Finance and Government Services � Issue No. 88 � Thursday, October 18, 2012 (HTML)

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; John Slater, MLA

3. 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
Presentations	2393
T. Hackney
G. Dauncey
J. Reed
S. Mann
I. Mason
A. Cahoon
C. Ewart
N. McRae
A. Wood
B. Schaufele
P. Lawless
M. McEvoy
A. Gage
L. Matthaus
P. Lacerte
B. Carter
P. Sandmark
P. Corrigan
K. Laurin
P. Lockie
K. Warwick
J. Curry
K. Peacock
M. Whitemarsh
F. Ford
R. Bealing
D. Turpin
C. Oliver

D. Horne (Chair): Good morning, everyone. I'm Douglas Horne. I'm the MLA for Coquitlam–Burke Mountain and the Chair of the Select Standing Committee on Finance and Government Services.

This is an all-party committee of the Legislative Assembly whose mandate includes conducting annual public consultations on the upcoming provincial budget. I would like to welcome everyone in the audience and thank them for taking part and participating in this process.

Every year, in preparation for 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 provincial budget.

Printed copies of the Budget 2013 consultation paper are available for information at the registration desks. Once this paper is released, the committee holds public consultations and invites input from British Columbians. Following the consultation period, the committee releases a report containing a series of recommendations for the upcoming budget. The report must be presented to the Legislative Assembly no later than November 15.

There are several ways that British Columbians can participate. This year the committee has held 18 public hearings throughout British Columbia. This is the final meeting of our public consultations. We've also visited Surrey, Castlegar, Cranbrook, Kelowna, Vernon, Vancouver, Coquitlam, Abbotsford, Fort St. John, Quesnel, Kamloops, Prince Rupert, Kitimat, Smithers, Prince George — and Courtenay and Parksville yesterday. We also held video conferencing hearings with Dawson Creek, Fort Nelson and Salmon Arm.

In addition to the public hearings, British Columbians can also share their ideas by sending us a written submission through our on-line form on our website. We also accept written submissions by e-mail, letter, fax, along with video or audio files. As well, British Columbians can fill out a short on-line survey on our website, which is located at www.leg.bc.ca/budgetconsultations.

There you'll find information on the consultation process. You can download a copy of the budget consultation paper and learn more about the work of this committee. All the public input that we receive is fully considered, and the deadline for submissions is actually today, October 18.

We'll start the meeting today by having members introduce themselves. I'll start with the Deputy Chair to my left.

M. Elmore (Deputy Chair): Good morning. My name is Mable Elmore, MLA for Vancouver-Kensington and Deputy Chair of the committee.

J. Slater: Good morning. John Slater, MLA for Boundary-Similkameen, and I live in Osoyoos.

D. Hayer: Good morning. Dave Hayer, MLA for Surrey-Tynehead. That's the home of the widest bridge in the world, the new Port Mann Bridge, the ten-lane one.

D. Horne (Chair): Also joining us today from our parliamentary committees office is Susan Sourial, the Clerk, along with Stephanie Raymond, at the back of the room at the registration desk.

In today's meeting each presenter will have ten minutes to speak and five additional minutes for questions from committee members. Time permitting, we also may have an open-mike session. If you're interested in participating in the open-mike session, please register with Stephanie at the back of the room.

Today's meeting is a public hearing which will be recorded and transcribed by Hansard Services. A copy of the transcript, along with the minutes, will be printed and made available on the committee's website. In addition to the transcript, an audio webcast of this meeting will also be posted on the committee website.

I'll begin by calling our first witness, being the B.C. Sustainable Energy Association, represented by Guy and Tom.

Welcome to the committee. You have ten minutes to present, and your time begins now.

T. Hackney: Thank you. Mr. Chair, Madam Deputy Chair, committee members, on behalf of the B.C. Sustainable Energy Association, thank you for giving us the opportunity to address the committee.

The B.C. Sustainable Energy Association's members are citizens and energy professionals from all over B.C. who are committed to moving B.C. to a sustainable energy future with energy use that can be continued in the
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long run without hurting the ability of future generations to meet their needs.

We are deeply concerned about greenhouse gas emissions from fossil fuels. These emissions are the main drivers of global climate change. Our members want B.C. to be a leader in reducing emissions and developing sustainable energy alternatives. BCSEA has two recommendations for the committee. I will only have time to speak about the carbon tax, but I will take questions on the second one, which is opposition to taxpayer or ratepayer subsidies to shale gas or liquid natural gas developments.

The carbon tax. BCSEA strongly supports the carbon tax. Specifically, the carbon tax should increase annually on an announced schedule by at least $5 per year, which is the current rate — or better, $10 per year. This gives a clear signal of direction, allowing British Columbians and B.C. businesses to plan and determine how best to manage the increasing cost of greenhouse gas emissions.

The carbon tax should be broadened to capture all non-combustion greenhouse gas emissions that can be reliably measured. That means emissions from aluminum production, mineral and lime production, cement production, methane venting from natural gas production. Together, these cause about four megatonnes of carbon dioxide equivalent per year, about 8 percent of B.C.'s total emissions. It is a matter of fairness that they should be covered.

In allocating the carbon tax revenues, government should consider directing at least some of the revenues toward climate change solutions, such as energy efficiency, transit improvements and non-emitting energy sources, rather than maintaining strict revenue neutrality. This would highlight government's leadership on climate change. It would increase the credibility of the tax by linking it to its intended purpose of supporting climate action, and it would engage British Columbians more directly.

Broadening the tax to cover non-combustion emissions would generate about $123 million per year that could be applied to climate solutions. Low-income people should be protected from undue hardship by ensuring that the carbon tax credit keeps pace with the tax itself. Social justice is critical to maintaining social licence.

Finally, there should be no loopholes in the carbon tax. It should be kept simple, transparent and fair.

Putting a price on carbon is widely regarded by economists and business leaders as necessary to encourage a shift from fossil fuel use toward sustainable energy alternatives. Carbon pricing is supported by the National Round Table on the Environment and the Economy and by the Canadian Council of Chief Executives. The Business Council of B.C. supports the carbon tax in principle, although it has expressed reservations about its execution.

Without a price signal, people are encouraged to disregard the climate change consequences of fossil fuel use. With a price signal that is graduated and predictable, people and businesses can plan alternative strategies and start to address a long-term sustainability of their energy use. This need not cause undue pain. Sweden has had a carbon tax since 1992. Its economy has grown by 44 percent while its greenhouse gas emissions have fallen by almost 10 percent.

Carbon pricing and/or cap-and-trade systems have been or are being implemented in a score of countries around the world, including China. There are many complaints about the carbon tax, but the bottom line, we say, is that the people of British Columbia want to be leaders, not laggards, in the challenge of addressing climate change. We don't want to stand by with our hands in our pockets while the biggest crisis facing humanity unfolds around us.

Our polling shows that British Columbians support the carbon tax. They don't think it hurts the economy, and they would like to see it extended.

During the carbon tax review this summer the Better Future fund initiative inspired 1,700 British Columbians to write personalized letters to the Minister of Finance asking that the tax be increased and broadened and that the moneys from the tax be put to a better future fund to support climate solutions.

The government of B.C. has looked at the carbon tax and its effects, as have researchers from the University of Ottawa. They find that since the implementation in 2008 fossil fuel consumption in B.C. has declined while B.C.'s economy has increased. The Sustainable Prosperity group reports that B.C.'s economy has outperformed the economy in the rest of Canada during this time, suggesting that the carbon tax has not been harmful.

B.C. has heard claims of economic harm, including to greenhouse growers and cement manufacturers. We take these seriously, because sustainability requires economic well-being, but we must be careful not to prejudge that the carbon tax is the problem or that it should be weakened in response.

If careful and thorough analysis shows that a business is hurt by the tax, government may decide that public interest justifies a special remedy. For example, one-time payments may be made to a business to help adjust to new circumstances, or there may be non-monetary solutions. The carbon tax was already accompanied by a large reduction in corporate taxes. Granting additional exemptions, especially to high-emitting industries, would undermine the purpose of the tax, while shifting costs onto other taxpayers.

Some people say that support for the carbon tax is only in urban, southern B.C. and that rural and northern British Columbians oppose the tax. BCSEA does not see that. During the carbon tax review one-third of the
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1,700 letters inspired by the Better Future fund initiative came from outside the Vancouver and Victoria areas. One writer from B.C.'s northeast called the tax "a huge step forward in the right direction for our province and for the planet." We should not underestimate people's desires to be a part of the solution.

The city of Dawson Creek, in its submission to the carbon tax review, says: "Every jurisdiction needs to do its fair share to reduce greenhouse gas emissions. The carbon tax is one tool in B.C.'s toolbox that will allow B.C. to achieve its climate action objectives while maintaining a strong economy. The city of Dawson Creek has been supportive of B.C.'s carbon tax since its inception, and we have been proactive in finding ways to reduce our own emissions."

Thank you again for this opportunity to address the committee, and I look forward to your questions.

D. Horne (Chair): Thank you so much for your presentation. We'll start our questions with Pat.

P. Pimm: Good morning. What a great way to start the morning. Great presentation. I've got a couple of questions and a couple of comments.

First off, did you know that Sweden's energy industry is exempt from the carbon tax in that country? Secondly, what do you say to the farmer in the Peace country that says the carbon tax is putting him out of business and that you won't be able to have any grain production? Thirdly, what do you say to the resident in the Peace country that pays $300 a month to heat his home and pays more in carbon tax than the average person pays in a heating bill in Victoria?

T. Hackney: In regard to Sweden, yes, we're aware of that. Every country has its own different approach to the tax, and there are exemptions. We think that in British Columbia it's not necessary or appropriate to have such an exemption. It's important to analyze carefully what's going to be achieved and how it will be achieved. We shouldn't lose the purpose of it, I say.

G. Dauncey: If I could answer that. In Sweden, to my understanding, it's only electricity that's exempt, not energy in general.

For the heating, the $300 a month, anyone currently burning oil can do a transition to ground-source heating or air-source heating in our environment and make good money on that investment, as a change of heating system. The purpose of the tax is to make it incentivize people to doing a change to other kinds of heating.

P. Pimm: I don't think anybody would argue that point, but that's pretty uneconomical for the farming community in the northeast.

T. Hackney: If I may just…. To reply on the Peace, I understand that there is a rural tax credit that is given, that does in fact offset the additional costs.

G. Coons: Thank you so much, Tom and Guy. This is a topic where on our tour we seem to be hearing the urban-rural split. It's nice to see the city of Dawson Creek coming out and taking a leadership role there. It seems there are so many issues in your presentation.

You seem to be against the large reduction in corporate taxes, and we need to look at that. The Business Council of B.C. has reservations about its execution, I think. A lot of people have reservations about its execution and where we need to go.

I think one idea or thought that we need, especially for those people in rural and northern British Columbia, is: should it be revenue-neutral, or should we be putting it towards initiatives that people can see, that are on the ground and are working? In urban areas you can see transit initiatives and all that happening. In Haida Gwaii, for example, to look at energy efficiency for your home, you have to bring in somebody from Smithers or Prince Rupert or Terrace, at a cost of thousands of dollars, just to analyze, you know, your house — that type of issue.

What initiatives could you see that would be on the ground for those in northern and rural B.C. that could work, especially since we don't have the transit solutions that you may have in the urban areas?

T. Hackney: Well, we haven't had the means to do a detailed study, so I'm going to be a bit on the general side. But certainly, we believe that building energy efficiency is something that could have big dividends for all British Columbians. The whole building stock could do with a thorough retrofit, and government would have a big role in ensuring that that was done right, in our view. A lot of….

G. Dauncey: I would add to that any initiatives around community car-sharing or ride-sharing, which require, ideally, local application to build trust. You know, as soon as you share a car with three people, you've reduced your fuel bill by two-thirds…

D. Horne (Chair): Thank you so much for your presentation. We've reached the end of our allotted time. I'll
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call our next presenter.

Jim, welcome to the committee. You have ten minutes to present, and your time begins now.

J. Reed: As you noted, I'm Jim Reed, president of B.C. Colleges. Thank you for including us in today's prebudget consultation process and allowing us the opportunity to help shape the 2013-14 provincial budget.

Let me start by saying that B.C. Colleges recognizes and is sensitive to the fiscal challenges currently facing the province. In your package you will find details on our budget submission, both a detailed submission and more of an executive-summary form.

I want to point out that we've taken a scaled approach to this budget. We started with a modest request for 2013-14, reflective of the fiscal challenges — an increase of budget in tandem with the projected labour market requirements and the predicted provincial recovery.

I also want to highlight that colleges have been running lean operations for some time now. But in order to build capacity to meet the growing labour market demand, we require a multi-year, sustained approach to funding. This long-term, stable funding will ensure colleges can plan and develop programs, build capacity, plan staffing and meet the emerging needs of our students, communities and employers.

I realize you've already heard from many of our colleges in your sessions throughout the province, and I hope this has given you an appreciation for the local challenges and the opportunities facing our college and our different regions of the province.

My presentation reflects the overall requirements of the B.C. college system. B.C. Colleges is a consortium of 11 public community colleges serving close to 200,000 people annually in almost 70 communities throughout the province. This makes a college education the most accessible and affordable pathway to post-secondary education in B.C.

As you know, the labour market numbers predict a million job openings by 2020. Demand for workers in B.C. will outpace the supply starting in 2016. Colleges have a pivotal role to play to meet the forecasted demand for skilled workers in the future.

There are three areas where B.C. colleges can play a significant role. The first is to ensure a skilled and educated workforce for British Columbia. College graduates will be essential to B.C.'s economic growth and prosperity.

A series of provincial and federal reports have highlighted the growing need for college graduates, including nurses, lab technicians, health care aides, pipefitters, marine trades, construction workers, transportation managers and many other college program grads. In fact, of the one million jobs forecasted, upwards of 600,000 of those jobs will require some form of college education.

Labour market forecasts estimate that the need for workers with advanced education will exceed the capacity of the B.C. post-secondary system by more than 10,000 college and university graduates annually by 2020.

On an almost daily basis there is media coverage about the looming skills shortage. Earlier this month in the Vancouver Sun the Conference Board of Canada highlighted the need for long-term education and training investment to meet this shortage, as well as the importance of tapping into underutilized groups in society such as immigrants, aboriginal people, women and people with disabilities. We agree. Planning investment needs to be put in place now.

To meet these labour force demands, we need to strategically build capacity through a multi-year plan with sustained annual investment, starting in 2013, of $7.2 million and building to $47 million by 2020. Ultimately, this investment will produce 2,000 additional college graduates per year by 2020 in areas immediately required for the B.C. economy.

Based on current forecasts, demand for many graduates will be in business, management, health, applied sciences and trades. However, I want to point out that we realize that the labour market forecasts are fluid, and as such, we will need to be flexible and adapt to changing needs.

I recently visited Northwest Community College and was shown a thank-you note from a mature student who recently completed the heavy-equipment operator program, one of the top ten trades in demand in B.C. This program turned his life around. He obtained a job shortly after graduation. In the note he said: "You gave me a chance to better my life and the life of my family."

We hear these stories all the time. With sustained funding, we can transform more lives, meet labour force needs and capitalize on the opportunities that will keep B.C. competitive, like the Asia-Pacific gateway and the growing number of shipbuilding and oil and gas projects.

The second key area is that we will help to build strong and vibrant communities in B.C. Our colleges create tremendous positive economic benefit for their communities. In many communities, colleges are the central hub of the town. With campuses and learning centres in almost 70 locations throughout the province, colleges have the broadest reach of any post-secondary segment in B.C.

Research shows that graduates are more likely to stay and work where they've studied, which in turn positively impacts the fiscal and social well-being of local communities. It's a win-win for students and communities.

With multiple campuses, a regional role in economic and social development, and programs and services designed to meet the particular needs of students, colleges
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are under-resourced for the job they are expected to perform. To support regional prosperity, colleges require an annual new investment, starting in 2013, of $5.2 million and building to $19 million by 2020.

Specifically, we want to improve infrastructure and Internet connectivity for rural learning centres. We want to increase access to regional campuses and enhance pathways for aboriginal learners, immigrants and other under-represented groups in areas that are labour market–critical. We want to provide educational support and continue to provide that support for approximately 30,000 college learners who require additional assistance in order to transition successfully to further training or into the job market.

We want to improve on-line and technology-assisted learning. Our colleges would develop 25 courses annually to deliver on line. Finally, we'll encourage innovation with a three-year $3 million annual matching program for innovation and commercial development.

The third area where B.C. colleges can play a significant role is to enhance B.C.'s competitive advantage in knowledge and skills. Skilled and educated workers are the 21st century's most critical resource.

B.C. colleges offer individualized attention, flexible programming and innovative delivery models to ensure world-class education. Colleges teach essential skills to help British Columbians keep pace with a changing workplace. We need to equip our colleges and students with the knowledge, equipment and essential skills crucial to a successful education and ultimately to transition to the workplace.

We require an annual ongoing new investment of $8 million in 2013-14, building to $10½ million in 2020. This investment includes new investment for equipment renewal and a matching incentive for business and industry, new investment to further international education with key trading partners and to continue a program that we started two years ago, which is systemwide education planning, and an essential skills pilot that establishes an assessment tool and learning framework to ensure that our labour market has a broad pool of skilled and productive workers.

Let me spend one more minute on essential skills. Fifty percent of B.C. college students and 65 percent of B.C. youth who are working or who are unemployed score a level 2 on a five-point scale of essential skills. In fact, 40 percent of Canadians, regardless of education, score a level 2 or lower. To function effectively in the workplace or to be successful in your education or training, you need to be at level 3.

Getting behind essential skills could be a real game changer. A recent study at NAIT, for instance, showed that apprentice students with level 3 were ten times more likely to complete their final exams than students at levels 1 or 2. It is really important that we get on with a pilot such as this.

In summary, the combined total new funding request in these three areas for 2013 is $20.45 million, scaling up over the subsequent six years to $76.5 million. Yes, it's a large ask. But it will take this type of bold commitment if B.C. is to meet the skilled labour forecast to the year 2020.

B.C. colleges are an excellent return on investment. With approval of this multi-year plan, I am confident that our colleges can help the province develop a skilled and educated workforce to build strong and vibrant communities, enhance B.C.'s competitive advantage in knowledge and skills, and ultimately help B.C. remain nationally and globally competitive.

B.C. Colleges shares the post-secondary sector's commitment to the principles of increased access to affordable, quality education and training for students in every region of the province. We will continue to look for opportunities for collaboration and partnership, thereby leveraging the strength of the British Columbia post-secondary education system. That's my presentation. Thank you, and I'd be happy to entertain any questions.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with our Deputy Chair, Mable.

M. Elmore (Deputy Chair): Thanks for your presentation, Jim. We've heard from a number of colleges right across B.C. We've also heard from industries and companies in terms of the need for skilled workers, and I think it's clear that colleges are well situated and integrated and knowledgable about the local needs in their areas.

My question is with respect to your recommendation No. 2, increasing access for immigrants, aboriginal learners and other under-represented groups. What are some of the initiatives or proposals to encourage greater participation?

J. Reed: Several of our institutions have immigrant students as a large portion of their population. They would like to expand the type of intervention and programs that they are able to offer but are very limited in terms of what they can do.

For instance, at Vancouver Community College 60 percent of their student population are immigrants, and they are really limited in terms of what more additional services and innovative types of programs they could introduce that would be able to ramp up and get people either learning-ready or job-ready.

So that's one of the areas. We also need to look at increasing the capacity of our institutions in several of our outlying areas of the province. When I was at Northwest Community College it was heroic, some of the work that's being done up there, particularly in that a large portion of that student population is aboriginal.
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That institution, for instance, is operating just on the edge in terms of their capacity, in terms of people to serve and the ability to have some long-term, sustainable funding. It's very limited in terms of being able to actually respond effectively to the changing and emerging needs of people who are traditionally under-represented in the post-secondary system.

M. Elmore (Deputy Chair): Just to follow up. Just to confirm, Jim, in terms of your ask and a specific request…. Each of opportunity 1, 2 and 3 — those items…. Is it to add them all together?

J. Reed: Yes. There's a summary table at the end which shows the annual, by-year amount for each of those three categories. The total for '13-14, if it was all fully funded, would be $20.45 million.

J. Reed: Many of those areas are already, I think, on the close to…. There have been some announcements in terms of some support. Let me talk about the equipment renewal. We've recently got some very positive announcements. But we need to do so much more.

Again, at Northwest Community College, when I was in that trades facility…. It's a 1960 facility. They are expected to be responding to the industrial development and infrastructure development up in that area and working with equipment that is 30 or 40 years old, training people on equipment that…. When those students transition into the workplace, they're all of a sudden faced with equipment that they weren't even trained on.

Now they're using simulation, which is an amazing introduction that they've taken throughout the area of the northwest, but we need to do a lot more and need to invest a lot more in that particular area. That's just one example.

M. Dalton: Thank you very much for joining us today, Jim, and sharing about the colleges. It's been a pleasure hearing from the different representatives throughout the province, and lots going on.

I met with Mark Evered at the University of the Fraser Valley last week and had discussions. There are some real expansions happening there. But there's a tight squeeze also. I'm just wondering if you can give us an idea of the enrolment numbers, what the trend has been over the past, say, five years. Even the number of programs — how are things going on that?

J. Reed: Enrolment has been very strong, particularly over the last three years. I guess it's a little bit reflective of the economy. It's sort of cyclical. Usually we experience, in post-secondary education, that when the economy is slow or is even, perhaps, in a sort of recessionary mode, people tend to want to go back or do go back to school.

Many of our institutions consistently, over the last several years, have been at 100 percent in terms of what their targets were given. Our enrolment has been very strong. We have particularly, you know, some big wait-lists in some areas that are more on the technical, on the trades area. But I would say overall that our enrolment is very strong, and the programs are very attractive to the people that are coming in.

One of the things that we really take a lot of pride in, in terms of the colleges, is that we are very close to what industry is requiring and what the job market is asking for, so we're adapting our programming on a consistent basis in order to be able to kind of respond to what those changing needs are.

We feel that we're very responsive, and the students are coming in to take those types of programs. Interesting phenomenon that we've been experiencing in the last little while is that we're getting a lot more people coming back who are already holding a university degree and looking for some practical training in order to be able to enter into the workplace. That's not a phenomenon just in B.C. That's right across Canada.

D. Horne (Chair): Thanks, Jim, for your presentation. We've reached the end of our allotted time, so unfortunately, we have to move on.

I'll now call our next presenter, being the Victoria Real Estate Board and Shelley Mann. I also understand that Ian Mason is joining us as well.

Shelley and Ian, welcome to the committee. You have ten minutes to present, and your time begins now.

The Victoria Real Estate Board currently represents 1,300 realtors in greater Victoria who work with buyers and sellers of homes and other properties located from Sooke to Sidney, as far north as Mill Bay, and the southern Gulf Islands.

We would like to begin with some good news about our local economy when it comes to the real estate sector. The positive news is that whether you review our annual stats or our single-family dwelling sales on our MLS board — currently Multiple Listing Service — for the last 90 years, our year-over-year numbers are virtually identical. This year's sales to date are 4,725, compared to last year's at 4,736.

So while it's been reported that our average prices are down, we would like to leave the impression with you again this year that we're experiencing a relatively stable real estate market. Please understand. We're not using these statistics to be overly optimistic about our current market conditions. But there is some strength in our sector that needs to be recognized. Our own assess-
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ment continues to be that our southern Vancouver Island marketplace for single-family detached homes is remaining stable with reasonable momentum despite the global economic situation.

Today our board would like to focus even more on our local marketplace and on how the local housing sector could contribute to greater economic stimulus if the government took a number of proactive steps.

We will address the opportunities we see for increasing the supply of all housing in our region and elsewhere in British Columbia and be specific about the needs for incentives for construction of rental housing. Then we will end our submission with support for the position of the British Columbia Real Estate Association on reducing the burden of the property transfer tax.

First, the housing market. We know from previous research conducted by the Toronto-based Atlas group that for each MLS transaction in B.C., an average of $60,200 in additional consumer spending was generated between 2006 and 2008. Since we are expecting total sales of 5,600 for 2012, this activity will represent a $336 million contribution to our economy using this multiplier. And that's just post-transaction expenditures.

One can easily begin to see from this small regional example the positive impact that the housing market has on the Canadian economy as a whole. Think about when you last read a story about the national economy falling slightly.

The main reason for this analysis was likely that the housing sector was in trouble. Last year we quoted to you an article that appeared in the Globe and Mail, headlined: "Slowdown in Housing Threatens Recovery." The article noted that the housing sector that helped pull Canada out of the recession now threatens to derail the recovery as a slowdown in sales and construction acts as a drag on economic growth.

The article goes on to quote the CMHC to show that housing-related activities, including the rental market and the sale of existing homes, now accounts for almost 20 percent of gross domestic product in Canada.

This year we want to stay on the same theme about the importance of both the sales side of the housing market represented by our profession and the construction side of the housing sector. It doesn't matter who you listen to in 2012. Almost everyone is pleading with senior governments to find ways to provide incentives for the construction of new, purpose-built, multi-unit rental housing units across Canada.

We bring your attention to an idea that is gaining traction from coast to coast, with support now from the Federation of Canadian Municipalities, the British Columbia Commercial Council of Realtors, the Canadian Federation of Apartment Associations, the Canadian Home Builders Association — the B.C. chapter — the Rental Owners and Managers Society of British Columbia, the newly formed Canadian Rental Housing Coalition, our own capital regional district directors, the Metro Vancouver board of directors, ourselves and others.

The idea is that the government of Canada be persuaded to allow for a change to the federal Income Tax Act that would allow for a capital gains deferral to spur reinvestment in purpose-built rental apartments. This position is supported by the Greater Victoria Chamber of Commerce, the British Columbia Chamber of Commerce and, as of this summer, the Canadian Chamber of Commerce.

Yes, this is a federal issue, and it relies on a change in the federal Income Tax Act to bring this idea into force. However, examine with us direct and immediate benefits to the British Columbia provincial revenue picture. On every sale, the province receives a property transfer tax. In the current budget for the 2012-2013 fiscal year that tax is estimated to generate $810 million.

When a residential multi-unit apartment owner sells his property, in order to qualify for the proposed rollover or deferred federal tax, he would be required to reinvest the proceeds in another property. Additional property transfer tax is generated for British Columbia.

Maybe some of you have heard Mayor Wayne Wright of New Westminster speak on this topic. He is chair of the Metro housing committee and co-founder of the Canadian Rental Housing Coalition. Last November Mayor Wright called on all levels of government and the private and non-profit sectors to work collaboratively to address the critical supply of affordable rental housing.

Coalition co-chair Marie Enser, who was Urban Development Institute's executive director at the time said: "The economic importance of affordable rental housing in this country cannot be overstated. The new rental construction creates vital, well-paid jobs, and sufficient supply is intrinsically linked to business investments and local decisions."

Tenants, too, have a voice on this purpose-built rental issue. "Renters are struggling to find good rental property housing in major cities across Canada. In Vancouver people are…forced into inadequate housing, often in need of significant repairs, and experiencing frequent moves," said charter signatory Ms. Nicky Dunlop, executive director of the Tenants Resource and Advisory Centre.

The supply of new housing is failing to keep up with the demands of our growing population. In Metro Vancouver there is an estimated demand of 6,500 new rental units per year, but only 600 units are being purposely built annually.

In greater Victoria ground was recently broken in Saanich on one of the first rental projects we have seen being built in the last 25 to 30 years. It's already fully rented, with completion months away. We need to see more.

