

In this project he goes in on reference from either principals or vice-principals. School counsellors will recommend him to kind of intervene if a youth is showing some attachment problems to school or some learning difficulties. He's able to get assessments completed, advocate for more educational dollars for youth that need more supports, but he also has a multitude of the services that South Fraser offers. We have 17 different programs, many of which are mobile and able to respond in the community.

He's also able to use those programs to help intervene for the family as a whole. If some of the basic needs around housing, food, referrals, counselling and those kinds of things aren't being met, we're able to offer adult workers to work along with the family to try to rectify those situations and use that to keep the youth in school.

The project has been incredibly positive. We've had some conversations with B.C. safe schools about doing a full report on how innovative and how successful it has been. That's in talks right now, but it has been recognized locally through the press and at the community social planning committee.

It is important to know that the project is mobile. You've got play therapy, adventure therapy, so he's able to take some of the most at-risk youth out into the community — camp, fish, do some of those kinds of things — just to start brokering those conversations that really mean something that will make a meaningful change in youths' lives.

There's a lot more information in your handout, so I ask you to take a look at that. I'm available for follow-up at absolutely any time. I once again thank the committee wholeheartedly for having us here today and taking the time to have this conversation.

D. Hayer: I want to say, first, thank you to South Fraser Community Services Society and to all your volunteers and staff. You guys do an excellent job.

Now, I know you've been working very closely with Mayor Watts and Judy Villeneuve — right? And our minister, Rich Coleman, has been very close to this because he thinks this is a very important file, a very important service to provide.

I'm sort of surprised. Looking at the chart on page 1, it shows Vancouver has unsheltered people at only 10 percent, and Surrey has 58 percent. Vancouver has sheltered people at 90 percent, and Surrey has only 42 percent.

Have you discussed this with Mayor Watts? I knew there was a problem, but I didn't realize that it was such a huge problem. Vancouver moved on to fix the unsheltered people, and they seem to be very successful, looking at your chart. Surrey, I thought, was closer than this, even though I've been following up what's been happening.

They're trying to find some space. They've been having challenges finding a community to put the space in, as you've seen in the media over the last week or so — right? Have you talked to them and said: "You finalized the problem, putting these shelters in communities. Why is it taking so long?" I know Mayor Watts and Judy Villeneuve were working very closely to find the solutions that can get you answers on this.

S. Williams: The stats that you have in front of yourself that you're referring to are from the Greater Vancouver Regional Steering Committee on Homelessness. Every third year they do a homeless count.

To be perfectly honest, with the total number of homeless at 400, we were pretty happy that that's what the count was. It's very comparable to the last count, which was three years previous. As we know, Surrey has grown 18 percent over the last census. It's incredible that we've gained so many new citizens and that it's still remained relatively static on the homeless numbers.
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That being said, the highest population of unsheltered, or at least one of the higher populations of unsheltered, is very, very alarming. I think the current city council and Mayor Dianne Watts have had some really progressive conversations with B.C. Housing and have announced the possibility of having what would equate to a HEAT shelter out here in Surrey — an inclement weather shelter, an extra 40 beds.

They are presently looking for land to make that happen. I think that's incredibly responsive and a great turnaround for these statistics that only came out in the springtime — to have a plan in place and to move forward with that.

I think the largest concern, and probably the most likely reason why we have the number of unsheltered in Surrey that we do, would certainly be the affordable housing. We work with, like I said, 300 people a day. I would estimate 80 percent of those individuals wouldn't be unsheltered or wouldn't be homeless if they had affordable housing that they could access. They certainly need the supports — because traditional landlords won't work with them — such as a community services agency like Options or ourselves or some of the other wonderful community services that are out there.

I think that the HEAT shelter coming is certainly another stepping stone towards what we really need, which is affordable housing. It'll act as an opportunity for community services to connect with the individuals and move them forward.

It's my understanding that the shelter will also have people staying multiple nights, perhaps for the whole time that the shelter is open. That gives us a long-term plan to work with some of the folks that have been traditionally ostracized and haven't been able to access these types of services historically.

B. Ralston: Thanks very much. As Wes will know, I had the chance to meet, at my request, with Matt Johnston and find out more about the program. I agree with you in your evaluation of it. It is a very effective, innovative program and relatively low cost, so something that I'm sure the group will want to consider.

I was looking at where you call SFCSS upward momentum. You've mentioned the challenges in the present location, the present building. There is, I know, some pressure — and there's a lot of community effort directed largely by the city council — to redevelop the city centre. That view and vision sometimes seems to come into conflict with the idea that there are people who are less fortunate in society and also are part of the broader citizenry that we all serve.

If you were to expand, what's the prospect for a move to a new facility or to redevelop on the same site? What's the prospect that you would have the support of the city council or that you wouldn't be pushed out to another part of the city?

D. Horne (Chair): I would ask you to be brief as well, because even though I was very generous on my time, you're actually over the amount of generous time I've given.

S. Williams: We've had conversations with the city. We've taken them to purpose-built facilities across the Lower Mainland — the crime reduction strategist and the city planner. I think we've been involved in the process since day one. They've hired CitySpaces to do an inventory of local services, and from that plan we'll move it forward.

I think the Surrey North community is the poorest community in Metro Vancouver. It has a multitude of social issues, and to move us outside of that community would take us away from the catchment of individuals we serve. I don't believe that's on the table.

M. Elmore (Deputy Chair): Thanks for the presentation and excellent reports to help give a full idea of the scope of the challenge and also, I think, the effectiveness of the programs.

My question is with respect to the point you raised about the need for a purpose-built building. I want to clarify it in terms of: are you looking to secure funding for that? Is that a request? Do you have a number? How is that moving along, and what is the status of progress?

S. Williams: We've actually been putting out several proposals to look at predevelopment funding, look at concepts and designs, kind of do an inventory of what's out there. I think where we're at right now is that we're really at the bay of the city in some respects, in regards to finding us a location. A location is certainly something that is high on the priority list.

I think absolutely that asking here to raise the financial challenges of our non-profit agency is certainly going to be…. I mean, they're essential services, and it's going to be a large endeavour.

D. Horne (Chair): I'll ask one real quick one myself, and then we'll end things off. One of the difficulties — and I'll get your sort of view of things — is on the coordination of agencies and working together. Oftentimes there are many agencies, and each is trying very hard, but the coordination…. In Surrey, do you believe there's good coordination right now, or how is that working?

S. Williams: If you would have asked me three years ago, I would have had a very different answer for you. Over the last three years we've had the homeless intervention project. It's really brought together all of the co-
[ Page 1849 ]
ordinated efforts with the Fraser Health Authority and the Ministry of Social Development, with B.C. Housing chairing and coordinating that. I think it's really built some great rapport.

We have the Surrey Housing and Homeless Task Force, which I think brings these regular service providers together at all times, from South Fraser Community Services' perspective. Within our drop-in, throughout the day it is an educational-vocational centre for individuals. We invite other community services to come down and offer services to the folks that we see, knowing that we're not the only solution and that other people have to play a role.

Without us having any housing within our homeless services building, it makes it really challenging to try to get people off the street, so we reach out to absolutely everybody.

D. Horne (Chair): Thank you for that, and thank you for your presentation today.

D. Horne (Chair): We'll call our next presenter. For those that have just joined us, we might have a quick introduction across the table again because we've had some new people in the audience. Perhaps as our next presenter is getting ready, I'll have the members introduce themselves once again.

D. Hayer: MLA Dave Hayer from Surrey-Tynehead. Welcome to the Surrey-Tynehead constituency.

D. Horne (Chair): I'm Douglas Horne, Chair of the committee and member for Coquitlam–Burke Mountain.

We'll now call our next presenter, who is from the Surrey Board of Trade — Anita Huberman. Welcome to the committee. You have ten minutes to present, and then we'll take questions after that.

A. Huberman: Thank you very much. Welcome to Surrey, for those of you that are not from Surrey. As mentioned, I'm Anita Huberman, CEO of the Surrey Board of Trade. I thank you for the opportunity to speak this morning.

You know, you're here today to make Surrey better for business. The Surrey Board of Trade's strategic plan is based upon the foundation that education is key to drive our economy forward — and the board of trade working collaboratively, locally and provincially, with our MLAs, our mayor and council, as well as our Members of Parliament. The foundation is to grow Surrey. In terms of population, Surrey is Canada's 12th-largest city, the 35th-largest city in North America, and is expected to surpass Vancouver in just a few decades.

The South Fraser region is now home to over 850,000 residents — over 19 percent of B.C.'s population. As a major part of the forecasted increase of B.C.'s population is due to immigration, among all Canadian cities, Surrey has the fastest-growing number of foreign-born persons over the last five years — especially relevant in terms of a position paper that we issued on business and families, which is in the package in front of you. I'll speak to that in just a moment.

The rapid and sustained growth of Surrey is very unique in British Columbia. I just want to underscore that that is a very unique situation, where we have a growing school district. We're the fastest-growing city in Canada. We're very, very respectful of the work that has been done by the provincial government in terms of giving funding for things like health care, our Surrey Memorial Hospital, transportation. We're great proponents of the gateway program — the South Fraser perimeter road, for example.

Now, we know that the Surrey Board of Trade has a long-standing philosophy that the government should seek a balanced budget as well as seek lower taxes and stimulate the economy wherever possible. The recent economic news of the collapse of natural gas revenues is certainly going to strain an already difficult fiscal management situation, which we noticed last week. However, we do commend the effort and intent to balance the budget. That is the concern, though, of ours.

Surrey has long been underserved, but a lot has been accomplished over the past five years with respect to transportation, health care and education. We wish to say we are pleased with the efforts of the government in addressing shortfalls in these areas. We're delighted, as I mentioned, about the gateway program, and we appreciate the commitment of funds to begin to address the school infrastructure problems.
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In addition to the issues I mention, the board of trade continues to advocate on many issues, but the priorities today are education infrastructure. We are issuing a position paper on October 23 that elevates our existing position paper on K-to-12 education and post-secondary education, and you will hear about that later on during Small Business Week in October.

For many years now we have come before this committee each year to explain the issues facing education in the city. In the fall of 2010 in a consortium with the Surrey school district, the city, Simon Fraser University and Kwantlen University, we indicated a backgrounder briefing paper on the resourcing shortfalls in Surrey. Since then the Surrey ad hoc committee on education, which you're going to be hearing from shortly, has continued to work with us as we now focus on the hardship facing those students south of the Fraser, who are seeking post-secondary academic as well as trades and technical training, to ensure that curriculum exists here south of the Fraser.

Within the next five years one in three B.C. students graduating from high school will be from Surrey. While other school districts across the province, including the Lower Mainland, are trying to deal with falling enrolment, the Surrey school district is exploding — 70,000 in Surrey versus 56,000 in Vancouver.

Both SFU and Kwantlen University continue to be dramatically underfunded in this rapidly growing region. There are thousands of students who want to pursue their academic and applied degrees and trades training in their home communities but can't. Our position paper next month will address that in terms of recommendations that we are giving to you, our B.C. government.

So when you hear from these institutions, remember that the Surrey Board of Trade is dedicated to helping Simon Fraser University and Kwantlen Polytechnic University to resolve their resourcing issues to ensure that our business community and our workplaces can continue to thrive now and into the future.

Severely restricting the number of students attending these schools makes it considerably more difficult for the area's businesses to find a local cadre of educated and skilled young people who will be the next level of entrepreneurs — business owners, researchers — ensuring the economic engine of our province continues to thrive.

In transportation, as I noted, we have much to be thankful for. But because of the entire growth of the Lower Mainland, many of the cities south of the Fraser still suffer from an imbalance of transit services. We note and express our thanks to TransLink for the increase in transit services in the South Fraser, and to you, the provincial government, for the recently announced restructuring of the tolling policy of the Port Mann Bridge. Nevertheless, we continue to strongly advocate — and this is the Surrey Board of Trade's position — for a comprehensive and fair road-pricing policy as a long-term strategy to ensure that our infrastructure can be maintained and improved upon.

With respect to taxation, I can't underscore that we need to have the transitional rules to the PST-GST regime as soon as possible. Our business members are awaiting that information. We know it's going to happen sometime in October. We were, however, great proponents of the consumption tax, HST, and are sad to see that go.

We acknowledge that a tougher fiscal environment means serious challenges for the government. However, we caution that a steady hand on the economy in the face of temptation to increase taxes now and in the future is a direction that the business community recommends to maximize the sustainability and growth of the business sector in B.C.

Further, we commend to you the ongoing review of all small business taxes that can be streamlined, reducing red tape, reducing the administrative burden on business. This includes things like further reductions to corporate small business income tax, property transfer tax and, of course, the carbon tax, which we're deliberating a position on right now.

To build a stable society and economy, the engine of the economy — business — needs stability, and for international investment to occur in a GST-PST environment, the Surrey Board of Trade feels that an ongoing review of all taxes is good practice. We will work with you on that with our team of experts.

One other thing that I wanted to mention that we issued this past year is a position paper on business and families. Just to give you a very brief overview of that. The fall position paper is in front of you. The business perspective is that work-life conflict among employees with preschool-aged children costs the B.C. business community in excess of $600 million per year and the Canadian business community in excess of $4.5 billion. This is based upon statistical evidence that we have collected in collaboration with other partners.

These costs include employee turnover, absenteeism and health care premiums. It's a costly issue. The context for Surrey…. As I mentioned, Surrey is a young city that is growing at a phenomenal pace of 900 new families per month. Population projections depict that the overall population will increase from just over 483,000 in 2011 to over 580,000 by 2021. More than 41 percent of all refugees to B.C. reside right here in Surrey. That's an unknown fact, but that's 41 percent of refugees that reside here in Surrey.

Surrey has the most children and the most to gain and the most to lose. There are links between affordable housing, family debt and child care, which are before you, which I'm not going to go in respect of time that I have. I know that the provincial government has made some investments in Surrey in respect to affordable housing
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most recently, but more needs to be done.

Our recommendations to the provincial government in the context of business and families — a key platform that we agree with, with the provincial government for the future of our economy — is to reform the child care subsidy system so that parents pay no more than $10 a day, full time, and $7 a day, part time, making it free for families earning less than $40,000 a year, ensuring quality services by providing funding for ample caregivers on site so that children spend their time in stimulating activities, developing them, including children with extra support needs.

(2) Creating and implementing tax incentives to support employers to develop family-friendly workplaces that include features such as family responsibility leave, a culture that supports work-life balance, alternative work arrangements.

(3) Introducing a healthy child check-in and parenting support program during a child's first 18 months.

(4) Parental leave. Conducting additional research and exploring how to extend parental leave beyond 12 months. We have spoken to the former Minister of Children and Families, Minister McNeil at the time, and she has indicated that some of this is possible. We've been speaking with the deputy minister of that ministry, but we wanted it on record that the business community considers this a key issue for the future of our economy.

Thank you very much for the opportunity to speak to you. We understand that this is a very difficult time, as we are in a soft economy. This is what we're hearing from our business community. They're very cautious in the expenses. They're very aware of what's happening in Europe and across the border. We're a border city. We look forward to working in collaboration with you for the future of business.

D. Horne (Chair): Great. Thanks so much for your presentation. Do we have questions?

G. Coons: Thank you, Anita. I'm really interested in your position paper on business and families. You've presented a lot of information here, and I think a key, as you've mentioned, is the education component. Whether it's access or affordability, we have a lot to move on.