The Federation of Canadian Municipalities, that all the
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members of the Legislative Assembly are aware of and respect as an organization, published two reports that we urge you to obtain and review. The Housing Market and Canada's Economic Recovery, published in January, 2012 and No Vacancy: Trends in Rental Housing in Canada, published in June, 2012.

"Although Canada's rental sector plays a critical part within a healthy housing system, it has been largely overlooked. Measures to create new rental housing, while also retrofitting what already exists, will help address a weakening housing system and contribute to a healthy economy."

"All orders of government must work with the housing sector in order to provide a balanced mix housing options able to meet the long-term financial realities of a changing population."

It certainly looks like there is reason this year to recommend strongly to the British Columbia Minister of Finance that he commit to work closely with his colleague, the Minister Responsible for Housing, to build a provincial coalition of interest to include the official opposition, the private housing sector and other groups in the province who think the time has come to push this issue and encourage the private sector to provide some of the jobs British Columbia is capable of producing.

Actually, wouldn't it be something if a unanimous resolution to support this proposal was passed by all members of our Legislative Assembly? This would be a positive approach to build the private sector coalition of interest, looking for creative ways to encourage Ottawa to take that first step.

In closing, we ask all members of the committee to reflect again on the suggestions we made to you by the British Columbia Real Estate Association on property purchase tax. They have provided some suggestions on how to begin to deal with the burden once it's in place.

The Victoria Real Estate Board believes that by introducing a credible tax of a new source of revenue through capital gains change at the federal level, it allows us to continue the argument to reduce the overall burden of PTT.

In closing, we appreciate the opportunity you have given us to present our thoughts and recommendations, and trust you will give them careful consideration.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Dave.

D. Hayer: Thank you very much. Very good presentation, very detailed presentation, very broad suggestions there.

My question is something a little bit separate from this, but it's also to do with the housing market. I've received quite a few calls from different mortgage officers and brokers. They're saying over the last two weeks or so they were having a difficult time getting people approved for mortgages. They said a lot of people were turned down even though they have a nice down payment, and credit rating is good.

Have you seen that at all? They are sort of afraid if they can't get to buy the houses, that means the market price will be forced to go down. All of a sudden these people who would normally qualify because of the down payment and good credit rating…. They are being turned down over the last two weeks. They're wondering….

Is that the same thing you've heard? Or is this unique to some people in the Lower Mainland?

S. Mann: No, I think that it's an overall thing that's happening on the Island as well. I've talked to a few mortgage brokers. When the amortization went from 30 to 25 years, we definitely noticed a decline in mortgages that are not being able to be put through. Younger families may have the down payment available, but that makes a significant difference in what they are able to afford.

The deals are being written, but they are, unfortunately, not being able to remove that financing clause because of the way that things are going right now. Prices are going to have to come down in order for those young families or first-time home buyers to be able to afford that property at a 25-year amortization.

D. Hayer: Some of them have 10 or 15 percent down payment. If the prices come down so much, if they have only a one-year mortgage, etc., they might walk away. That might have a ripple effect, which is probably not considered. That's what they were saying. I don't know if that's true or not. I want to get your opinion on that.

S. Mann: Absolutely. Yes, I definitely agree. I mean, why wouldn't they? We're in a frustrating market as far as what's going on with our mortgages. You also have to think of what's good debt and bad debt. I think that's the other thing that we're taking into consideration, too, with our mortgage brokers.

We're really working hard with our mortgage brokers right now. When we write a deal, the first person we phone is the mortgage broker to find out what is going on and if it's possible that this deal is going to go sideways or if we're going to be able to keep it together.

I. Mason: I think that the broader concern is that there are less transactions, less people able to access the real estate market. This is having a net impact for government as well, in that lost property transfer tax opportunities are occurring, as well as lost opportunities for the economy. As we know, as we presented in our submission, for every MLS sale there's a spinoff of approximately $60,000. That has a ripple effect throughout our entire economy.
[ Page 2401 ]

J. Les: I wasn't going to ask a question, but the discussion that we're into now interests me — the question of the amortization, the length of amortization of mortgages. I'm not one to necessarily be too fond of government regulating too much, whether it's the maximum allowable is 25 or 30 or 35.

But I think, along with that, we have a problem in society generally, and that is a lack of financial literacy. People will take on a 35-year mortgage quite blindly, as if it doesn't really matter — "I can get into a house today, and isn't that lovely?" — not knowing, at the same time, it will cost them hundreds of thousands of dollars additional, lifetime, to cover that mortgage.

On the one hand, we bemoan the fact people are being limited now to a 25-year amortization. On the other hand, you know…. I hate to say governments are sometime saving people from themselves. We have seen south of the border over the last half-dozen years how if a market is allowed to go nuts, it quite often does. The prudence that's being exercised is perhaps a good thing, especially in light of what seems to me to be a serious case of lack of financial literacy.

I. Mason: I think the situation in the States is definitely unfortunate, but I've heard it described by some of my colleagues in the States as NINJA loans — no income, no job, no assets. Essentially, the fundamentals are different in Canada in that we do actually have prudent mortgage lending regulations.

We are seeing the impact of those current amendments to the regulations, but generally speaking, our fundamentals are sound in Canada. The current government has established a regime that they feel is prudent, and I concur that debt is an issue. In other countries, in Europe, anecdotally, there are generational mortgages. Certainly, there is some balance there in the middle.

D. Horne (Chair): Great. That comes to the conclusion of our time. Thank you so much for your presentation.

I'll call our next presenter. Our next presenter is Royal Roads University, represented by Dr. Allan Cahoon.

A. Cahoon: Thanks very much. I appreciate the work of the committee. As a professor of public administration, I've always been intrigued by how government operates and functions and never had the courage to step up and be part of a political movement. But I think accountability and decision-making and advice with respect to things from potholes to brain surgery is a challenge and an opportunity. So I commend you on your work and appreciate the opportunity to speak before you today briefly as part of a presentation by Royal Roads but also part of the Research Universities Council of B.C., which you'll be hearing from later this afternoon.

Most of my experience was in Alberta and Saskatchewan before coming to British Columbia. I can say as an outsider that the post-secondary system in British Columbia is something that you should be proud of. It's a differentiated system. It's a system that is working effectively.

You heard from Jim Reed earlier, from the colleges, also endorsing what we're trying to do as a sector with respect to an opportunity agenda. We work collaboratively at Royal Roads with the colleges, the teaching universities and the research universities. Yet we're a very different kind of an institution. I wanted to talk a little bit about what that meant.

As a background, the government of British Columbia created Royal Roads University in 1995 but didn't want just another university kind of elbowing its way into the sector but to look at a university education in a different way — so a special-purpose, primarily graduate university with two faculties, six schools, 21 professional master's degrees, a doctoral degree, undergraduate degrees, certificates. We have over 5,300 students now, including 700 in China, and 70 percent of our students are graduate students.

The thing about education is — it's interesting — there's both a tradition and an opportunity. If you're keeping track with the Globe and Mail these days, it's interesting what they're saying about the future of post-secondary education in Canada and the challenges that we face. The system started with what we had in the 11th century, in terms of the lecturer kind of role, and the academic design of the program was developed in Germany in the 18th century. Yet we have some interesting challenges with respect to the kinds of learners in the 21st century.

What we're trying to do and what Royal Roads does uniquely is really respond to the needs of a 21st-century university. Think Apple store at the mall rather than Woodward's or Eaton's as a department store. Most institutions look at themselves as a form of a department store with as many departments as possible. We look at what we can do specifically and focus only on that.

Some comments about the type of university. We're fully interdisciplinary, no departments. Again, if you relate to a university based on the one that you attended or the one that you visited or the one that your families attended, then Royal Roads comes out somewhat differently. This idea of…. The average age of our students was 41 at last June's convocation. That's a little bit different than seeing 22-year-olds or 19-year-olds come across the stage.

We have a small staff, of which 80 percent are non-unionized, a small core faculty — 10 percent of our instructors are core faculty — that are required to have performance expectations each year and are evaluated on that basis. We are only in applied and professional areas.
[ Page 2402 ]
As I said, we focus mainly on graduate students; 70 percent of our students are graduates.

We use technology extensively in terms of the delivery of our program. Eighty percent of our students work and study at the same time, and we are leaders in what's called blended learning, this idea of concentrated learning for two or three weeks, in ten and 12 hours, seven days a week, and then people go back to work and stay on line as groups.

We're also a leader in prior-learning assessments, this idea that people can bring a portfolio of qualifications into university and use it as part of the admission process. Anywhere between 10 and 20 percent of graduate students in a program could have come in this alternative way. I think some of the stories about the unique experience and opportunity to go back to the workforce…. The fact that over 60 percent of our students are women suggests that that's been a way in which they could do that.

We think it's important we have a unique governance structure — a 12-person board of governors that acts both as governors and as an academic senate and that's designed to be nimble in its decision-making and responsive. The board implements a 95 percent rule, which means that in any year, when I come up with my budget forecast, I have to have my expenses at 95 percent of the projected revenues, or they won't allow me to proceed.

We have market-responsive degrees, outcomes-based learning — and success at it.

This whole idea that's happening now with the opportunity for fully on-line learning…. That's important to us. We use on-line learning, but we also believe that learning is a social process — so bringing people together even though they will interact on line. If they know the people that they're working with and they have that kind of cohort established, it makes the learning much more effective.

Our success rate is that we get 90 percent of the students who start our program to complete. In an on-line program like Athabasca, for example, which you take fully on line, the success rate is between 35 and 38 percent. We use both the technology…. But we believe the blended approach uses it.

The other thing that I think is important for us is that we use work and experience as an integral part of the learning. Students bring that in, and as they bring that in, they become important components and catalysts to the learning process. Faculty members are more facilitators and enablers than they are absolute experts. That means that the kinds of students who come in are very demanding. They're not interested in simply stepping over hurdles. They're interested in seeing how it can offset the time away from family, time away from work and time away from their community.

As I said, the value proposition of what we're trying to do is…. Royal Roads is the best example of B.C.'s differentiated system. Amidst the cuts and deficits that have plagued the system in the past few years, Royal Roads had its most successful year last year, in '11 and '12. We're funded for 1,980 full-time-equivalents. We have over 2,500 in our system, and although it's stretching capacity, we think it's prudent to be able to do this.

Our success is measured by the kinds of students that we have. They talk about transformational in terms of learning, the ability to apply what they learn in a relevant way. We would argue that you should be commended for the vision to establish this type of a unique university in Canada.

I think we're best an example of the kind of demand-deliver program. We work very cooperatively with our community. We work in applied research. We have the Solar Colwood project. Our students participated and assisted in getting that project with Colwood. We have a master's of disaster emergency management. For one of the residencies, the students have to go out with local communities and help them develop a disaster emergency plan to do that.

Our financial success. As I've said, government funding is now less than 30 percent of our base, which is significantly different than others. Our business model costs are directly linked to revenue targets, and our ratios are tightly monitored. That success is happening. There are a couple of charts in the handout that show an increase in both our full-time-equivalent students domestically and in our operating income.

We also are exempt from the DQAB — Degree Quality Assessment Board. We post our programs. We have an internal process of quality review which involves external assessment of those. We have two recently approved programs from the Ministry of Advanced Education: a new bachelor of business administration and a bachelor of global tourism management. We have a joint proposal sitting with Advanced Education, which is a bachelor's degree in interdisciplinary studies, which is a partnership with Camosun College.

We're in our third intake of our doctoral program. A doctoral program, because of the nature of Royal Roads, allows people to stay in their community. Five of those students now in our doctoral program are aboriginal students. I think other successes.

This unique value proposition is based on a sense that we have to earn the right to continue to exist. We don't have a sense of entitlement even though we have a great facility, a great campus that, hopefully, you had a chance to visit. It's not easy to maintain an office in a 105-year-old building, but we are grateful to do that. We're thankful for the investment of the province in the Learning and Innovation Centre that was completed a year ago, which I hasten to point out was completed on time, below budget and is a state-of-the-art facility.

The value proposition is that we need, in order to
[ Page 2403 ]
achieve the growth that we're expecting, a new academic building. That would be about $30 million of classroom and office space. We don't expect that that money is available now, but we'd like to signal that as an opportunity. We see a new residence capacity, which we will fund ourselves. We're supportive of the research universities' proposal for the sector on additional funded students, affordability, access to students in need and Innovate B.C.

So there's a comment about the future of where we're going, but I'm really saying that we're delighted to be part of this system, and we sense a responsibility to be accountable to the people of B.C.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Bruce.

B. Ralston: Thanks very much. You spoke of a 105-year-old building. Of course, we work in one that's even older than that, so we're familiar with some of the drawbacks there.

I wanted to ask you a more general question, and I thank you for a very comprehensive presentation. When we look at economic and social success in the future, how important is it to have people who are trained either as skilled leaders in public administration or skilled and visionary managers on the business side? It seems to me that's at least part of the value that your institution delivers to the province, so I wonder if you could just speak more generally about the importance of that for future prosperity.

A. Cahoon: I think I support what Jim had to say earlier about the need for immediate kinds of skills in the province. That's the catalyst for the kind of business development or economic development that we need. But we also need long-term capacity. We need those tradesmen to get a business degree so that they can set up their own business. We need project managers that can handle the long-term development, whether it be with Seaspan, etc.

I think the relevancy of Royal Roads is that the education becomes available at the time in which people are motivated to get it. So being able to think: "I've done this, and I've succeeded in whatever, in the skills training or the labour efforts that I've had. Now can I get some just-in-time education?" Our system is designed to make it convenient.

If you've been out of the workplace or out of the university for 20 years, what's it going to be like to do a research paper, to be in class? That kind of transition is something that we work on. It's really to be responsive to those kinds of needs of people as they need them and in areas in very interdisciplinary ways. So environmental management is approached from a number of different things. It's demand-driven in terms of what we're trying to do.

M. Dalton: Thank you very much, Dr. Cahoon, for your presentation. I really appreciate the Royal Roads philosophy and approach, and I would like to visit it at some time in the future.

If you could share with us how your tuition compares with other institutions. And do you have a challenge filling seats? Another question I can throw in there also is: what type of interest are you finding from other institutions, both nationally and internationally, as far as your approach?

A. Cahoon: Okay. Excellent questions. Our tuitions are generally not much higher but higher than other institutions. We price our tuition, initially, based on a business plan that talks about margins being 50 percent and achieving those. So we establish them. We are effective at domestic tuitions. In other words, most institutions, given the freeze in grants by government and a cap on tuition, are moving into structural deficits. Each additional student costs them more than it allows them to educate. Our model doesn't restrict us to that, so we have generally higher tuition.

Our enrolments are up 10 percent the last two years. Unlike what Jim said, that typically in universities and colleges when the economy goes down, attendance at university goes up, at Royal Roads when the economy went down, our enrolment went down because, largely, people are working. They have families, and they're affected by it.

We've had a turnaround. Our enrolments are up. We started at 2,100 three years ago in full-time-equivalents. We're now over 2,500, and our target is 4,000. So we're moving in that direction.

M. Dalton: If other institutions across the country and internationally are looking at what you're doing and copying.

A. Cahoon: Well, they're not copying us, but they're learning from us. UVic, for example. One of its latest programs is a blended master's degree in community health. UBC has imitated the blended approach. We've had colleagues that have come to Royal Roads. We had a meeting of vice-presidents academic at Royal Roads to talk about what our model is. They are both surprised and intrigued and see that possibility.

We have an extensive collaborative effort in terms of exchanges. There are many administrators that are being trained at Royal Roads, including our gold medal this year at our convocation — if you've seen the news story of a former hockey player who is a department head at
[ Page 2404 ]
Algonquin College in Ontario — who is getting his MBA from Royal Roads.

D. Horne (Chair): A very, very quick question. We're already over time, but Mable — less than 30 seconds.

M. Elmore (Deputy Chair): It is a quick question. Dr. Cahoon, thank you for your presentation. I'm just curious. What is your doctoral program, your degree that you offer? Is that a program that you're looking to expand?

A. Cahoon: It is an interdisciplinary program in social sciences. Students choose where they want to focus. The requirement of it is ten years of administrative, professional experience, so I think most people in this room qualify, depending on the fortunes of the future. It's an interesting one in which you really define the areas of your choice, from leadership to social development to environment to health care and aboriginal studies. They have been all part of that.

We started with a small group of 12. We're now admitting 15. This is the third entry point. It's a four-year program. It's pretty lockstep in the sense that we use our approach to walk you through it. It's been very successful. I threaten that when I finish my term I'd go back and get another doctorate, because it really allows me to do areas…. It's very flexible.

D. Horne (Chair): I'll now call our next presenter, being the Rick Hansen Foundation, represented by Colin Ewart.

Colin, welcome to the committee. You have ten minutes to present, and your time begins now.

C. Ewart: Good morning, and thank you. My name is Colin Ewart. I'm with the Rick Hansen Foundation and will be speaking today about our global centre of excellence program called the Rick Hansen Institute, which is located at the Blusson Spinal Cord Centre at the Vancouver General Hospital site.

Thanks to past government support — and that includes in B.C. and with many governments, not only across this country but also some internationally — this institute has created and leads a collaborative, national research network of 31 sites, plus five international sites today.

The network leverages knowledge, expertise and resources to minimize paralysis for the newly injured by accelerating the implementation of research discoveries and improving treatments and cures for the multitude of issues that people face immediately after their injury and ongoing through their lives.

Since its inception five years ago the institute has become recognized as a world leader in the field of spinal cord research and collaboration to minimize paralysis. We're very proud to have it headquartered in British Columbia.

I've shared with you some materials that explain how far treatment has progressed since Rick was originally injured as a teenager. The bottom line is that because of investments and Rick's vision on our program, more newly injured people are walking away from spinal injury today. Witness Mike Harcourt's story as one example.

As this committee has heard me share in previous years, although there are only 5,800 people living with spinal injuries in British Columbia, a number that grows by approximately 200 per year, the family, personal, community and health care impacts remain huge. Health economists have calculated that paraplegia care costs between $1¼ million versus ventilator-dependent quadriplegia, like that suffered by Christopher Reeve, with 24-7 care that can be as high as $25 million over the person's lifetime.

It's a future health care debt or mortgage on the B.C. health care system, which we estimate grows by $477 million each and every year based upon the numbers of newly injured in the province. In addition, there are other health care costs related to what we call secondary complications, such as bladder infections and pressure sores, which cause significant costs also across the broader patient population.

There's a diagram in the materials I gave you on page 9 that gives you what these economists forecast are preventable costs. That's why our institute work is focused on finding cures for paralysis and recurring health issues and for best-practice treatment. We're collaborating with the best minds globally to identify what works, collecting ideas on launching multicentre trials in hospitals with patients to improve their outcomes.

Our program is intentionally designed to implement the best ideas in B.C. and save on the pain and suffering and health care costs. We're leveraging resources from the federal and other governments and from private sources so that B.C. doesn't have to do this alone.

Today our institute has spearheaded the development of the first multicentre clinical study in Canada for acute spinal cord injury, and we have others in the pipeline. One of the studies involves a low-cost drug called minocyclene, a common antibiotic. Minocycline has been shown to reduce inflammation of the injured spinal cord, thus reducing the degree of paralysis.

A reduced level of paralysis reduces the length of stay for the person in hospital as well as lifetime health care costs and needs. This treatment can mean the difference between independence and daily dependence on a care-
[ Page 2405 ]
giver. It can mean the difference between a meaningful career and not being able to work at all.

D. Horne (Chair): Colin, sorry to cut you off, but that bell actually indicates the ShakeOut. I've suspended your time.

It's now the Great British Columbia ShakeOut, which is an earthquake drill. If there was currently an earthquake in British Columbia, this would be the time when everyone would basically drop to the floor, take cover under your desk or under a large piece of furniture and hold on until the end of the earthquake.

D. Horne (Chair): I won't, and I won't actually ask anyone else to do it as well. We'll spend our minute talking about it rather than doing. But I think it's important that we do talk about this and that we do deal with this.

Potential for earthquake hazards depends on your position and where you are in the province. All of the province is actually considered a high earthquake zone compared to the rest of Canada. On January 26, 1700, a magnitude 9 earthquake similar to the 2011 earthquake off the coast of Japan hit all of British Columbia as well as Washington, Oregon and California, so the potential to have a very large earthquake is quite great here in British Columbia. It's a matter of time as to when it would happen.

One of the other things other than knowing what to do is knowing that when an earthquake happens, you hold on until the earthquake and the shaking ends. There may be additional aftershocks, and one should be aware of those.

If you're inside, when you do take cover, you should take a look at what's around you and then basically try to stay away from objects that could fall on you and glass that's around you.

If you're outside, you should find an open area away from trees and power lines and glass that might fall on you. The importance of doing that may save your life.

It's also important that you prepare for an earthquake and that each person should be able to care for themselves for at least 72 hours after an earthquake, because to think that help will come immediately just isn't possible given the conditions that may exist after the earthquake.

With that, I'll resume your time and thank you for participating in the Great British Columbia ShakeOut.

C. Ewart: Well, thank you. I think that actually was extraordinarily timely given the subject that I'm presenting to you on.

Not as a prepared set of notes, but I would like to just comment that during the Haiti earthquake there was a significant number of people that were spinal injured, and the emergency response and the ongoing international response turned to leaders in British Columbia at our institute on many occasions. Indeed, we had leaders that went from B.C. and participated in the care and the treatment of Haitians that were injured and spinal injured during the earthquake. So it was actually a very timely situation that just happened.

If I could continue, as I was mentioning, the treatment can mean the difference between independence and daily dependence on a caregiver. It can mean the difference between a meaningful career and not being able to work at all. All of these factors contribute to a reduction of the economic burden both in this province and across the country.

As I mentioned, without government support, none of our progress would have been possible. Going forward the Rick Hansen Institute will be working with the Ministry of Health to request an investment of between $10 million and $15 million over the next five years starting in 2013-14. Previously this ministry has provided $11 million to help build the program, and we cannot afford to let these gains be lost.

Given the profound cost of paralysis on our ability to have people walk away after injury or spend less time returning to hospital, helping just 5 percent of B.C.'s newly injured each year would cover the five-year cost of the program. We think that's a great investment, while protecting B.C.'s national and international leadership in this field.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Bruce.

B. Ralston: On page 13 you've spoken about the additional British Columbia funding that's needed. I'm wondering if you could just speak about what you would assess as the broader benefits to the health care system of the innovations that you propose. Obviously, there's some savings, I would think, based on your work on pressure ulcers and urinary tract infections, which are a difficult problem in the health care system. I suppose the corollary of that is: if you weren't funded, what would be the consequence?

C. Ewart: Well, thank you for that question. It's an excellent one. As the materials show…. I'll cover them into the record. On slide 13, yes. Obviously, as you've pointed out, the focus is activities that are about taking the best ideas and getting them into practice. Those will help achieve less paralysis for individuals, as we have
[ Page 2406 ]
witnessed.

In addition to that, there will obviously be efficiencies and improvements to the actual giving of care to individuals. We see the system being streamlined and improved as best practice is implemented. That would mean, for example, that someone that is in Prince George should be receiving exactly the same treatment as someone that's injured in the Lower Mainland.

Examples that are benefits would be our work with Accreditation Canada that allows us to start to introduce the standardization of care in all hospitals. That's a key project for us.

Secondly, we are working with the Sauder business school at UBC, and we have been identifying a more streamlined pathway for people from the point of injury, where they're picked up by the emergency services, into the hospital, through the hospital, through rehabilitation and back in the community. We see that as an opportunity again to streamline the processes to get the best outcomes for people but also help the system save money.

The final example I'll give you is that we've been working with the Canadian Medical Association and will be improving doctor knowledge as part of their continuing education programs about best practice so that when somebody has actually left the health care system, they'll be able to go to their primary care physician and get the best advice and support for the rest of their lives.

All of those are benefits that are resulting directly from the programs that we're involved in.

I think, lastly, in terms of the consequences — I think that was the question you'd asked — obviously, if there is no further funding in B.C., that would, as a minimum, reduce the clinical expertise that we've got here and, I think, lead to the corollary of what I've just said. That would be poor health care outcomes. The demand for health services — with people going back into the system — would increase, and there would be escalating costs. Obviously, I don't believe that that's going to happen, or I hope that's not going to happen.

At a more national level, as I said, this initiative is headquartered in British Columbia. There are other provinces, though, that have made significant investments, and they would increase their role, and we could face a shift of leadership from this province. I think that would be the biggest risk, because I think we've invested here. We believe in it here. Rick's vision is emanating here, not only across the province and nationally but internationally. I think that would be lost, potentially, if you weren't to invest further in this.

M. Elmore (Deputy Chair): Thanks for your presentation, Colin. I'm interested in the clinical trial of minocycline. When is that expected to initiate? If you could just talk a little bit more about that.

C. Ewart: Thank you. If you look at page 10 in your materials, I actually — fortunately, given your question — incorporated how this has progressed right from back in 2004. This was a discovery made by UBC scientists. So it was a basic science discovery where they started to identify that this very common…. It's actually often used for acne medication. So it's a drug that's given to kids, that stops skin breakouts — minocycline. It's an off-patent drug. So big pharma are not interested in investing further in it. But UBC discovered this.

At a similar time at the University of Calgary, actually, clinical-based researchers had started to notice a coincidence where there were kids coming off the ski slopes, and some kids were having more paralysis than others. As they started to examine this, they discovered what was the differentiating factor. They discovered that minocycline seemed to be a differentiator. Some kids were on it, and other kids weren't, and they were having better, or less paralysis than others.

We have got to the point where that trial has moved to the stage where now it's ready to go as a multitrial centre across Canada. This is a very safe, very efficacious and very low-cost drug. We believe it could be administered, as an example, at the site of a traffic accident, where the paramedics simply give someone minocycline at that point. So immediately, as they are being transported to hospital, the protective benefits of this drug would suppress the immune system. That's what we think. Actually, it's the immune system attacking the damaged area of the spinal cord that causes paralysis in some ways.

So this is an extraordinarily low-cost but high-reward opportunity, and it's ready to be tested in humans. We're working with Health Canada to have that moved to the next step and be a multicentre trial all across Canada. Indeed, we've got partners in other parts of the world, including Israel and Australia. They're also interested in participating.

C. Ewart: It'll go in the next year. It's ready to go right now, so it's going to happen.

D. Hayer: Thank you very much, Colin. My father became paraplegic back in '88 from a shooting in the back. I was talking to many people that used to say: "You know, probably in 25 years, spinal cord injuries will have solutions where you can fix them with a change in the technology."

Do you see a time when they will be able to repair these types of injuries on the spinal cord with a change in technology, not just using the medication but also other treatment? How far away are we from that, if you were to guess?
[ Page 2407 ]

C. Ewart: Thank you. It's a great question. I remember our conversations before about your father.

The reality is there are multiple cures, because there are multiple conditions that are involved. So we can help — with the points that were raised earlier — with bladder infections and pressure sores. I'll give you an example. We have been involved in a number of products that are now moving towards commercialization opportunities. One, functional electrical stimulation, a product that's been developed that actually, by stimulating with small electrical currents — say, the hands — is rehabilitating the hands to where people can come back and go back to work again.

Those are examples that didn't exist when your father was injured, when Rick was injured. Those exist today. We're getting much more partial paralysis today, and Mike Harcourt would be a good example of that, where he has virtually no permanent paralysis.

That is the shift, and the good news is that that shift is happening quite dramatically. It's because, we believe, of our efforts and the efforts of others to take great ideas that have been sitting in labs and with scientists and getting them in and translating them into practice. The ideas are there.