I do want to look at your child care subsidy system that you've put forward. In your format of putting together the position paper — and you have recommended this to the government — is there a costing in there that you can put out for us?

A. Huberman: Not off the top of my head. There is a short-term costing analysis we did in collaboration with a UBC professor by the name of Dr. Paul Kershaw. Some of that statistical evidence is in the full position paper, in our advocacy book that's before you. There is some short-term costing, but from our perspective, you know, the long-term benefit is something that really needs to be focused on.

M. Dalton: Thank you for your presentation, Anita. You've spoken to the importance of balanced budgets and moving in that direction. Just going along to the comment about subsidized daycare, I know that in Quebec that's the situation. It's also the highest-taxed province in North America, and a lot of it has to do with this type. It is a high-cost issue. We've looked at these things, and we have also implemented all-day kindergarten recently, which has a great cost.

Just concerning advanced education, can you maybe talk a bit about how, what with Surrey…? Is that where it's at right now with the number of placements and seats, say, as opposed to a decade ago? Has there been movement there?

A. Huberman: Well, there has been some movement. You know, the provincial government has seen SFU and Kwantlen University as major centres of educational excellence, so they have provided additional seats to both institutions — but not in pace of demand, not in pace of the growing population. I have specific stats around that, which I can send to the committee, but I don't know just off the top of my head how it's improved in terms of specific numbers.

All I can say is that the position paper that we're about to launch next month is asking for an enhanced focus south of the Fraser on post-secondary seats for both Kwantlen and SFU, and we have some background statistical data around that.

M. Dalton: Yeah, it'd be interesting to know the percentage of students that are staying here locally now as opposed to, say, a number of years ago.

M. Elmore (Deputy Chair): Thank you for your presentation and the package. It's very helpful and I think gives a very comprehensive view of the dynamism of Surrey. I appreciate, as well, the Surrey Board of Trade being proactive on a number of issues.

I have a question with respect to the recommendations and priorities that the Surrey Board of Trade has recognized, particularly around the challenge of daycare and citing the losses to employers in terms of either a lack of quality child care or difficulty of not only retention but also recruitment of qualified employees.

So my question is in terms of…. Seeing the recommendation for the $10-a-day child care. The price tag I've seen on that is in the hundreds of millions of dollars — very significant. I'm just wondering if there has been discus-
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sion or thought around making the recommendation but also some proposals in terms of how we resource that and where the funding would come for that.

Also, with regards to the other recommendation — identify that education is a driving force for the economy and the need for not only K-to-12 but post-secondary support and opportunities for youth to access programs, to take the jobs of tomorrow. Has the Surrey Board of Trade taken a position with regards to the $50 million cuts that the Ministry of Education faced — the only ministry to face cuts in the last budget? So those two issues of daycare and post-secondary.

A. Huberman: Well, first of all, we are great believers…. Our philosophy of our strategic plan is that the only way to move the economy forward is by having a very solid foundation of education that is both K to 12 and post-secondary and, secondly, transportation. That's the way you move the economy.

In respect to our business and families position paper, we are working with the deputy minister right now on the cost issue of the $10 a day. You know, when the provincial government says that families are a key priority for the future of our economy, I think perhaps a reallocation — taking a look at your budget in terms of what is your priority, what makes sense, reallocating funds from one budget item to another. There is some short-term expenditure if that is not done, as you realize.

But we are working with Paul Kershaw, who has done a lot of the statistical analysis around this with the B.C. government, to try to see how this can be done. We're also working and have presented this to the federal government and are hoping for a national child care policy too.

M. Elmore (Deputy Chair): Has the Surrey Board of Trade communicated to the Ministry of Advanced Education your position in terms of the cuts to post-secondary education?

D. Horne (Chair): We've got three more speakers, and we've got two more minutes, so we need to make it very, very quick.

P. Pimm: I'll be very quick. You certainly have a great representative here, I have to tell you. All the stuff that Surrey gets is a direct result of your MLA here in Surrey-Tynehead. But anyhow, that's not my….

You said that the Surrey Board of Trade was taking a position on carbon tax and that you're going to be doing a submission. Now, are you going to have that in to the Finance Minister by the August 31 deadline?

A. Huberman: We will, yes. We just had a carbon tax debate at our environment awards lunch last week, and so that really helped us get some background information. But yes, we will.

B. Routley: Thank you for your presentation. I share a lot of your concerns about the cost to business with child care issues that are in place, the need for post-secondary and a solid K-to-12 education.

Part of the conundrum when you look at the basket of revenue streams to the province of British Columbia…. One of the things I've observed is the dramatic cuts that have taken place, going from 16 percent corporate tax down to 10 percent corporate tax. One of the solutions could be to actually increase some of the corporate tax, given that the board of trade is very familiar with, essentially, the cost benefit of some of these issues.

You're, I'm sure, very aware of the falling revenues in oil and gas, so I wonder whether your position would support, in order to pay for some of these things, an increase in corporate tax. Have we actually gone too far? Has the government gone too far in cutting corporate tax? Some of these social services would benefit from increasing corporate taxes.

A. Huberman: We would have to assess that with our finance and tax team. I just know, on first blush, that any increase to corporate tax would be seen as a detriment to business growth, especially in this soft economy that we're hearing of — especially from the SME sector, the small and medium-sized business sector. But that is something we can consider with our team of experts.

D. Hayer: Thank you very much for a very good presentation, Anita. We put the new trade and technology campus of Kwantlen University in Cloverdale — it was under our government — and also expanded the Newton campus of Kwantlen and put the new SFU Surrey campus in Surrey, which has over 8,000 students compared to Tech B.C., which only had about 180 students before we were elected in 2001.

What is the number of students that you'd like to see funded in this area? What do you see from the Surrey Board of Trade point of view over the next ten or 15 years — the number of spaces we need? Do you have any information on that, or can you provide to us what schools should be looking at over the next two decades maybe?

A. Huberman: Well, we'd like to see a triple number of seats south of the Fraser. I mean, right now what is happening with both Kwantlen and SFU is that they are
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having to turn away students based upon the number of allocated seats that they have funding for. I think, also, that we're finding students are having to look elsewhere — either downtown, you know, at UBC or elsewhere within Canada — to find the curriculum, the training that they need for specific sectors that they're wanting to be educated in. They can't find that training here.

I think when we put out our position paper next month, it's about working collaboratively with government so that you understand what type of curriculum is needed here south of the Fraser and the additional seats. Right now the Kwantlen trades and technology campus is virtually sitting empty. It has some training, but when you go into that building, so much more training could be done if they had so much more funding.

We know it's a very difficult time, so we want to work with you to understand what it is that our members are saying — where they're going to look internationally for employees that are trained in specific engineering degrees, specific ways to make widgets. Delta Controls here in Surrey have to go to Serbia to find workers for a special product that they're making for the military. Why are they going to Serbia when our youth could be trained here at the Kwantlen trades and technology campus? I mean, these are stories that I could go on and on and tell you about.

D. Horne (Chair): Unfortunately, we don't have time, but thank you so much. On behalf of the committee, I'd like to thank you for your presentation today and thank the Surrey Board of Trade.

We'll now move to our next presenter. Our next presenter will be the British Columbia Medical Association, represented by Dr. William Cunningham.

I'll give you a couple of minutes to get set there, and then we'll get going. When you're ready, you'll have ten minutes to present, and then we'll take questions after that. Begin anytime.

W. Cunningham: My name is Dr. William Cunningham. I am incoming president of the British Columbia Medical Association, the organization which represents the 10,000 practising physicians in the province of British Columbia. I'm an emergency physician in Duncan, in the Cowichan Valley — population 85,000, which covers the Malahat to Ladysmith and nearly out to Nitinat. We work in a 1960s-vintage hospital — 115 beds, 60 GPs, 40 consultants. All the GPs still have hospital privileges. The Cowichan Valley has a health care system that works as a result of the current agreements.

As an emergency physician, I am a canary in the coal mine. I see what works in the system, and I see what does not work in our current health care system.

It is not a surprise that health care is continually one of the top, if not the top, areas of concern for British Columbians. Health care represents the single largest expenditure in government. There are a lot of competing demands in the system and many organizations and groups which have ideas on how to make the system stronger and responsive to the needs of British Columbians.

Physicians are an important pillar of the health care system. Right now I'm going to focus on the three key areas of importance to B.C. physicians.

First, we must continue to collaborate at many levels and expand our efforts in primary care if we hope to control health care costs. This has been proven successful. It has to be evidence-based. As a student of successful health care systems, I know that we are following the right trail here in British Columbia.

Second, we must continue to improve access to the services. Acute hospitals continue to feel huge pressures around the province. In order to move forward on these challenges, we must work collaboratively to implement changes that meet patients' needs and reduce costs. Physician involvement is critical if we want this to be successful.

Third, government must take a hard look at how it plans for future physician workforce. Physician shortages in our rural and remote communities continue, and while innovative programs are making some headway, we need to continue to place emphasis on this key area. The training programs of B.C.'s medical schools must align with the system and community needs. When we work together to deal with these challenges, we are supporting a healthy economy for British Columbians in every region of our province.

Primary care is an area in this province where we are leading the world in system reform. We know that patients who are engaged in their own health care are healthier, safer and have a better overall experience in the health care system. That pays dividends. To that end, the BCMA, in partnership with the Ministry of Health and health authorities and a variety of health care stakeholders, has developed a number of programs to ensure that doctors are always able to provide the best health care to their patients.

The key to this success in the last number of years was collaboration. The physician master agreement, which was recently signed, first and foremost supports collaboration. That started in 2006.

One example of such collaboration is the GP Services Committee division of family practice. The divisions are groups of family doctors that work in partnership with our health authority, the Ministry of Health and patients to identify gaps that exist in patient care in a divisions community and develop solutions to meet their own unique community needs. This is the model used in the most cost-effective, best-outcome health care systems in the world.

The keys to success are quite simple: a focus on
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evidence-based practices; a focus on targeting key populations — the elderly, the end of life, the homeless, the chronically ill; a focus on grass-roots solutions to the unique needs of each community. One of the most successful divisions in B.C. is in fact in the area I call home, which is Cowichan.

The model works. The coming together of the grass-roots citizens movement, Cowichan Communities Health Network, the division and the collaborative services committee with the Ministry of Health, senior VIHA, personnel division and the public has led to maternity clinic, better relations with the First Nations, and the Warmland House, where GPs work in collaboration with nurse practitioners so that these patients no longer have to come to the emergency department.

They identified that end-of-life care was critical and a missing link in the community. So they are sending out one of the family physicians for residency in that field so that can be provided there as well.

This is the future: keeping people healthy and out of hospitals. My goal as an emergency physician is, quite frankly, to become an unemployed emergency physician.

It is critically important that government continues to make an investment in such important programs. Health care economists can show that the potential savings run into the hundreds of millions of dollars down the road.

The second issue has to do with accessibility to the health care system. The BCMA has provided numerous recommendations and reports on how to improve access across all parts of our system. Pressures in the acute care system will continue, but there are opportunities for innovation.

We are currently working with partners on initiatives to promote operating room efficiencies, emergency department efficiencies, different ways of performing diagnostics. In acute care hospitals too many acute care patients end up being housed in emergency departments, hallways, the wrong wards, because there are no beds. I live this problem every day. It is unnecessary.

Our specialist services committee is still in its infancy, but it has started to set the stage for positive change in these areas, integrating the specialist and primary care services into a continuum of seamless patient care. The goal of SSC is to improve these efficiencies in the specialty care system so that the challenges in acute care can be addressed.

Solutions to our challenges don't have to cost a lot of money, and they don't need to be complex. They just need the vision and the will to make things happen.

For instance, through SSC we are promoting the greater uptake of telephone advice fees between GPs and specialists. GPs get answers to their questions sooner; patients get faster and better care.

Other examples are teledermatology, where waits of six months are converted into answers and patient care in three days. Group visits are another such initiative.

There are many new, exciting initiatives in the SSC specialist consulting world that will bring us more efficient, effective and evidence-based care.

The physician master agreement has also provided $20 million for recruitment and retention for specialist groups facing competitive challenges from other provinces.

The third issue has to do with the physician workforce. Many rural and remote regions of the province continue to face physician shortages. I myself worked in the Yukon territory for 14 years. My brother, a family physician, works only rural locums. My father, a foreign medical graduate, worked exclusively in Canada's most isolated and remote locations.

There are many good things done by the Joint Standing Committee on Rural Issues to deliver care to rural and remote British Columbians. The medical school has taken good steps at its so-called distributed sites, where we know that doctors who train in rural communities are more likely to go back to rural communities and provide the much-needed services there so that we can have equity in our health care system. We need to ensure this happens and support it, but more work needs to be done if we want to make this a reality.

We also face challenges in all other sectors, such as our aging workforce. Many doctors are retiring, and many young doctors are moving into the system. Younger doctors have a better work-life balance and are generally not willing, as their older counterparts were, to work around the clock.

I've already mentioned the specialist consulting recruitment and retention fund. It is absolutely critical that in dealing with all of these challenges the BCMA, the Ministry of Health, health authorities and medical schools all work together to ensure that we are training the right kinds of physicians for what the province will need in the future, and then we can move forward.

In conclusion, this isn't all about money, although, correctly applied, money is important as a lever for dictating behaviour. It's about how we work together in a way that is open, with frank discussion from all health care stakeholders. We have to focus on the patients and the communities they live in.

The BCMA has great ideas to bring to the table. Already our president is touring B.C., meeting with members and with MLAs in their communities to hear their concerns. The BCMA is an active and willing partner and wants to help find solutions and innovations in the health care system to help those who work in health care to do the best possible job for their patients.

We need our society to be healthy and assured that they can get the care they need when it is required. Our patients and our economy depend on it.

Thank you for your time. I'm pleased to answer any questions you have or meet with you anywhere, anytime.
[ Page 1855 ]

I have three people on our list for questions. We have five minutes for questions.

B. Ralston: Thanks very much. If you ever run out of work as an emergency physician in the Cowichan, you can come to Surrey. It's the busiest emergency in the province. I doubt it's going to be out of work anytime soon.

Two questions, quick ones. One, there is a group of physicians and people who teach at UBC medical school who advocate on behalf of Canadians, some even who've grown up in rural and remote locations, who are trained in foreign medical schools yet can't get internship positions in British Columbia to perform the very work that you spoke about, in rural and remote communities. What's your position on that?

Secondly, electronic health records are talked about at every level as a potential solution, at least in some respect. What's the position of the BCMA on that?

W. Cunningham: Thank you for bringing both of those issues up. Part of the point of having a discussion with all members at the table is to discuss issues such as foreign medical graduates and, also, Canadians who train abroad. Ultimately, these are college issues. However, the BCMA does have a role to play and would like to be at the table. It is important from the college's point of view, which actually has nothing to do with the BCMA, that the quality of the work that is ultimately produced by individuals will serve the patients well and is of a high standard. But the BCMA is quite happy to discuss these things at any time.

The second question has to do with the electronic medical record and what we call the patient's medical home. We feel one of the weak points in our system is, in fact, the electronic medical record. The BCMA has advocated for a long time to sit down with all partners so that all of the groups involved in creating these things — government, health authorities, private physicians, hospital-based physicians — don't all go and do their own thing. We would very much welcome….

The truly innovative thing is that we could all sit down together. There is no doubt whatsoever that the patient's electronic medical record is one of the key planks to the quality of care and to the future care of that patient. So we would strongly support that.

J. Les: Bruce Ralston stole my thunder slightly in that I, too, am very interested in this issue of students who are trained abroad. You've given your answer, and frankly — you'll have to forgive me — I was a little underwhelmed. Given your concern about physician shortages, I would imagine that the B.C. Medical Association would be all over that issue and would have a very strong position and would be raising the roof on it.

I know there are jurisdictional issues. You have your own association, you have the college, and of course, you have the school of medicine at UBC — all of whom are involved. But I think from the public's perspective, when you've got students who in many cases have grown up in British Columbia and have got a very good medical education overseas and only want to come home and practise — in many cases, in rural areas — simply, people can't understand why this can't be accomplished.

I just wanted to sort of amplify that. Perhaps you have something further to add on that.

The second issue is care of the elderly. Given our demographics, it's going to be even more of an acute issue in the future. If you compare how we care for the elderly here as compared with Europe, for example, we tend to send people to emergency an awful lot more here than in many European jurisdictions, where the practice is that the physician visits the facilities in which these people are housed and cared for rather than shipping them by ambulance to emergency wards.

Are you aware of any significant work that's being done to perhaps encourage more physicians to visit their patients in the facilities in which they reside?

W. Cunningham: Let me answer your first question. I'm sorry you feel underwhelmed. There are many players in that. I think we would encourage that the workforce — the lack of physicians, those positions — be filled by physicians who are already in the system somewhere. But the conversation has to occur. There has to be a political will.

There are many jurisdictional things. There are many federal laws around this as well. There are many issues with UBC and the residents associations. We are very open to a discussion on this subject, but it would take a political will, actually, to make it a reality. We are not the obstruction here.

I might point out that I was one of those physicians in British Columbia who had left British Columbia because I couldn't get hospital privileges in '86. That turf protection, I think, is something of the past and certainly not in the leadership of the BCMA today.

W. Cunningham: B.C. is making huge strides in the care of the elderly. I think there are a lot of societal atti-
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tudes about end of life. There are a lot of problems with the delivery and especially keeping people at home, in their own home, and supporting them there with home care, which was not done perhaps as fully as it could have been in the last decade. The health authorities, certainly the Vancouver Island Health Authority, are putting a great focus on that. The idea is to keep people at home as long as they can and to support them.

The physicians — certainly, I can say, in the Cowichan Valley — are very open to going and seeing the patients in their own homes. Nearly all care homes have designated physicians who go to the facilities, but you really don't want the patients in the facilities either, if they don't have to. They do in fact do that. I think there's a certain mythology in that too.

We want good care for the elderly. We want the best care to keep them healthy and at home and out of hospitals. As an emergency physician, the moment you come into an emergency department, you're in an acute care mindset, and it quite literally will kill you. This is not the right place.

Huge things are being done. UBC is not always in alignment with this in what and who they train, and some of the enablers through payments are also not in alignment. This is something, again, where collaboratively we have to sit down and talk about it, and I think we can come to solutions that serve the patients the best.

D. Horne (Chair): There are a number of members who have questions. We have cut it back to two more. I'm going to ask MLA Routley and then MLA Pimm for the last question, and then, unfortunately, we'll have to cut it off.

B. Routley: Thank you for your presentation. I knew a lot of great things came from the Cowichan Valley, but I think I've just met another one. It's great to hear you, and the comments that you have made certainly give us some hope.

Particularly, I'm interested in your talk about collaboration and reducing some of the situations we have in acute care through dealing with some of the unnecessary obstacles that stand in the way. My question is…. I wondered if you could simplify for us, if that's possible, what the three most important steps would be that government could take to help alleviate the situation that has led to the large number of people waiting in waiting rooms in acute care situations. Lastly, is there some possibility to use nurse practitioners?

I've done some looking at what's happening in the United States. They're using a large number of and increasing the numbers of nurse practitioners to help alleviate some of the situations in hospitals, and I wondered if you thought that was also a potential solution.

W. Cunningham: Let me start with your third one, which is the nurse practitioners, and the other group, which are the physician assistants. Of course there's a role for these people to work collaboratively. I think I mentioned that, certainly, in the Warmland and on our maternity ward there are a lot of opportunities to use people with appropriate training in the correct locations. The key is collaboration and working together.

The conversation also has to occur. The conversation has not occurred. Again, if I was the government, I would open that conversation. BCMA does have a position paper on it currently that we can send you, if you wish.

As far as the acute care, the key to acute care is putting me out of my job. It's by doing solid primary care where you not only go for the low-hanging fruit, which is kind of the middle classes, but also make sure that there's primary care in the medical home for every single British Columbian — every elderly person, every street person and everybody else. Good prevention — and that's in all its aspects, and some of the other social determinants of health — is how you actually get rid of the need for the number of acute care beds.

You can run them more efficiently. You can run them more effectively. You can discharge patients earlier, if you wish. If you've got proper home care, there are many things that can be done. It is a choice to make those things a reality.

We are happy to sit down, and one of the things we are doing at the BCMA is we are engaging the health authorities in a much more realistic manner to actually have these kinds of discussions.

P. Pimm: I'll try and be very quick. You talked quite a bit about rural physicians and the need for that. Certainly, I'm very familiar with it. I've got a community in my area that has 6,000 people with three doctors, and they can't get anybody to come up.

How do we attract people to come up to the north? I know we don't have the time right now. Certainly something that's very interesting…. I mean, the doctors that are there make between $750,000 and $850,000 a year, and we can't get anybody to come north. There are doctors down here making 100 grand a year. Do they not know, or what is it? Is it communication? Is it education? What is it that we need to do?

W. Cunningham: Well, I was certainly not aware that my colleagues made $750,000 up there.

W. Cunningham: We also know as a fact that the most likely person to go back to a rural community is somebody who comes from one. That's why I worked in the north for such a long time and why I feel so comfortable working in the lowest-level rural community, which is
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actually Duncan. That is the number one thing.

The other thing is that you give them the support they need, and it's not always financial. It's that they work collaboratively with nurse practitioners and others so that the burden of call doesn't make it unrealistic.

The other thing that you have to do is something that was closed down by UBC a number of years ago. After they've done their time there, if they do not wish to spend their whole lives up there — and many do — you give them the opportunity to re-enter and have a second career in medicine. That door has been closed and must be opened again.

There are a lot of things you can do to make it a comfortable place. Bringing foreign medical graduates in who have no intention of doing more than three years up there is not the solution. It's a stopgap measure. It has helped us. It's kept us out of trouble, but it has actually not solved the problem.

There are many other technical reasons — getting rid of the rotating internship years ago, and various things like that. These are things we can sit down and discuss, but I've never seen a discussion of these things with all partners at the table. It might be time to do so.

D. Horne (Chair): Thank you, Dr. Cunningham, and thank you to the British Columbia Medical Association for your presentation today.

We'll now move to our next presenters: the Kwantlen Faculty Association, represented by Joel Murray, and Phillip Legg from the Federation of Post-Secondary Educators. Welcome gentlemen. As you know, you'll have ten minutes to present, and then we'll have about five minutes for questions after your presentation. So begin any time now.

My name is Joel Murray, and I'm on the executive of the Kwantlen Faculty Association as the vice-president, grievances. In addition to representing the KFA, I'm an instructor at Kwantlen, where I've been employed for more than 12 years. I teach academic English-as-a-second-language — ESL — courses.

The KFA's 800 members work at the four different campuses of Kwantlen Polytechnic University located in Surrey, Richmond, Cloverdale and Langley. We're glad that the committee made the decision to come to Surrey and gather public input directly from citizens and organizations in this community. We thank you for the opportunity to share our faculty association's views on what should be the priorities for the February 2013 provincial budget.

I would like to give you a brief overview of our institution. Kwantlen was established by the B.C. government in 1981. It was first a community college, then a university college and now Kwantlen Polytechnic University. I would like to point out that Kwantlen is the only public open-access post-secondary option in the South Fraser area west of Abbotsford.

That's an important point to keep in mind because, as I will come back to in a few minutes, the growth in the eligible student population in this particular region has been significant — so much so that we are currently running well ahead of our capacity limits.

Kwantlen offers bachelor's degrees, associate degrees, diplomas, certificates, citations and trades training. We do all of this by offering over 135 programs. We also provide over 25 services to help students with their studies.

We are home to about 17,000 students who come largely from communities located south of the Fraser but also from other areas around the Lower Mainland and from outside of B.C. and Canada.

As a special purpose teaching university, a critical objective of our institution is to provide students with a broad range of post-secondary education options. In addition to our university programs, we offer an extensive trades-training program at our Cloverdale Campus, which works closely with local and provincial employers.

We offer an adult special education program and English-as-a-second-language programs. Our adult basic education program and developmental education programs provide people with the opportunity to upgrade their skills, complete their high school education or secure the necessary prerequisites to enter new programs or improve their career options.

We are particularly proud of the important outreach work that we do when it comes to developmental education. A great example of that is our partnership with the Phoenix Society. Through this program, we are able to provide developmental education as part of a drug and alcohol rehabilitation program that Phoenix offers here in Surrey.

We partner with Phoenix because it fits with our overall mandate to provide comprehensive post-secondary learning opportunities in this region. That mandate, providing comprehensive learning opportunities, has both a social and economic dimension to it. On the social side, we believe post-secondary education needs to be as accessible to as many citizens as possible. Improving that access means adapting programs as much as possible so that we lower the barriers that individuals might face when they decide to enrol in our institution.

On the economic side, we know that over three-quarters of all new jobs will require some form of post-secondary training, so partnering with Phoenix, for example, helps improve the prospects of those people not just to recover from addiction but also to move past that to a better life and full-time employment.

I mentioned earlier that Kwantlen is currently running ahead of its rated capacity in terms of student enrolments. This fall we are at 103 percent of our enrolment
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capacity. What that means is that based on the funding provided by the Ministry of Advanced Education and their budgeted amount for student enrolment, we are over that funding limit. In practical terms, that means Kwantlen is absorbing a funding hit by running above our funding capacity limit.

How do we do that? In part, we do that by squeezing the system, putting more students into programs, cutting back on support services — in short, doing more with less.

You might be able to get away with doing that once in a while, but for Kwantlen — and, I suspect, for many other post-secondary institutions across the province as well — doing more with less has been the operational plan for much of the last decade. Certainly, if you look at core funding for post-secondary institutions in B.C., our operating grants from the Ministry of Advanced Education, you see that on a per-student basis those grants have been in decline over the last 11 years. When you factor in the impact of inflation, the trend line down steepens even more.

For Kwantlen, the frustration with funding cuts two ways. For students lucky enough to get into Kwantlen, the funding crunch means they are paying a much heftier level of tuition, both absolutely and relatively. Today's students pay close to a third of the cost of their education. For any members of this committee who attended a B.C. post-secondary institution decades ago, that comparable number was closer to 15 percent.

Today's students are increasingly turning to part-time work to help shoulder the cost of their education. As an educator, I see students in my classroom who are under a lot of stress as they juggle the demands of part- or even full-time work with the demands of school. I also see students who are taking longer to complete their programs because in order to juggle those work and study demands, they are unable to enrol full-time.

The other impact of underfunding is that many students are being turned away from our institution. When you operate at 103 percent capacity, it tells you that the demand in this region is exceeding what the province is prepared to invest here when it comes to post-secondary education. Relative to the population in our region, Kwantlen receives half the funding for student FTEs when we compare ourselves to other post-secondary institutions.

In fact, there have been no changes, really, to our student FTEs for about 30 years. As a result, we have longer wait-lists to get into preferred programs, and we also have longer wait-lists to get into courses that are core prerequisites for many of the degree certificate and diploma programs.

The Premier has talked a lot in the past year about a jobs strategy for B.C. We agree that B.C. would benefit enormously from a well-thought-out jobs strategy. But our concern at this point is that in the absence of more targeted investments in post-secondary education, the province's jobs strategy will simply not work.

Last year, when I spoke to the committee, I touched on the issue of international education. As I mentioned in my introduction, my teaching assignment is in the area of English language training. B.C. has a long history of encouraging international students to enrol in our public institutions. As I mentioned last year, and I will emphasize again this year, increasing the number of international students in our public system needs to be matched by greater investments in the supports that are needed to help those students.

There is tremendous diversity within the ranks of international students — diversity that requires a much higher level of student support work both by individual educators and by the institution as a whole. Both requirements are not fully reflected in the funding that institutions receive currently.

To summarize, the Kwantlen Faculty Association would like to suggest some priorities that need to be strengthened in the 2013 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.

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.

My final point. The government needs to look at a new funding formula for post-secondary institutions — a formula that will not only guard against the impact of inflation but will also recognize the unique cost pressures that various institutions face in providing access to post-secondary learning in their community.

One of the promises that was made when this category of special purpose universities was created was that the work that you spoke of — trades training, adult special education, ESL and adult basic education: that range of services and teaching opportunities that is not offered in the conventional university — would not be jeopardized. There wouldn't be institutional drift or leadership
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towards becoming a more conventional academic institution focused on university training in the traditional sense.

Obviously, the value to the community and to the students of that range of training is immense, particularly when you speak about it in the context of the government's failed jobs strategy.

What is the status within the institution of that kind of pressure? I don't know whether you're able to comment too directly on it, but that's a concern that I've had raised by people who are familiar with what goes on in your institution.

J. Murray: It was a great concern. The programs currently still do stand. They are not expanding. There was institutional drift. There's been a change in senior leadership, a most recent change.

We are hopeful that the drift will not continue. It seems to have peaked. We hope that our special purpose is retained, certainly.

Joel mentioned the dysfunctional relationship between ITA, the Industry Training Authority, and post-secondary institutions. Our concern has always been that it makes no sense to have ITA under a ministry other than Advanced Education. It was for a brief period, about three or four years ago, moved back into Advanced Education. Now it's moved out of Advanced Education into the Ministry of Jobs and something and something. I'm not sure.

Our concern here is it only adds to the confusion and to the dysfunction that we think needs to be corrected in terms of making sure that you have that seamless working relationship between ITA and public post-secondary institutions, which deliver the vast majority of the trades-training programs across the province.

You've made a comment a couple of times about you're having to do more with less, especially over the past decade. It seems like you're suggesting…. You comment about cutbacks. But am I right or am I wrong that the numbers have gone up significantly, that the programs have gone up — maybe you can comment about that — that there's been expansion to the facilities? Has it gone the other way around? Are there actually fewer people that are going to school? Can you expand on that, please?

P. Legg: A couple of points. The fact that Kwantlen currently is at 103 percent capacity tells you that even at current funding levels, we're not coming even close to meeting the needs in that particular region.

A second point, and I know that this was true when Murray Coell was the Minister of Advanced Education. He was fond of saying that there had been a 76 percent increase in the funding. What he was including in that number, of course, was the 146 percent increase in tuition fee revenue that came into the post-secondary system.