Our job as an institute is to get those ideas into practice. That's why we've partnered with Accreditation Canada, with the Canadian Medical Association. It's to take knowledge and move it into practice so that when someone is newly injured — in a car crash or off a mountain bike or diving into shallow water or whatever — they will today, going forward, get the best opportunities to walk away or have a much more limited amount of paralysis.

We believe we'll get there. Rick absolutely believes that within the next ten years there will be dramatic improvements in that. Within 25 years…. He says it'll be another 25 years. He has just celebrated his anniversary. But he says in 25 years he truly believes that we will have multiple cures for paralysis.

D. Horne (Chair): On that note — a good note to end. Thank you so much for your presentation and being with us here today.

I'll now call our next witness — the Accountability Council for Cooperative Education, represented by Norah McRae.

N. McRae: Thank you very much. My name is Norah McRae. I'm currently the executive director of cooperative education programs and career services at the University of Victoria, but I am here representing the Accountability Council for Cooperative Education in British Columbia.

The Accountability Council represents all directors and executive directors of any cooperative education program at all post-secondary institutions in the province of British Columbia. I do want to thank you for the time to speak today.

First of all, are people familiar with what cooperative education is? If not, I can give a brief description. So perhaps I should do that.

N. McRae: Cooperative education is a form of work-integrated learning where students go to school in a field, and they are placed in paid work terms related to their area of study. They have a number of different work terms so that by the time they graduate with their degree or their diploma, they have relevant work experience that has related what they've been studying to the world of work.

That's co-op in a nutshell. It's been practised in British Columbia since the '70s. We now have, across the system, 10,000 students engaged in co-op placements across B.C. The students earn a salary during their work terms of about $10,000 per work term.

What we're asking for here is that the province of British Columbia consider implementing a tax credit to support, specifically, small- and medium-enterprise businesses to hire students. While we realize that there would be forgone revenue from a tax credit, we feel that it would be a very good investment.

The investment comes in three ways. First of all, as we all know, small and medium enterprises comprise 85 to 90 percent of the labour market in B.C. We know that when they hire students — and research does demonstrate this — it increases their productivity. Employers report pretty well across the board that hiring a student adds value to their business. It adds value to their bottom line. Students are capable and able to contribute significantly.

They enable the business to be more productive. It also frees up the entrepreneur or the small business owner to spend more of their time on doing what they're good at, which is innovating, and it generally increases productivity and leads to job creation.

It also allows our business community to be partners in the educational process. When students are on work terms, they are gaining the soft skills and the competencies that enable them to be more effective.

The second point that I'm going to make is: it enables them to attach more successfully to the labour force. That deals with when they are on a work term studying. When they're studying and going to a work term, they're developing the skills and competencies related to both what they're studying and also to the world of work in the future.

So 63 percent of all those placements, the 10,000 place-
[ Page 2408 ]
ments, are in private businesses, and 78 percent of them are in B.C. The students do tend to stay in the province of B.C. developing those competencies.

While they're working, they earn on average $10,000 for each semester, which enables them to finance their education — which means that there's less demand for student financial aid and they also attach more successfully, once they've graduated, into the labour force.

Students who've done co-op tend to be hired more quickly, tend to have much lower rates of unemployment, tend to make more money more quickly — which increases their salary levels and gives them the potential to be contributing more tax revenue as they gain more employment and their salaries increase. During their work terms, of course, while they're in B.C. they are consuming products and services and so, again, contributing to the economy.

The third point around why this is a good investment is that research does show that students who are engaged in programs such as cooperative education are more firmly attached to their educational programs, because it acts as a focusing device, basically.

When you're studying something and you're not quite sure what it's all about and you work in a field related to it, it helps you focus on what it is you like about what you're studying or what you don't, what it is you're good at, what you're not good at. You're interacting with employers and professionals, and you're building your own network. As a result, it adds relevance to what students are studying, which leads to increased levels of motivation, persistence and retention.

It's a very efficient way to educate students. You have much lower rates of withdrawal from programs when they're in co-op, because of the motivational components. That results at the end in that we will have more young people retained in British Columbia to contribute to the future of this province and to the economic productivity that we're all looking for and, hopefully, dealing with future labour shortages as they come up.

This is why I'm here presenting this idea — and why we think it's a great idea, of course — from co-op institutions. Just to point out, Ontario has had a tax credit since 1996, Quebec since 1994, Newfoundland and Labrador since 2009 and Manitoba since 2004. Nova Scotia also has one as well.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Mable.

M. Elmore (Deputy Chair): Thanks for your presentation — very interesting. Currently there are 23 post-secondary institutions offering the co-op program. My question: are you looking to expand that?

N. McRae: Not necessarily. I mean, it's up to the institutions to make that decision. But what we've seen in these other jurisdictions that have the tax credit is that more students were hired, and so more students were able to participate, because there were more opportunities for them.

M. Elmore (Deputy Chair): Yeah, I know I've talked to many students who are placed in co-ops, and I've heard back very positive responses from them. I think it is a very successful program. In B.C. are there any tax credits that are offered now?

N. McRae: Yes, there are tax credits offered for the apprenticeship program. In our proposal, what we're suggesting…. Because the apprenticeship program has been extended — for an additional three years, I believe — what we're saying is that a very simple mechanism to make this happen would be that we take the existing infrastructure of the tax credit for apprenticeships and increase the criteria to include co-op students. Then you don't have to set up a new infrastructure. There's no new thing that has to happen. You just increase the definition to include co-op, and you're ready to go.

M. Elmore (Deputy Chair): So your recommendation is to expand that to the entire co-op program?

M. Dalton: Thank you very much, Norah. Just a question on student debt levels for those that go through the co-op programs. Do you notice any difference between the students who go into the regular programs, as opposed to the co-op?

N. McRae: In the paper that we've provided there is a reference to a research study that was done — I think it was in Newfoundland and Labrador — where they did study that and did determine that co-op students had much lower levels of debt. But I don't believe there has been one in B.C., so I can't speak to that specifically here.

B. Routley: Can you give us some examples of the range of training that students are taking? Is it primarily in trades, or what is the experience of the cooperative in the various kinds of training that they're taking?

N. McRae: We're really fortunate in B.C. that co-op extends to pretty well every discipline. For example, at the University of Victoria you can do co-op in every faculty at the undergraduate, master's and PhD level. That means a student doing an undergraduate in philosophy can do a co-op program, all the way to a student doing a master's
[ Page 2409 ]
in engineering, for example, and law — the whole range.

That's very much the case in most of the major research-intensive universities in B.C. It's right across the board.

In smaller institutions the concentration tends to be in the engineering or business areas, but really it's very diverse. What's wonderful about that is that someone can study philosophy, for example, and gain relevant, related work experience that enables them to take that learning that they've gained in that context and apply it in a meaningful way.

D. Hayer: Are you looking at the $1.6 million per year for this funding? How much are you looking for to increase the funding by?

N. McRae: Yes. In the executive summary you can see at the very bottom there we've posed two suggestions. Our preference is a full-on tax credit, and our assumptions here are that based on the number of placements and a 50 percent uptake rate, it would cost $6 million per year. That would be going with the apprenticeship model and just doing that.

The second suggestion is that we focus it as a wage subsidy, whether or not you target around non-profits, for example, or other sectors. If it was non-profits, we estimate it would cost $1.5 million. That's what those numbers mean.

So $6 million sounds like a lot, coming out of the gate, but as I said, I think it's a good investment. When you think of 10,000 students in B.C. earning $10,000 for each of those placements, that's $100 million that they're earning in salaries, which do flow back into the economy — well, the 78 percent of them that stay in B.C. when they're working here.

D. Hayer: Now, how many more students will get jobs for this — more apprenticeship programs or co-op programs?

N. McRae: Well, I think there's a tremendous amount of student demand, actually. I could see our programs growing quite a bit if there was an…. That's certainly been the experience in Ontario and Quebec. If there was more incentive for small businesses to hire, I think there's a tremendous amount of potential — a lot of student demand and a lot of employer demand as well. It's hard for youth right now to get employment, so there's a lot of interest in these programs.

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

I'll now call our next witness, Sustainable Prosperity, with Alexander Wood and Brandon Schaufele.

Welcome to the committee. You have ten minutes to present, and your time begins now.

A. Wood: Thank you, Mr. Chair, members of the committee, for this opportunity to come and talk to you about the carbon tax in British Columbia. My name is Alexander Wood. I'm the senior director of policy and markets at Sustainable Prosperity. With me is Brandon Schaufele, who is our director of research and also a professor of economics at the University of Ottawa.

We're a green economy think tank based at the University of Ottawa, and our basic mandate is to promote a stronger, greener Canadian economy. Within that, we have a specific focus on the use of market-based instruments in policy-making around environmental issues. So, obviously, the carbon tax, and carbon pricing policy generally, is an area that we focus a great deal on.

Before I get into the specifics of my presentation, I just want to make one point, I think, that may be obvious but that is probably worth reminding ourselves of. That's the simple fact that B.C., in terms of its carbon tax, has got it right. I say this as someone who spends a lot of time thinking about carbon pricing policy, who looks a lot at what is happening in international jurisdictions around the world, who talks to a lot of people involved on the policy side, on the private sector side on these kinds of policy issues.

I can tell you with some confidence that there is a large consensus out there that B.C. is really setting the benchmark when it comes to this kind of policy instrument internationally. In fact, what we're seeing now — and I'd be happy to discuss some of that — is a lot of other jurisdictions essentially playing catch-up with B.C. in terms of wanting to bring in policies of this nature.

The way the presentation is going to work is that I'm going to talk a bit about a couple of pieces that Sustainable Prosperity has put out, including a submission specifically to this committee. Brandon is going to talk about some specific research that he's carried out on the impacts of the tax in the province.

We've got a presentation in front of you. I can glide through the first couple of slides having to do with Sustainable Prosperity, but just to underline again this question of a low-carbon economy and the use of market-based instruments like tax policy and cap-and-trade systems is an area of considerable focus for us. We've put out probably 30 or so reports over the last three years on the topic and continue to do a lot of research in this area.

The first thing I want to talk about is the submission that was provided to this committee from Sustainable Prosperity, drawing on the lessons of the research that I
[ Page 2410 ]
just alluded to, these 30 reports, and the kind of experience that we've accrued as a result of that. It's really, essentially, lessons learned from carbon pricing in Canada but also internationally, and what are some keys issues for the committee to consider as it looks at the pricing policy, at the tax policy, going forward.

There are really four major themes around which to organize our thinking in this area. The first one is around what I call fiscal sustainability, which really has to do with the simple fact that having a carbon tax in place opens up all kinds of fiscal options for the government — options that, in our view, it has struck the right balance on right now with this focus on one-side revenue neutrality through the reduction of corporate and individual income taxes but also through targeted programs to address the distributional impacts of the policy.

That balance, as I say, is, in our view right now, probably the appropriate one. Going forward, that balance and decisions about what to do with additional revenues if the tax is to increase over time will have to take that balance into account.

The second major category of issues has to do then with this equity and distributional set of issues. The tax, obviously, is a regressive one in the sense that it impacts low-income British Columbians more directly. Based on the research that we've seen and the research that we've done ourselves, again, our conclusion is that the policies that are in place right now — through the northern and remote communities programs but also programs targeting low-income families in the province — are an adequate balance for addressing some of those equity concerns.

But what we've also seen is that, as additional increases kick in for the tax, due consideration and careful analysis will need to be taken as to adjusting those kinds of programs as well to ensure that the regressive nature of the tax is addressed.

The competitiveness concerns, obviously, are kind of a perennial issue around this issue. What the research tends to show in that area is that the concern over competitiveness tends to be overstated when it comes to this kind of policy.

There are concerns that are related to what are called the energy-intensive and trade-exposed sectors. They tend to be the most specifically impacted by this type of policy. The competitiveness with trading is most acute with them. But that tends to be a small part of the economy.

Again, if there are major concerns over the competitiveness impacts on those sectors, the traditional — and certainly, the research shows, the best — way to address that is through specific initiatives that target those sectors instead of more general, broad-sweeping types. Brandon may have a bit more to say about this.

On innovation and productivity, what we're looking at here really, I think, is the good-news part of the tax. Research in this area, research done by ourselves and by international organizations, and certainly, the experience that's emerged out of other jurisdictions that have priced carbon is that a carbon price, a tax in this case, is an innovation driver. To the degree that it's an innovation driver, it's also a productivity driver.

I think one of the things that we're starting to see in the province — and we can talk about that a bit more in discussing the next report — is that the response that's being seen in the province is, in fact, a reflection of the kind of innovation that is happening in the B.C. economy to shift away from fossil fuels and to become more efficient in the use of carbon-based energy as a result of the tax.

That takes me by segue to the next major report that I just want to touch on at a high level. We issued a report back in June on the anniversary of the tax looking at the impact of the tax in its first four years of existence. I just want to touch on, given the time constraints, some high-level conclusions from that.

First, what looking at the numbers, essentially — the use of fuels that are covered by the tax during that period and, obviously, the emissions as well — has shown to us is that emissions have been reduced considerably in B.C. over the time period. Our calculation was 9.9 percent — far in excess of what is being experienced in the rest of the country, where the reduction number, if you take B.C. out of the equation, was 4.3 percent.

The other major finding. Fuel use in the province has, on a per-capita basis, decreased 15.1 percent — again, this is for fuels that are covered under the tax — while the Canadian per-capita number for the same time period is an increase of 1.5 percent.

The key issue in some ways is that all of this has happened in a context where the B.C. economy has continued to grow, consistent with the kind of growth that it had experienced before the financial crisis. It has continued to show the same rates of increase and, again, has remained competitive with the rest of Canada in terms of that growth in the economy.

That really points to the last of the points that I want to underline, which is to me, in some ways, the most significant finding from an examination of this policy experience and what the economic consequences have been.

What we're starting to see in British Columbia is what economists would refer to as a decoupling between economic growth and the use of fossil fuel, which effectively means that you are finding a way to grow your economy while lessening your dependence on fossil fuels, which — in a world where we know the cost of those fossil fuels will be both more volatile and, probably, as a long-term trend, increasing over time — is a major competitive advantage for the B.C. economy.

So that's a trend that we're going to continue to carefully follow, but again, a trend that says to us that the B.C. carbon tax is a positive policy experience and one that,
[ Page 2411 ]
as I said, many countries are looking to replicate as well.

I'll turn it now to Brandon. He'll talk about some specific research he's conducted.

B. Schaufele: If we could just go to the last slide quickly, I'll maybe address one point before time's up. It's with respect to exemptions and how the greenhouse growers got an exemption.

One of the interesting findings of the interesting research that's coming out of our shop right now is that exemptions aren't the best way to protect competitiveness. There are rebating plans that can address that a little bit better. If the questions pertain to that, I can maybe address that.

D. Hayer: Thank you very much for your presentation. As I have travelled around the province listening to the people, besides listening to my own constituents, there seem to be two different views. Some people love the carbon tax; other ones hate the carbon tax. Some people say it's killing jobs. It's moving our jobs to other parts or provinces.

The cement industry was presenting to us. You know how imports of cement have gone up by about 35 percent just in the last year alone, ever since the carbon tax was introduced. I think it went from some 8 percent to about a 30-40 percent increase, and the same with the greenhouses.

You talk about driving behaviour changes with the carbon tax. People are saying it is because of high prices of gasoline. Also, revenue in the gasoline has gone down because of the carbon tax. Part of the tax does increase the gas prices. So people are going across the border here to buy their gasoline more. That seems a little different than yours.

On the other hand, I don't have a lineup of constituents coming in to say, "Please increase the carbon tax" or "Keep it." There are some people saying it. Most of the people are saying: "Please eliminate it as soon as you can." That doesn't matter what income level they are. Some are middle income, low income to high income. That seems to be different than some of the organizations that are promoting the sustainability of keeping the carbon tax or increasing the carbon tax.

B. Schaufele: I can address both the gasoline market and the competitiveness concerns.

What our research shows on the gasoline market is that — if you look at our figures on slides 6 and 7 — prices went up over a ten-year period in all of Canada. They went up from about 2000 to 2008. As a consequence, demand went down. Right as the carbon tax came in, gasoline prices were at their peak, and they fell off the map.

If you look at slide 7, you see what happened to consumption in British Columbia and Ontario comparatively. In British Columbia consumption continued to drop. In Ontario consumption started to increase again with lower prices.

This was a major change. This is a big deal in terms of the carbon tax. What this means is that British Columbia drivers actually bought into the carbon tax and changed their driving behaviour in the gasoline market.

Now the arguments of cross-border shopping. British Columbia has had much, much higher gasoline prices than Alberta and Washington State over the last 15 years, so anybody who would cross-border shop should have been cross-border shopping long before the carbon tax ever came in. It's rational to do so. If you live within driving distance of Washington or Alberta, you should fill up in those two jurisdictions.

To claim the carbon tax led to an increase in cross-border shopping would imply that drivers previous to the introduction of the carbon tax were acting irrationally, which, as an economist, doesn't really make sense. The cross-border shopping argument is rather hollow, and it's rather weak.

With respect to competitiveness, I think there are some concerns there, both for greenhouse growers, for the agricultural sector, for the cement sector. What you have to be careful with when you're adjusting this policy is how you address that. So something like a border adjustment tax on cement is an easy way to equalize the playing field for domestic and foreign producers.

Similarly, if you want to exempt or rebate to certain industries, exemptions are a poor way to do it, just from an economic sense. They lead to inefficiency. A better approach is to rebate based upon output — not based upon fuel usage but based upon output. You can get the same profit levels at a much lower cost because of that. It has to do with the tax base.

As soon as you provide an exemption, you narrow the tax base, so fewer people are paying the tax. It leads to a contravening of what economists call the equimarginal principle. You really want to make sure that everybody is paying the same marginal price.

So everybody is paying the tax. Then you rebate after the fact. You can rebate at a much, much lower rate. A study in the U.S. shows that if you rebate at 30 percent, most industries will actually benefit from the tax, or from a cap-and-trade system.

D. Horne (Chair): Great. Thanks. We need to move
[ Page 2412 ]
on. I've got six people on the list, and we've got about a minute and a half left.

B. Routley: I wondered about your position on carbon tax for some of the biggest polluters in the province. Do you think it should be just held at gas tax?

Also, you haven't commented on the fact that we've got a growing NSR, or not sufficiently restocked, land base that's actually a carbon sink. When you plant trees, if you plant more trees, you have more carbon consumed by the environment in British Columbia.

One of the things that I believe we're failing at right now in B.C. is we're not helping our own carbon retention by planting sufficient trees. In fact, the province has embarked on a strategy of not planting enough trees. I wondered if you had any comment on either of those two things.

Also, the third one was exemptions for products like cement. I gather you're saying that they should be included in your notion that they should pay but maybe get some kind of a rebate.

B. Schaufele: From an economic perspective, you want to make sure that all emitters — whether they're big polluters or whether they're somebody driving a Toyota Prius that has a very low footprint — pay the same what we call marginal rate — so the same tax rate on each tonne emitted. In that case you get the most benefit for the lowest cost.

Coming to your last point, I think cement should be one of those industries that is of high energy usage — we call them emissions intensive, export-focused types of industries. So they are high-energy usage — greater than 5 percent is what the Waxman-Markey bill in the United States uses — and they are trade exposed. So that means either they export to foreign markets or that there is a significant proportion of imports coming into B.C. You'd want to look at those particular industries and design policies that could maintain their competitiveness in one way or another.

With respect to the land base, that's a trickier one. One of the ideas behind British Columbia's government being carbon neutral is that they have to offset all of their carbon emissions. One of the ways they could offset that is by planting more trees in some of these areas.

But as it stands now, there's no incentive to offset for a polluter. They just pay the tax, and that's their cost. It's a more nuanced answer than I gave, but that's….

D. Horne (Chair): Unfortunately, we're way over time, so I'm going to have to cut it off there. Thank you for your presentation.

Peter, welcome to the committee. You have ten minutes to present, and your time begins now.

P. Lawless: Thank you very much. First, I guess I should apologize for being Peter Lawless. I think you were supposed to see Ryan Cochrane. He is much faster, in the pool at least, than I am, and I know it's a disappointment. But thank you for having me here to speak in terms of sport and why sport matters within the province and why this committee should do what it can to fund sport and the reasons for that.

The first thing I want to say, though, is that the province of B.C. has been a strong supporter of sport in the province all over. This has actually made a difference. It's made a difference in sport performance. It's made a difference in your communities. I think that is something we shouldn't lose sight of. So thank you for that.

One of the things that's important when you look at sport is that sport allows people of all ages across the province to be engaged citizens. It's not something that is for a small sector or a small proportion of the province. It's everywhere. Sport recreation is something every one of us can and often do, do.

It's a key component to creating healthy communities across the province. It's a rewarding and viable social investment that benefits multiple aspects of society, which sounds like a great thing, but I'm not even sure what that means beyond telling you that there's three particular things that I would ask you to consider. One is continued investment in the legacy fund. The second is making a multi-year investment in sport rather than the annual basis that it's been done in the past. The third is to comment on the concept that medals matter.

So with respect to the legacy fund. Since the close of what was the most successful home games in 2010, the Olympic and Paralympic Winter Games — and one of the most successful games, I would suggest, ever — the sport sector has valued the investment from the province with the sport and arts legacy fund. It's been leveraged financially, so the dollars you put in have been leveraged on average 4.71 times to generate further revenue.

It's been a catalyst for increased participation in sport, and certainly, we've seen an increase in podium performances. That fund, though, will sunset in March 2013, and that's going to result in a $10-million-a-year loss to those established sector programs. I would suggest to you that it's very important that these funds continue and ideally are transferred into the base budget for the ministry.

With respect to a multi-year investment, traditionally sport is an annual line item. That's fine. Don't get me wrong. I'd love to take your money on an annual basis. But I think you need to consider what a longer-term investment would do and the advantages in terms of planning and knowledge that the sport community would have. It provides consistency and an ability to plan beyond annual blocks of funding.

For example, I do a lot of coaching. We do stuff on a four-year basis. We do quadrennial planning. In particular, I coach a girl named Michelle Stillwell, who you
[ Page 2413 ]
may or may not know. We brought one gold and one silver medal home from London this year, and we're currently the world record holders in the 100-, 200- and 400-metre events on the track. That's in Nanoose Bay. Now Parksville has given her the key to the city — the first time they've ever done that.

That speaks to my next point, which is that medals matter. They don't matter for the object that they are. They matter for the objective that they are, for the person and for the community. So when I see what Michelle is doing in Parksville, for example, right now…. There are school kids that are thrilled to see the medal, to touch the medal, to go out there to register in their local track-and-field program. Again, it doesn't matter whether it's track and field or bungee jumping or going for a walk. It's activity, and that's part of the health benefit that I spoke to initially.

But the medals themselves translate into a desire in the community to participate, to be active, to be good community citizens. I think there's value in that for itself. It's about inspiring the community. It's about getting people up and active and off the couch or showing kids that great things can happen. I think someone like Michelle provides an even better and more compelling story.

For those of you that don't know, she has a spinal cord injury. She broke her C7 and C8 vertebrae while piggybacking on her boyfriend at the time going down some stairs.

Blink-of-an-eye stuff. We've probably all done stuff like this, but she happened to draw the short straw and broke her neck.

That didn't stop her. She moves on. She starts playing basketball, wheelchair basketball. She becomes the first quadriplegic to ever play wheelchair basketball. She wins a gold medal in Sydney — spectacular, a gold medal at the Paralympic Games in Sydney. Then that whole neck injury, brain stuff starts going on, and she's out of sport.

She puts on a bunch of weight, stops being a really active community member. We ended up getting together in 2005. I met her at a coaching conference. She was doing some coaching of wheelchair basketball. I actually saw how fast she moved, mostly because I tried wheelchair basketball. I couldn't get by her, and it bugged me. It's like: "Really, how can I not get past this…?" Anyways, it turns out: "Hang on. You're pretty fast. I can work with that."

Fast forward a couple of years. She's off to the world championships. She drops a bunch of weight. She goes to Beijing. She wins two gold medals there. We break a bunch of world records. Fast forward to London. We go back. We defend the 200. We break the 400-metre world record this year, which we had been setting as a goal for four years.

Her whole community comes out and supports her. It's remarkable the level of support that that gives. People were at the airport sending her off. People were doing Facebook messages.

There are thousands of people within the province that are engaged because of her story. Nobody cares that she happens to go super fast for 100 metres. That's not true. I actually cared a great deal that she goes very fast for 100 metres. The key, of course, is going faster than everyone else ever, and everything else is unacceptable. It's what she can do with that. The investment that we make in sport is what delivers her to that line, which then translates into what you can do within the community.

I would suggest to you that in terms of the benefits of sport, it's an effective and efficient health promotion and prevention program. It does more than just score goals. There is a bunch of research that shows that individuals who are physically active have fewer preventable health issues such as diabetes, obesity and heart disease. I suspect nobody is going to argue that point. I don't have the name of the studies that show that, but I think it's common sense to some degree that the active person is likely healthier.

There is one statistic I would share with you. It's out of date now, but I think it's still compelling for the discrepancy it shows, specifically on the disability side. There was a study done — I think it was in 2006 — by the Canadian Paralympic Committee. It showed that 30 percent of youth in Canada are actively engaged in sport — fantastic, 30 percent. There's nothing wrong with having other pursuits, be it arts or otherwise, but there is 30 percent of youth in sport.

They then looked at disabled youth, and that number fell to 3 percent. Three percent of the people in the community that arguably are big consumers of health services and costs are active — 3 percent of youth. That seems like a tragic discrepancy, in my opinion. I suspect, although I don't know, that were that number to increase to an equal level of the non-disabled youth, you would probably see a net savings on the health side.

Beyond that, though, sport helps prepare kids for life. Working on a team can teach you a lot of things about how to behave.

Purely on an economic side, I think you have to acknowledge that sport is an economic driver. Look at Whistler GranFondo that we've seen, that cycling thing that's been going on the last couple of years. Thousands of people are coming to Whistler to ride a bike up a road. They're spending an enormous amount of money to do that.

Whistler again has just been granted the five-year licence from the World Triathlon Corp. for Ironman Canada. That's enormous, and it is actually of benefit overall, I think, because Penticton is going to get to do its own thing. We're actually increasing what's going on. And if in fact it's $4.71 for every government dollar — wow, are we making a difference there.

The sports sector provides an estimated 2 percent of
[ Page 2414 ]
jobs in the province. There are 400,000 volunteers connected to sport in B.C. That's a significant portion. That's a lot of people giving up their free time because they think it matters.

B.C. is home to companies that are developing technologies related to sport that also are applicable to other industries — EA Apparel, Active Games for Nintendo Wii, Bionic Power.

There are compression shorts. SoundOfMotion turns Bluetooth phones into sport performance monitoring tools, which I like but, frankly, Michelle doesn't, because then I get to really see what she's doing at the time. She can't hide from the coach anymore, and we are fighting a little bit about that. I'm not, again, going to lie to you.

P. Lawless: Well, what I would say, then, simply with respect to sport legacy fund, is that despite that global economic downturn in 2009, the province announced a $30 million fund that supported $10 million in annual programming that is currently making a difference across the province to children, to families and to communities.

We know that the current fiscal environment is challenging. There's no two ways about that. We're not asking for more funding. I'm told we're not asking for more funding. I would like to ask for more funding, but we as a sector, I guess, are not asking for more funding.

We want status quo funding for the next three years. We'd like it to be three years. We think that that $10 million annual legacy fund is an incredibly effective and efficient investment in health, in education, in community development. The things we do with your money really do matter.