M. Dalton: So are the numbers down? Are your student numbers down over the past decade, and are your programs down?

P. Legg: Has there been a commensurate increase in funding? No. That's the problem.

J. Murray: That's a matter…. Sorry, Phil. If I can just jump in here. Kwantlen, as I mentioned, is not funded in the same way that just about every other institution within the province is funded, on a per-student, FTE basis. So yes, we may have increased over the number of years, but the funding certainly hasn't caught up.

For example, our nursing area has just moved out to the Langley campus. Most of the classrooms there are not e-classrooms. The instructors can't use their computers in the classroom. When is that going to change? Well, I don't know.

Funding? There's no funding to put computers there. They were in another area. They've expanded their offerings because of some targeted funding that the government gave to Kwantlen. They've moved, and now there's no funding for e-classrooms.

D. Horne (Chair): We're actually past the time now. I thank you for your presentation. I thank both Phillip and Joel for making their presentation this morning. I'll have to, unfortunately, call the next presenter.

I'll now call the Ad Hoc Committee for Surrey Schools — Linda Stromberg and Nancy Peirce.

I want to welcome you both to the committee. As you've probably heard as you've been sitting in the audience, you have ten minutes to speak, and then we'll take questions for about five minutes following that.

L. Stromberg: Thank you, Mr. Horne, ladies and gentlemen of the Finance Committee.

I'm presenting on behalf of the ad hoc committee on capital funding for Surrey schools. I'm a member of the Lord Tweedsmuir PAC. I have a daughter in grade 12 and a son in grade 8. With me today is committee member
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Nancy Peirce. She is a director with the Surrey district parent advisory council and has four children. Three have graduated, and one is currently attending school in Surrey.

You have in front of you an introduction to our committee and a listing of our members, along with contact information. As you can see, we are a non-partisan, citywide advocacy group comprised of representatives from our local government and business community; teacher and support staff organizations; neighbourhood resident associations; district and individual school parent advisory councils; and concerned parents, students and residents.

Last year when we presented before the committee, we also provided a written report. In order to provide you with up-to-date and accurate information, we're waiting for the final enrolment data, which should become available shortly. A written submission will be made by the ad hoc committee prior to the October 18 deadline.

Investing in education is a topic in this year's consultation paper. It is noted that investment is up despite a drop in student enrolment. We'd like to stress that although most school districts in the province are in decline, there are a small number of districts that are seeing growth. Surrey, the largest school district in the province with over 70,000 students comprising 12 percent of the entire B.C. school population, is by far the fastest-growing and shows continued growth projections of from 600 to 1,000 new students every year for the next ten years.

Last year, with over 10 percent of Surrey students attending classes in portables and two high schools on extended schedules, in consultation with the school district, we determined that Surrey's immediate capital funding need was $273 million to begin to address the overcrowding throughout the district.

As you may be aware, $102 million in capital funding was announced for Surrey schools at the end of October 2011. We are most grateful to government for this significant step in addressing our needs. This investment is building two new elementary schools and additions to two secondary schools. Funding also went towards purchasing land for two new secondary schools — one in Grandview Heights and one in North Clayton — and two more elementary schools.

In order to understand the processes involved in capital funding for schools and their impact on Surrey, ad hoc committee members have reviewed historical data and had discussions with MLAs, the Minister of Education and the Minister of Finance. In late August one of our members was included in a meeting with capital funding staff from the Education Ministry at MLA Falcon's office.

Historically, elementary school construction in Surrey has taken anywhere from two to 5½ years. Due to our steady growth and our city goal to limit sprawl and instead accommodate demand by increasing densification, the longer the time from approved funding to the school opening, the greater the chance that schools will open with portables.

We've been following the progress of the four new construction projects closely. Despite a three-month delay from funding announcement to a decision by Partnerships B.C. on the design-construction bid process to be used, construction has now begun on the two elementary schools and will soon begin on the additions to the secondary schools.

When we inquired about the involvement of Partnerships B.C., we were informed that they were looking into opportunities to economize by bundling three elementary school projects. This step is not normally required on projects under $50 million. We are hopeful that these projects will all complete in time for the 2013 school year, two years after approval of funding.

At the October 2011 announcement Premier Clark acknowledged Surrey's ongoing funding need and assured us that more money was coming. A portion of the funding received in October was for completing purchases of land for two high schools and two elementary schools. It's our understanding that our school district is ready to begin the construction process for these much-needed projects.

The estimate for funds required to build the two new high schools alone is $130 million. The elementary schools will run approximately $20 million each. We've also been told that added to the list of priority projects in our district's capital funding request this year are additions to four elementary schools.

When last asked, the district advised us that the time it takes to build a high school from the point of announced funding to open doors was anywhere from three to five years. This year high schools on extended schedules due to overcrowding include Lord Tweedsmuir, Earl Marriott, Sullivan Heights and North Surrey. Next year it's likely that Clayton Secondary, Kwantlen Park and Tamanawis will be added to this list.

According to the school board, most of Surrey's high schools are on some kind of extended program this year to accommodate demand for certain classes. Therefore, we know today that even if funding for those two new high schools is announced tomorrow, given the normal time frames, we will have at least seven extremely overcrowded high schools with extended schedules and additional portables before those new schools open.

To illustrate the very real negative impact of extended schedules on our high school staff and administrators, students and families in Surrey, I have some examples to share with you.

From last year's graduating class. A student was unable to attend the advanced-placement physics class which is offered at Lord Tweedsmuir Secondary. This has affected
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his university and scholarship applications, as this class would have given him an edge. The student was not accepted into UBC this September. This will affect his university applications for the rest of his life.

A student was unable to continue with his part-time, after-school job. This student was from a lower-income family, where the extra income was an absolute necessity, not a perk.

A student was unable to look after younger siblings after school or keep his part-time job. This is particularly heartbreaking because halfway through the year the mother of this family left the marriage and abandoned the shared family home, the father barely coping. Many nights there was only Kraft Dinner or sandwiches for dinner.

A student was unable to assist his great aunt, an elder member of the family, with her yardwork and lawn mowing. This resulted in the aunt being unable to find another helper and is now forced to sell the property due to her inability to maintain it.

A student was unable to assist their mother after school when she had surgery, causing extreme stress and hardship for this family.

Many grade 12 students were leaving home at seven in the morning and arriving back home at 5 p.m., a full adult workday, then doing homework. This resulted in diminished family time; diminished time for after-school work and volunteer activities so important for current university and scholarship applications seeking that well-rounded student; and diminished time for sports, music and social activities which make up and enhance a well-balanced and well-rounded life.

From our PAC meeting just last week at Lord Tweedsmuir. So far this year Lord Tweedsmuir enrolment is 1,893. The school was built for 1,450.

Lord Tweedsmuir has two gymnasiums and one playing field. One of the gyms is larger and can be divided to create a total of three gym spaces. This year we have one block of class with nine PE classes and three blocks with seven PE classes. The administration is looking into getting Ping-Pong tables and indoor curling equipment to hold PE classes in the hallways. It's extremely challenging to deliver an appropriate physical education curriculum in these circumstances.

Tryouts for volleyball and basketball at grade 8 level are bringing out in excess of 65 students. Only two teams can be accommodated, which means many extremely talented athletes who would otherwise have made the team are being turned away. This is discouraging and negatively impacts the future athletic participation and opportunities for these students.

With a PE class in block 5, team practices and other athletic programs are running later into the evening. Science classes have to share lab time and are using regular classrooms when lab space is unavailable.

This year the number of students with a fifth block has increased. Next year, with a projected 100 additional students, it's likely portables will have to be added and specialty classes, gym space, sport team opportunities, etc., will be even more scarce.

Capital funding staff from the Education Ministry made it clear that the Legislature determines capital priorities. We understand the categories for capital funding. There are five of them.

In the years between 2006 and 2011 there were no announcements for additional space for growing districts. Our continuous and significant growth combined with no announcement for funding have brought us to the point we're at today.

We are therefore concerned that all B.C. MLAs recognize and understand the unique needs of growing school districts and the devastating impact overcrowding can have on our students, families and community. We ask that the Treasury Board provide funding for growing school districts' priority capital projects to alleviate the overcrowding and provide equitable facilities to deliver public education.

We urge our new Education and Finance ministers to visit Surrey, meet with our school district and see firsthand the overcrowding and the growth we're experiencing.

Lastly, ask your colleagues in the Legislature to recognize growing school districts, like Surrey, and allow for funding priorities that address that growth.

D. Hayer: Thank you very much, Linda and Nancy. Thank you very much for presenting to us last year and every year and working hard on this. Because of your involvement, the school trustees' involvement and our minister constantly meeting with the teachers, the parents, the students, the MLAs and especially Laurae McNally, the chair, we were able to get the CommunityLINK program solved. That was the first time it was solved in the last 15 or 20 years. Also, $102 million, which is almost half the money, came in for our schooling programs.

You have said there was a schooling problem. Have you talked to the chair of the school and the school trustees to say: "How are we, compared to how we were in the past history of the Surrey school district, from the funding point of view?" When I talk to them, they say that this is the most, and the most fair, funding they have received. Not enough funding — but the fairest.

Do you ever talk to them — get your perspective from your side? But also, I want to say thank you very much for presenting this, because we have said to the minis-
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ter, when we got $102 million for the expansion: "This is not over yet. We need more, as we're getting 1,000 new students every year." More kids are born at Surrey Memorial Hospital than any other place, so we will be constantly needing more funding. A lot of young people live here too.

L. Stromberg: The district, I know, is very grateful, and we — the parents throughout the community of Surrey — are very grateful for the funding that we have received. Our concern with the committee is that that's a start and that because of the time frames involved, giving those examples, you can see how things are today. We're looking anywhere from three to five years, if we get a commitment this year, for additional funding for those high schools.

We have made a good start. We need to continue. It can't be the end, and we know it's a significant amount of money.

B. Ralston: I appreciate the work you've done. I listened to your presentation, and it's a very widely based, non-partisan committee.

I know that MLA Hayer has given a very spirited defence of the government's spending priorities, but I'm wondering what reaction you've had from your own MLA, who up until very recently was the Minister of Finance and in charge of the levers of capital spending.

L. Stromberg: Well, one of our committee members met with then Minister Falcon in June and had a very positive feedback from Minister Falcon — acknowledged the need for continued funding in Surrey. Minister Falcon indicated that he would speak with Mike McKay and get directly from him the next priorities. I don't know if that meeting occurred or not.

He also did accommodate our request for a meeting with the capital funding staff from the Education Ministry, and that meeting took place on August 30 with two concerned parents and one of our committee members.

L. Stromberg: The meeting took place here in Cloverdale. With the capital funding?

M. Dalton: Thank you for your presentation. You have the exact opposite problem that most districts in the province are facing, but it's still a problem. There's no doubt about that. I'm a public school teacher myself and have taught in portables.

I'm just wondering what type of cooperation you have with the city, with Surrey. I know that in the schools I've taught in, sometimes we've had arrangements with the recreation facilities, the gyms and all that. So there's a strong cooperation to meet those needs — for example, the PE needs of kids. Do you have that type of coordination with the city?

L. Stromberg: Well, I'm not privy to discussions between the school district and the city, but I've had discussions with the school district, and I've worked with the city on this committee. They are part of the committee, and I know that they are doing everything in their power to help and assist with issues like that.

I know that our administrator at Lord Tweedsmuir was going to be approaching the new Cloverdale Rec Centre about space there. I don't know what's available during the time frames that they have classes or whether that's an option from the point of view of the district's policies for moving kids around the district. I don't know how that works.

N. Peirce: At Kwantlen Park my son would jog down to the rec centre, work out and jog back to school as part of a PE requirement. We don't have a field for rugby. We do have it now in writing, because there was a mixup when our school rugby team went out to practice, and it had been rented out to another group. So yeah, we've worked through those problems. We do access the local community rec centre in the north.

D. Horne (Chair): Great. I want to thank you both for your presentation today and for bringing your views to the committee. The committee will now take a short recess, and we will reconvene after lunch.

D. Horne (Chair): We'll resume our afternoon. I welcome some of those new people in the audience. We've been going this morning…. This is the Select Standing Committee on Finance and Government Services, and we're currently completing the budget consultation process.

Our next presenter is Geoscience B.C., and Dr. Anglin will be presenting on their behalf.

I call you to the front. As you may or may not know, you have ten minutes to present, at which time I'll give
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you about a minute notice before the end. Then we'll take about five minutes of questions and go from there. So whenever you're ready to begin.

L. Anglin: Thank you very much, Mr. Chair, Ms. Deputy Chair and members of the committee. It's a real pleasure for me to be here again to speak to you. Many of you I've had the chance to speak to before or have met and talked to.

On behalf of my board of directors and my staff, I'm here to give you a bit of an overview on Geoscience B.C., tell you a bit about our activities, some of our successes and a little bit about our plans for the future. Before I go any further, I'll just state up front: we're not making a financial ask this year. We'd like to thank the province very much for the additional funding that we received last May — $12 million. Yeah, you guys are off the hook then.

I wanted to let you know how we're spending that money, what we're planning to spend that money on and what impacts we think we've had. I've prepared a deck. It's nine pages, a couple of images per page. I usually have too many slides, so I'll probably try to go through these quickly so there is time for questions.

Just for those of you not familiar with the organization, we are an independent non-profit, funded primarily by the province. Our mandate is to attract investment to British Columbia through the provision of geoscience information and knowledge. Our focus over the last few years has been on water, minerals and oil and gas. I'll give you some more details on that in a few minutes.

We have been funded to the tune of $48.7 million by the province since we were created in 2005. We've brought in over $8 million from other sources to fund our projects and a tremendous amount of in-kind support, which we have difficulty putting a dollar number on. It's quite significant, especially volunteer time and information from industry and government partners, academics, communities, First Nations — all the people that we've worked with.

On the next page I'll comment on why invest in geoscience. Essentially, geoscience is one of the most cost-effective ways for a jurisdiction to attract investment in mineral exploration and oil and gas development and to increase its resource industries' competitiveness. Geoscience not only triggers exploration and development, but it also provides a lot of information to allow government, communities, industry, the regulator to make responsible land use and development decisions, and this helps the province maximize the return it gets from its resource potential.

Geoscience B.C. has been operating provincewide. The map at the bottom of page 2 gives a quick footprint idea of all the major projects that we have been involved with across the province. The red and the blue areas, the yellow and the light blue outlines — those are, respectively, geochemical projects and airborne geophysical surveys. The blue are projects we've done in oil and gas areas, mostly related but not exclusively related to water for unconventional gas development.

In addition to what we show on this map, we've also supported numerous projects, primarily by university students and researchers, from Atlin to Cranbrook, from Port Renfrew up to Fort Nelson. All of that information is available on our website.

We also work in partnership with government. The B.C. geological survey is a primary partner of ours, as is the oil and gas division in the Ministry of Energy and Mines.

The next page has example impacts of GBC programs. We've put a few bullet points here under minerals and oil and gas, and I'll speak to those for a minute or two. We conservatively estimate that we have stimulated over a million hectares in new mineral claim-staking. We know significant industry investment in exploration has followed up on that staking. It's difficult to put an exact number on that, but we consider that probably two to three times what Geoscience B.C. has invested has been stimulated in exploration investment.

I mentioned to this committee last year that there was a proposal coming from Huckleberry Mines to extend the mine life there, and that was partly as a result of
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Geoscience B.C.'s data in that area. I'm happy to report that on January 3 of this year they did in fact get their permits — you're probably aware of this — and have extended that mine for seven years. That's 230 existing jobs that are being retained for another seven years, and I think 70 new jobs are being created, so we're very proud to have had a hand in that.

We've also contributed to a few other discoveries that we know of and probably some we don't know of, as well as lots of new jobs and business opportunities, especially in rural areas but not exclusively rural areas. There are a lot of businesses in Vancouver that depend on the mineral exploration and mining industry that are also positively impacted by this work.

On the oil and gas side most of our projects have involved areas where land tenure is already established, but the questions about development of the unconventional gas in northeast B.C. have often raised concerns about the impacts on water. Our work in northeast B.C. has been primarily looking at water sources for gas development.

The results of some of that work, including studies on deep saline aquifers, have contributed to very large investment decisions made by companies, including EnCana and Apache, that put in a saline water treatment plant so that they don't use surface water. They're using this deep subsurface water that's not suitable for any other use. That was an expenditure of over $90 million in putting in that plant. Nexen is also looking at saline water treatment projects in the area, partly as a result of the information Geoscience B.C. was able to give them.

You may also be aware that we have recently announced a seismic monitoring program that we're going to do, in funding partnership from industry and with in-kind support from the Oil and Gas Commission and from Natural Resources Canada, to have a look at the impacts of hydraulic fracturing on seismic activity in the area. We don't anticipate a problem, but we also know that there is concern, and this is an important thing to look at and ensure that there are not going to be any long-term negative consequences of hydraulic fracturing. All of this information is collected and shared transparently. We think that's a very important role that Geoscience B.C. plays.

We've also made a lot of effort to encourage the First Nations groups in the area to participate with us. We actually have representatives from both the Fort Nelson First Nation and the Acho Dene Koe from Fort Liard, who participated in selecting the contractor for surface water–monitoring work that we're doing now. We're training representatives of those First Nations to work with us on that water sampling program.

The next few slides I probably won't have time for, so I'm going to briefly outline what's here. I've given a quick outline of what we've been doing in northeast B.C. That's what's on the next page — the Horne River project, what we call our Montney water project, a new water allocation tool that's been developed by the Oil and Gas Commission, with support from us, that grew out of these other projects.

In terms of student support, I'll also mention that we provide a lot of scholarships to students as well as direct support to projects. The picture in the top right is a UNBC PhD student who is actually sampling the Upper Kiskatinaw watershed near Dawson Creek. The city of Dawson Creek is supporting this work, as are a few companies. She's essentially looking at the watersheds in the area as part of having background information, baseline information in areas that are undergoing development.

On the next page, in the northwest we've been involved in a project in the Dease Lake–Iskut–Telegraph Creek area. We're very happy we've had good partnership developing with the Tahltan First Nation. In fact, on each of our airborne surveys in that area — we've done three, one just completed this summer — we have had a Tahltan First Nations band member work with us.

The picture that I've used in this year's presentation, of the woman standing beside the fellow in the checked shirt in front of a helicopter, is the same picture that those on the committee will have seen last year. She is a Tahltan band member from Iskut and worked for this group, through us, last year. I'm very happy to say that she came back and worked for us again. She enjoyed herself. She's actually a business student at UNBC.

The other thing that I'm just going to mention is the Northwest Community College in Smithers. These programs are generating job opportunities for the school of exploration and mining there, which is a joint effort between the college and the Smithers exploration group. I went to their celebration of learning, which is a graduation event, a month or so ago in Smithers. It's a fabulous program training, particularly and primarily, First Nations for work in the resource industry. It's been a very, very good program.

On the next slide, the central Interior of B.C. We have done a lot of programs. In fact that was the major focus of our work from 2006 until 2011. These have been in the mountain pine beetle–affected area of the province. We've had a lot of community support and partnership funding from the Northern Development Initiative Trust for this work from their mountain pine beetle recovery account.

It was out of this work that the new Huckleberry expansion came, but we've also contributed to a new discovery there at another old minesite called the Silver Queen that was a really interesting story, which I'd tell you if I had more time.

Also I'm very pleased to say that, again, jobs and opportunities for local communities are being created. A young man who started an expediting business out of Smithers…. I saw him at Minerals North in Prince George in 2010, and he told me that every time Geoscience B.C. publishes data, he has to hire more people for his business, and he gets more people out on the land.

We're looking at doing another project in the Interior starting next year. I'll skip the next slide, what we've been doing on northern Vancouver Island, which has been a really fun project with a lot of community support.

The next slide is an outline of what we've been doing in southeast B.C. and working with the chamber of mines there and local prospectors and BCIT.

In terms of future activity, again I'd like to thank the province for the additional funding and let you know we are going to continue with water and seismic studies in northeast B.C., hopefully launch a new project in the Interior in the mountain pine beetle–affected areas and probably continue some work on northern Vancouver Island.

Then on the last slide, I'll just very quickly mention that we also…. A lot of people have approached us about whether we could do work on geothermal or water for other development decisions, like in agriculture or other industries and possibly carbon capture and storage. I have to say there is geoscience that could be done relevant to all those questions, and we're looking into whether Geoscience B.C. might have a role to contribute in those areas as well.

Thank you very much. I hope I left at least a couple of minutes' worth of time for questions.
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J. Les: Thank you for coming today. I always enjoy hearing from Geoscience B.C. It's been, I think, very much a good-news story, all the time that you've been in operation.

Maybe just a slight cautionary note. Towards the end you talked about all the different things you could get into. I think the success of Geoscience B.C. has been its focus, and I'd encourage you to maybe focus on the initial mandate. I think that's very important, because you've had so much success there.

In that context, could you tell us a little bit more about QUEST and some of the specific things that you've been able to identify? You've already talked about a couple of them. Obviously, in the pine beetle–affected areas there's a great hunger for more economic opportunities, and I'd be interested in hearing maybe just a few other examples of where you're leading potential investment.

L. Anglin: Absolutely, I'm very happy to. Actually, it will give me time to tell one of my stories, or maybe a couple of them. Two things, or maybe three, that I think in a nutshell kind of describe…. The data that was generated in QUEST…. And not only that but just the interest that those projects generated, because they were very large-scale, new types of data that hadn't been collected in this way before.

A few things. There were investor newsletters that wrote about these projects that were essentially promoting B.C. internationally. We got attention from other jurisdictions. We contributed to the Huckleberry mine, the new discovery at the mine and that expansion, and also at this old property, the Silver Queen mine, which I believe is southeast of Houston.

The story there is that we were giving a workshop in Prince George, and the woman who owned the claims over the old mine was one of our students in the workshop. It turns out that some of the data we collected went right over her property, and it was a fellow prospector who pointed it out to her. She looked at it and went: "Oh, we don't hold those claims anymore. We let those drop." Apparently, I found out a year later, she went to the back of the room, on her cell phone, and called a colleague who then staked those additional claims.

Subsequent to that, which I just learned about six or eight months ago, they did more geophysics. They drilled the property, and they've come up with what they think is a new discovery. She's right now trying to raise more money to go back in and do more work.

Then another example. We've had some large companies who hadn't been doing a lot of work in B.C. really take notice of this data. We know one of them is still continuing to follow up on claims that they staked when we first even announced that we were doing that first QUEST project. I don't know exactly how much money they've spent. It's hard to get those exact numbers. But we know they've been back every year for the past…. I guess that it's now five years.

Then up in the northwest I actually had an exploration company geologist tell me — though I can't quote him, because I forgot to ask if I could — that with the projects that we've done up around Dease Lake and Telegraph Creek, they've already committed $5 million in new exploration to follow up that work.

It is having that kind of a direct impact on exploration and investment decisions. I hope that's getting to the answer you were looking for.

G. Coons: Thank you, Doctor, for your presentation. It's always impressive when I read and hear about the work that Geoscience B.C. is doing.

I do have a couple of questions. One, I do think it's exciting that there are other activities and projects in the future. I think, again, hitting the mandate of attracting investment with the information that you're gathering, and especially the seismic monitoring project dealing with the issue of fracking, I'm wondering what the time frame for that is.

One other one is with the funding. I think you mentioned $48.7 million from the province. Is that per year, and what's the time frame for your provincial funding?

L. Anglin: The funding that we have received has come in several increments. Sorry, I'll answer the last question first. We got $25 million in 2005 when we started, and then in 2008 we had an additional $6 million for additional mountain pine beetle area work and $5.7 million for work in northeast B.C., which is what got us into doing water work. Then we got $12 million in May of last year, and that's to carry us.

We generally spend on the order of $5 million to $6 million a year. The majority of that is spent on projects. We do maintain a very small admin/overhead budget which is less than 15 percent. All the rest of it is going into programs. We leverage that money, and we generally spend $5 million to $6 million a year, so that money from last year should allow us to carry on projects into 2014. Beyond that, then you'll probably hear from me next year, when I'll be back saying: "We might need more money." That's how that has worked.

The question about the seismic project. Those stations — we are just finalizing the agreements with…. I believe the permitting is being done now, and finalizing the agreements for the purchase of the stations. The installation we hope will be done by the end of this calendar year, so that project will begin in January. It's designed to be a long-term monitoring program, but again, we have two years of funding. We're planning for two years of monitoring at this point, and then we'll see where it goes after that.
[ Page 1866 ]

D. Horne (Chair): We're over time already, but I will ask the Deputy Chair for a really quick question and then a response.

M. Elmore (Deputy Chair): Thanks for your presentation. I'm interested in just a general idea of the areas and what the potential is around the geothermal energy and, also, the other sectors that are interested in the water resources and management.

L. Anglin: In terms of the geothermal, that's a very good question. I think we're not really sure just what the potential is. If you ask anybody in the industry, they'd say, "Of all the places in Canada where you would go to develop geothermal, B.C. would be the place," because we have the highest heat flow. But for any specifics about geothermal for either local district heat or large-scale power generation, we just don't know. On the power generation, of course, the question would be whether it's competitive with other sources of energy.

We have actually funded a small scholarship to a student who is doing some work in the Nazko area, a First Nation representative, looking at whether there's geothermal potential there, because there are very young hot rocks in that area. We're also quite interested in just whether this is a source of heat, primarily, but also, possibly, local energy in areas that are off the grid.

It's a question that we don't really have a lot of information on. We've had some meetings with industry representatives and academics who've worked on geothermal to try and get an idea of what's out there. But we don't really have an answer to that question yet.

M. Elmore (Deputy Chair): Other areas of industry or agriculture interested in waste resource management.

L. Anglin: Oh, in the water resource. Well, that came out of a booth we had in the southern Interior. We had several people ask if we could do the same kind of work that we've done in northeast B.C. in areas like the Okanagan, where water is an issue for agriculture and for communities. We certainly feel we could apply the same kinds of research methodologies and techniques to that area as well.

D. Horne (Chair): I want to thank you for your presentation and thank you for being here today.

We'll move on to our next presenter. I understand that Dr. Gleeson is here. I'll let you make your way to the table. I thank you for being here again this year. I understand you were here last year and for a couple of years.

D. Horne (Chair): You know the rules. You have ten minutes to present, and then we'll have some questions. You can begin anytime.

M. Gleeson: Okay. You are all going to play the legal aid game. Each of you is receiving a folder. If there's a blue M on it, it means you're male; if there's a red F on it, it means you're female. But there are more folders than people. I'll go through what's happening with all of these patients. This is probably a three- or four-week window out of my calendar.

If you are Emily Davidson and you are here, you're 72 years old, and you have a dog named Maxie. Maxie is actually named Gavin Maxwell, named for the Irish writer. Now, the problem that you had and that you came to my office about was that you went to an SPCA adopt-a-thon and adopted what you thought was going to be an Irish terrier — i.e., about 35 pounds, maybe 14 inches tall.

Unfortunately, Maxie is an elkhound. Unfortunately, you live in a condo. Unfortunately, you have the condo board coming after you, and there is no legal aid. We were able to determine that Maxie did fit the criteria and was grandfathered, therefore Maxie was not kicked out of the condo apartment. The point being that there is no legal aid to protect you if you're 72-year-old Emily Davidson and you have an Irish wolfhound.

One of the people that might be here today is Mark Lane. If you're Mark Lane, you're a 15-year-old boy, and you attended a rock concert with your cousin, who is named Paul Owens. I'm not allowed to discuss Paul because I don't have his parents' consent. Mark Lane's father is a drug addict. He gave both kids marijuana brownies.

Thankfully, somebody at the concert spoke to the police. Thankfully, the police spoke to the event organizers. Thankfully, the event organizers stopped the two boys, and they phoned me. I was able to go and collect them. The problem being: who is going to do counselling for these two kids? The dad is the person who gave them the marijuana brownies.

In a perfect world where we had legal aid, I would get the file, and I would phone up any one of the lawyers that I know, and I'd say: "Look. You need to go to legal aid. You need to get some counselling arranged for these kids" — mine is the only office that will do it for peanuts; I'm actually two dollars cheaper per hour than my plumber — "and you, the lawyer, need to protect this child from his idiot father, who's also a drug addict." We don't have legal aid, so who's going to find the money to pay for the counselling for these two kids? Trust me. It won't be their dad.

If you're playing the legal aid game today, you may be Nick McMillan. If you're Nick McMillan, you're 75 years old and you came to my office because you have a seatbelt ticket. Normally, I would just giggle with you and tell you that you're 173 bucks cheaper. But you were wearing a halter monitor when the cops stopped you, and you
[ Page 1867 ]
couldn't get the seatbelt around the halter monitor that your doctor had put on you. The cop was too busy to sit and talk with you and find out that you were wearing a halter monitor.

Should you have been driving? Absolutely. Do I have the documentation? Absolutely. Is he going to be all right? Absolutely. But he's 75 years old. There's nobody to help him because legal aid isn't there, and I'm tired of fixing seatbelt tickets.

If you have in front of you the case file of Tommy Stephens, you will notice that you are seven years old. Tommy has witnessed a tremendous amount of violence in his home, so therefore he sees a psychiatrist.

Now, the psychiatrist happens to be a good friend of mine, so we discuss this file frequently, and I apologize for sending it frequently. Tommy has said to the psychiatrist that he doesn't want to see his dad. Tommy has told his psychologist, me, that he does not want to see his dad because his dad has guns. He has told his teacher he does not want to visit with his dad, and when the policeman from New Westminster went to Tommy's school, Tommy went and got his younger brother, who was in kindergarten, and the two boys went to the policeman and said: "Please don't make us see our dad."

Mom can't get legal aid, so guess where Tommy and his little brother are going to be every other weekend till they're old enough to pack their own guns?

If you are Richard Parks, you are 86 years old. You are a pianist. You are a wonderful pianist. And your B.C. driver's licence is good till the 23rd of March, 2013. You decided that because your grandson was in town, you would go in, and you would renew early because you have a concert tour. The problem is your grandson drives an automatic. Mr. Parks owns a big — let me tell you, it's big — very old standard. He flunked his driver's test. Do you realize that without a lawyer's letter, we can't get him a retrial? We've gone through DriveABLE B.C., and we can't get an answer from ICBC. Richard Parks can't get a lawyer to help him.