Again, it's not the medal that we get to put on the table. It's what that medal represents and the fact that a community looks at a medal. Yes, one person gets to put it on their neck, but that medal is made up of many, many pieces. There's a piece that comes from the coach, from the family, from the supporters, from the funders, from the organizations. We all, here in B.C., own those medals that Ryan won, that Michelle won and otherwise.

G. Coons: Thank you, Peter, and thank you so much for the work that you do with elite athletes and other coaches throughout the province. I have ties with the coaching association. I was, of course, conductor for the NCCP level 1 and 2 general theory and did B.C. amateur hockey workshops — clinics 1, 2 and 3 — for many years, for about 20 years, before I had this life.

We did hear Trevor Hirschfield yesterday in Parksville come in and talk about the Medals Matter initiative. Throughout every corner of the province we've had the push from Sport B.C. and sports groups about the legacy fund, the importance of it and the multi-year investment, and I think you're talking to nearly the converted at this point in time.

I do have a question about the Medals Matter — you know, the cost of the program, the number of B.C. athletes involved.

P. Lawless: Well, I couldn't tell you what the…. There is no official program called "medals matter" that I'm aware of. I think it's a position to take that those medals do translate into things. What I think it is, is that you can't put a hard cost on a medal.

Sorry. Let me back that up. I think you probably can. I think the athlete assistance program in the province allows up to $1,000 for provincial-level athletes. I think the federal athlete assistance program allows up to $18,000 for our athletes to go out, and that's to do their job for 18 grand. Those medals — there is a cost to them. I couldn't tell you what the overall budget is for it. So I don't think I can properly answer your question, unfortunately.

M. Dalton: As Gary mentioned, we've had lots of presentations on sports, and we believe. There's no conversion. We're all on board right there, definitely want to do all we can to see sports spread, because it definitely is a very important health issue too. So we need to do that change in the schools.

I just wondered about KidSport. They received $400,000 just recently — I think about a month or so ago. Is that part of this budget, or is that a separate budget?

P. Lawless: It's part of the annual legacy fund, and it leveraged 5,500 kids from low-income families because of that. KidSport takes that $1 and turns it into $2.6.

Might I offer one comment? I know I probably should have used it as part of my presentation. But one thing I would maybe say, just to hit off what you said about: "Everyone agrees; we're almost the converted."

I think that's one of the problems, frankly, that sport faces. It's that we all agree with it. We all know it's good, but it's hard to value it. I can't give you a number of a medal thing. I think that's where the struggle is.

I was just in London, of course, and the level of engagement of the population was extraordinary. Every day that stadium had 80,000 screaming sports fans. They didn't
[ Page 2415 ]
care what they were seeing, but it mattered to them — in the Tube and otherwise.

I happened to be on the Olympic committee, and we watched that and wondered: what are they doing that we're not? It seems to be a valuing problem.

Here it tends to be because we all agree with it. It sort of gets pushed to the side of the desk, and I mean that with respect. I understand that there are big issues in the province to deal with. This one, it seems like, we all get along on, so we don't have to spend as much time. With respect again, I think that might be a mistake.

D. Horne (Chair): Thank you for your presentation. I'm a big supporter of the Olympic movement. Before I was elected I helped the Russians design the Sochi 2014 bid and was very involved in Torino, in Athens and many Olympic cities. I personally recognize the advantages of sports and the Olympic program as well, so thank you so much for being here today.

I'll call our next presenter, being the B.C. School Trustees Association and Sherri and Michael.

M. McEvoy: Thank you. My name is Michael McEvoy. I'm the president of the British Columbia School Trustees Association. With me today is Sherri Moore-Arbour, our director of communications.

I hope I don't disappoint you. You see, I'm not going to refer at all to the written submission that I have provided. Instead, let me just start by saying that we represent all 60 school boards in British Columbia — trustees responsible, obviously along with all of the staff throughout British Columbia, for educating 560,000 students across this province.

Let me also start by saying that I think we recognize that in British Columbia, Canada, probably the western world, we have a demographic challenge ahead of us where it's projected we will have a worker shortage in the coming years. Why is that important? It's important because when I look now at what we're doing in the school system…. We have to make sure, not just now but ten years from now — those kids in kindergarten, grade 1, grade 2, grade 3, long after we're finished doing what we're doing here — that each of those kids is going to reach their potential for success. We want to make sure we're graduating all of our kids. That is absolutely critical if we are going to be successful here in this province.

Where are we now? We have moved the graduation needle from in the 60 percent range probably 20 years ago. Working together, school boards and the Ministry of Education and government together have moved that figure to 80 percent. That's the good news. The not-so-good news is that we haven't moved that dial past 80 for the last few years.

Two things about that. One is, obviously, that there's 20 percent — we're talking thousands of kids — every year that are not graduating. We know that you need to graduate in order to have the greatest potential for success.

The other thing about that is that even the 80 percent of kids who are graduating…. We are now in a situation in British Columbia, I think, where we all — all members of the Legislature, all of us in the education community — are reflecting on whether those 80 percent are getting the kind of education they need to make their way here in the 21st century.

Those two things together pose, I think, great challenges for us. Now, the thing we do know is…. We know more about brain science than we ever knew before. We know how to, I think, effectively get to and engage kids more than we ever knew. That's good news. We also understand some of the barriers and obstacles to why kids aren't learning what they should. There are a lot of kids who come to school in this province who are simply not in a position ready to learn for a whole variety of reasons, often because they come from backgrounds of poverty or, frankly, stress in their lives, which makes it very difficult for them to learn.

The good news is that we're learning more about how. Some of those issues have to be dealt with outside the school system, but we're learning more and more in the school system how we can help kids — what's in the parlance now — self-regulate. The work of previous Minister of Education George Abbott in bringing Dr. Stuart Shanker and talking a lot about self-regulation…. These are major steps forward that allow kids to be able to learn in the classroom and be all that they can be.

Now, all of this…. What does it mean? It means that it costs money to do this, but we think that investment is worth it, because looking forward, again, we want to make sure that all of our kids are going to be successful.

What does it mean in terms of money? Where does the money go? It goes to training teachers so that they understand some of the signs. I know on this panel there are people who have been educators in their careers. Teaching can be a lonely profession. When you're in that room with those kids, the chance for self-reflection, to work with colleagues, is not always there.

We need to be spending and investing more in our teachers so that they understand those things that are happening on that front — self-regulation and all kinds of other ways to engage kids. That means professional development.

In greater Victoria, for example, there's a program that we'd like to spend a lot more money on, called learning initiatives. These are master teachers that we hire at a district level. They go into classrooms. They share the wisdom that they've had the chance to reflect on, working with teachers every day to enhance their skills.

This is something that has been raised by the teaching
[ Page 2416 ]
community in greater Victoria. I have to say we're in the priority areas here. I'm sure, across the province there is a lot of this going on, but we need to be doing more of it. It also costs money, of course, to pull teachers out of a classroom to do pro-D — for substitutes and all that kind of thing.

There's another area that requires financing. That is that in some places, in some classrooms — boards working at a local level know where those are — there is a need for greater support in classrooms. I think that's an area that I'm really encouraged by the discussion that's been happening amongst members on all sides of the House on this question. There's really not a lot of evidence to support the fact that we spend hundreds of millions of dollars for lowering classroom averages by a student or two, across the board — that that's really an effective use of money. We need to be thinking about targeting that money and targeting in areas of greatest need.

The learning improvement fund. We have worked with the Ministry of Education. We think that's a very positive start. It was $40 million this year, I think — enhanced because we had the teacher work stoppage for three days, and that money was put back into that fund. That money is very, very well spent across this province. Boards look in each of the local areas. Because we're attuned, we know exactly what the needs are, and we can identify where that money can be spent wisely.

Those are the areas we need to be spending the money on, to move the dial from 80 percent graduation rates. We believe the potential is there to reach full graduation rates if we work on these things together. It does require commitment. It's going to be a commitment now. There are lots of things that we can….

I'll maybe back up to say that I know there is this ongoing discussion about health care budgets and how large they are. I understand the political realities around those things. My hockey knees can be put off, I think, for a couple of years. You know, what can't be put off is a kid. What can't be put off, though, is that child in kindergarten or grade 1 that needs that attention now that's going to affect them for the rest of their lives. That's something that I think we all need to think about as we decide how we're going to divide that investment pie to move forward.

That would be my plea to you when you're looking ahead to the budget this year. Education, which has been a priority, and we very much appreciate that…. But we think we can do better. We have to make sure that the potential for all of our students is recognized and we move forward to engage those kids and move them forward.

D. Horne (Chair): Thank you for your presentation. We'll start our questions with our Deputy Chair, Mable.

M. Elmore (Deputy Chair): Thanks for your presentation, Michael. With respect to the graduation rate in B.C. at about 80 percent, how does that compare across Canada? Also, are there specific groups that have a lower-than-average rate? I'm thinking particularly aboriginals or new immigrants or other groups.

M. McEvoy: Thank you very much for asking that question. We are actually doing reasonably well in British Columbia in graduation rates. It's not just graduation rates. I should add that when we look at our education system…. PISA testing, which is probably the gold standard around the world, tests 15-year-olds in math, science and reading. British Columbia is constantly in the top five in the last decade. So we have much to be proud of. In fact, when you look at the difference between the top-end kids and the bottom-end kids, it's actually relatively compressed. It means we're not leaving as many kids behind.

On the grad rate, you're absolutely right. The grad rate amongst our aboriginal kids is unacceptable. It's completely unacceptable. We have made some progress. I would say that.

Boards across the province have worked very hard with the Ministry of Education and our partner groups to do that. But much more work needs to be done.

There are all kinds of different programs happening. You may have read a recent article in the Globe and Mail on the weekend on what's happening at Haida Gwaii. It points out, by the way, the strength of local school boards in being able to respond to community needs and develop programs that meet those kids' needs. But there is much, much more work that has to be done and requires more investment.

M. Elmore (Deputy Chair): Do you have any data on the success of new immigrants in their graduation rates?

M. McEvoy: I don't, actually, off the top, but that is a challenge as well — English as a second language. And there's a new term that we're now using that just off the top of my head I don't recall. Particularly in the Lower Mainland and working with our colleagues in Burnaby, Vancouver, Richmond and so forth, we're looking at programs. There's obviously some overlap with the federal government as well. But the school system is often the first — if I put it, on the front line — on those kinds of issues. So there has to be greater investment, for sure.

M. Dalton: Thank you very much, Michael and Sherri, for coming here today and making the presentation. I did teach for many years prior to getting elected. One conversation that we've had often in the classrooms was the increasing difficulty, as far as the teachers, because of the levels of special needs and the changes — perhaps a reflection of society.

Just wondering, as far as professional development programs, is that keeping up to the needs for prepar-
[ Page 2417 ]
ing teachers coming into the school system? Where are things at now with that, as far as ongoing workshops and a focus on special needs, so that the teacher isn't just subject-specific at the high school but can really meet the needs and instruct the kids at all different levels?

M. McEvoy: We think this is a big issue. We've had many conversations with the Ministry of Education, the deans of education, in terms of how well young teachers are being prepared for the learning environment that they're facing. We don't think it's good enough. We think advances have to be made.

Universities are independent and autonomous, and things sometimes move slowly — too slowly in our view, if I may say that frankly. A lot of teachers…. I hear it from principals and other teachers — the young teachers coming in really not prepared for the environment.

It's not just, by the way, on the special needs issues. There is more talk, as you've probably heard, about personalized learning, which is a very good thing. We need to be responding to the individual learning needs of kids. That also involves learning new teaching techniques, where you're able to meet the different needs of kids in a classroom. It's a real challenge. It's not easy, and if you were schooled 20 years ago on stuff, these are issues you didn't face. So providing that professional development — we'd like to be doing a lot more of it.

Some political issues around that, too, by the way, as you probably know — how much of this is team-driven in a school, meeting needs of school versus teachers seeking greater autonomy over pro-D? Somewhere, though, we've got to come together for the kids.

We need to be working on this stuff together. We know what the issues are. Teachers have to be working with other teachers, working with administrators, coordinating with the Ministry of Education. This is something we have been encouraging, we're going to continue to work at, and we remain optimistic that it can be done. If the focus is students, we think it can be done.

G. Coons: Thank you so much, Michael, for your presentation and for your brief you put before us with the financial concerns that trustees across the province have about child poverty, operating grants, playgrounds, capital projects, facilities grants. We've been hearing that loud and clear, I think, over the years.

We have been hearing quite a few presentations about the EDI, early development initiative, and the work of Dr. Clyde Hertzman. You talk about how we as legislators should be looking at greater support in the classrooms in areas of greatest need. When we look at the EDI, it looks at five aspects: physical, social, emotional, language and communications.

It says that 31 percent of students entering kindergarten are vulnerable in at least one of those areas. That's a huge amount. We've had that conversation here. Do you think we need to take that information, the EDI, seriously when we make decisions about where we should be putting our finances?

M. McEvoy: Yeah, absolutely, and boards look at that information. I should say that the EDI and Clyde Hertzman's work is very valuable to what we do at local levels. It integrates a whole series of things, including, by the way, FSAs. So that's something that ultimately the legislators have to wrestle with.

All of that helps to identify the area of greatest need. It's a very important tool, but it's one of a series of factors that boards look at. Oftentimes there is other data that districts have on their own. Whether it's in Prince George or Coquitlam or Maple Ridge, there are always unique aspects to these communities that have to be addressed. But that's definitely an important part of the equation.

B. Ralston: Thanks very much. You spoke briefly about the PISA scores, and you mentioned that British Columbia has been in the top five over the last decade. There was a suggestion made to us by an earlier presenter that in fact PISA scores in British Columbia have declined relative to other high achievers, such as, obviously…. Finland, I think, is consistently number one. You may not be able to answer that now.

I'm not sure a lot turns on it. Although, it was being used to advance an argument about the impact of a perceived decline in funding. I'm wondering if you can answer that.

M. McEvoy: Well, these things are complex. There are other jurisdictions that have really worked hard to move their scores. I think of Singapore, for example, as one of the countries that's moved up. Finland's been near the top of the list since it started. Alberta and British Columbia consistently do well, but that doesn't mean that there isn't more work to be done.

When you think of the tens of thousands of kids every year in this province who are not graduating, their chances of life success are obviously diminished. We cannot waste that resource in our province, that human capital, because we know what happens generally. Well, the statistics about what happens to kids that don't graduate — they tend to be the kids who end up in our penal system, and all kinds of things.

It's an investment that's absolutely critical. Yes, we're doing well. We believe we can do much better and be leaders in the world. There's no reason why we can't be leaders and working together on these issues.

D. Horne (Chair): Thank you so much for your pres-
[ Page 2418 ]
entation and for being here today.

I'll call our next witness, who is the West Coast Environmental Law, represented by Andrew Gage.

D. Horne (Chair): Good morning. How are you? You have ten minutes to present, Andrew, and welcome to the committee. Begin now.

A. Gage: Fine. Thank you for having me. I'm really excited to be able to present. I've met some of you before, and it's always a pleasure.

I've given you two sets of documents. One is the letter of today's date, which is really what I'm going to be following. The other is materials that we provided in respect of the carbon tax review. That is the issue I'm speaking to, the carbon tax — how to improve it, why to keep it, how to expand it.

We do believe that the carbon tax is a crucial and very important tool to be used to address climate change and to help B.C. move from a fossil fuel–based economy to a carbon-neutral economy. Speaking personally, I have two small children. I am terrified by the problem of global warming, and I've always taken a lot of comfort in the fact that B.C. has played a leadership role in addressing this crucial global problem.

We applaud Minister Terry Lake's promise that the government will reject calls to scrap the carbon tax, which he announced via Twitter, and hope that Budget 2013 will include measures to expand the tax and make it fairer.

We did, as mentioned, put in joint submissions with a number of environmental organizations and labour unions on the carbon tax review. I've provided a copy of those submissions.

In brief, they recommend that B.C. should continue to increase the carbon tax in 2013 and beyond; that B.C. should extend the carbon tax to include emissions that are currently exempt from the tax, thereby levelling the playing field within B.C. and making the carbon tax more effective; that we should take action to avoid putting B.C. industries at a competitive disadvantage, provided this can be done without undermining the tax's effectiveness — and I'll come to that in a moment, because I do think there are many ways that that can be done — and to invest in solutions that use revenue from the carbon tax in ways that build and don't penalize public institutions; and finally, in ways that make the carbon tax fair for low-income households.

Many of those recommendations, I think, you've probably already heard from other witnesses. I propose, due to time, to focus on two areas that aren't really directly covered in those joint submissions.

First is your mandate from the Legislature under the Greenhouse Gas Reduction Targets Act to consider how B.C. will achieve its targets. It's a legislative mandate that I think is to all of government, to consider those targets.

Secondly is how issues of competitiveness with other jurisdictions can be addressed without compromising the effectiveness of the tax and without the use of ad hoc exemptions.

First, the Greenhouse Gas Reduction Targets Act, of course, was another instance of leadership on the part of British Columbia, setting targets for 2020, 2050 and providing for interim targets in 2012 and 2016. It doesn't explicitly set out who's responsible for achieving those targets, but our view is that it's pretty clear that the Legislature intends government to look to those targets in making decisions related to climate change and to greenhouse gas emissions.

In the United Kingdom very similar targets have been used to create five-year carbon budgets that allow the government to outline at each stage how it intends to meet its targets. Clearly, the carbon tax is a key piece in meeting that legislated objective.

In adopting the targets, B.C. struck an action team to advise us on how to achieve the goals. The action team explicitly recognized the need to review and build on the carbon tax going forward, recommending that after 2012 the government, if required to achieve the emissions targets, increase the carbon tax in a manner that aligns with the policies of other jurisdictions and key economic factors — a clear recommendation from the advisory body struck by the government to evaluate the need to increase the tax to achieve those targets — and by 2012 to extend the carbon tax to cover all greenhouse gas emissions or, alternatively, to include the emissions that are not covered currently in a cap-and-trade system.

If Budget 2013 doesn't expand and increase the carbon tax, our view is that you'll be failing in your mandate under the Greenhouse Gas Reduction Targets Act or that you'll need to explain what other initiatives you are funding to make up that lost opportunity and to move towards achieving our 2020 targets. At a minimum, a failure to increase and expand the tax should be explained in the progress reports that the government is required to table every other year under the Greenhouse Gas Reduction Targets Act.

Moving to the issue of competitiveness, we know that you've received submissions to the effect that the carbon tax is undermining the competitiveness of certain B.C. industries. We hope that you'll not just accept those assertions at face value but will actually demand evidence supporting that claim, if it's true.

The carbon tax was, of course, revenue-neutral. For many, and perhaps most, industries, the industries get back what they are paying in terms of increased taxes. It's not clear why there should be a general disadvantage to industry. There are specific industries that are carbon-intensive that may be able to make that case, but they
[ Page 2419 ]
should still provide evidence to the fact that they are being disadvantaged.

But where that is the case, where they can provide the evidence, we would urge you not to look at ad hoc exemptions of whole industries but rather at ways to design the tax so that those industries can be protected through the very revenue-neutral nature of the tax. You can make the tax revenue-neutral for a particular industry. It doesn't have to just be at the provincial level that it's revenue-neutral, if there is a concern to protect an industry.

In fact, because the tax was revenue-neutral, industries have received reduced corporate taxes paid for by the carbon tax. So if you exempt an industry, you're actually subsidizing that industry. They're actually no longer paying their fair share of the reductions in corporate taxes that they were previously paying. The exemption removes….

If you want to make it revenue-neutral to a particular industry, that could be done. In fact, there are examples of where that has been done. The best documented example is the refunded emission payment structure that Sweden adopted in respect of nitrous oxides, where in the early 1990s they began to charge a fee to large-scale combustion plants for nitrous oxide emissions. But because of concerns about competitiveness, both with other jurisdictions and also with small operators which weren't covered by the scheme, they gave the revenue back in a revenue-neutral manner, but they apportioned that to the companies on the basis of relative output.

Now, suddenly, companies that were producing a lot but emitting little started getting a competitive advantage for that while the industry as a whole was protected.

What that translates into is protection for the industry while giving a strong financial incentive to reduce emissions and to increase efficiency. In fact, between 1992 and 1998 Sweden's mean emission rates for those companies were reduced by about 40 percent, which was considered very substantial because nitrous oxide is actually a technically very difficult gas to control.

The U.S. Environmental Protection Agency compared NOx emissions from selected plants with similar technologies, including one in Sweden, and the Swedish plant had about half the emission rates of NOx, nitrous oxides, of the plants in other countries. The report attributed that to the revenue-neutral refunded emission payment structure that Sweden was using.

Far from just exempting industries, B.C. can design the tax to protect those industries, if there is indeed a concern. That's not to imply that that's the only model for protecting an industry's competitiveness, but it is an important one. There are others you can look to that don't amount to an ad hoc exemption.

We do acknowledge the leadership that B.C. has already shown in setting the Greenhouse Gas Reduction Targets Act targets and in creating the carbon tax, still the only jurisdiction in North America to have one like it. We hope that this committee and the government will continue to display the leadership that we've seen to date by expanding and increasing the tax, as well as making it fair.

D. Horne (Chair): Thank you so much for your presentation. We will begin our questions with our Deputy Chair, Mable.

M. Elmore (Deputy Chair): Thanks for your presentation. We just recently heard a previous presentation from Sustainable Prosperity talking about the benefits of a rebate system versus exemptions.

My question is with respect to…. Do you have any other examples of other incentives in terms of going towards industries or companies to incent a change of behaviour to offset their carbon usage?

For example, I know you've given the specific example of the refunded emission payment in Sweden, and more specifically around a rebate model. But did you have any other examples or other programs that have been implemented in other jurisdictions?

A. Gage: There don't appear to be a lot that have been industry-specific revenue neutral that I've been able to find. It's been observed that the economic effect of this approach is actually very similar to a cap-and-trade system, where you essentially allow the industries that are able to reduce easily to get a financial benefit from that and thereby create a financial drive to efficiency. But I don't have any specific examples off the top of my head that I can point to beyond those.

M. Elmore (Deputy Chair): Are there specific examples in the agricultural sector that you know of?

A. Gage: No. You mean in terms of how you might do this in relation to greenhouses? No, I don't have specific examples of that.

I would say that outputs become a little more difficult, in that obviously the industry creates a large number of different outputs, depending on what they're growing. But I think the obvious way to look at doing that would be to probably base refunds on the greenhouse area as opposed to…. The area under cultivation within a greenhouse rather than…. The alternative, I think, would probably be to come up with a fairly complicated formulation of trying to equate different crops, and I suspect that would be fairly complicated.

I will say that one of the leading thinkers in Canada for many years on how to structure these types of mechanisms was the executive director of West Coast Environmental Law, Chris Rolfe, who is now and has been for several years an employee of the Ministry of Environment. So you have some internal expertise to
[ Page 2420 ]
government that I think certainly could be brought in and should be brought in to help design an appropriate system.

P. Pimm: Thank you very much for your presentation. I want to touch a little bit more on the agriculture industry, because we've been through the province, and the grain growers made presentations to this committee that certainly show that their industry is going to be hard hit. That's the industry that feeds us all, and I'd hate to see the carbon tax be the reason that the grain industry goes out of business.

Tell me how we model something so that the grain industry…. The farming, agriculture industry is a tough business as it is, but explain to me how we're going to incent that industry so that they don't go out of business and we don't have food.

A. Gage: Well, I think I've already touched on it in that if there is indeed a concern with that particular industry, the goal should be to make the carbon tax revenue-neutral in respect of that industry — not to exempt the industry altogether, which actually would amount to a subsidy. I mean, if we want to provide a subsidy, let's be transparent about it and not pretend that it's somehow removing a harsh tax.

As long as the industry itself is no worse off as a result of paying the carbon tax, then any problem that they're having economically is not attributable, as far as I can see, to the tax. I'm not sure that I can say more than that. But you know, the tax was revenue-neutral. If it's hurting some particular industries harder than others because they're paying more than their fair share, the solution is not an exemption. It's a restructuring of the tax so that those particular industries receive back a larger portion that reflects what they're paying.

G. Coons: Thank you, Andrew, for your presentation and your thoughts on this. It is interesting. I'll try to keep this short. Earlier in our presentations — I'm not too sure when — somebody talked about purchasing carbon credits in lieu of paying the carbon tax, for B.C. projects. I'm wondering what your thought on that would be.

A. Gage: It's not necessarily impossible to design that type of system, but carbon credits are ordinarily included in a cap-and-trade system. One option, of course, would be to move, for certain industries, to a cap-and-trade system. B.C. has done a lot of work in developing and looking at what that might look like. But to sort of introduce the idea of a carbon offset structure into the carbon tax…. I think it probably could be done, but I think you'd really need to look through the implications of what that means.

I'm actually fairly skeptical that if they were credible offsets — not that I've looked at this or costed it; it's the first I've heard of it as an idea — that really were reductions in the emissions, whether you'd be able to buy them at rates that are…. The carbon tax isn't that high yet. I mean, maybe it will be at some point. I don't know what the going rate is for a really credible offset. What are we at with the tax? It's like 30…. I should know that.

At that point we have to conclude the session. We've reached our allotted time. Thank you so much for your presentation.

We'll move and call our next presenter — the Organizing for Change, represented by Lisa Matthaus.

Lisa, welcome to the committee. You have ten minutes to present, and your time begins now.

L. Matthaus: Thank you very much, Mr. Chair. Thank you all for the opportunity to present to the committee today. My name is Lisa Matthaus, and I'm the provincial lead for Organizing for Change. I think I've met many, if not most, of you.

Organizing for Change is a project of 12 of B.C.'s foremost environmental organizations. Each year we choose priority policy issues where we believe there's a good opportunity for government and/or opposition to demonstrate environmental leadership.

One of our priorities for the current year-long period, running through to the next election, is on climate action. Our intention is to ensure that British Columbians are able to raise this issue effectively in the election context.

The 2013 budget is an opportunity for concrete action that will demonstrate commitment to climate action and to meeting B.C.'s legislated greenhouse gas emission reduction targets by 2020, as Andrew was just discussing before me.

Government plays a very important role in shaping our economy and our society. Through laws, policies, regulations and financial incentives and disincentives, government is communicating the kinds of activities that are acceptable or not in our society and economy and setting expectations for behaviour.

"This is how we treat labour in British Columbia. This is how we treat our environment. We want to encourage highly-skilled jobs in our economy or not. Laws and regulations will be strongly enforced or enforced for some but not for all." These are all communications to the economy at large.

Government policies also establish a degree of certainty and consistency for businesses and individuals trying to plan for the future. When government establishes a course of action for the long run, will they stick with it or will they vary it depending on how circumstances evolve with a cabinet shuffle, with a change in government?
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These are important considerations for economic actors, both businesses and individuals, both those already here and those considering whether to come here. It can affect their planning and investment horizons in significant ways.

Where an intentional approach to shaping our economy and society is taken, especially when aligned with the values of communities and residents, a consistent and coherent policy environment encourages longer-term thinking, brings more certainty for planning horizons and expands the social licence for operators who respect those widely held values.

Without a strong vision and a commitment to stick to it, some businesses will expend a lot of resources on trying to create loopholes for their own benefit and focus more on relatively short-term gains, because the long term is too uncertain. Without some overarching plan or direction, tension and conflict can arise between the values of communities and residents on the one hand and companies seeking to maximize profits for shareholders on the other.

Achieving the former is certainly not easy. It requires vision on the part of government and a strong understanding of and alignment with citizens' values at a fairly broad scale. It's very hard to get it right, to find that sweet spot across the economy as a whole, especially in highly partisan political environments — maybe somewhat easier on a sectoral basis — but we all know what it looks like, what it feels like, when we get it wrong.