The Pasternak estate is currently on my desk. This is a wonderful guy that…. His name was Anton Pasternak. He was 96 when he died. He has two sons, ages 71 and 74. I don't know who wrote Mr. Pasternak Sr.'s will, but almost everything was outside of the realm of probate, so that was grand. In the bit that was left over, called the residue of the estate, Mr. Pasternak talks about Roger. No one knows who Roger is. Roger was actually a golden retriever who used to come to lawn bowling in the company of his owner, and Mr. Pasternak left 9 percent of the residue of his estate to Roger the dog.

Having tracked down Roger the dog, Roger's owners want an accounting of the estate. But the two executors of the estate, ages 71 and 74, can't afford a lawyer, don't know what to do, so therefore it's on my desk. I haven't been able to get a statement from Roger the dog.

If you have in front of you Timothy Smithrovitch's file, you will see he is 60 years old, and he is special needs. Timothy lives in the community, and he got a ticket from Transit. So he came into my office, and he said: "Fix this." I said: "Wait a minute. If you didn't pay the fare to be on the SkyTrain and they caught you, you owe them the money. Don't ever get on the train without your ticket."

He said he'd paid it and he lost it. We went through this, and he said he'd paid it on an MBNA cash card. I looked into this. I was able to track down the fare receipt for that day on his credit card statement.

We've been trying to deal with Transit, and Transit have been very good. They actually sent him a little, I don't know, wallet thing that he can put around his neck and that he can put his ticket in. But Timothy, being special, is convinced it's a tracking device, so this has just muddied the issue even more. The point being who takes care of Timothy if there isn't a lawyer there, there isn't a psychologist with a sense of humour, because there is no legal aid?

One of the ladies that I dealt with was a nice lady. Her name is Katherine James. I'm sure you have the file. She's 96 years old. She's got all her marbles. She's in great shape. She went over to Safeway, and she saw that dog food was on sale, the large cans of Husky. She bought 24 cans of dog food, because her daughter has dogs, and she thought this was just such a deal.

Unfortunately, the lady at the cash register knows Mrs. James and decided that this meant, given that Mrs. James lives in a very nice apartment block and couldn't possibly own a dog, that the poor old lady was eating dog food. She reported Mrs. James to the elder abuse folk, and Mrs. James ended up in my office saying: "Help me. They want to come and inspect my suite. I'm sure they will find my wine."

I told her that it was kosher to have wine in that particular block and that the memo she got was about not smoking marijuana in the block. Still, she wanted a letter. Historically, I would have sent her to any lawyer that didn't like me. I would get a letter written, and we would solve that problem.

There are 16 files in front of you. None of these people are going to be helped, because we don't have legal aid.

D. Horne (Chair): Thank you for your presentation. I'll now open it up to questions from members.

G. Coons: Thank you, Dr. Gleeson. I had the opportunity to be invited to sit on the public commission when it was up in the north, up in Prince Rupert, and I heard story after story of how the legal aid system is failing the needy individuals and families, the justice system in our communities. I think what you put before us is very telling — the stories, actual stories. I really appreciate that. I believe there were nine or ten recommendations from that commission that….
[ Page 1868 ]

M. Gleeson: But none of them have followed through. You're talking about the Len Doust commission — right? The Len Doust public inquiry into legal aid.

M. Gleeson: Yeah. I was at it, and they got me on in the last day, and nothing has come of it. There are fewer and fewer and fewer services.

I have little kids who come to me. I had one kid who brought me his dad's heroin, and he said: "Can you get rid of this for me?" I said: "Let's do it together. Let's go to the New Westminster cop shop. Let's hand it off to a policeman that I know down there."

G. Coons: So I can finish, I think that your presentation has opened the eyes of all us here on the committee, and hopefully, we will look at the recommendations and see how we can fit them into the budget.

D. Horne (Chair): Any other questions? Seeing none, thank you so much for your presentation today.

I'll now call the next presenter, the Downtown Surrey Business Improvement Association — Elizabeth Model and Bill Rempel. Good afternoon. As you've probably heard, you have ten minutes for a presentation and five minutes for questions. Anytime you're ready, you can begin.

E. Model: Good afternoon, everyone. Bill Rempel was unable to attend today, so I'm in his stead.

First of all, let me introduce ourselves. We represent the business improvement association within Surrey's city centre. We are comprised of 1,100 businesses, and our property owners represent total taxes in excess of $12 million in downtown Surrey.

In Surrey — to give you a little bit of background for those of you who might not know as much as we do, obviously, being from this area — we have 485,000 people, and we're growing. We are British Columbia's fastest-growing city, the 12th-largest city in Canada and projected within a decade to overtake Vancouver in population. We have between 800 and 1,000 new residents per month, and one-third of our population is under the age of 19. With that in mind, we have the largest school district in British Columbia.

We are positioning downtown Surrey to be the regional hub south of the Fraser, with this tremendous growth. Our mission is to facilitate business improvement, community economic development, business revitalization and enhancement of our downtown core.

With that we have world-class Simon Fraser University Surrey campus. SFU, as most of you probably know, was named yet again as the number one comprehensive university in Canada. We're proud to have it there. Simon Fraser's establishment in 2002 helped define our city centre and fuelled new growth for our area. Also, SFU demonstrates commitment to participate actively in our buildout in economic as well as social development within our community.

With that in mind, just to fill you in, our request to the Finance Committee is that we'd like to add our support, as the business organization for downtown Surrey, and endorsement to the B.C. government to recommit the memorandum of understanding signed with Simon Fraser University and the province back in 2006 to double its size of full-time-equivalent students, which is 2,500 currently, to over 6,000 students.

The success of Simon Fraser University is in offering programs in areas of high labour market demand and in having the major role in the economic and social development of Surrey. That has been demonstrated over the past decade.

In addition to meeting future labour market needs, the city centre businesses believe that the growth of Surrey's campus is directly coordinated and would act as a catalyst for our economic development and would be an excellent investment in our downtown core. Expansion in engineering and health programs and research will draw other research and community partners to our area and will support local industries and also companies by providing them access to student entrepreneurs, graduates and facilities as well as expertise in areas of high labour market demand.

As you know, we want to keep and educate our university students within our own country. Honouring that memorandum of understanding between the province and SFU to the equivalent of the full-time students will greatly enhance our area. The region south of the Fraser, obviously, will benefit from the economic spinoff with the companies' involvement and, overall, create a win for education and a win for business, which in turn benefits everyone south of the Fraser.

We're very proud to have Canada's top-ranking comprehensive university in our downtown core, and that's our request, from the business community to you.

B. Ralston: If neither Mr. Hayer nor myself said something, that probably would be considered negligence on our part.

This commitment that was made is a longstanding one, and I know that past president Stevenson and the present president of SFU, Andrew Petter, both worked on that.

You mentioned the programs that are available. I've
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toured the campus, so this is not so much for me but perhaps for other members of the committee. I know there's mechatronics. There's criminology. There are other innovative programs. I'm wondering if you, in the brief time that you have, could talk a little bit more about the nature of the programs and why they're in high demand and also a little bit more about the demographic of south of the Fraser. I know you've mentioned that.

You mention what you call a conversion rate here. Perhaps you could just expand a bit on that and why focusing on that would be important in driving the growth of the institution and preparing those people for productive work in future.

E. Model: Thank you, Bruce. That's a lot to answer in a few quick minutes, but I'll do my very best.

First of all, as I mentioned, Simon Fraser University is recognized as the number one comprehensive university in Canada. Part of the reason is the unique programs that they have, involving the business community, as well as some of the research that they do, as in mechatronics and some of their engineering projects. It's really amazing. Some of the health sciences they're engineering are world-class, in the body and pain deprivation as well as pain management. It's world-class, and we really need to put that first in the forefront with the demographics that are happening south of the Fraser.

As Bruce mentioned, with our tremendous growth of over 1,000 residents a month, we just don't have the educational support for our youth to attend. There are waiting lists three to five years long to get into some of these programs because there just aren't the entries that are available through Simon Fraser University.

As mentioned, there was a memorandum of understanding signed between the province and SFU that would take it from full-time-equivalent students of 2,500 up to 6,000. That hasn't been met. It really goes without saying, with our population exploding the way it is and our schools overflowing and the number of students, that a third of our population is under the age of 19. We need to keep these people south of the Fraser. We need to educate them here, and we need them to grow here and build with us as we grow out as a city centre.

B. Ralston: Well, it's the start of a conversation. I mean, I appreciate the memorandum. Personally, I think the longer-term future of Simon Fraser is at least 15,000 or 20,000 students south of the Fraser, given the rate of growth and the demography here. That's probably a conversation for another day.

D. Hayer: Thank you very much. A very good presentation and very detailed information that lists all the great projects that you've been able to lobby for from this government, including the ten-lane Port Mann Bridge that was missing on the list, the widest road in the world, and the new hospital, a new tower at Surrey Memorial out there.

For this university, do you have any idea approximately how much money government needs to commit to doubling the number of seats for Surrey, what you're saying in this request?

E. Model: That would be a question for Andrew Petter and Joanne Curry from SFU to answer, because I don't know their actual business detail. That's a very good question. I certainly could find that out and follow up with you.

D. Hayer: I think it's really good to see. Personally, I think that over the long term you will have 20,000 to 25,000 students coming to Surrey centre SFU, because it is the fastest-growing area. It will be larger than Vancouver in population. Especially, young families and youth are here.

Surrey Board of Trade was here saying the same thing, and also we had another organization from the schools. They were talking about how we've got $102 million and need more. Keep up your pressure on the government. I think this is the best way to remind all my colleagues that Surrey has always been underfunded for a long, long time. We need to catch up and continue catching up so that we don't fall behind in the future.

D. Horne (Chair): We now have an opportunity to move to other business for a moment, if the committee will indulge me.

Earlier there was a copy of the request for proposals for the auditor for the Auditor General's office distributed to members. Basically, we had a meeting concerning this a while ago — when we elected myself as Chair, actually. The Deputy Chair and I have had a chance to review the document and talk more about it. Perhaps I'll pass over to Kate to give a little bit of background on where we're at.

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): For those members who have served on the committee for a number of months, you may recall some time ago that a motion was adopted by the committee to delegate to the Chair and the Deputy Chair the responsibility, on behalf of the committee, to oversee the preparation of an RFP.

The purpose of this RFP is to fulfil a statutory require-
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ment under the Auditor General Act. Section 23 of that act requires that this committee, once each parliament, appoint an independent auditor to audit the Office of the Auditor General.

This is a task that this committee has now undertaken on two occasions, the first being in 2005. We were due to have the committee undertake this responsibility in the first session of the 39th parliament in 2009, but unfortunately, for a variety of different reasons, the task has not yet been completed.

However, before you is a draft RFP which we would purport on your behalf, should you choose to approve it today, to issue publicly to seek applicants from qualified audit firms to provide to your committee, to the Chair and the Deputy Chair if you so wish, applications to undertake the audit of the Office of the Auditor General for a period of up to five years, which would take us from the current fiscal year 2012-13 forward on a five-year basis.

The process that was followed in 2005 was that the RFP at that time was posted publicly on the committee's website. It was also posted through the B.C. Bid service and sent to accounting organizations throughout the province, and a number of requests were responded to. Then the committee appointed Grant Thornton of Victoria as the independent auditor. Grant Thornton has continued to hold that responsibility on an ad hoc basis, year by year. The committee has not yet dealt with the RFP process, so consequently, one-year appointments followed thereafter.

The proposal before you today is to consider, if you might, the format of this RFP, which has also been reviewed by the Office of the Auditor General and a lawyer. Should you have any suggestions for its improvement, we'd be pleased to take those into consideration, or, should you so choose, for a motion designating our office in conjunction with the Chair and the Deputy Chair, we can then move this process along to the next stage.

B. Ralston: Just to give a sense of the contract, what's been the rough annual billing, say, on average over the last three years from Grant Thornton for this service? I'm not presuming that the request for proposals would come in necessarily at this amount, either over or under, but just to give a sense of proportion.

K. Ryan-Lloyd (Clerk of Committees): Yeah, the estimated value would be about $25,000 per fiscal year, as I understand it. I think, pursuant to the act, if I'm not mistaken, it's an audit both of the financial statements of the office and also of the annual report of the office — the performance measures/indicators that are included in that document.

D. Horne (Chair): If we don't have any further questions, I would look for a motion. Oh sorry, MLA Hayer.

D. Hayer: Were there any concerns or issues raised with this? Or was there anything, from the Chair and the Deputy Chair, to say how to improve on this report? Were there any views on that?

D. Horne (Chair): Both the Deputy Chair and I reviewed it and gave any comments that we had. Those comments have been incorporated into the document.

D. Hayer: And you're satisfied with the information that you provided, that's included in there, both of you?

K. Ryan-Lloyd (Clerk of Committees): Just for clarification, in our office, then, we'll continue to move this process along.

I understand that the next step would be that the request for proposal would then be administered and become a public document. I would propose that the RFP be open for a period of up to six weeks and that through the Chair and the Deputy Chair we will report the results of that process at the earliest opportunity.

D. Horne (Chair): All right. We'll now recess for approximately an hour. We'll return at about 3:45.

D. Horne (Chair): My name is Douglas Horne. I'm the Chair of the Select Standing Committee on Finance and Government Services.

I'll now welcome Linda Hepner, who's with the B.C. Games Society. Linda, you'll have ten minutes to speak, and then we'll have about five minutes of questions following that.

L. Hepner: Thank you, Mr. Chair, and I hope I'll be able to answer those questions.

I come before you today as a councillor that was the co-chair of the recent B.C. Summer Games, so I thought it was important to share with you the experience that
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Surrey had relative to those games and why we think sport and the continued contribution towards the many sports in British Columbia is really important to all of our cities.

My own experience with Surrey I wanted to share with you — both from an economic perspective, in terms of how many hotel rooms we had filled over the course of the summer in the several days of the games, and the opportunity it provided to us, as I am sure it would to many of the other communities. We went to Vernon to watch the Winter Games to see how that played out, to see what the other communities are offering and the kinds of opportunities there are there for their young people.

In Surrey's case, we partnered it at the same time as we did a Fusion Festival, so we got to show not only what Surrey offers for sport in our city but also how we could celebrate diversity in our city. The Fusion Festival was the largest festival we have ever had during the times of the games.

We were certainly impressed with the economic spinoff, and I can tell you — from someone who sat on council as we supported the Olympic Games — that the B.C. Summer Games was a mini-rendition of those Olympic Games. We had more than 3,000 of our people and our residents serving as volunteers. The cost to do that, in terms of what that payback is in community engagement and building strong communities, I think, is immeasurable.

I'll give you a little story of a young boy. I gave out many medals during the games, and there was this young boy. I could see he was crying in the corner, and he had a coach trying to talk to him. I walked over, and I said: "Is there something I can do?" The kid was crying because he'd lost his name tag that said he was with the B.C. Summer Games.

I cannot emphasize how passionately I feel that these kinds of things and the continued provincial support for these kinds of things build good citizens. It's how we create that sense of community. It's how we can take our at-risk kids, and it's what we can do to provide life skills. My understanding is that, from the B.C. Games and from the provincial funding for sport, for every dollar we get $4.70 back from the sport associations. And even for KidSport, it's like 2½ times from corporate donors and from other donors once the province assists in sports.

I know how challenged you are — we face the same challenge at the local level; it is a considerable job you have in terms of where to fund — but even a status quo, if that is possible. I think in terms of public health, obesity and childhood obesity…. More than that, I feel passionately that we need to create really good citizens. In a city and a province that is as diverse as ours, I think this is a significant contributor to that.

From Surrey's perspective, we have more refugee children than anywhere else in the nation coming into this city, and to be able to have them participate in something that makes them feel like they belong, at a cost that is 20 cents on the dollar to what it would cost us if we had to fund the whole thing, I think, is money well spent.

If there's anything that you could take away from today, it's our participation in B.C. Games and what we hope to gain through our sport tourism opportunities as well. We're standing by as strong partners for you in that. If B.C. Games and the sport associations could be funded even at the same level, I think that would be a strong indicator that we believe in what this can do for our young people.

D. Hayer: Thank you very much, Councillor Hepner. I want to say thank you to all the council and to Mayor Watts. You guys did an excellent job at the Summer Games. When I was going around, the people were telling me: "It's like a mini-Olympics." It was good for the kids. It was good for everybody, especially the diversity they saw in the opening ceremonies. And the closing ceremony was tremendous.

My question is: were you able to talk to the different hotels and small businesses after the games to see how they thought they benefitted from the Summer Games — from your personal experience? I know the Sheraton was really packed at that time.

L. Hepner: Yes, I tried to stay here several of the nights. I managed to get in two, but I couldn't get in on the third.

I also sit as a director on the tourism association board, and the tourism association board acknowledged that there was a significant rise in hotel rates. Also, our restaurateur and food industry, as well, saw a bump. So I think that these kinds of events that bring….

There were a lot of, by the way, families that came in, stayed for one day — or stayed for the day that their child was participating — and did a lot of homestays as well, so we had to do the economic impact based on restaurant uses as well as that.

G. Coons: Thank you, Linda, for your commitment to the society. I think most of us here would agree that the importance of it to the athletes, the coaches, the volunteers, the officials — especially to the communities, wherever they're held….

I do have to add that in 1981, I was the paid coordinator for the Northern B.C. Winter Games in Prince Rupert. That, through northern British Columbia, is a key component to bringing people together — and the thrill and the excitement of the sport, but the building of
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communities and the region.

I'm sure all of us here appreciate the hard work that the society does, and we'll consider your recommendations for funding.

L. Hepner: If you were participating at that level, then you know how much work goes into that and how strong that community-building gets. We had people sleeping on the floors in the kitchen because they had to get up so early to feed the kids. It was really quite a sense of accomplishment for all those volunteers. Wow.

M. Elmore (Deputy Chair): Thanks for your presentation and also for all the volunteer hours. I can appreciate that. I wasn't involved as an organizer but as a participant in field hockey in the Summer Games. It was great fun.

I was just wondering, in terms of the B.C. Games Society. So you're responsible for the Summer Games and Winter Games. Are there other activities or events that the organization organizes? Also, do you have a specific request in terms of the amount of support that you're asking for? What is your current level that you receive?

L. Hepner: I'm before you today speaking on behalf of the Games Society only as it related to our recent experience and how Surrey felt, relative to the continued participation of the sport association. I don't have the economic numbers myself. That would be….

L. Hepner: Yes, I believe. I'm not sure if it was included in…. There was a letter that Kelly Mann in an e-mail sent out relative to some of the economic numbers. I'm not sure if they're all in there.

M. Elmore (Deputy Chair): I guess we could follow up with her in terms of the details and specifics.

M. Dalton: Thank you, Linda. I did attend the games and was struck with the enthusiasm, the energy, the organization of the event. One of the communities I represent is Mission, and we're hosting the 2014 B.C. Winter Games. I know that there's a lot of enthusiasm there too.

I'm just wondering about the coordination, as far as…. Will there be any mentoring, working alongside with our community with the Winter Games? Do you have a team from here that will be working along with them?

L. Hepner: Yes. I think that's also an interesting component of where some value comes in. When we went to Vernon for the Winter Games, we partnered up with whichever element we were dealing with relative to the games. We had a specific partner there that you could liaise with.

Not only was it building expertise within our volunteers, but our own organization directors came to understand what the other communities were all about. Surrey is doing exactly that with Mission. In fact, we had them tagging along with us during the games, and they saw where some of our challenges were.

Something else it does is it teaches young people and volunteers how to think very quickly on their feet. When you've got a bus taking food to the kids and it has poured rain and there's no longer a game and the kids aren't there and they're still hungry, how do you solve that? There are so many moving parts to that that it creates this required synergy and comrades. It's sort of "We've got to do this, and we've got to be all in this thing together."

I think that bringing that sense to a community is invaluable, and we certainly are there for Mission. Yeah — rah-rah.

M. Dalton: We've seen some funding already go towards the game. For example, the curling rink. I think there was about a $400,000 upgrade to it. That's all kind of part of it.

L. Hepner: I think that was the importance relative to the comment around leveraging that money. When we agreed to host the games, as a city, we threw in a lot of money to upgrade tracks, to increase some of our sport facilities and in fact to build some new facilities. It also allowed us to showcase those facilities and to now be able to leverage some of the other international and national sports to come here. We've got the expertise that will allow some sport tourism to go on.

D. Horne (Chair): Thank you so much for your presentation and being with us today.

I'll now call our next presenter: Coast Forest Products Association — Rick Jeffery and Susan Gagnon.

As you probably heard, you have ten minutes for a presentation and about five minutes for questions. You can start anytime.

R. Jeffery: Okay. Thanks for having us here today. You have paper copies, if you care to look at them.

I'm just going to start with a really quick strategic
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overview of where the coastal forest industry is. I don't want to spend a lot of time on this, because I only have ten minutes.

We're essentially looking offshore. We're looking at non-residential. We're looking at the value-added sector, which in our definition includes not only semi-commodity niche products but, as well, bioproducts, which are an emerging part of our business. That's what we're looking at.

Market conditions today are fairly difficult. The U.S. is showing some signs of slow recovery. There's a pall over Japan now because they're introducing a consumption tax there that will affect housing quite significantly. China has slowed, and Europe is a mess.

Pulp and paper is off significantly, so we're pushing into headwinds. Notwithstanding that we're pushing into headwinds, the industry is showing some small amount of profitability.

We have a competitiveness agenda. The thing that I would say about the competitiveness agenda is that the industry is highly impacted by the regulatory and tax framework of government. That partially is because of the private land ownership and the level of interaction government has on the regulatory front with business.

There are a number of factors that we see impacting our competitiveness today. First and foremost is that we are moving back to PST. That's a $130 million hit to the industry. It also increases our marginal effective tax rate from 18½ to 27 percent. The marginal effective tax rate has a direct correlation or impact on our profitability and our ability to reinvest in the business.

What are we looking at out there beyond that? Higher hydro rates, higher fuel rates, a strong Canadian dollar and weak markets. So not only are we facing headwinds today; we will be facing headwinds for awhile.

As I said, we've got a three-pronged strategic approach, and the key word in of all that is "innovation." We are very much looking at ways in the recommendations we make to you today to promote capital investment and commercialization and innovation in a number of product ranges. Industrial products are a big market segment for us. That includes sound abatement, oilfield matting, treated wood, things like that. The non-residential sector — looking at heavy timbers, both in a structural and non-structural application, as well as just getting wood into non-residential buildings. Then there's the bioeconomy and the full range of products that are possible out of there.

We have a number of recommendations. First of all is reduce the corporate income tax rate. A lot of this stuff emanates out of the fact that we are moving from HST back to PST. We are facing a large jump in our marginal effective tax rate, so one of the ways you can deal with that is to reduce corporate income tax. That helps. It's not a panacea in any stretch of the imagination. It's almost as much about a signal that you're sending to the investment community and the business community as it is about a financial benefit, although there is a financial benefit there.

Second of all, we talk about streamlining the PST. What I'll say about our industry is that we're capital intensive and we are an export-focused industry. Ninety-five percent of what we produce goes outside of the province. PST has a large impact on us, so we're asking for streamlining of PST.

A couple of things there. We'd like to streamline the exemption rules. There are too many of them. They need to be streamlined and reduced. We're looking for an expansion in exemptions on capital for transportation and telecommunications. Transportation in our world is a high cost, and we'll be paying PST on PST when we return, so we're looking to see if we can get some exemptions there.

You have to know that we cannot recapture the PST in our world, because we sell globally in global markets. We can't turn around to the Japanese or the Chinese and say: "Can you pay 7 percent more PST?" It just doesn't happen. It's too competitive, and our other jurisdictions that we compete against don't have those taxes. Essentially, we pay it, and we can't recoup it. We think there is a need to streamline it as we go back to the PST world. Our final recommendation talks about actually moving away from PST, but we'll get there when we get there.

Research and development. We're looking at research and development grants or refundable tax credits. This one's been on our list every time I've appeared in front of this committee for the last eight years. Bruce always asks me a question about this. I always end up sending him something afterwards. I've taken the shred thing out, Bruce, because we're not quite sure what the feds are doing with their revamping, so we're kind of waiting on that, but we think the province can probably play a role in that regard.

That's to do the R and D piece. The corresponding piece to that in terms of investment and innovations is how to reduce the risk. I talk about bioeconomy, going to new products like nanocrystalline cellulose or biofuels — those kinds of things. High capital cost to do that, and you're going from the laboratory to commercial land. There's a huge amount of risk to go there. What role can government play in reducing that risk? We look at things like refundable plant modernization tax credits and quicker write-offs of capital in these new kinds of things, new kinds of products and processes.

We're not talking about blanket stuff here. We're talking about targeted things you can do in this field that would result in investments in these new processes, new products, that we're on the cusp of realizing.

Municipal taxes. I won't talk about that. It's another one of those things that's been on the list for eight years. Some small modicum of progress has been made. A lot of
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it has been made at the municipal level, but we still think the provincial government has a role in setting the framework for what the bounds of reasonableness are in the municipal taxation world. So I won't go much into there.

I will spend a little bit of time on the next one, which is the carbon tax. First and foremost, when the suite of climate change policies was introduced in 2007 by the government of the day, we had a different economic circumstance. Today we find ourselves in a completely different world. The world has changed on us. The policies, we think, need to be reviewed across the piece, from carbon tax to GHG emissions to clean technology funds, etc.

But in the forest industry here's what happens: notionally, the carbon tax is supposed to be revenue-neutral. It is not revenue-neutral in capital-intensive export industries. For us, we are energy-intensive, so we have to pay the carbon tax in all manner of energy inputs, and we export our products.

Again, we find ourselves in a position where the revenue offset that we get in the tax reduction is far outweighed by the costs of the higher domestic energy, transportation and those kinds of things attributable to the tax. We end up paying a lot more and, again, are in a position where we cannot recoup those extra costs in the global marketplace. We are price-takers selling commodity products.

We think there's a fundamental need for the government to look at the full suite of carbon and GHG policies and review the carbon tax. We, along with the B.C. Business Council…. I don't know if you've heard from them yet. They have a seven-point plan, so we are supporting that.

First is the comprehensive review of the climate change programs. Second, we say: freeze the carbon tax, maintain the tax base and consider reducing the tax or do some analysis around that. Maintain revenue neutrality provisions but then develop clear policy for the tax benefits. It's not quite working the way that we think it should be, so we think you'd be well suited to look at that and make sure that revenue neutrality is actually working.

We have to do this in a pan-Canadian approach, probably a pan–North American approach, really. We have to ensure that B.C.'s carbon tax is factored into the federal sectoral regulatory approach, which they're well on the way to doing. Any kind of GHG reductions we need to do need to be compliant or harmonized with the feds. We think you should review Alberta's GHG technology fund. There might be something there that's useful for us.

Then you need to put in some policies for energy-intensive, trade-exposed industry, like the forest industry, in the next budget.

Then lastly, we think you need to look at a made-in-B.C. value-added tax. Okay, the HST failed. One of the underpinnings of that failure — the main underpinning if you listen to Mr. Vander Zalm — was that he didn't like the province giving up control of taxation policy, and that would happen in the harmonization. So we're saying let's look at a made-in-B.C. value-added tax that would deliver the same economic benefits that HST would but do it in a B.C. way and keep our autonomy and how we do that rather than signing that autonomy over to the federal government.

Tough politics, but I think we need to have a dialogue on that, and so we encourage both parties to pursue that dialogue.

A bunch of recommendations all aimed at trying to improve and capitalize on innovation, drive investment. Investment drives the jobs, and the community-building and all those kinds of things. Thank you very much. I’m happy to take questions.

M. Elmore (Deputy Chair): Thanks for your presentation. I would like if you could talk a little bit more and share more of your thoughts and specifics with regards to the value-added tax and what you envision that would look like, to be implemented specifically here in British Columbia.

R. Jeffery: We're asking for dialogue on that. In our world we would see a value-added tax that looked a lot like the HST in terms of looking at input credits and, where appropriate, making sure that those input credits could be claimed against the tax paid.

We think that consumption taxes are a way more effective tax program than broad-based taxes are, especially on a goods-based tax, goods and services–based tax like the PST, which is fairly regressive.

We have some ideas around what it looks like for the forest sector, but our main recommendation to you is to engage in a dialogue. The failure last time around wasn't that it wasn't necessarily a good tax but that it was not publicly debated. The pushes and pulls on it weren't fully explored, and the federal government put handcuffs on us. You got so much for exemptions. "How do you want to use the exemptions?" "Oh, we're going to use them on gas, this, that and the other" — I think diapers.

Well, if we do a made-in-B.C. version, then we can have a much more robust conversation.

D. Hayer: Thank you very much for your presentation. My question is something that was raised by one of the committee members earlier. I'll paraphrase what the member said — it was relating to the Surrey Board of Trade — that the B.C. Liberal government over the last ten or 11 years has decreased the taxes too much. It's time to increase the taxes maybe to generate more revenues.

I want to find out from your perspective, if we were to increase corporate income tax, would that generate
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more revenues and create more jobs, more investment in British Columbia? Or would the effect be zero, or would it have the reverse effect, a positive effect, on that?

R. Jeffery: Well, increasing corporate tax or any other tax on business is regressive in terms of job creation and in terms of investment. You tax; you have less money in your pocket. You have less money in your pocket, you can't buy the new piece of equipment, and you can't invest in new technology. You can't employ people because you've taken that dollar out of your pocket and put it in government's pocket.

In moving to HST, one of the pieces of magic around that was that our marginal tax rate was dropping down to 18.5 percent. That puts us in the lower kind of third of North American jurisdictions and makes B.C. an attractive place to invest.

Well, we're going backwards now. We're going back to PST. We're going to go back up to 27.5 percent marginal effective tax rate. That's going to have an impact on investment. I'll tell you that right now.

So the notional idea of increasing business tax as a way to increase revenue doesn't work. It actually decreases your revenue from the corporate sector. Our guys know how to avoid taxes, and that can be anywhere from having high-priced accountants dancing on the head of a pin to moving your head office to Alberta. So if you increase tax, business will respond appropriately, and you will get less investment and less jobs.

D. Horne (Chair): We have less than a minute, but I'd like to have two more questions.

B. Ralston: Thanks very much. I'll get you to respond to Mark Carney's suggestions about the impact of tax reductions creating a lot of companies that are sitting on cash and not investing.

B. Ralston: The minister dropped off the report this morning. He didn't make any comment on its recommendations. But from my quick glance one of the key recommendations does seem to be to take PST paid on machinery and equipment and make it into a refundable tax credit, and because the terms of reference were that it had to be revenue-neutral, increase corporate income tax by 0.5 percent and increase mining taxes and oil and gas royalties.