I don't know when it was last achieved in forestry in B.C., for example, if ever. Certainly not in the two decades that I've been an observer. Right now the fight against Enbridge and, increasingly, Kinder Morgan are indicative of proposals for our province that are about as far from the sweet spot as you can get. Where B.C. got closest to that sweet spot, closest in recent memory for me anyway, was on climate action.

I apologize. You just had a presentation. It sounds like you've already had a couple this morning on climate, but it's here again.

B.C.'s climate actions to date are greenhouse gas emissions reduction targets, the carbon tax, clean energy commitments — the first round — and, among other actions, set out at least a trajectory, if not a full vision, for a certain kind of future economy that we wanted, a low-carbon economy that would put us ahead of the curve in the kinds of jobs we'd be creating, the types of businesses we were encouraging and the role we saw ourselves playing in the global transition that's well underway.

Not to say that there weren't detractors, but for British Columbians broadly, there seemed to be an acceptance that this is what we had to do, this is where we needed to go. British Columbians said yes.

Polling has shown fairly consistent support for continued leadership on climate action, even if neighbouring jurisdictions lag behind, and they don't believe climate action is harmful to the economy. Polling also shows broad acceptance of, and maybe even some support for, the carbon tax, a remarkable achievement for anything with the word "tax" in it.

Having found that elusive sweet spot or come close to it, it's incumbent upon government to stick with it, to build upon it, to improve upon it, both because there's lots of scope and need for improvement and also because it's now something British Columbians have adopted as our own, part of our collective identity. We are climate leaders. We are a green economy, etc. We won't give it up easily. We won't give it up lightly.

You could even see the Enbridge blowback, in part, as a manifestation of this identity. We British Columbians don't prioritize oil company profits over risk to our environment.

From a budget perspective and broader government goals for jobs creation, there is much to recommend maintaining and even improving this trajectory towards a low-carbon economy. Estimates of the costs of climate change to B.C.'s timber sector alone could reach $3 billion by midcentury. Sea-level rise and changes to precipitation could put an additional 11,000 homes at risk by 2050 and an extra $7.6 billion in annual costs.

On the other hand, recent GLOBE Advisors reports on just three green economy sectors in B.C. enumerated more than $15 billion in direct and indirect GDP contribution and more than 120,000 full-time-equivalent jobs in 2011, with projections to almost double that by 2020.

Also, it's working. Several other presentations you've already heard have outlined how British Columbia is already seeing declined fossil fuel use, especially in comparison to other provinces, without an apparent impact on our GDP to date.

There are several ways in which the 2013 provincial budget can contribute to improving the trajectory we're on to help ensure B.C. gets on track to meet its legislated targets to reduce greenhouse gas emissions.

For one, expand the carbon tax to include all measurable carbon emissions. We now have the ability to accurately measure and therefore tax 82 percent of B.C.'s greenhouse gas emissions, up from 75 percent when the tax was first implemented. Closing this loophole for some key emitters would make the tax more fair to all economic sectors, encourage innovation in the sectors and processes not currently captured and provide a further $125 million per year in revenue to the province at the current $30 per tonne.

Secondly — and this was the topic that my colleague was just touching on here — don't create new loopholes by offering sector-specific exemptions from the tax. The value of the tax as an incentive is to change behaviour and spur innovation. Providing exemptions reduces or eliminates that incentive and encourages other sectors to think they can get exemptions as well, diverting resources
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into efforts to justify exemptions rather than to innovate ways to reduce carbon emissions and thereby weakening the price signal of the carbon tax across all sectors.

If there is truly evidence that a specific sector is experiencing a competitive hardship due to the carbon tax, there are various tools available that would not undermine the incentive of the carbon tax — as we spoke of already, the lump sum payments, but also the allocation of some carbon tax revenue to innovation funds and pilot projects to help that sector find solutions, or even border tax adjustments on imports for those where that makes sense.

Thirdly, we need to continue regular increases in the carbon tax over time. The most powerful aspect of the carbon tax is not so much its absolute value, especially right now when it's relatively low. It's the commitment to a steadily increasing price signal over time. This is what gives businesses, communities and individuals the incentive to make low-carbon investment choices, especially when we face big decisions that lock us in for a while. What car do I buy? Where do I live? What kind of industrial equipment do I buy for my business? How do we heat the new municipal pool?

When faced with a steadily increasing carbon tax and the belief that government will stick to it regardless of who wins future elections, we will make better choices than if we think there's a possibility of changing it with the next election or economic downturn. This is the shaping power of the carbon tax, nudging us towards a low-carbon future, incremental decision by incremental decision.

Fourthly, use incremental revenues or a portion thereof beyond the current levels to invest in making British Columbia healthier, fairer and more sustainable. The commitment to revenue neutrality was a laudable hallmark of the carbon tax where British Columbians have repeatedly stated their desire to see revenues being used to invest in solutions — transit infrastructure, expanded retrofit programs, innovation funds, clean energy and ensuring low-income families aren't unduly burdened by increased costs.

OFC and a number of partners have been talking to British Columbians about thinking of incremental revenues from the carbon tax as the Better Future fund, which helped generate more than 1,700 responses to the carbon tax review in support of the tax and its expansion.

I have a couple of quick recommendations on oil and gas subsidies as well. In the recent GLOBE Advisors report on clean energy it was noted that levelling the playing field by reducing oil and gas subsidies was an important enabler for that sector, and I'll leave the rest. And the second one was: don't introduce new subsidies in the rush to promote liquid natural gas exports, tax breaks or infrastructure development.

The last piece I'm going to leave you on is a repeat, actually, of a quote that you heard from a presentation on your first day — and it's worth reminding you here at the end — from a UBC engineering grad, James Boak:

"One of the great obstacles to this transition is that those who currently profit from producing or consuming fossil fuels know who they are and what they have to lose. They will invariably raise the spectre of lost investment and lost jobs. The people who will gain jobs in a new clean economy don't yet know who they are or how much they have to gain, so they're not making as much noise in support of policies like the carbon tax as the fossil fuel–dependent sectors are making in opposition."

D. Horne (Chair): Thank you so much for your presentation. Questions from members?

G. Coons: Thank you so much, Lisa. The dilemma that we have here when we start looking at the loopholes…. I guess, one question: if we close the loopholes, what impact will that have on the percentage that is covered by the carbon tax? I think right now….

L. Matthaus: Right now 75 percent of our emissions are covered by the carbon tax — basically, everything where we burn fossil fuels. It's mainly process emissions and, say, waste emissions and some agricultural emissions that aren't covered because when we first brought the tax in, those were hard to measure. We now have the ability to measure a chunk of those, not all of them. So what we are proposing…. There's about another 7 percent in emissions that we can now measure accurately enough to be able to tax them. Those are process emissions, mainly from aluminum smelting, cement production and natural gas processing.

G. Coons: Just following up on that, I think our dilemma here is that if we fix the loopholes, we want to do it without devastating an industry or a sector, whether it's agriculture or the cement industry. We have to come up with a concrete plan to say: "This is how we can help you as an industry." And you talked about lump sum or pilot…. Perhaps just expand quickly on that.

L. Matthaus: Well, Andrew did a bit of that beforehand. Thinking about the innovation, the ability to use some of the funds, especially if you were to expand it, we'd now have $125 million more. Can some of that be used to help some of these sectors find innovative ways to reduce their emissions? That's the objective. It's actually about reducing emissions. And I used, say, the cement industry. You know, they're saying: "Oh, my gosh. We can't do this. It's going to kill us, blah, blah, blah."

Just recently, coming out of Nova Scotia, without a carbon tax — because innovation can come from anywhere — they've come up with a way of producing cement that actually captures and stores carbon. They can store their
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own emissions, and it becomes a…. Yeah, it reverses the process, to a certain extent.

I don't know. I haven't looked at it. I'm not the technical one to look at it. But it's an example of how, if we had already applied the carbon tax to our cement sector here, maybe there would have been a greater incentive for somebody here to come up with that innovation, and we'd be licensing the technology to Nova Scotia rather than us now having to go there and say that we need to license this technology here because we're going to put a carbon tax on our cement sector and they need to figure out how to reduce their emissions.

M. Dalton: Thank you, Lisa. Just a few days ago there was a major report out of England, based upon 3,000 stations all throughout the world, that essentially shows that there's been no change in temperatures at all over the past 16 years and that the change since 1885 has only been 0.75 percent of 1 degree Celsius. I mean, that's their research. You can look at that. I'm just wondering: do you think, if science starts to move more in that direction, that there should be any change in our approach towards carbon tax and our investments?

L. Matthaus: The one thing I regret not bringing and having a slide to hand out to you here is one of my favourite cartoons of recent years. It was a play on, probably, the Copenhagen Conference or something. You've got this big conference room and all these people there looking down, watching somebody giving a presentation. There's a big PowerPoint behind them, and the PowerPoint is listing all of the ways in which, if we take climate action, we make the world better: healthier people, less pollution and a more fair tax system. It just lists all these ways in which climate actually improves other things other than the climate. And you've got this denier up the back having a rant, and he's saying: "What if we make all this effort to make the world better and it was all for nothing?"

The kinds of improvements that we're talking about here — a lot of the climate action things that we are proposing — actually make us better off in lots of other ways as well, in addition to reducing our greenhouse gas emissions. I think that's part of the double dividend or even a triple dividend you get from good climate action — if we are reducing pollution in our cities by getting people out of cars and onto transit, if we are making our industries more efficient by having them use less energy and, therefore, having to pay less in utility bills.

I've reduced my natural gas bill by 50 percent in the last three years because I took advantage of the B.C. LiveSmart program and the federal grants and made all kinds of investments in retrofitting my 100-year-old house in Fernwood. That's helpful, regardless of the impact on the climate.

D. Horne (Chair): Thank you, Lisa. Unfortunately, we've reached the end of our allotted time.

That brings us to our break for lunch. We will resume about 12:50, although I'd like to try to resume a little bit early, maybe at 12:45, if we could. So if we could have everyone back for 12:45, that would be great.

D. Horne (Chair): I hope the Deputy Chair arrives within seconds. Why don't I have the next presenters come forward, and then we'll get started once the Deputy Chair arrives back? The next presenters are the B.C. Association of Aboriginal Friendship Centres, represented by Paul, who I just said hello to, and Barb.

Good to see you again as well. Okay. Let's get started. So welcome to you both again. You have ten minutes to present, followed by five minutes of questions, and your time begins now.

P. Lacerte: Thank you. I'd like to recognize the traditional territory of the Songhees and Esquimalt First Nations, their keyoh, and acknowledge and give our good greetings to the committee members.

I'm originally from the Carrier territories, and I work as the executive director for the B.C. Association of Friendship Centres.

I'll just quickly introduce some of my kids that are here to look in on their own futures and understand the process that we're doing here. So we've got a mentorship effort going on here.

Mr. Chairman, this is Raven, Sage, Shakoia, Kele and a good friend of our family, Sierra. We also have the executive director — another one of our youth representatives on the end of the table here — Bruce Parisian, from the Victoria friendship centre; and Barb Ward-Burkitt, from the Prince George friendship centre, both of whom sit on the executive committee of the association.

P. Lacerte: Our presentation today is really a continuation of the engagement effort that friendship centres
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across this province have been making for the past three years to raise the level of awareness and to bring the issue of the social and economic condition of off-reserve aboriginal people in this province to the forefront.

This effort has involved really direct engagement with as many members of the House as possible, with two core messages. One, that when it comes to every social and economic indicator in this province, aboriginal people consistently rank on the bottom, and that there is currently no coordinated strategy to effect positive change and to improve the quality of life for aboriginal people living off of the reserves.

It has really been a clarion call for the establishment of an off-reserve aboriginal strategy that has measurable actions attached to it and the establishment of a long-term capacity fund of $3.1 million to support and build the efforts of the friendship centres in British Columbia to respond to the ever-growing needs of the urban aboriginal population.

Just a quick summary. I know that you as committee members have heard from a number of our friendship centres. We do have 25 friendship centres across the province. We have 1,000 employees. The average age of friendship centres in British Columbia is 37 years old, so most of our friendship centres have been operating for more than 40 years.

It's a needs-based organization. As aboriginal people started migrating from villages into towns and cities, they encountered all sorts of challenges in settlement — racism, lack of education due to the impact of the residential school system in our communities, the challenges of addictions, the intergenerational cycles of neglect and family violence and different forms of abuse that are realities in the daily lives of many of our people, not as a result of our own doing.

I don't have too much more to share. I know that there are a number of questions that the committee has indicated to our friendship centre representatives across the province that you'd like to have answered, and so I wanted to make sure that we have adequate time, Mr. Chair, to have that discussion as well.

We appreciate you hearing from us, and we appreciate the support of the committee in bringing forward recommendations for the past two years. We're making some progress in establishing some actions, but the recommendation of the committee to establish a long-term fund has not been implemented to date. So again, that's our reason for being here, and we look forward to the discussion.

D. Horne (Chair): Thank you so much, Paul, and thanks for bringing the young people today as well. I think you, yourself, as well, are an incredible example, and the work that you do is just so incredible. So thank you for being here.

M. Dalton: Thank you very much, Paul, for your presentation and for coming here today.

And Barb, we're following you around, or vice-versa, and your family and Bruce. It's great.

Friendship centres — we've had many presentations. I just wanted to read a little dialogue I had with my son. He sent me a text yesterday, and he said: "I'm going to get on the board of the friendship centre here." We're talking about Fort Simpson in the Northwest Territories. He works as a project coordinator up in the Northwest Territories for developing a youth addictions program. He says: "I'm going to be volunteering Saturday mornings with grades 4 to 7 judo for kids." And I responded and said: "I have sat through maybe a dozen presentations of friendship centres on this tour. They do good work." He says: "Yeah. I'm at the friendship centre probably four to five days a week. That's where the gym is."

So, great participation, and I thank you just for the work you do. It even helps benefit my family.

Now, I know the ask is $3.1 million. If you could just break that down a little bit, how you want to use those funds.

P. Lacerte: There are two questions, we understand, from the committee: one in terms of the distribution of the funds and one in terms of the potential or proposed use of the funds. I'll just speak first to the distribution.

The federal government established a provincial core funding investment together with a fairly complex allocation formula based on the number of aboriginal people in a community, remoteness, the degree of need, the size of the agency. The federal investment is $3 million in British Columbia per year since 1972. The allocation that we are proposing is to match the federal investment in the friendship centres.

The funding range is from $86,000 to $170,000 per centre. We'd be happy to provide the committee with a centre-by-centre or community-by-community breakdown of the amounts that we're proposing that each friendship centre would receive. It would be to match the federal government's investment and to invite in a federal-provincial funding partnership.

That's the funding breakdown, Marc. I don't know if that answers the first part of the question.

In terms of what the funds would be targeted towards, as I mentioned in my presentation, there are two very pressing capacity demands on the work of friendship centres. Over the past number of years demand on our services has more than doubled, and what that means is that the number of clients walking through the doors of friendship centres has more than doubled.

As you are well aware, there is significant downward pressure on the availability of administrative revenues to meet those demands. So while our service base has grown and we have over a thousand staff in the friend-
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ship centres now and our capacity to provide services has increased significantly, our administrative infrastructure and the capacity of our organizations in terms of management and governance have not kept pace.

We were very excited to see the province invest $100 million in the capacity-build for First Nations through this Liberal government, through the new relationship trust. We also engaged, as you've witnessed, similarly with their provincewide consultation exercise to gain access to those funds, and we were not successful. So out of the $100 million that the Liberal government established as a capacity fund for First Nations, only bands or tribal councils were eligible to access this fund. That provided a capacity lift to strengthen the overall administrative infrastructure for First Nations but did not do so for our friendship centres. That's broadly the intention behind the resourcing.

The second is the increased necessity to focus on outcomes. What exactly is the investment that the province is currently making through friendship centres yielding, as far as improved social and economic indicators for aboriginal people? We have very pressing public safety issues that are coming forward, which Mr. Les is very familiar with, around the safety and well-being of aboriginal women in our communities and so on. We have a shared interest to produce different outcomes and measure those outcomes — so around the reporting and accountability, clear outcomes and measures.

I think we're collectively shifting into a change from measuring outputs and counting widgets to whether or not this investment is having a particular impact. That would be the second domain of space that we would like to strengthen — the capacity of our friendship centres to report on the kind of impact that we're having at a community level.

That's sort of, broadly, the intention behind the resourcing, and it's as far as we can go without a formal commitment from a level of government to work with us to jointly develop a set of criteria.

The federal core funding criteria is very detailed. There are a number of very specific eligible expenditures attached to the funding. Those were developed in partnership between our organizations and the government — things that made sense for the minister of the day and senior officials and met both of our interests.

We feel that there's an opportunity to work with the province of British Columbia to develop a set of criteria in a shared, co-creation kind of way to make sure that the needs of the province and the needs of the friendship centres are reconciled and that we're able to generate something that's meaningful for the government and for our communities.

G. Coons: Thank you so much, Paul and Barb, and welcome to all of the guests. It's so heartening to see the future leaders here today.

On this particular tour we had Farley Stewart in Prince Rupert, Annette Morgan in Smithers and Barb in Prince George presenting and talking about the long-term capacity fund and the $3.1 million, and I think it comes to this day, today, sitting here and getting the concluding remarks, which are very important.

Going back to the throne speech in 2011. I was there when I heard the Premier talk about the off-reserve aboriginal action plan. I wrote that down. Not too often do I write things down during the throne speech, but I wrote that down, and I went: "Wow." I started to contact a few people and say: "Hey, what do we foresee about this? This is pretty exciting." We'd been talking about this for quite a few years, having a plan, a direction, a strategy.

So my question is, besides all the good work that you do in our communities…. All of us at the tables here know that good work and how vital it is. Paul and Barb, what do you see as the top three initiatives vital in any off-reserve action plan or strategy?

P. Lacerte: Excellent. Thanks, Gary. We'll be signing a protocol agreement with Minister Chong tomorrow. One of our top three deliverables is authentic relationships. These are deeply historically rooted and complex social problems. This is not rocks, trees and fish. This is not a land-based discussion. This is a social and economic discussion.

The authenticity in the relationship is that the economic yield is less measurable and it's more challenging, which is why we're focusing on the ability to measure the economic impact of improving those indicators for our communities.

One is authentic relationships. We want to have a real relationship with the Crown and a shared space where we can sit down and talk meaningfully about how to improve the quality of life for British Columbia's poorest and most marginalized people, which are aboriginal communities, and our women and our children in that context. That's the first.

The second is that systemically we have a capacity deficit in aboriginal communities. We have a capacity deficit fiscally. So 8 percent of aboriginal people in British Columbia have achieved a middle-class economic status and level of strength in their communities. That's very low, comparative to the general population.

We're still not graduating 50 percent of our people from the K-to-12 system on time. And 55 percent of the children in the foster care system…. I don't want to say percentage. I want to say that 5,300 aboriginal children in British Columbia are in care. Based on our population of 5 percent, that should be 320. That shouldn't be 5,000; it should be 320 of our kids.

We have a capacity deficit, so the second success indicator is a capacity-build. There is core, foundational infrastructure-building that we need to do in aboriginal
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communities to enable us to build solutions that are relevant to our communities.

That leads me to the third core piece — it's the thing that makes us different and the thing that is a challenge for institutions to respond to the needs of our people — which is our culture. Culture is mental health. Culture is economic strength. Culture is identity.

All of the research points to how if you're an indigenous person or a non-indigenous person and you understand where you come from, who you are and where you're going, you're going to have the resilience that you need to become employable and remain employable. It's the thing that distinguishes indigenous communities and indigenous organizations from the efforts of the Crown and other institutions. They can't come from that deeply cultural space.

The third is to engage, honour, embrace, empower and resource indigenous ways of knowing and being. That is part of our recovery from the impact of the residential school on our people. That's what's happening in our families. Generation by generation, we're getting stronger and reculturalizing ourselves.

D. Horne (Chair): Unfortunately, that's brought us to the end of our allotted time. We had a couple more members who had questions, but unfortunately we've reached our end. Thank you so much for being here today and the great work that you do. All I have to say, when I toured the friendship centre here in Victoria…. The sense of community there was fantastic.

We actually…. It was a decision that I heard about afterwards, but I unilaterally actually gave the committee's lunch to the friendship centre in Smithers and heard about it later.

P. Lacerte: Feeding our people firsthand, right out of the committee. Yeah, we're making progress here.

D. Horne (Chair): I'll now call our next presenter, the Greater Victoria Chamber of Commerce.

Bruce, welcome to the committee. You have ten minutes to present and five minutes for questions. Your time begins now.

B. Carter: Thank you very much. Bruce Carter, from the Greater Victoria Chamber of Commerce, assisted by Oriane Fort, who helped to draft the report.

We created a project or a set of principles around finance called Our Vibrant Community, originally destined for municipalities in the region, but we felt as though it really did apply to the provincial government as a community as well. We talked about keeping tax increases within our spending and within our means, building our quality of life and saving for the future and then looking at communicating what the government does and working to deliver services in the most efficient way.

Certainly, we're going to talk in this presentation about those first two bullets, but I think it's important to talk about the premise of where we are and where this presentation is going. We certainly recognize that the province's budget affects the quality of life for every resident, and we're looking at doing this as we continue in a global financial crisis.

We expect that crisis to continue for some time and the recovery to be slow, yet we maintain the call for balanced budgets and continued fiscal prudence on the part of the provincial government. At the same time we do that, we recognize the need for continued strategic investment in British Columbia in order to take advantage of that economic recovery when it comes and to build our economic capacity as a province.

While we're doing all of this in a poor economic climate, we need to remain competitive, particularly within Canada and globally. Our presentation is going to focus on sort of how we go about that from a budget perspective as a province.

Capital taxes have been something that has been talked about a fair bit lately. There are a variety of forms of capital taxes. Without question, we think that all of them, regardless of their form, are detrimental to the economy of British Columbia. They tax the assets that are used to create investment and to create jobs. We don't recommend them in any form. We'd be the only jurisdiction to have them in Canada, and I think they'd be very detrimental to the economy of British Columbia. So that's something that we don't think would be good.

I want to talk a bit about income taxes. First off, they're preferable to capital taxes because they're a tax that would take place after investment is made, based on the productivity of our province, as opposed to before that productivity takes place. I think whenever we talk about income taxes, either corporate or personal, we need to recognize the highly mobile nature of both business and employees in Canada these days. We need to remain competitive, particularly in a Canadian context.

We'd like to talk about corporate income taxes. I think we need to be comparable and competitive within Canada. I'd love to compete with Alberta, but to be quite honest, they're in certainly a significantly different fiscal reality than most of the other provinces represent.

You would think that looking at Ontario is probably a more appropriate measure. Their upper tax limits are at about 11½ percent, 4½ percent for small business. I think that sort of describes a scale of competitiveness when we
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talk about corporate income tax rates. I think as we look at corporate income tax we need to remember that there is a reintroduction of a social services tax. That's a 7 percent cost to many businesses this year, in addition to the conversion costs that are there.

There may be some room to raise or adjust corporate taxes slightly in order to get that money for strategic investment. But that scale is very limited with the introduction of the PST.

Personal income tax. We as a society have accepted that we have a number of services that we'd like to receive — health care, education, social services. I haven't named them all by any means. The individuals are the main consumers of these services. It's reasonable that we would expect to pay taxes in order to do that. Although the taxes on a personal side do affect take-home pay, they are generally directly to services received by citizens.

There's some room to adjust tax rates and remain competitive. Once again, this is a modest amount of room. The challenge becomes that the largest opportunity to raise taxes is in the lower income tax brackets, just based on the volume of revenue for the province. So although there is some room…. Once again, we're not advocating an increase in taxes, but we do need to make sure that we maintain the investment in our province to keep that economic capacity.

I think the other area that we look at is when we talk about saving for our future, we're talking about debt-to-GDP ratio. I don't think that having no debt is actually a laudable goal. I think that if we were a corporation, we'd look at a reasonable amount of debt to be a performing corporation. I think that's true as a province as well.

With the current debt-to-GDP ratio of about 15.2, we're certainly very healthy. There may be some room to increase debt. Indeed, as we go into deficit, that's exactly what we do. We do increase debt. There may be some room to increase debt to make strategic investments in our economy and do those things.

I've talked a couple times now about strategic investment. I want to talk about structural deficit versus strategic investment.

When we talk about structural deficit, we're describing a deficit that is an operating deficiency within the government. That's essentially that it costs more money to run the government than the government brings in. We simply can't have that. That operating or structural deficit needs to be eliminated, and indeed, the operating costs of the government need to leave room for strategic investment. That's the significant challenge, I think, ahead for the province as you look at the economic conditions that we have.

Structural deficits need to be avoided. Structural spending needs to be controlled. We need to make sure that we have the room to make strategic investments in our economy.

I'd love to provide you a list of strategic investments for Victoria, but that's not actually in this presentation. I think there are a number of strategic investments that need to be made around the province. We're happy to compete with other jurisdictions to do that.

I think that the important thing is we do need to make sure that we continue to build that economic capacity. There is some room for some minor adjustments in some of the tax areas and debt, but we would only do those if we're talking about making strategic investments in our economy, building our economic capacity into the future.

I think as we go forward to do that, there's a real opportunity to work with the other levels of government, both federal and municipal, in identifying those strategic economic opportunities and making sure you highlight those as we go through and make those investments. Oftentimes those are infrastructure programs. Talking about building that economic capacity….

I think that the province has a real leadership role to play, particularly at the municipal level, saying: "You have an economic role to play. Jobs are important in your community, because your community is ours. We need you to put forward and champion projects that are going to create that economic capacity."

I think that's a real leadership challenge for the province, but I think it's one that starts with the budget.

Once again, we're advocating for continuing to move towards balanced budgets. We're talking about making sure that we maintain our strategic investment in our economy so that we can continue to create jobs, wealth and improve our quality of life. There's some modest room for adjustments in some of the tax rates and debt ratios, but a capital tax would certainly be detrimental to the economy.

Peter and Patrick, welcome to the committee. You have ten minutes for your presentation, and your time begins now.

P. Sandmark: Thank you very much. Good afternoon. Thank you to the whole committee for the opportunity to present our recommendations. We've handed out a brief. You should have copies of that.

I'm Peter Sandmark. I'm the executive director of ProArts, or the Professional Arts Alliance of Greater Victoria. With me is Patrick Corrigan, who's the executive director of Pacific Opera Victoria, and he's also the chair of our provincial committee, which looks at issues of provincial funding for the arts.
[ Page 2428 ]

Before I get into the key points in the paper, we want to start by expressing our thanks to the government for reinstating $15 million back to the community grant program. It's important, because the cuts to the gaming grants had been devastating to arts organizations. The partial restoration of funding, along with returning the eligibility for adults arts organizations, has been extremely helpful for many arts groups that were struggling after those cuts.

We also want to thank the government and the former Minister of Community, Sport and Cultural Development, Ida Chong, for her recent announcement about the $6.75 million of the legacy funding going to the B.C. Arts Council for the current fiscal year. This will allow most operating grants to arts organizations to remain roughly stable for this year.

This decision, however, has raised the issue of what the government intends to do for the next fiscal year. You no doubt know about the $10 million of legacy funding. It's set to expire — $10 million per year for three years. It expires at the end of this fiscal year. If that is not replaced, then the B.C. Arts Council's funding will drop again, and the groups that depend on it will find themselves, once again, struggling.

In fact, even the current Premier, Premier Christy Clark, stated that swings in funding for the arts should end. In a comment she made in response to questions from Arts Advocacy B.C., she stated…. I put this on the front cover so you can follow: "I believe the arts and culture community is important to the social and economic health of the province. It is time to put an end to the yo-yo effect of funding and realize the positive impact of arts and culture in British Columbia, from our youngest resident to the oldest."

We are here today to ask for an increase for the B.C. Arts Council, because we believe that the arts are a fantastic investment for the government. As we point out in our info graphic on the cover of the brief, every dollar in government funding leverages $31 of economic impact. I want to unpack that graphic for you a little bit. The information comes from the Vital Signs report from the Victoria Foundation, which states that $5.4 million represents the amount of funding from municipal, provincial and federal levels to 32 arts organizations in greater Victoria.

The other figure, the $169 million of economic impact, comes from the 2010 Greater Victoria Arts and Culture Sector Economic Study, by Dr. J. Brock Smith from the University of Victoria, commissioned by the municipal CRD. It looks at the impact in greater Victoria, at spinoff economic benefits. I think it's a very telling comparison to see how much government funding from all three levels translates into $31 per dollar of economic impact in the region.

We wish we had a provincewide study for this same impact, and we don't yet. But we will certainly work on it as part of the newly formed Arts Coalition of British Columbia, which we are a part of. We also endorse their submission to the committee, also calling for an increase for the B.C. Arts Council and gaming grants.

We believe that the arts are a great investment for many reasons — that they enhance the quality of life in communities, that they inspire us and that they teach us about each other. They're a bridge between cultures.

The government's budget consultation paper talked about protecting priority programs like health care, education and social services. In our brief we reference studies that show that the participation in the arts has health benefits, such as the British study Arts in Health: a Review of the Medical Literature, which has extensive detail of various studies.

There are other studies that show how arts improve students' performance in school or help at-risk youth, such as the recent study from the Endowment for the Arts in the U.S. — The Arts and Achievement in At-Risk Youth, and increasingly, studies that show how culture and arts create jobs.

Similar to our own regional study, there was a study in Michigan that found $51 economic impact for every dollar of government funding. In fact, we've even seen the reversal of some arts cuts in the United States by Republican governors who realized after they'd cut the arts that they had made a mistake, and they reinstated that. This is in the news.

The context for B.C., though, is one of restrained operation due to, as Premier Clark calls it, the yo-yo effect of up-and-down funding triggered by arts funding cuts back in 2009. It's made it difficult for us to plan, to go ahead, to develop new programming. The latest Statistics Canada aggregate figures show that B.C. still remains last in terms of provincial funding for the arts, with per-capita funding of $54 — least among the provinces and below the national average of $90 per capita. The impact of this inadequate funding is restrained arts programming.

Speaking from my own experience as a manager of an arts organization…. I work for MediaNet, as well, because I only work part-time for ProArt, as we're not funded. We put on shows, video. We held video production. It holds us back in terms of what federal funding we can access. In other words, organizations that have less provincial funding find it difficult to do the programming that then gets them increased federal funding. There are studies that show that the funding from federal sources is lower in B.C. than in other provinces. We're doing less than we could do, due to less provincial funding.

The essence of this is that there is a great deal of untapped potential in the arts and culture sector of British Columbia. As much as we feel that arts leverages economic benefit, we can see that there would be a reverse deleveraging effect on economic impact if we cut the arts
[ Page 2429 ]
or lost economic impact if we don't increase support for the arts. We have in British Columbia many artists. We have a public that attends cultural performances and buys cultural products. But we are simply not reaching our potential.

The budget consultation paper asks: how do we create jobs that future generations will depend on? We hope that the Finance Committee sees that the arts and culture sector can be part of the solution for the challenges that we're facing as a province. Increased funding for the arts will stimulate economic activity that will create more jobs and engage communities as well as enhancing the quality of life, not to mention attracting creative-class workers — no doubt a theme that's going to come out of the Creative City Summit coming up next week here in Victoria.

The cost to the government for this increase, we believe, will be more than returned in income taxes, provincial sales taxes and property taxes to the municipalities. The study demonstrates the economic impact in greater Victoria, generating over $20 million in property tax. I'm sorry we don't have a study yet that shows the precise figure of provincial tax that would be generated. I did calculations on my own, but I'm not an economist, so I'm not going to hand those in. But they look like they more than cover the costs of the programs.

Our recommendations, to cut to the essence of our presentation here, are to increase the budget of the B.C. Arts Council to $32 million with a plan to increase their legislated investment to $40 million over the following two-year period.

Second, in accordance with the options presented in Skip Triplett's Community Gaming Grant Review Report, we propose increasing gaming community grants from $134.9 million to $156 million for 2013-14, remembering, too, that only a portion of the gaming grants go to arts organizations — this would bring the gaming grants back to where they were in 2008 — and keeping in mind the option also raised in Skip Triplett's report about substantially increasing gaming grants in the long term.

Third, provide stable, predictable funding for the B.C. Arts Council community grants so that they can offer multi-year funding to arts and culture organizations. This is specifically to address the yo-yo effect of up-and-down funding. Canada Council for the Arts provides three-year grants for organizations. It provides stability, and we can plan in advance. We can organize things and increase our programming, increase our audiences.

This is the three-year budgeting model that we recommend. It would allow groups to carry over unspent funds and does not penalize successful fundraising and philanthropy.

The government, finally — in point 4 — should ensure a capital program that will help arts organizations obtain, own and maintain venues for the presentation of art. I can't stress how important venues are. As prices go up in the core of cities, as real estate values go up and arts organizations have to move out of the core, we lose the opportunity to present art in the core of our cities.

It's happening. I've seen it in greater Victoria after the cuts. Three arts organizations that we know of had to move out to the periphery of the downtown area. If we don't act to ensure venues, we will lose groups out of the downtown.

M. Dalton: Thank you, Peter and Patrick, for your presentation. I know that in the communities I represent — Maple Ridge and Mission — we have a very vibrant arts community. I know that's the case throughout the province. We have a building called the ACT, and it's the hub of the community, in many ways, with many presentations and productions happening there.

My question regards the $500 tax credit that was in this year's budget, for children 16 years and younger. I'm just wondering: what has been the response to this? Is it being promoted at all? Is it of any help? Just some comments on that.

P. Sandmark: Anecdotally, I know of many groups doing youth programs. It's no question that we recognize the importance of outreach to youth. We're developing new audiences coming up. At the organization I work for, we did youth programs, for sure. I hope the parents are taking advantage of the tax credit.

P. Corrigan: I'll just comment briefly. Several of my employees have young families. They've said that there has been a marked difference, that people recognize that this government is supporting that development in their families, and they're taking advantage of it. It does create discourse, and it does put a force in the community to encourage that kind of programming and accessibility for young kids, absolutely.

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

I'll now call our next presenter, Camosun College,
[ Page 2430 ]
represented by Kathryn and Peter.

Welcome, both, to the committee. You have ten minutes to present, followed by five minutes for questions.

K. Laurin: Thank you very much. Good afternoon, everyone. We're really pleased to have the opportunity to participate today in the budget consultation process. I'm Kathryn Laurin, president at Camosun College, and I'm here today with Peter Lockie, who is our vice-president, administration, and chief financial officer.

I'd like to begin by stating that we recognize and are very sensitive to the fiscal challenges currently facing the province. We are committed to playing our part in building B.C. for the future.

As more people turn to our college for advanced skills and education for employment in the new knowledge-based economy, we face both financial and physical capacity issues that, if not addressed, will limit our future ability to serve our communities' needs. The current level of demand is placing unprecedented pressure on capacity at our college.

In 2011-12 once again we achieved high enrolment numbers with an overall utilization rate of 102.8 percent of our ministry and ITA targets, and 2012-13 is expected to be similar. We will be in a handful of colleges that are over the 100 percent rate. In 2011-12 after making budget cuts, we balanced our budget. With strong financial management of our available resources, we ended the year with a very small surplus.

Camosun College has a new and exciting vision, which I'm happy to share with you. It's from our new strategic plan, and the vision is: "Inspiring lives: Canada's college of life-changing learning." Very proud of that vision.

You'll find in your package a coloured document that looks like this. This is a document that contains highlights from our Accountability Plan and Report, which is a report that we submit to government on an annual basis. You'll find in here that the data are impressive and speak to Camosun's important role in regional economic development.

Camosun serves over 18,000 learners in the southern Vancouver Island and southern Gulf Islands region annually, and 94 percent of those learners reported that they were satisfied or very satisfied with their education at the college, according to our most recent student outcome survey data.

Camosun offers over 160 different programs from two campuses in the areas of arts and science, business, engineering technologies, trades, health and human services, sport and exercise, access and indigenous education. We are one of the region's top ten employers, with over 1,000 employees and an annual budget in excess of $100 million.

In addition to having an economic impact in our service area in excess of $800 million annually, a recent study found that 86 percent of our graduates remain in the region to live and work after completing their studies, with 97 percent remaining in the province.

We all know the economy is beginning to recover, but some areas are a little bit slower than others. This year our total student enrolment is at record levels, slightly higher than last year, and we are operating at near full capacity. We have wait-lists or have had to turn students away in the following areas, mostly in health sciences, including nursing, dental hygiene, dental assisting and medical radiology technology, which is a new program for us.

The demand for trades training at the foundation level, including marine and metal trades, is very strong, with apprenticeship demand a little bit softer due to the economy.

We have also seen an increase in demand for retraining programs for disabled students and for training for immigrants — a lot of language training.

We continue to have strong demand and deliver results in excess of the regional population rate for aboriginal training programs. Approximately 10 percent of our student body would be of aboriginal descent. That would be close to 1,000 students of the college.

As a result of scarce capital funding, some of our students are learning now with outdated equipment and technology, and that makes providing advanced skills and education for employment a challenge. The province has supplied some much-needed additional one-time funding for health education equipment and trades training in the last few years, which is much welcomed. Any additional funding in this area would be very beneficial, especially in the trades area, as we know there's a current focus on skills training.

In order to deliver more cost efficiencies, we need to modernize our facilities and upgrade our systems. The construction of a centre of excellence in health and wellness has long been a priority for Camosun College, and our vision is for a new state-of-the-art teaching and learning facility on our Interurban Campus that would be adjacent to our highly successful Pacific Institute for Sport Excellence facility.

I would be remiss if I didn't say at this time that Camosun is extremely appreciative of the province's recent announcement to invest $29.2 million in renewed and expanded trades-training facilities. This will greatly align with the B.C. jobs plan and skills and training plan.

We are the largest provider of trades training on the Island and the second-largest in the province. We will play a lead role in marine trades training and shipbuilding, working in close partnership with BCIT — very exciting opportunities.

How has Camosun responded to its budget challenges? Flat operating grant funding, the tuition cap policy and
[ Page 2431 ]
the reduction of infrastructure maintenance funding have meant that we have had to undertake extraordinary measures to try and maintain the range and quality of programs and services that our students demand.

In the past few years we've gone through annual budget cost reduction exercises. We've implemented educational cuts, administrative cost savings which have totalled in the $4 million to $6 million range.

We continue to operate with a balanced budget and are committed to financial accountability, but in 2011 we reached the point where there was nothing left to cut without making program reductions to balance the budget. We announced that program reductions would be effective in September 2012, about 18 months later. Unfortunately, we had to make the difficult decision to suspend the applied communication and learning skills programs at that time — September 2012.

Without additional funding, or appropriate funding, we expect this regrettable trend to continue in next year's budget. Funding cuts will only exacerbate the situation.

Our request to government. Our college plays a vital role in building B.C. by providing our students with the advanced skills and education they need to participate in the economy. In order to do so effectively, we have four requests.

Number 1 is that we require sustainable operating funding. Every year our costs continue to rise faster than our revenue. In 2013-14 there needs to be an increase to our operating grant to accommodate inflation, another unavoidable increase, or we will again face having to make cuts that will inevitably compromise programs and service quality at a time of extremely high demand. Multi-year funding would also help improve our planning capability, since educational changes take time to implement.

Two, at the earliest opportunity government needs to start to restore the infrastructure maintenance funding, which we use to renovate and maintain our campus facilities, back to pre-2009 levels. At that time it was reduced by about 75 percent, and there has been some small return, but we really need to get back to those levels.

Government needs to look to the future and plan for major capital needs, with our top priority, as Kathryn mentioned, being the construction of a centre of excellence in health and wellness.

Number 4, government needs to review its policy changes that would allow institutions to access their prior reserves in some accountable, managed process. No new money is required. Existing resources could be freed up to advance provincial goals. This would improve our ability to plan and be responsive to the needs of learners.

In conclusion, Camosun is a top-performing college in B.C. It's the primary provider of advanced skills and education in this region. The provincial funding framework is not providing us with appropriate operating funding to enable us to continue to maintain this performance.

Investing in our college is vital to this region's future economic health. We're a good investment. We return $3.80 to the provincial economy for every dollar of taxpayer financial support. Camosun is committed to working with our community to further the economic health of B.C. by providing programs and services that result in the advanced skills and education for employment.

We're also leaders across the province in applied research. We are and will continue to be a key driver in regional economic development.

Thank you for your time and attention. We'd be pleased to answer any questions anyone has.

D. Horne (Chair): Thank you for your presentation. We'll begin our questions with Bruce.

B. Ralston: Thanks very much. I'm interested to read your statements on page 3 about your ongoing effort to reduce administrative costs. That's what one would expect with strong and capable leadership, as you have in place at Camosun. However, in the budget in 2012 the former minister didn't seem to hear that message.

The defence of the reductions in the budget over the prospective fiscal plan was that there were further administrative measures that could be taken without affecting programs. I'd like to hear your direct response to it, because clearly in the budget in 2012 that message wasn't heard, or if it was heard, it wasn't believed.

P. Lockie: I'll take a stab at that. I think, really, over the last four years of flat funding we've been taking a look at all administrative costs. As we look out — and many of you may know there has been a study and a project underway looking at administrative cost savings — we're looking at areas like procurement and information technology and back office. We're committed to explore all those avenues.

Do we believe it can save us the level of savings implied in the future budget? We think that is doubtful.

D. Hayer: My question is with regard to your point No. 4 on page 3 or 4, which talks about the policy changes that will enable institutions to access prior-year reserves in an accountable, managed process. No new money is required. Can you explain that in a little more detail?

P. Lockie: In essence, what has happened over a number of years is that institutions have built up small surpluses and sometimes larger surpluses, which have accumulated. There's essentially a pot of money which is residing in institutions.

The requirement to balance the budget is looking at not only current revenues and current expenditures, but it's also saying that you can't dip into past reserves. A commercial entity might say: "Well actually, we want to invest
[ Page 2432 ]
in some area and use our past reserve," because they have the money in the bank, essentially, to do that. We're not able to do that by policy at this time. I know school districts and some other organizations are.

We feel, anyway, that it is a piece of flexibility that could be done in a managed way that wouldn't threaten fiscal targets or any of those financial accountability measures, but it's a door that has been closed to us at this time. We think it's a policy worth revisiting and taking a look at.

D. Horne (Chair): Peter, of the $4 million to $6 million in savings that were found in the past, how much of those were administrative and how much of those were found within programs?

P. Lockie: I think the vast majority have been administrative. We've always looked to administrative cuts first, and we really, essentially, took out a middle tier of our management, which makes us particularly lean across the system. That was my reference to the provincial funding framework.

We're sort of viewing ourselves as a top performer. We're right on that edge of cutting programs now, and it doesn't seem to be a very good strategy or path to be on when we're meeting the community needs so well, and the students' needs. The bulk of it, the vast majority, would have been administrative to date. This was the first time that we actually, this year, dipped into the educational program.

I'll now call our next presenter, being the Alma Mater Society of the University of British Columbia.

Kyle, good to see you. You have ten minutes to present, and your time begins now.

K. Warwick: Thank you so much for having me here. I really appreciate the opportunity to make a presentation to the select standing committee.

I guess just to get started I'll provide a little bit of background around what the AMS is and what our concerns are in regard to this upcoming budget. The AMS is a society incorporated under the Society Act. It's the student society of the University of British Columbia's Vancouver campus.

With approximately 50,000 members and about 900 employees, we manage an annual budget of about $14 million. We organize social events. We run student businesses. In addition to that, we advocate for the interests of our members, who are all of the students at the university.

I think, just to get started, things that we're very cognizant of are the economic difficulties and challenges that the province currently is in and the fact that investments can't come easily and they can't come without some kind of a return.

We've really emphasized in our submission the studies from throughout the country emphasizing that investments in education at the post-secondary level are in fact net increases to government funding. Every dollar you put in will return more than one dollar to the taxpayer and to the economy. I think that's one of the first things, and this holds true whether this is in regard to investments in teaching, in regard to physical infrastructure, in regard to research. In all of these cases, that's the case.

Ultimately, this is really something that I think is entirely in line with the priorities emphasized in the families-first plan, in regard to the B.C. jobs plan. That's why we have these asks. It's not simply because these are nice-to-haves. Rather, we think these are actively beneficial for the province.

Another point would be that some of these benefits are particularly impactful amongst some of the more marginalized communities in the province. For instance, with regard to the aboriginal population in Canada, the earning potential of a degree from a post-secondary institution increases approximately $55,000 a year, even more so than is the case with a Canadian from outside of that community.

This is also particularly the case with lower- and middle-income students. All of these points are crucial just in the context of the cost of living in the Metro Vancouver area and the fact that this can create burdens on then participating in post-secondary education.

With all of this context, with the labour shortages that we're seeing in certain parts of the province, with the fact that we need to build a knowledge-based economy, all of these things sort of get towards the asks that we have and the things that we think the government could do to really make some smart investments that could be beneficial for the economy.

Before I get to that point, I think it would be remiss of me not to acknowledge some of the great work that has already happened and, we think, some really positive steps. One of the great things we've seen has definitely been…. Although there's more to do, it's definitely right to acknowledge the work in regard to the student loan repayment assistance plan and the fact that that's certainly a step in the right direction and one that we very much acknowledge and appreciate.

Another thing that's really quite exciting, quite recent and quite budget-friendly is the initiative announced by the province with regard to the open textbooks. Our sense is that, for many universities throughout the province, this is going to significantly reduce costs for students. This is also very much in line with our beliefs around intellectual property and open access.
[ Page 2433 ]

There are a number of great things that the province has been doing, and we do definitely want to give credit for those. But there are definitely some things that the province could additionally do that would be beneficial. I guess I'll just get right into those.

First of all, as it stands, student aid for housing in the current system that exists allocates slightly over $500 for housing per month. Due to the housing market, even for lower-level housing in Vancouver, that creates a gap. If you are relying on student loans and you need to rent a house, basically, you have an unfunded gap.

The University of British Columbia has expressed a willingness to fill that gap, but as it currently stands, they can't supplement the B.C. cost-of-living tables without that money being clawed back. So I think, first of all, there's an argument for the province to reassess the cost-of-living tables. Secondly, if it's unwilling to do so, it should consider allowing the university to do so.

Secondly, I think another area that the province has done amazing work on is investments in capital projects on the University of British Columbia campus. We have a number of great projects with generous support from various donors, whether that's the pharmaceutical building, whether that's the biodiversity centre. All of these buildings have had great private support, and they've also had great governmental support.

At the same time, this does obscure the fact that, for core operational funding, we've seen a freeze over the last approximately five years.

We've seen a lot of great work in creating administrative efficiencies on the part of the university. I think that's important and that needs to be acknowledged. At the same time, it's now getting to the point where the opinion of all of the professionals in our university is that there really are not further administrative efficiencies to be found without hurting front-line programs. It's also the case that simply having capital investments for certain buildings is not a method to create stable funding that allows ongoing, long-term planning for operations.

So there's something to be very much credited for the great investments in the capital infrastructure. At the same time, we do need to also be aware of operational expenses.

Those are two of the main things, I think, that need to be considered. Another is the fact that right now much of the student aid that's provided in the province is done on the back end — once one graduates. That can be a problem for people coming from certain cultural communities that have debt aversion. The fact that there's aid at the end can sometimes be a lot less effective than having that aid be up front.

This is something that's been noted throughout the country, not just on the left or the centre of the political spectrum. This has also been done federally by the Conservative government. Realistically, this is just a very effective manner to take the existing money and allocate it in a more effective way.

Another area that the AMS has some strong opinions on is the TransLink system in the Metro Vancouver area and transit funding in general. One of the great successes that the AMS has been proud to partner on with the province, as well as the university and TransLink, has been the universal bus pass — the U-Pass program.

That's been an outstanding, runaway success. It's led to 54 percent of the trips to UBC now being done by transit. That's outstanding. That's comparable to the mode share in Manhattan, for example.

That's been a great success. Unfortunately, it's now the case that, in some ways, it's a victim of its own success in that the ridership has kept increasing. We now have the busiest diesel bus line in the province.

You will commonly face during rush hour pass-ups from about three buses before you can squeeze onto one. Your ability to schedule yourself in a predictable manner is harmed. This isn't just an issue for students. This is also harmful from the perspective of workers who need to travel to campus. This is harmful for the fact that the Vancouver General Hospital shares the same area, and they also suffer from this lack of support for transit.

All of this means that, fundamentally, transit operations need to be considered in terms of high prioritization for funding. That's important, first of all, from the perspective of provincial funding. Secondly, it's crucial in the sense that the Mayors Council in Metro Vancouver has considered certain options for funding increases to generate revenue, and so far the province has not given the okay, although there is the legislative ability to do so.

We think, first of all, that the province needs to consider this as a priority, and secondly, it's important that the Mayors Council be given the tools that they need to do this. This is not just an issue for our members living on campus or living on the west side of Vancouver. We have members throughout the entire Metro region — in Surrey, south of the Fraser in Delta and Langley, in Richmond, Burnaby.

All throughout they're saying there are huge gaps in service. There are unreliable buses. There are no rapid buses. They're essentially paying into a system from which they can't benefit. That's definitely something that is harmful for student quality of life. It's also harmful from the perspective of the economy and the lost economic values that occur when people are just sitting in the bus and not being productive.

I think, given all those points, I'll just wrap up by saying that we're certainly aware that in this fiscally difficult time, it's not going to be possible to do every single thing that would be beneficial. But we do hope that some of these considerations are taken under advisement, that there is a prioritization. Anything that can be done in these areas would be very beneficial.

Fundamentally, what we're asking for is not a handout
[ Page 2434 ]
from the taxpayer but an investment in students and in society that we think will pay off more than 100 percent for the taxpayer in the long run.

D. Horne (Chair): Thank you for your presentation. We'll begin our questions with Mable.

M. Elmore (Deputy Chair): Thanks for your presentation, Kyle. You have in your report a recommendation to support child care.

M. Elmore (Deputy Chair): You reference that students across B.C. need child care to continue their studies and that, for lower- and middle-income students, it is often a barrier that they consider and that may prohibit them from enrolling in studies. Can you talk about some of the initiatives that AMS has been involved in on the child care front?

First of all, it's certainly been a priority for us when we talk to different levels of government, because we recognize that this is not only an issue of the provincial government. There's also a federal obligation in this area, and we do feel it's important that we advocate for the federal government to contribute their share of this. That's certainly something that we hope to work with the province to do — to educate the federal government on the benefits of this.

Another thing that we've done in addition to advocacy is we have chosen to directly subsidize spaces. In each of the current ten years we're directly donating $100,000 to UBC's child care facilities. So in total, we're making a $1 million donation there.

That's to guarantee students spots, because UBC has done a great job of providing quality child care, but the waiting lists can simply be longer than the time it takes to complete an entire degree. So they really can not be used by a lot of the people who really need them. That absolutely has been a barrier that has led to degrees not being completed, and that's a huge drain on the economy.

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

I'll now call our next witness. We're going to do something a little bit different. Since our next presenter isn't actually here and we have a group here that would like to register for the open mike at the end, I'm going to call them forward now. It's a group from Simon Fraser University.

Unfortunately, as we don't actually have any more spots left on our agenda today, you'll have five minutes to present followed by a few questions. Your time will begin now, so go ahead.

My name is Joanne Curry. I'm associate vice-president external at Simon Fraser University and also executive director of SFU Surrey's campus. I'm joined by Nicole Rogers today.

I am not going to speak to the opportunity agenda for B.C. The Research Universities Council of B.C. will be presenting to you shortly to give you more details.

I'd first like to start out by thanking the province for its investment in the SFU Surrey campus. We're in fact celebrating our tenth anniversary this year. The materials in your package include a wonderful brochure for later viewing. It includes a timeline of milestones of community engagement, student developments as well as research achievements.

We're really pleased that the committee has heard already from the Downtown Surrey Business Improvement Association, who have spoken to the role this campus has had in the social and economic life of Surrey and the development of the city centre.

We now have over 7,000 students studying at our campus, taking one or more courses, in addition to thousands of lifelong learners. We're really pleased that 67 percent of our incoming class reside in a South Fraser city, and the Surrey school district is now SFU's top district at all of its campuses.

SFU is the only B.C. research university that wishes to significantly grow its undergraduate student population. This is a result of our location in Surrey, which is one of the fastest-growing regions in Canada.

We are before the committee today to ask the province to renew its commitment to the expansion of the SFU Surrey campus from 2,500 full-time-equivalent students to 5,000 full-time-equivalent students. It is our top priority for Simon Fraser University.

Since 2006 the city of Surrey has increased its population by 18.6 percent, which is double that of greater Vancouver. It now represents half of the grade 12 enrolments in the Lower Mainland but is quite underserved, having only 126 seats for every thousand 18- to 29-year-olds. This is compared to the provincial average of 244 seats. We also face lower transition rates in the Fraser Valley, traditionally lower than that of Richmond, Vancouver and the North Shore.

In 2006 we signed an agreement with the province, and the province demonstrated its commitment to meeting regional demand and ensuring B.C.'s economic competitiveness by seeking to double the size of the SFU Surrey campus from the 2,500 to 5,000 student FTEs. In addition, we were provided funding to purchase several lots surrounding the campus to accommodate this growth.

Since 2006 the need has only grown. The province's Skills for Growth certainly points out the needed increase in post-secondary participation rates, without which we'll be experiencing major skills shortages by 2020. It
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estimated that 1.1 million jobs will open up, and about 80 percent of these require post-secondary education.

Since only 67 percent of the current workforce has post-secondary training, 90 percent of new labour market entrants will need to have this type of education. Obviously, this will include secondary students transitioning to post-secondary.

Last year in 2011 this committee did make a unanimous recommendation that the province recommit to this expansion of the Surrey campus. This year's committee has also heard, as mentioned, from the Downtown Surrey Business Improvement Association, as well as the Surrey Board of Trade, to support this action.

I am, therefore, asking that with the MOU signed again in 2006, where we planned to double our enrolment by 2015, and given increasing demands since this date, the committee reaffirm the recommendation of last year's committee to double the size of the Surrey campus from 2,500 to 5,000 student FTEs and also recommend to the province that they proceed with the first phase of this expansion, which is approximately 800 student FTEs, starting in 2013.

D. Horne (Chair): Thank you for your presentation. We'll begin our questions with Marc.

M. Dalton: Thank you very much for coming here and making the presentation. SFU feels like home for me. I worked there for ten years. I got a couple of degrees there. I've got two children attending SFU also. It's a very vibrant campus — campuses now — and lots of great things happening.

I just wonder if you could talk about the downtown program and what the plans are. How are things going there — in Vancouver?

J. Curry: In Vancouver. Well, that campus has also thrived. As you know, it has very distinctive programs in contemporary arts, as well as our graduate School of Business. It's certainly thriving, and I think that the move of our School for the Contemporary Arts to downtown Vancouver is playing one of the roles in the Downtown Eastside.

D. Horne (Chair): I'm guessing the next two questions will be about Surrey, and I'll now recognize Bruce.

B. Ralston: That's a beautiful building there. It's hard to believe that a former B.C. cabinet minister once called it a highrise fast ferry. But that was in the past — obviously mistaken, and I'm sure he regrets that.

We did make a unanimous recommendation last year. I know that the administration immediately acted upon it. What was the response? Frankly, given the demographics south of the Fraser — which I think the university has strongly put forward in a number of presentations by both President Petter and President Stevenson — I'm wondering if you aren't aiming too low in terms of the growth. I personally could foresee 10,000 or 15,000 students on the Surrey campus.

J. Curry: Yeah. Well, thank you. Long term, you know, the vision is 10,000-plus students because of the demographic growth. And I did mention…. We're really proud of the fact that 70 percent of our students are from the South Fraser, because we are in easy access of Burnaby. We have a lot of students from the Tri-Cities and other areas as well.

We did not have a response to the recommendations of this committee last year, other than that we have received support to start our program planning for an energy systems engineering program — where we've done industry surveys, as well as a curriculum design. But we haven't been requested for any further information. I mention this as SFU's top priority, and we have submitted, as our top capital request, the next building development at the Surrey campus.

D. Hayer: Well, thank you very much for coming and presenting. SFU is very important. I went there. My kids are going there, like everybody else's kids and many Premiers.

Now, my question is about Simon Fraser University, especially the Surrey campus. I was going to note…. I remember back in the year 2000-2001, they were Tech B.C. They had 173 FTEs there. Now, I was looking at SFU's 2011-12 Accountability Plan and Report, on page 15. It shows close to 8,000 students — bodies actually there now — which is good to see. But I really see in the future, long term, SFU having 15,000 to 20,000 students there, not just 10,000.

Can you tell me, from the students' point of view, where is the fastest growth in students? Is it north of the Fraser or south of the Fraser? Where is the fastest-growing school district, etc., that will feed into this university and post-secondary institutions?

J. Curry: Well, without question, again…. I did mention that we're the only university that is substantially
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growing its undergraduates. Again, it's because of our location in the epicentre of population growth for the Lower Mainland. With our colleagues at Kwantlen and University College of the Fraser Valley, we're starting to see the consequences of flatlined growth for the last number of years.

We're now turning away three students for every student that comes to our campus, and the grade point average to get into our programs has risen from 75 percent, which was the goal, to over 85 percent — and, in some programs, over 90 percent.

So there are some consequences here. We have seen transition rates for the Surrey school district increase 10 percent over the last number of years, which is huge, given that it is B.C.'s largest school district. We are concerned that students are starting to get the message that it's getting more and more difficult to get into the programs and to pursue their passions.

D. Hayer: Thank you very much. I've always considered SFU as one of the best universities. I have attended UBC, BCIT and Douglas College and served on the Kwantlen board of governors, but SFU is a great place. Especially this campus is one of the best in the world.

J. Curry: Thank you for that, but B.C. is fortunate to have, I think, one of the best post-secondary systems in the world.

D. Horne (Chair): Great. I actually attended SFU. I think it's a great institution. Thank you so much for being with us today.

We actually don't have our next presenter, so I'm going to take a brief recess, but I'd ask members not to go anywhere.

D. Horne (Chair): I will call our next presenter, Ken Peacock, with the Business Council of British Columbia.

Ken, welcome to the committee. You have ten minutes to present, followed by five minutes of questions. Your time begins now.

K. Peacock: Thank you. That's a tall order — covering everything I have in ten minutes — but we'll see what we can do.

It's much appreciated, appearing before the committee. In the ten minutes allotted I'm just going to run through the Business Council's sense of kind of the economic conditions and what we see out there, and then turn to some priorities for Budget 2013.

Essentially, for the economic outlook we sort of see the slow-growth environment that you hear of repeatedly in the news, in the media. Global economic growth is slowing down. China, of course, is a big part of that slowdown.

The eurozone remains the biggest risk to the global economic outlook — I think that's pretty apparent — Spain, Greece and Ireland, in particular. The eurozone is in recession. Those countries that I just mentioned are particularly troubled. We see that as sort of an element or factor weighing down the global economic recovery. Of course, that's spilling over into China, dampening China's export prospects, which in turn is now showing up, at least from our perspective, on B.C. shores in terms of our exports.

A little bit of good news in there is that we believe the U.S. economy is showing some signs of life. They still have their issues and difficulties to work through, of course, but from B.C.'s perspective, an important development is the bottoming of the U.S. housing market and the recovery in U.S. home-building. We note that housing starts have increased from around 450,000 up to 750,000, and we think that trajectory is going to continue. Not a robust recovery but a gradual, steady recovery, which is very good news for B.C.'s lumber industry.

China I did mention a moment ago. Their growth rate is expected to slow to about 7.8 percent. Still a large number by our standards but quite a bit lower than what China has experienced over the past number of years, or the past decade in particular — 10 or 11 percent growth a number of years back.

Turning briefly to Canada, a similar story to British Columbia. We see a kind of tepid growth for Canada, right around 2 percent. Business and non-residential investment is a primary source of growth for Canada as governments work to retrench. Consumer outlays are softening, and the export sector at the national level continues to struggle with the global economic slowdown as well as a relatively high currency.

I did mention B.C.'s exports. One thing that we have noted is that if you look at exports to China, B.C.'s export growth has slowed quite notably. If you take out coal exports to China, we actually have seen the remaining value of B.C.'s exports fall by about 2 percent. That's a relatively new development. Even excluding coal, all major categories of B.C.'s exports have grown quite rapidly and quickly over the past decade when you're talking about the Chinese market. So that's something to keep your eye on.

The U.S. is a little bit of a different picture. The recovery that I noted a moment ago is having some traction in terms of B.C.'s exports, and we are seeing growth in B.C.'s exports to our neighbour to the south, particularly in the lumber and wood products segment.

In the year to date so far B.C. has registered a 25 percent jump in U.S.-bound lumber shipments, so that is good news. However, overall on balance, with the global slowdown and what's happening in Taiwan, Singapore, Hong Kong and China, we don't think that exports are
[ Page 2437 ]
going to add much to B.C.'s economic performance.

On the domestic side of the economy, the housing situation is starting to slow and weaken. We think that has ramifications for home-building. Consumers here in B.C. remain a little bit tentative, and of course one factor there is high debt loads. Statistics Canada recently — just the other day — came out with a report noting that debt-to-income levels in Canada have risen to record levels, and B.C. no doubt, with our high housing costs, is leading the way on that front. Home sales are slowing.

The one very bright spot in the B.C. economy is non-residential construction. Non-residential construction activity has actually returned to that boom era — that 2005, 2006, 2007 sort of investment boom. We have building in the non-residential segment, in terms of permit values, back up to the same levels. So that is a very bright spot for B.C.

Despite these overall varied and mixed conditions, the job market in B.C. is relatively healthy. We've got pretty good job growth, and at the Business Council we do note that there's sort of a decline in self-employment and increase in the number of people on payrolls. We believe that's a positive development. Similarly, an increase in full-time jobs and a softening or a decline in the number of part-time jobs. We also interpret it as a positive development.

In short, we think that economic growth was similar to what the government just came out with, their forecast. We think B.C. will grow by 1.9 percent this year, and we actually see a little bit of an improvement in 2013. The government, or the Ministry of Finance, thinks there will be a little bit of a slowing in 2013. But we think some fiscal traction or some stimulus traction in China and the improvement in the U.S. will lead to some second-half strength in 2013, so in 2013 we have the B.C. economy growing by 2.2 percent.

With that, I will shift to some priorities for Budget 2013. Just at the outset, I would note that the business council does support the government's plan to balance the budget by 2013-2014. As we've articulated in past submissions, we believe the government has generally done a good job in managing the province's finances since 2001. That decade-plus period entailed sort of a muted start to the decade. Then there was relatively robust growth led by an investment boom and then of course the financial crisis and a fairly severe recession. Now we're into sort of a muted growth recovery scenario.

In light of some of the difficulties and uncertainties related to the global economic outlook, sort of as an overall perspective, we think that the upcoming budget should essentially be a stay-the-course effort. The government should maintain its overriding fiscal policy priority as responsible stewardship of the province's finances. We do think it's worth considering adopting some supplementary anchors for fiscal policy. I'll touch upon those in more detail in a moment.

Of course, the loss of more than a billion dollars in natural gas revenues creates some challenges for meeting the balanced budget target. We do note that we believe there are some additional downside risks in this regard, not necessarily in the natural gas area. The slowdown in housing could mean weaker revenues from property transfer tax. If China slows more dramatically than people anticipate, that could impact coal and other mining revenues. So we do caution the government on that front.

The one small item that we would highlight up front is we think it's important for the government to follow through on its commitment to make the port property tax cap permanent. So implement that. From our perspective, that is very important. It's very important to make ports as competitive as possible. The government should provide an environment to encourage expansion in port activity. We believe the gateway is going to continue to be a leading growth industry or segment for the B.C. economy.

Carbon tax. The business council recently completed a submission to the government on the carbon tax. In short, we think that it's important to recognize that the carbon tax is by far the highest of any North American jurisdiction. At $30 a tonne, it does create some competitiveness issues and difficulties for what we call emission-intensive and trade-exposed industries — things such as refineries, cement, chemical manufacturing, oil and gas sector, pipelines, transportation. Encourage the government and the Ministry of Finance to look at ways of mitigating the negative impact on those industries.

Some comments on the expert tax panel. We encourage the standing committee and the government to carefully review that panel's analysis and recommendations. With the PST slated to come back into place and replace the more efficient HST next April, we believe that as an initial step the committee should encourage acting on the panel's recommendations to streamline the administration of the PST.

The panel, of course, was operating within a mandate of revenue neutrality. It did propose increasing the mining and oil and gas royalties, as well as a half-point increase in the corporate income tax. Here we would underscore encouraging the government to proceed very, very cautiously on this front and be careful not to increase taxes at a time where we see a lot of other taxes and fee and cost increases impacting the competitive position of B.C. businesses.

To name a few, the PST, of course, is coming back. That's a $1.5 billion or $1.6 billion hit to businesses operating in the province. As well, EI premiums, WorkSafe premiums are going up. We do have the carbon tax, which I just mentioned. Electricity rates are going up. Businesses are grappling with the higher minimum wage, and many industries face relatively high or onerous property taxes.
[ Page 2438 ]

Well, we'll jump down to the end of our submission. At the end, on page 17, we review and recap our recommendations and summarize what we think the government's priorities should be for the upcoming budget cycle.

We mention the cap on the port property tax and strengthening the framework for fiscal policy. I just want to touch upon this briefly.

The balanced-budget legislation. I mentioned we encouraged the government to following through with balancing the budget, but we also believe that there's room to expand the fiscal framework and tighten up the fiscal framework and, in this regard, think about introducing an additional element of fiscal responsibility by putting a cap on the debt-to-GDP ratio.

We say that because of the way the books are run here in the province as well as other provinces. You can balance the budget, but you can still increase the debt through capital spending. We do note that most of the debt in B.C. is the result of capital spending, not deficits. I think that's an important point to get across.

K. Peacock: You know what? An interesting point that we put in at the end, looking at how this budget will get out to 2015-2016 and that we may see some LNG facilities come in place here in the province.

A final point we make in our submission is the government should examine the potential or the possibility of introducing sort of a resource revenue heritage fund. If these LNG plants produce a lot of royalties from increased production of natural gas, we think it makes sense to introduce something like that.

I would note that Saskatchewan just came out with a similar plan to introduce that. You know, it follows sort of the B.C. pattern and a number of other jurisdictions around the world that do save money from their non-renewable resources.

D. Horne (Chair): Thank you for your presentation. We'll begin our questions with Bruce.

B. Ralston: Thanks very much, Ken. Just looking firstly at your comments on page 8, you say: "Meeting the…balanced-budget target remains the preferred course. At the same time, the government should be cautious about implementing tax increases or instituting further substantial spending cuts to meet the target if revenues continue to fall."

It sounds to me like you're saying, in a roundabout way, that aiming for a balanced budget is an important target, but if substantial spending cuts are going to be required to meet that, then perhaps live with some kind of a deficit. Is that a fair summary?

K. Peacock: It's a fair summary. I would just refocus it slightly and say that from the Business Council's perspective, we believe a sort of short- and medium-term priority is the competitiveness of B.C., given what's happening in the world, how competitive the global economy has become. Other provinces…. Saskatchewan just announced it's going to be cutting its corporate income tax rate. So that's why we use wording such as "proceed very cautiously before you increase any taxes."

After that, it's up to policy-makers and politicians to grapple with the balance between the two.

B. Ralston: I just had one supplementary, if I might. You mentioned creating a resource revenue fund. I did ask the Minister of Finance, then Kevin Falcon, in estimates about the structure of the royalty on LNG exports. He said that they were in the process of developing that, but it was going to follow models in, I think, Australia and, I believe he said, the eastern United States.

Clearly, your expectation is that there is going to be revenue there that could be put aside in a fund rather than be dedicated to current operations. Do you have any further information about the structure of that royalty?

K. Peacock: No. Sorry, I don't have any further information, and our thoughts and comments are quite preliminary.

It is our sense that if one or two of these projects come on line, there will be a jump in royalties associated with natural gas. Rather than just putting that into general revenue right away, take a portion off and allocate that into some sort of heritage-type fund. That's essentially our thinking at this stage.

D. Horne (Chair): All right. We're actually already over our 15 minutes, but I'll have a very brief question from Dave.

D. Hayer: Thank you very much — a very detailed presentation. My question's very similar to what Bruce has said. I've had many people ask me: "Is the Business Council of British Columbia supporting the balanced-budget legislation?" Or are you guys changing that, say-
[ Page 2439 ]
ing we should start running deficits? Can you be clear on that? People are confused. They're wondering where the council sits on this.

K. Peacock: No, we do support the balanced-budget legislation unequivocally. We think it's an important target. It instils and focuses some discipline in the budgeting process, and it's an important target to aim for. We, in fact, in our submission articulate examining tightening the fiscal framework to introduce even more rigour and more discipline around the debt-to-GDP ratios and the long-term sustainability of debt in the province.

D. Horne (Chair): All right. That brings us to the end of our time. Thank you so much for your presentation.

I'll now call our next presenter, the Canadian Home Builders Association of British Columbia.

Welcome. You have ten minutes to present, followed by five minutes for questions, and your time begins now.

M. Whitemarsh: All right. You've all got the written report there. I know it's scintillating reading and that you'll all take it home tonight and make sure that you read every word of it.

The first thing on the list today, though, is the Professional Builders Institute. Since 2002 CHBABC has been lobbying government for the creation of a professional builders institute. In the '90s, with the creation of the Homeowner Protection Act, the Homeowner Protection Act demanded that builders in B.C. be licensed.

We don't disagree with that, but it didn't go far enough. In the province of British Columbia there's a provincial building code which governs housing. If you want to flip a burger at McDonald's, you also have to go and take FoodSafe. To get your licence from HPO, you don't have to have any education and training requirements whatsoever.

We believe that education and training needs to be tied to the licensing of professional builders in the province. Government has agreed with us, and for the last ten years we've been working on the creation of a professional builders institute for British Columbia. This was approved by the government in 2010. But for some reason, it's become stalled somewhere, and the longer we wait, the longer we put ourselves into jeopardy of having builders out there that have taken no education and training to support their licensing.

Every year I come here and speak to you about property transfer tax — or as we in our office call it, the Vander Zalm tax — and I'm not going to be any different again this year. I am going to discuss property transfer tax.

Property transfer tax, as you know, was created by the Vander Zalm government in 1987, when the average cost of a house in the province of British Columbia was $101,916. The way it is calculated is that on the first $200,000 there's 1 percent paid in property transfer tax and 2 percent on the balance. Back in 1987 and a few years following, only 5 percent of British Columbians were subject to a large amount for the 2 percent over. In 2011 the 2 percent collected applied to 86 percent of houses that were either purchased or changed hands.

What we are asking government for is to look at…. Last year we talked to you about triple taxation with property transfer tax. As soon as a farmer sells his field or any land is sold to a developer, there's property transfer tax charged on it. Then when that land goes to a builder in the form of a lot, it has property transfer tax on it. When a house is built on it and a consumer purchases it — property transfer tax. Three times, that same piece of property is taxed before it gets to the consumer.

And when the consumer purchases that house, they are initially, in the purchase price of the house, paying property transfer tax three times on that same piece of property on which their house is built.

That's one of the inadequacies with the property transfer tax, and we believe that it needs to be changed. The suggestion that we are coming forward with this time is…. When we went through the HST issue with government, government agreed with us that a threshold of $400,000 was not proper for British Columbians because that's way out of line for what the cost of a house is in B.C.

We agreed at that point in time to raise the threshold to $525,000. We believe that the property transfer tax should be changed from 1 percent of the first $200,000 to 1 percent of the first $525,000. We also believe that that $525,000 should be indexed so that it matches Stats Canada's new housing price index that comes out every year. It'll go up, and it will go down.

We realize that this reduction in property transfer tax will net about $139 million, based on 2011 numbers, in government coffers. We further realize that we need that money to support our world-class education system, the hospitals and schools that we so desire, and our wonderful health care system.

But we also believe that that $139 million will soon be made up with the increase that will happen for the building of new homes that people will then be able to afford more, the spinoff spending that occurs with every home that is built, which is about $60,000 a house, with the taxes that are collected and the jobs that are created.

Our industry created 35,595 jobs with the housing starts in 2011 alone. B.C. has the largest ratio of job creation in the country. Job creation from our industry in B.C. is 1 in 65 jobs, for the residential construction industry. In Canada the average is 1 in 109. We have a fabulous ratio for creating jobs, and it behooves government to ensure that our industry is strengthened, that housing remains stable, that more British Columbians can purchase housing and that taxes like the property
[ Page 2440 ]
transfer tax, which is a regressive tax, remain more fair to the consumer that is going out there and purchasing the housing stock.

We believe that if families really are first and if jobs really do matter in this province, then it's time to bring the property transfer tax calculations into the 21st century, and even more so into the budget of 2013.

The HST. You know, it was a good tax. It hit our industry worse than any industry in this province, but it was a good tax. Any tax that is a tax on consumption always helps the economy, but the people have spoken and the tax is going. We implore government to ensure that when the provincial sales tax is brought in, there are no new surprises on housing. Either bring it back to where it was before, or look at what was before and ensure that it is just as fair going out as it was coming in the last time.

We again want to impress upon government the need for a housing secretariat. We have been blessed for the last few years to have a Minister of Housing that actually understands our industry. The unfortunate thing about Mr. Coleman is that he has so many other ministries to look after that it's always "and the Minister Responsible for Housing."

When you consider that the housing industry in British Columbia is the second-largest generator of gross domestic product of this province and creates 35,000 jobs a year, we really should be looking at having our own ministry or at least a secretariat that has direct conduit between those in the housing industry that know what's going on and the people that work within the Housing Ministry.

I've detailed some of the things there that we believe would make a difference. It's in the report. You can read it yourselves. I'll leave that with you.

In conclusion, we in residential construction…. Our industry has a seven-year cycle. We go up, and we go down. Right now we're in one of the troughs. We know that we will come back, and we will come back swinging. We have that time to take a breather and to re-engineer and retrain and relook at what we are doing for housing in British Columbia.

The Professional Builders Institute will be a huge step forward. Please, let's make it happen. Let's make it happen soon. Ten years is a long time to wait. The first time that I presented a report was to George Abbott, who was then Minister of Housing, and that was August 2002.

It's time. Let's move forward with the Professional Builders Institute, and please ensure that there are changes to the property transfer tax in this budget that's coming up so that it's more fair for all British Columbians.

D. Horne (Chair): Thanks so much for your presentation. We'll begin our questions with Bruce.

B. Ralston: I'm interested in your presentation on the Professional Builders Institute of B.C. As recently as this year I was dealing with a constituent who was dealing with the emotional, personal and financial fallout from a leaky condo. That basically dramatically altered his life.

I understand the desire to protect the public from shoddy and unprofessional workmanship, and I think Mike Holmes has made a sort of show of that. What do you think the resistance is?

My suggestion might be that it's inconsistent with some of the statements we sometimes hear about red tape reduction. There may be a desire not to do this because it's perceived as simply red tape rather than conferring a substantial benefit and stability upon the whole home-building industry and creating better workmanship and better value for money for homebuyers in the long run. Would you care to comment on that?

M. Whitemarsh: Certainly. The red tape is already there. The Homeowner Protection Act is in place. Builders do have to have a licence.

You wouldn't proffer a licence to a doctor that hadn't gone through school and got his MD. Why would you do the same thing to a builder? What we are saying to builders is: "You cannot build a house in this province unless you have a licence." They go to the HPO to get the licence, and what does HPO say? "What's your education and training?" No: "Where did you get your third-party warranty." The licence has to be shored up by more than a warranty.

So, Bruce, the red tape is already there. All we are doing is improving it and creating some kind of substance for that licence to be received.

D. Hayer: My question is also to do with the builders getting licenced under the Professional Builders Institute of B.C. that you're proposing. I have some builders coming and talking to me. They say: "We don't know how long the course is going to be." Is this to sort of shut down some of the builders who can't qualify — making the licensing very complicated and all that? Can you go over it in detail a little bit what you think?

M. Whitemarsh: What the Professional Builders Institute is going to do is determine what the education and training should be. So a given is going to be construction law, building code and safety. I would assume that those would be givens.

The builders that already have licences — my understanding is that they will be grandfathered for the first year, and then there will be a professional development requirement or a CPD requirement going forward. It's
[ Page 2441 ]
newcomers into the industry that are going to have to take this education and training and ensure that they have the benchmark courses that they need to ensure that they actually do know what they're doing.

D. Hayer: Yeah. I think some of the builders that have talked to me said that maybe this is a way to shut down some of the builders who might not have English as a first language. That was what they were afraid of. I said that I don't think so, but maybe you can provide some more information that people need — maybe they can get to the website — explain what you really mean, how difficult it would be. They might have it in different languages or something — the information.

You just want to make sure they're qualified to build so we can have safer homes rather than leaky condos or leaky houses.

M. Whitemarsh: Exactly. Absolutely. We do not want to go through the debacle we went through in the '90s.

This is not excluding people from the industry. This is including people in the industry who have a right to be there, and it's also protecting the consumer. It's the biggest investment they ever make when they purchase their home, and they need protecting.

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

I'll call our next presenter, the ORCA Children's Advocacy Centre — Fred Ford.

F. Ford: First of all, thank you very much for the opportunity to address the standing committee again. Some of you may recall that I did a presentation to the standing committee last September on the same issue.

I will be repeating some things, but I'd also like to leave a little bit more time for some discussion and questions, because last year we kind of ran out of time for questions, and I do want to make sure that the importance of this issue is understood and any questions that you have are answered.

I am the board chair for ORCA Children's Advocacy Centre Society. The name ORCA stands for Organized Response to Child Abuse, and the society was established for the purpose of creating a children's advocacy centre to serve children and youth in greater Victoria.

The children's advocacy centre model is a model for organizing the professionals that are involved in investigating and prosecuting child sexual abuse cases and serious cases of physical abuse. The model was created about 27 years ago in the United States. Since that time, more than 900 centres have been established there, and research has indicated a number of beneficial outcomes, both for children and for communities and the economic health of communities.

Among the most important things that happen is that a child receives support early on in the process from a victim assistance worker. That victim assistance worker becomes involved in the police investigation by ensuring that the child's needs are met and often will follow that child right through the process to court preparation and providing support for that child as a witness in court.

The model involves co-locating police, Crown, child protection workers, victim services workers and others that are involved to create a specialized response, a specialized centre where a child's needs are met. Some of the benefits of the model include reduced court times, which is a very important issue in B.C. As you know, the Cowper report came out recently, and in the last year there have been a couple of horrendous situations where charges have been dropped because the accused had to wait too long to go to trial.

In Edmonton, Alberta, the Zebra Centre, which is a children's advocacy centre, has been operating now for ten years. They saw a reduction in court times from two to three years to an average of 14 months. That makes a huge difference in the life of a child.

We have been working on this for a number of years, and we've been seeking government support. We were very pleased in the spring of this year to meet with Minister Bond, who endorsed the model and said that this was the way to go. We were provided with some funding to implement our plan.

The priority has been to get the police on side. So we've had a working group for the last three years that represents all of the different partner agencies, but our focus was on getting the police on side. The configuration of police in Victoria is a particular issue with this because of the jurisdictional issues and the lack of specialization among the different forces. So I was very pleased to have all of the police detachments agree to assign a police officer to a committee that's been meeting with us over the last number of months. We actually had a meeting this morning.

What the police have indicated to us is that they endorse this model. They think that it's the way to go, but the issue that faces them is budget. As you may know, the recent Vital Signs report from the Victoria Foundation identified that at 155 police officers per 100,000 population in 2011, the number of police officers in greater Victoria was lower than both the national average at 201 and the provincial average at 196. The centre, as I mentioned, is working very closely with police, and it now appears that the only way they will be able to support this is if there is provincial endorsement of the model and an increase in the number of officers.

I guess what I'd like to do is get to what our requests would be of you, and then I'll stop. Individually, as MLAs, in your communities and regions, I hope that you will support the establishment of children's advocacy cen-
[ Page 2442 ]
tres. There are four other communities that are working on this, and one has established a children's advocacy centre. That's Sophie's Place in Surrey.

We'd like you to advocate for the provincial government to support this model as best practice and provide funding for the establishment of these centres, and lastly, that you recommend that the provincial government provide funding to ORCA Centre and other children's advocacy centres in B.C. through the victims surcharge special account, which is intended to benefit victims of crime but which has been allowed to accumulate a very large surplus, while services could be much better coordinated by this model.

D. Horne (Chair): Thanks for your presentation, Fred. We'll start our questions with Mable.

M. Elmore (Deputy Chair): Hi, Fred. Thanks for your presentation. I remember when you presented last year. So ORCA is here, and you operate on the Island. Is Sophie's Place the only other centre up and running right now?

F. Ford: We are not up and running. We are trying to, at that point…. Sophie's Place is the only one in the province that's up and running. They were given some private funding, and the mayor endorsed the establishment of the centre and provided a space in cooperation with the child development centre there.

M. Elmore (Deputy Chair): Do you receive any…? What funding sources do you have right now for ORCA?

F. Ford: Right now we have $50,000 in provincial funding to take us through this year, $25,000 of which is to develop a sustainability plan. The other $25,000 is towards our implementation plan, which is this work that we're doing with the police and other partners to develop protocols and agreements for how it's going to operate, to identify a site and things like that. We're quite active in doing all of those things.

But the police issue is our main one right now. Without the police, this cannot happen. They have indicated that they need additional officers. As you know, the Victoria police pulled back one officer from the regional domestic violence unit recently, and the problem that led to that is the same thing that keeps them from being able to sign on to this.

M. Elmore (Deputy Chair): Do you have a specific number that you're requesting that is necessary, that you are proposing to come out of the victims surcharge?

F. Ford: Yeah. We would like the infrastructure costs, meaning the lease costs and the executive director, administrative person — those costs — to come from that fund. We've only been asking for that for this fund. It's about $500,000. But the police are indicating that they need additional officers as well, so that may be necessary.

Today I presented some numbers that were crunched in consultation with police. They cannot do it within their current budget, as I mentioned. Greater Victoria does not have the allotment of police officers that it needs, and those additions need to occur as well. Perhaps that could come from the surcharge fund as well. I'm not sure.

F. Ford: Well, we have actually drafted a piece of legislation, a discussion paper that I gave the committee last year, and it proposed that something called the B.C. children's advocacy centre contribution act and fund be created and that that would be used for organizations like ours to make application to.

We're working with the police, and we plan to have a formal budget request to the ministry early next year, but we need some signal from the Justice Ministry that they will endorse this in order for the police to be on side. At this point their involvement will be conditional on getting those additional positions.

D. Hayer: Thank you very much, Fred. A very good presentation. The Child Development Foundation of B.C., located in Surrey, actually donated the space. The city of Surrey also gave some money to it, and the province of B.C. also gave some money to them. This is the first place, Sophie's Place, for a child protection centre.

Have you actually visited there to see how they're working? I went for the opening ceremony and a couple of meetings after. I just want to get your perspective, what you think and how it is actually operating, since this is open now.

F. Ford: Right. No, I haven't been to that centre. I've been to a number of other centres in Canada and the U.S., but I haven't been there yet.

We're also hoping to take advantage of some shared space. We've been talking with the regional domestic violence unit here in Victoria, and we're looking at ways of sharing resources with them and would like to do some of the same kinds of things to create efficiencies like they've done in Surrey.
[ Page 2443 ]

D. Hayer: It's an excellent place. Surrey firefighters also supported them. Many other businesses supported them.

F. Ford: Yeah. Once they're established, it's easier to get people on side and to have funding provided by donors and so forth, so we need to get this up and running.

G. Coons: Thank you so much, Fred. There are three or four committee members that weren't on the committee last year, so maybe if you resubmit that, that would be really helpful for some of us.

D. Horne (Chair): Before…. Sorry, Gary. If he's planning on doing it, he needs to do it today, just so that we're all aware.

G. Coons: Maybe I missed the answer to this, but I'm just wondering. I have three questions. How much is in the surcharge fund? You said there was a significant surplus.

The second one. You mentioned five advocacy centres in B.C. Maybe if you could say where those are. The third one: what about other provinces? What levels of support would those provinces give to advocacy centres that they may have?

F. Ford: There was, I think, $45 million in that fund about two years ago. I don't know what the current amount is. I've been told it's over $50 million, but I don't know. The federal government has recently doubled the rate of that surcharge.

There are individuals planning children's advocacy centres in Surrey, in Maple Ridge and in Vancouver, and we recently had a call from people in the Kootenays. None of them are up and running. There are two centres operating in Alberta. One recently opened in Manitoba. Ontario has two — one in Toronto, one in St. Catharines — and there's one in Halifax that's being developed for the whole Atlantic region.

In Manitoba it's interesting that they have the opposite problem. The provincial government and the child protection folks want to set one of these centres up, but they were having trouble getting a non-profit society to take it on. We have the opposite problem.

G. Coons: So these other centres in other provinces do have the provincial support.

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

I'll now call our next presenter, being the Private Forest Landowners Association.

R. Bealing: Thank you, everybody, for the opportunity. I'm reasonably confident that during this process you've heard from lots of people that are asking for money. I'm not here to do that. I hope that gets your attention. In fact, we're really proud as a sector — B.C.'s private managed forest landowners — of all the benefits we generate for the people of British Columbia.

I'm going to get into a little bit of detail right now. However, our continued success and survival is sensitive to government policy, and I'm going to highlight some examples. I feel it's worthwhile just to remind government generally that we have a successful policy basket here, a successful sector. It could be more successful, but generally, we're generating benefits and finding balance in the woods. But it's worthwhile just to look at how delicate that balance can be.

If I could get you to look at page 2, the summary. The provincial government can encourage responsible stewardship of private forest lands by maintaining policy distinction for private land. That's a distinction between Crown and private land to reflect the unique nature of private land.

A competitive regulatory framework. As we're all too aware, we operate in a brutally competitive global economy where we have to be able to compete with other jurisdictions and balance the needs of our neighbours and citizens at home.
[ Page 2444 ]

It's really important to maintain provincial jurisdiction over forest management. What I mean by that is — it's really quite simple — the province makes balanced resource management a priority. Local government does not have those same priorities. It's important for private managed forests, because our lands are typically in the urban interface — we're in the valley bottoms and the coastal areas near settlement — that we have some consistency and some provincial oversight of the regulation of our land and the way we're able to manage it.

It's a delicate balance. We realize that. We think we've done a pretty good job of managing that balance in our work with communities, but it's really important to maintain that provincial jurisdiction.

The fourth thing is to ensure a competitive tax model. Clearly, that impacts the business in a big way, and it affects our global competitiveness — especially property tax. We're farmers. We grow trees on up to 100-year rotations. You can imagine that the impact of property tax compounded over those rotations can be just brutal, so it's important to have a competitive property tax.

The fifth one. I have to bring it up every time. We are in a bizarre situation in British Columbia where private managed forest owners are unable to obtain an international price for our logs. It does have a huge impact on our business, and I'd like to just again bring your attention to that as we go through.

Just a bit of an overview here. B.C.'s private land provides about 10 percent of the provincial timber harvest. That's really significant when you think it's less than 2 percent of the provincial land base. The reason that happens is because we're on fertile valley bottom, coastal land primarily, and we manage our land intensively. It just shows how much timber you can grow when you apply that kind of approach.

We're very proud of our efforts to balance the environment, community and commercial values. It's something we strive for constantly. There are about 20,000 people involved with the ownership and about 4,000 full-time direct jobs associated with the harvesting and growing of timber on those lands. Of course — you can do the math if you like — 10 percent of the provincial timber harvest generates a significant amount of tax revenues, and that's just the direct jobs as well.

Slide 4 just graphically illustrates what a tiny portion of British Columbia private land is. It's that tiny little sliver there. Often our biggest fear as an association is that we get swept along with policy development that makes sense for Crown land. It's really important that government pauses for a moment and says: "Well, how does this proposed policy change work for fee simple private land owners?"

A little bit more detail about how we manage our land. We really are very proud of our performance in managing our land. Just as a bit of an aside, our regen delay — that means the time it takes us to plant trees following harvesting — is typically around the six-month mark.

Land that doesn't have trees on it isn't really in production, so we try to get trees in the ground as fast as possible. We're very good at reforestation. Our lands are certified independently.

There are over 30 acts and regulations that protect water supply, fish habitat, reforestation, critical wildlife habitat and soil conservation. We are required by law to reforest, but it's good business anyway. Of course, we're subject to penalties, audits and public reporting.

Our group is an extremely diverse group. I'm very proud to be involved with the PFLA members — very diverse, across the province, large and small, coast and interior. It's a fascinating group of people to work for — individuals, families, pensioners and investors. I'm a small-scale forest owner myself.

Of course, our operations support a wide range of people with good family-paying jobs: biologists, soil scientists, engineers, forestry professionals, roadbuilders, loggers, tree nurseries, mechanics, suppliers, etc. Lots of people are involved in getting a tree from a seed to a log to market these days. It's an art and a science.

Responsible forest stewardship means economic activity and investment, but it's increasingly complex and costly. A competitive, stable operating climate and world-class log prices are necessary to support world-class forest stewardship. I think we're all agreed that we want our forests managed responsibly in British Columbia.

Our number one risk regarding operating certainty and confidence is public policy development — rules that change, that impact our ability to manage our land. Our number one source of revenue to sustain these operations is log sales.

So just to recap, we're farmers growing crops of trees. Our business is risky. Our trees can catch fire, blow down. Bugs can eat them. All kinds of unpleasant things can happen, and timelines for growing our crop are extremely lengthy. We need some operating certainty and some confidence in order to feel good about putting trees in the ground now that can be harvested in the future and that we'll get some value from them.

Ongoing communication with all levels of government and the owners is absolutely essential to developing meaningful public policy. We're extremely proud of our track record as educators of managed forest owners, of loggers — of anybody that's involved with the business, frankly — about public policy, helping them understand what is important to government and helping government understand what's important to the people that work in our operations.

Moving on to market access. We've had a very traumatic few years in British Columbia, as you're no doubt aware. Our domestic log markets — many of them are unviable, which means that the price offered for logs is less than the cost of producing them.
[ Page 2445 ]

When that happens, the fibre dries up. The flow just stops, and all the people involved that we talked about earlier lose their jobs, quite frankly.

R. Bealing: Thank you. I'm just going to jump ahead, really, to the next slide. I think it's worth spending just a moment on this. There's a big myth out there about exporting a log is exporting a job. Effectively, many domestic log markets have collapsed. We can't sell logs. Many of our sorts we can't sell. So in order to make timber stands viable these days, we rely on export markets for a portion of that timber harvest. So these export markets are a lifeline to our operations.

The way things are structured currently, local mills are able to obtain logs, all the logs they need, at B.C. prices, which are not necessarily the same as international prices. They're usually substantially lower. So what that means is that when there's no timber harvesting, there are no logs for local mills.

The logic I'm trying to demonstrate here is that log exports currently subsidize local mills, which is very contrary to a lot of the misinformation that's out there. So if I'm going to use my minute, that's what slide we can focus on.

D. Horne (Chair): We'll now move to questions, and our first question is from Dave.

D. Hayer: Thank you very much for your presentation. We've been hearing from you every year. My question is…. On page 12 of your information package, you have presented log export myths — right?

D. Hayer: How long has British Columbia been exporting logs to other countries from here? Is it only for the last ten years, or before?

The second thing is: can you explain the graph on page 12 — log exports, imports by Japan, by source?

R. Bealing: Okay, right. B.C. has been exporting logs, I think, since before there was a B.C., really. It's been part of commerce in British Columbia since the beginning of time, really. To explain this graphic, this demonstrates the source of logs imported into Japan during 2008. I use it because it demonstrates that…. I use it to refute the argument that if we don't sell our logs to Japan, they'll be forced to buy our lumber.

Well, what this shows is there are plenty of other suppliers out there in the world that are quite happy to meet Japan's demand for logs. We're actually a small part of the supply picture.

D. Hayer: What percentage from B.C. and what percentage do you have from U.S., Russia, New Zealand, Germany, etc.?

R. Bealing: Russia is — jeez, that looks goofy — 33.3, the dark one. Canada is 14.4, and that's essentially entirely British Columbia, when we say Canada for the purpose of this exercise. New Zealand is 15.7. We're fourth in terms of log supply to one of the most important timber-importing nations on the planet, so that's quite significant.

D. Hayer: So more than 85 percent of logs to Japan are sent by other countries, other than British Columbia and Canada.

I'll now call our next presenter. Our next presenter is the Research Universities Council of British Columbia, represented by Dr. David Turpin and Robin Ciceri.

Welcome, both. You have ten minutes to present followed by five minutes of questions, and your time begins now.

D. Turpin: Thank you very much. My name is Dave Turpin. I'm the president of the University of Victoria, and it's my pleasure to appear today as part of the prebudget consultation.

I'm not here as the president of UVic. I'm here speaking on behalf of the Research Universities Council of British Columbia: SFU, UBC, UNBC, Royal Roads, Thompson Rivers and the University of Victoria. With me is my colleague Robin Ciceri, who's the president of the Research Universities Council.

Let me begin, and I'd like to begin by acknowledging the support that the post-secondary sector has received from the citizens of British Columbia. Over the past ten years we've seen increases in funded spaces for students as well as investments in infrastructure on campuses across British Columbia.
[ Page 2446 ]

In recognition of the importance of post-secondary education, the government of B.C. has continued to provide stable funding to the post-secondary sector even in the tough economic times of the last few years.

B.C.'s post-secondary system is recognized as one of the strongest in Canada, and our universities are consistently ranked among the best in the world. We are recognized for the way in which we work together as an entire sector. Simply put, we have the best-integrated post-secondary system in the country. Our credit transfer system provides our students with a seamless path from college to university, from institution to institution and from on line to the classroom.

Let me give you a very personal example. When I left high school I didn't go to university; I went to college. I spent two years at Vancouver Community College. I transferred to university. Two years later I got a bachelor's degree, and then less than three years after that I had a PhD. That could not happen in any province other than British Columbia.

Now in spite of our great system we need to continue to work to meet the challenges of the world we live in. We must make sure that we can meet the needs of today's students and tomorrow's workforce. To do this we have developed a plan that we call the opportunity agenda for British Columbia. It builds on a vision and on the previous investments and sets out what we, meaning both government and the post-secondary system, need to do to move forward.

It's a practical plan to expand opportunity, create new jobs, support families and grow a sustainable economy in every part of the province. The plan is built on three pillars. The first is a space for every qualified student; the second, a guarantee for students in need; and the third, a commitment to innovation and jobs for British Columbians.

The plan is based on a belief that our most important economic asset is that our people are the most important economic asset and that a strong economy fosters growth, social mobility and sustainability and is fundamental to the future of the province. Quite simply, we do not want to end up in a situation of having people without jobs and jobs without people.

Our plan is straightforward. First, a space for every qualified student. The fact that our workforce is aging means that our labour force is shrinking, and to ensure strong economic growth and to meet the demands of the labour market, we will need more educated and trained workers in the future. In fact, it is anticipated that over the next decade there will be approximately one million job openings in the province. Of those, 78 percent will require post-secondary education. Based on B.C. government statistics, 35 percent will require a university degree, 28 percent will require a two-year college credential and 15 percent will require a trades credential. If the decline in immigration continues, the gap will be even larger.

So how are we positioned to meet these challenges? Well, simply put, across the system the number of qualified applicants for post-secondary education exceeds the number of funded spaces available.

Let me give you one specific example. B.C. produces far fewer graduate students in fields such as engineering, mathematics and computer science than many other provinces. In fact, there are more than 4,000 unfunded graduate spaces here in the province of British Columbia. And graduate students are absolutely key to improving our province's competitiveness and productivity by commercializing and transferring knowledge between the universities and the private sector.

So to address the systemwide problem, we're proposing that we work with the province to create 11,000 newly funded spaces for the entire system over the next four years. This would mean about 4,400 spaces for colleges and trades. It would mean 3,600 spaces for undergraduates, and it would mean 3,000 spaces for graduate students. And there's a cost. It's $130 million at the end of the four-year period.

Now, funding for these student spaces at universities, colleges and institutes will help ensure that every qualified student in the province will be able to attend a post-secondary institution. It will also mean that B.C.'s economy will benefit from a highly skilled workforce and a highly educated workforce, where the skills we need as a province are matched by the skills that we have.

The second pillar in our plan is a guarantee for students in need. Unlike Alberta and Ontario and some other provinces, B.C. does not provide grants to undergraduate students and does not have a graduate student scholarship program. As a result, too many students decide not to pursue their studies or leave the province to study elsewhere.

Many others begin their working career with debt. Now, not all B.C. students graduate with debt. But for those who do, the average debt is about $27,000 before loan reduction. After loan reduction it's about $20,000. This is a very significant burden.

Right now B.C. universities provide about $135 million a year to support students in financial need. But together, government and our sector need to do more and work towards offering a guarantee that every qualified student in B.C. can attend a university, college or institute regardless of their financial circumstances.

Our proposal is to establish a more comprehensive student financial assistance package. It would include the following. For new students, an upfront undergraduate grant program of $1,500 a year. This would entice students that might be afraid of the costs. It would entice them to engage in post-secondary education. For graduating students, a guaranteed award for the current loan reduction program of $1,500 a year. And for graduate
[ Page 2447 ]
students, the development of a new program, an opportunity and innovation graduate scholarship of $15,000 per scholarship.

The total cost of these three elements is $90 million, but with a total new cost of only $51 million.

Now, to turn training and education into innovation and new jobs that are needed to drive economic growth, we need research in our institutions. The third pillar is therefore a commitment to innovation and jobs. In B.C. we need to support leading-edge research that tackles difficult social, scientific, economic and environmental issues.

Post-secondary institutions are engaging their communities and connecting their research to the needs of British Columbians across the province. The technology sector alone, just to give one example, contributes about $10 billion a year to our economy and employs over 84,000 people. Many companies in all sectors and their employees had their beginnings in B.C. universities.

We're also taking the discoveries that are made in our institutions directly to the marketplace. So our proposal is to develop an Innovate B.C. initiative. What we're proposing is that Innovate B.C. would bring together government, businesses and the post-secondary institutions to build on British Columbia's research and innovation potential, advance new opportunities and help drive economic growth.

This would require, first of all, a commitment to stable funding for existing research and innovation initiatives that currently position B.C. as a leader — things like Genome B.C., Ocean Networks Canada and the like. Secondly, it would require support for the B.C. knowledge development fund, BCKDF, to maximize the research and infrastructure investments in the province.

To give you a sense, since its inception in 1998 BCKDF has levered over a billion dollars in research funding to the province from Ottawa and from the private sector. It allows our institutions to build the necessary facilities to attract and retain top talent from across Canada and, in fact, around the world. It has provided our students with the best tools to learn the skills they need to succeed.

The fund has been absolutely instrumental in driving innovation in B.C.'s traditional industries, such as mining and forestry, and in new sectors, such as entertainment, tourism, digital media and the life sciences. Innovate B.C. will also help to ensure that new provincial funding supports research and innovation initiatives that position B.C. as a national leader in attracting investment and creating jobs.

In conclusion, the opportunity agenda is a modest investment in tough times. The post-secondary sector of this province will work together with the government to find a balance that recognizes the current economic environment while ensuring we are meeting the needs of today's students and the requirements of tomorrow's workforce.

Three things: a space for every qualified student, a guarantee for students in need and a commitment to innovation and jobs.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Bruce.

B. Ralston: You've given particular stress to the importance of graduate students and the importance of creating funded graduate student spaces. How important is that to achieving goal 3, the research commitment to innovation and jobs? That's my first question.

Second question is…. I think President Stevenson used to speak of the articulated system that is British Columbia, and very effective in the way that institutions work together. How does this fit with the goals of colleges that we've heard a lot about from individual colleges and today from the body of B.C. Colleges itself?

D. Turpin: Two very good questions. The link between graduate students and the third pillar, the innovation and jobs pillar, is absolutely critical. The graduate students carry out much of the research at universities and also link effectively with businesses. We work very hard to ensure our graduate students are working on real-world problems. They provide, really, the conduit between the private sector and the universities through co-op placements, through practical research programs and through the jobs that they then take when they move out into industry. Those two are really inextricably linked.

The second question is about the articulated system and how our request here aligns with the colleges. In talking with the colleges, they have been talking about a need for about 1,100 spaces a year for six years. Well, 1,100 times four years — ours is a four-year plan — there's the 4,400 college spaces.

Our next presenter is the Federation of Post-Secondary Educators of British Columbia, represented by Cindy Oliver and Phillip Legg.

Cindy and Phillip, welcome to the committee. You have ten minutes to present and five minutes for questions, and your time begins now.

C. Oliver: Good afternoon, everyone, and thank you for the opportunity to speak to you about the priorities we hope to see addressed in the February 2013 provincial budget.

The Federation of Post-Secondary Educators represents over 10,000 faculty and staff who work and teach in B.C.'s post-secondary institutions. Our members span a variety of post-secondary learning and knowledge-creation activities, everything from pure research and graduate studies programs to trades training and ap-
[ Page 2448 ]
prenticeships. We also represent members who provide a broad range of student support services — things like academic counselling, library and research services, as well as laboratory and technical support.

Several of our member locals have made presentations to the committee this year. So, too, have some of our other partner organizations in post-secondary education. Here I would include organizations like the Canadian Union of Public Employees, the B.C. Government and Service Employees Union and the Confederation of University Faculty Associations.

Those organizations, along with ourselves, the Canadian Federation of Students, and the B.C. Teachers Federation, are partners in the Coalition for Public Education, an advocacy organization that believes that investment in education at all levels is an investment that makes sense for B.C.

That belief is anchored to a number of key points. Research consistently shows that post-secondary education tracks very positively with higher lifetime incomes, greater labour mobility and higher levels of social engagement. Much of that research was highlighted for the committee in the presentation made to you earlier this month by CUFABC. Similar research findings were provided to this committee in our submission last year when we summarized work done by the Canadian Council on Learning, a federal body that examines the importance of post-secondary education across Canada.

I wouldn't want to suggest to this committee that the importance of post-secondary education is something that only post-secondary educators recognize. The B.C. Business Council also sees the importance of post-secondary education. They come at it from a slightly different direction, but their research shows that over 75 percent of all new jobs will require some form of post-secondary training or credential, which can include a degree, a diploma, a certificate or a completed apprenticeship.

Currently only 60 to 65 percent of B.C.'s workforce has that level of training. Clearly, we have a gap to close.

We know, as well, that the public supports greater investments in post-secondary education. Our organization, along with others in the Coalition for Public Education, has tracked public support on this question for many years. Our findings show that upwards of 70 percent of B.C. voters want to see the provincial government invest more in public colleges, universities and institutes.

While that support is heartening, the more interesting number is that about 62 percent of voters would support greater investments in our public post-secondary institutions even if it meant paying more in taxes. It's a number that this committee needs to understand as it recommends priorities for the government's February budget.

The unfortunate fact for our institutions, however, is that current fiscal priorities do not align with what the public wants. The most telling evidence of that came in the February 2012 budget, a budget which included close to $70 million in proposed cuts to post-secondary institutions over the three-year service plan of the Ministry of Advanced Education. Those cuts came on top of a decade-long trend in which post-secondary institutions saw their real per-student operating grants, the core investment made by the province in our post-secondary system, decline by close to 9 percent since 2001.

The problems created by underfunding of post-secondary education have been well documented for this committee. The most visible evidence is the loss of programs and course offerings; longer wait-lists to get into preferred programs; the loss of student support service that helps students make the best choices, given limited options; and ultimately, a longer time spent completing degrees and diplomas.

These impacts are felt equally by students and faculty. For students, the impact is made that much more onerous because throughout this period they have seen tuition fees skyrocket, forcing more and more of them into greater and greater debt. For faculty, the impact can be summed up in the phrase "Do more with less." It's a strategy that might work in the short term, but as it stretches out into 12 years, it becomes corrosive.

Another indication that the funding crunch has hit a breaking point came in March when 25 post-secondary institution presidents released a letter that they sent to then Minister of Advanced Education Naomi Yamamoto. The letter was written after the 2012 budget was tabled. For post-secondary institutions, the projected drop of $70 million in the annual operating grants was too much.

Let me read to you and into the record a key point that the presidents raised in the second paragraph of their letter. "It is critical for government to understand that the $70 million reduction to institutional grants over the last two years of the fiscal plan, combined with five years of underfunded inflationary pressures, creates a strain on the operations of post-secondary institutions."

I'm sure that members of this committee would agree with me that for 25 presidents of public institutions to not only sign a letter like this but then release it to the public is very unusual. As the quote I read to you indicates, their concern over funding has been brewing for some time. Those presidents, much like my members, have reached a point where the doing-more-with-less mantra simply doesn't work anymore.

Having reviewed some of the Hansard transcripts from your public hearings, I know that some members of the committee take the view that as long as the fiscal cupboard is empty, public services, regardless of their merits or importance, will simply have to wait until the budget achieves a surplus. I would remind those members who hold that view that after a decade of tax cuts that were supposed to pay for themselves, it's time for the
[ Page 2449 ]
current government to take an honest look at the wisdom of those tax cuts.

Our polling suggests that B.C. voters are open to that kind of review. In fact, there's a strong case to be made that if a government is prepared to show exactly how it intends to invest needed tax increases in specific public services, voters are more likely to support that change.

While that review of tax policy should be a major priority in the February budget, it is by no means the only priority that post-secondary educators believe needs to be addressed in the budget. I mentioned skyrocketing tuition fees and rising student debt. Both are making access and affordability more of a challenge, and the February budget needs to take steps to address that problem.

Bringing back the student financial aid program would be a logical first step in that regard and so, too, would measures to lower the interest rate that students pay on their debt.

On the specifics of operating grants to post-secondary institutions, yes, the grants obviously need to be increased. But before we do that, it makes good sense, in our view, to re-examine the funding formula behind the allocation of operating grants. That formula has not been reviewed in any substantial way since the early 1990s.

The cost structure that individual institutions face varies significantly. What constitutes a full class in early childhood education at a College of the Rockies campus isn't the same as what that would constitute at Douglas College on the New West campus. If we are committed to real access, then it's time to re-examine the funding formula.

We also have major concerns about the Industry Training Authority. First and foremost, it should be under the Ministry of Advanced Education. Our institutions deliver over 90 percent of the trades training in the province, and having two ministries seized with that reality is ineffective.

The Auditor General agreed with our view in his 2007 report on the ITA — a report that led to ITA moving back to Advanced Ed in 2008. However, since then it has moved out to different ministries and now sits with Jobs, Tourism and Labour. It creates unnecessary dysfunction at a time when we need much better coordination to deal with critical skill shortages.

I have one final point that has to do with developmental education. Certainly, for our community colleges and special purpose teaching universities, their mandates include the provision of comprehensive learning opportunities. What that means in concrete terms is that programs and course offerings are adapted to encourage and support adult learners who are returning to post-secondary institutions to either upgrade or change careers.

Developmental education is a labour-intensive program. The classes are small, diverse, and require more support than mainstream programs. However, if we are going to succeed in closing that skills gap that I mentioned at the outset, developmental programs will play an important role. But like other areas in our system, funding in developmental education is hard to find and even harder to maintain when the directive is to do more with less. We need to change that, and the February 2013 budget would be an excellent place to announce the government's commitment to provide more substantial support for developmental programs.

Once again, I want to thank you for the opportunity to provide our input, and I would be happy to answer questions.

D. Horne (Chair): Thanks so much. We'll start our questions with our Deputy Chair, Mable.

M. Elmore (Deputy Chair): Hi, Cindy. Thanks so much for your presentation. I think the education sector has been…. We've heard consistently — it has been very good representation — from a number of organizations, faculty organizations, college and university administrators, student associations as well as industry, private companies and, really, the chambers of commerce talking about and recognizing the value and the importance of having a skilled workforce and the key role that investment plays in post-secondary education to ensure that we have skilled workers to drive a vibrant and dynamic economy.

The one area that we haven't heard a lot about, and I'm curious, is around the topic of developmental education and developmental programs. Can you talk about that a little bit more — maybe some of the key institutions that deliver that and how you see expanding that?

C. Oliver: Developmental education is really the backbone of the post-secondary system and, certainly, the backbone of anyone who is trying to either upgrade their skills or to start on a new program and they're lacking skills for many reasons. Some didn't complete high school and went on to work and now find themselves out of work or needing new skills. Some who had been to high school many, many years ago find their skills are a bit stale or dated.

All of the institutions in British Columbia that are represented under our organization — the faculty are represented — have developmental education programs. It's a key, because students who come into the institution, whether it's a college or one of our special purpose universities or an institute…. First of all, we have open access, so students are able to come to our institutions without having to qualify through, perhaps, certain rigorous standardized examinations. It means that they do have some kind of testing and assessment.

Then they're placed in either an appropriate program which they would like to study, or they're pretty much told: "Well, you might have to upgrade your math skills,
[ Page 2450 ]
or upgrade your reading." That's where developmental education takes over. It's a wonderful bridging program, giving students skills so they can be successful. There's nothing worse than having a student enter into a program and the instructor finding that student doesn't have the skills, and the student ends up either dropping out or failing.

We don't want to do that. Our members are very dedicated to student success. We want to give them all the tools they need. That's a very important program. Often it gets left by the wayside. I hate to say this, but sometimes at our special purpose teaching universities…. You know, it's not very glamorous to do developmental ed, so funding often will be targeted elsewhere into the sort of higher-profile areas, unfortunately.

M. Elmore (Deputy Chair): Is it also characterized under adult basic education and some of the courses to complete and bridge from high school graduation into being able to take college courses?

C. Oliver: Yes, it is. It's sometimes called different things. We use developmental programs, adult basic ed, those kinds of things — even beginning with literacy training. Some of our ESL students — English as a second language — some of our foreign students, international students have to be filtered and funnelled through those courses so they can upskill themselves