Now, I know that maybe a bit short notice in terms of…. Obviously you haven't had a chance to study the report, but do you have any initial reaction, if it's not too unfair to ask you?

R. Jeffery: Yeah, sure, Bruce. Obviously we'd like much more targeted tax reductions than broad ones. So if you said to me, "We will give you specific PST exemptions on equipment, manufacturing technology, those kinds of things, versus a small" — like if it's 0.5 percent — "increase in corporate tax," we'd go: "Yeah, you know what? Provided the specific PST exemptions were real and were targeted at where we needed them, we'll take that, for sure." We get the cupboard is bare.

What I will say, Bruce, is anytime government increases taxes to business, it is noticed in the boardrooms and in the investment houses. So I think we can say that British Columbia has done a very good job of trying to send the message to the investment community that we're open for business; we want to make sure this is a place people want to invest. So there's a practical thing there, Bruce — yes. Targeted PST exemptions, absolutely. The message you'll send on a corporate tax increase is: "Well, you know what? Maybe we'll look twice at whether we invest here or not."

P. Pimm: Obviously, there are a lot of things in here that hit home fairly close to my heart as well. But the question I have to ask is…. The Finance Minister is just putting together the carbon tax review. Did you make your presentation to the Finance Minister?

P. Pimm: Okay, because far too often I hear industry talk about this but don't get….

R. Jeffery: We worked with Jock and the guys on the seven recommendations, so those are consistent.

D. Horne (Chair): I'll let MLA Routley ask one quick question, and then we'll conclude.

B. Routley: On slide 4 you talk about fostering investment and innovation and about allowing capital projects to be written down faster. Could you give me a little bit more detail on what that would mean exactly or how that work? And do you have any other suggestions on
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how…? The industry — over the years I've heard a lot of talk about the need to see the major manufacturing set up almost like clusters to connect to more value-added from the high-end part of the log that doesn't always go to its maximum or best use. I wondered if you had any ideas on how to bring that about through policy levers.

R. Jeffery: Right. On your first question, Bill…. I'll go to the second question first. The value-added industry on the coast is pretty established. I don't know that there are government levers that you want to pull there. When we look at how the log is broken down and where it goes and how the highest end value is achieved, we're pretty good at it. We've got the custom cutters out there, we've got the small value-added guys out there, we have the big manufacturers out there, and we've spent a lot of time and effort with FPInnovations, forest investment's innovations and ourselves looking at new markets and new products.

For instance, we developed this sound-abatement fencing, which is half the cost of the concrete sound-abatement fencing. It's carbon-friendly in terms of storing carbon, it's lighter, it's easier to install, and it has this incredible cost advantage. And it fits very nicely with the baby squares program into Japan. It takes all the falldown.

It's those kinds of efforts, Bill, that I think are the hallmark of moving up the value chain. You know, the cat 2 program, for instance, didn't work. The value-added program that the ministry ran — it didn't work. It didn't achieve those objectives. I think what you needed to do is enable the marketplace to be able to pursue those things, and they will pursue them.

On the tax piece, essentially what we're saying is that if you allow faster write-off of capital purchases — again, you can target this stuff — especially in the new, more innovative products and marketplaces, then people…. You know, there's a risk to that, but if you can write the capital down quicker, you reduce the risk.

So when I think of the bioeconomy piece, Bill, and taking a pulp mill and trying to tack on a power plant or a nano-crystalline cellulose facility, where the markets are uncertain, there's high risk…. If we had a tax write-off policy that allowed people to do that — write it off faster, reduce the risk — then we'll get that stuff out of the laboratory, so to speak, and commercialize it. I think that's what we're getting at with that type of tax credit.

D. Horne (Chair): Great. Well, Rick, I want to thank you for your presentation and being with us here today.

D. Horne (Chair): I'll now call our next presenter, Skate Canada, British Columbia–Yukon. We have Ted Barton here presenting on their behalf.

Ted, as you've probably heard earlier, you have ten minutes to make your presentation and then approximately five minutes following that for questions. You can begin at any point.

T. Barton: Thank you for this opportunity. I must say that my topic may not be quite as heavy as the previous one, but hopefully, it will hit home, especially with those who have children.

My name is Ted Barton. I'm the executive director for Skate Canada in British Columbia. I've been involved in our organization for 30 years. I was a former athlete. I represented Canada at the world championships. I coached several athletes on the national team. I've worked for the International Skating Union in creating the new judging system after the scandal of Salt Lake City. I was one of six people that created the system and trained the world under the new judging system using technology.

I'm thrilled to be here today to bring to you some of our…. Actually, it's a good-news story. We have been thrilled with the support of the government in supporting sport consistently for the past three years. We knew the funding we were going to get for a three-year period of time. That was huge for us.

I want to go back to following the Commonwealth Games in 1994. There was a great cut in sport, and it greatly affected the registration numbers and the activity in sport and I think, therefore, the health system as well.

We know that in today's challenges, in today's society, technology plays such a huge part, especially for the children, and that many of the kids are in rooms now, at school or back at home, either playing video games or on the Internet, not getting the type of activity they need. Many of them in the old days, of course, going outside and playing baseball and soccer and swimming and whatnot…. It was easy to send your kid outdoors. That doesn't happen anymore because of the way society has changed.

We've worked very, very hard on making sure that we get as many kids into the ranks to learn to skate. We teach hockey, kids how to skate, speed skaters, ringette, public skaters. Skating is a big part of Canadian life, so our sport has done that for over a hundred years now.

As I said, it's a good-news story in the fact that the participants in sport have increased. What we're really here to ask you for is the continued support on a longer-term basis, rather than going back to the old way of each year not knowing what sport was going to get.

I want to talk a little bit about our use of technology because technology is a double sword. On one hand, the kids are playing video games, texting. It's part of their life and will not go away. So it's maybe keeping them out of physical activity in some ways.

What we've done in our sport is actually used technol-
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ogy to our advantage. We do a lot of live streaming, and we have our own broadcast centre so that our clubs in every one of the communities around British Columbia have the ability to communicate directly with us. We broadcast to them about the values of getting involved in sport and in our sport. We educate our volunteers. We educate our officials, and we provide competition viewing, if you will, for those children in Smithers or Kitimat — the small areas that wouldn't have the same access to high-level sport competition as they do down here in the Lower Mainland.

The use of live streaming and now our own broadcast centre has enabled us, in our sport, to get our message out and to educate more people at any time anywhere in British Columbia. So we've taken technology and tried to bring it to inspire people into the arenas.

Just an example. We've had some of the kids that have covered in our live-streaming coverage…. The schools are actually tapping into that now, so the kids can watch their own classmates as they compete. As the kids come back to school, their self-esteem has increased. The promotion of the sport has increased. So I guess my message there is that we feel very strongly that technology needs to be used in the education of sport and the promotion of sport.

Essentially, what we need to do is continue to promote sport and physical activity to keep our society healthy. The health system suffers because kids aren't active, because people aren't active. If we can get sport and physical activity in each one of the communities at a higher degree, at a higher level, then I think we'll see the benefit in our health system as well as in our education system.

It's not a huge ask. It's continued support, as the government has given for the past three years, and not rolling back to the old days where we saw a lack of support result in a lack of participation.

I'm a little short on my time, but I wanted to make sure I got that message. I wanted to thank you very much, the government, for the support. Of course, the Olympic Games didn't hurt us. It helped us. It brought a nation together like never before.

I know many of you probably have your children in sport. It's probably just a common thing for you. But can you imagine a world without sport? I mean, think about it. If our kids weren't active in sport, if we didn't have sport to watch, where would we be? Sport is not just sport alone. It's really a huge part of our society and needs to continue and needs to grow. Thank you very much for your support. I'll take any questions, if you wish.

T. Barton: Well, actually these professionals…. They make money. We just spend it — right? [Laughter.]

D. Hayer: Thank you very much for your presentation from Skate Canada, British Columbia. Can you let me know: what is your budget per year, and where does most of your funding come from for your organization?

T. Barton: Our sport is not that large a sport, but we're about a million-dollar budget. We have over $300,000 come from the government. The rest comes from registrations and sponsorships. As I said, the technology has really helped us because we actually sell advertising now on our broadcasts, which helped us pay for the equipment and helps to reach…. We have a large audience. In fact, last year out of six competitions, we had 60,000 unique viewers worldwide. Sixty countries watched — large contingents from Korea and Japan.

We're generating revenues through our live streaming, sponsorships, registration and, of course, government.

G. Coons: Thank you, Ted, for your presentation. I was also going to ask about the budget, and so thanks for clarifying that. I think, again, we had the B.C. Games Society in here looking at the benefit of sport and how it's pulling together communities and how vital it is for the health of our young.

I was wondering about — you're talking about funding for a longer-term basis — whether or not it's just yearly and you would prefer a three-year or five-year frame.

T. Barton: Yeah, absolutely. That's critical. A sport cannot plan their programming, because they don't know what to count on. I mean, we're lucky because we've been innovative in using technology in generating revenues to help offset our government support, but there are many sports that haven't had that opportunity or haven't taken that opportunity at this point. They completely depend on the government sources, so they can't plan too far in advance.

At the same time, we were trying to spend our effort and our experience to give to them to generate their own revenues. Technology — we've taken it on in a big way. I know that once that gets out there…. We are now communicating with other sports. Hopefully, they will follow in the same footsteps and be able to generate some of their other revenues as well. But many of them don't have the same opportunities that we've had.

M. Dalton: Thank you, Ted, for the presentation, and just to recognize the importance of sports to long-term health, whether it be physical or emotional. Government
[ Page 1878 ]
just allocated $400,000 for KidSport. I believe that was last week or something like that, so that's good. And inside the curriculum in schools right now they have to have a minimum amount of sports activity every single day, so that's in recognition of physical activity.

On funding, is your funding through gaming, or is it independent of gaming grants? If it's a million dollars, it must be above and beyond.

T. Barton: That's independent of gaming grants. I know this is not the committee to deal with that, but we have…. I don't know if I want to say concerns, but we have some comments on gaming for sure, but it's in addition to gaming grants.

We're answerable at a very high level for government funding, especially for high performance. As much as it's been a task to do, it's been the best thing for us. In fact, the government holding us responsible for our results has been the best thing for the development of our sport. It's huge.

In fact, our sport, I can honestly say, would not…. We have kids all over the world every weekend competing somewhere in the world for Canada. We would never have been there had there not been the funding — and that we were not held to a high standard of accountability for how we were spending that funding. So that's the good news.

The gaming is completely different and is a big concern, because we need to be held — all sports need to be held — to a higher degree of how that's spent. I know that's not this committee. I just wanted to throw that in there.

M. Dalton: Do I understand you correctly in saying that there's been a change of policy as far as long-term funding towards your organization, or not? You're concerned about that.

T. Barton: Our three-year term is coming up. We're asking that the committee consider long-term funding for sport to keep it consistent.

If I may just mention, just take another second about education. One of the things we're doing with the technology is to provide schools with instant access to information and education on sport. So they're not only more active, but they have access to our websites for promotion of sport and education.

P. Pimm: Can I just follow up on that a little bit? I'm a little bit confused about what you're saying. Thanks a lot for the presentation, by the way. It's good, and I certainly support your goals and objectives.

You said you have a three-year term that's coming up. So are you actually asking for a three-year term every year, like a revolving three-year term? Is that more what you're looking for on your funding so that you know each year that you've got another three-year commitment?

T. Barton: Yeah, a three- to five-year term would be terrific. I mean, I understand there's a responsibility of this government for accountability, and certainly, these are challenging times for the government. We understand that. But for the sport sector to rely every year…. Not knowing what's coming up, it's very, very difficult for us to apply sport throughout every community in British Columbia. That's very hard.

P. Pimm: Okay, but I got that right. You've got a three-year term now, but it's finishing, and so you don't know if it's going to be renewed or not.

D. Horne (Chair): I want to thank you, Mr. Barton, for your presentation and for being here today.

As we end our first day of presentations, I want to thank some of those that are travelling with us as well, including, from the parliamentary committees office…. I note that Stephanie actually just walked out with a box, but I want to thank Stephanie Raymond and Gordon Robinson, one of our researchers who is here today — who were at the registration desk.

I'd also like to thank Michael Baer, Jean Medland and Steve Gullickson for handling the Hansard services here today in such an able fashion — and, as well, our Clerk, the Clerk of Committees, Kate Ryan-Lloyd, who's also joining the committee this week.

Tomorrow we continue with presentations, and I look forward to reconvening at that point.

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

6) Geoscience BC	Dr. 'Lyn Anglin
7) Dr. Mychael Gleeson
8) Downtown Surrey Business Improvement Association	Elizabeth Model

Chair:	* Douglas Horne (Coquitlam–Burke Mountain BC Liberal)
Deputy Chair:	* Mable Elmore (Vancouver-Kensington NDP)
Members:	* Gary Coons (North Coast NDP)
	* Marc Dalton (Maple Ridge–Mission BC Liberal)
	* Dave S. Hayer (Surrey-Tynehead BC Liberal)
	* John Les (Chilliwack BC Liberal)
	* Pat Pimm (Peace River North BC Liberal)
	* Bruce Ralston (Surrey-Whalley NDP)
	* Bill Routley (Cowichan Valley NDP)
	John Slater (Boundary-Similkameen BC Liberal)
	* denotes member present
Clerk:	Kate Ryan-Lloyd
Committee Staff:	Stephanie Raymond (Administrative Assistant)
	Gordon Robinson (Committee Researcher)

Witnesses:	Dr. 'Lyn Anglin (President and CEO, Geoscience B.C.)
	Ted Barton (Executive Director, Skate Canada, British Columbia–Yukon section)
	Dr. William Cunningham (President-elect, British Columbia Medical Association)
	Hon. Michael de Jong (Minister of Finance)
	Wes Everaars (South Fraser Community Services Society)
	Susan Gagnon (Coast Forest Products Association)
	Dr. Mychael Gleeson
	Linda Hepner (B.C. Games Society)
	Anita Huberman (CEO, Surrey Board of Trade)
	Rick Jeffery (President and CEO, Coast Forest Products Association)
	Phillip Legg (Federation of Post-Secondary Educators of British Columbia)
	Elizabeth Model (Executive Director, Downtown Surrey Business Improvement Association)
	Joel Murray (Kwantlen Faculty Association)
	Nancy Peirce (Ad Hoc Committee for Surrey Schools)
	Linda Stromberg (Ad Hoc Committee for Surrey Schools)
	Shayne Williams (Executive Director, South Fraser Community Services Society)

1) South Fraser Community Services Society	Shayne Williams
	Wes Everaars

2) Surrey Board of Trade	Anita Huberman
3) British Columbia Medical Association	Dr. William Cunningham
4) Kwantlen Faculty Association;	Joel Murray
Federation of Post-Secondary Educators of BC	Phillip Legg
5) Ad Hoc Committee for Surrey Schools	Linda Stromberg
	Nancy Peirce

9) BC Games Society	Linda Hepner
10) Coast Forest Products Association	Rick Jeffery
	Susan Gagnon
11) Skate Canada British Columbia/Yukon	Ted Barton

REPORT OF PROCEEDINGS(Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES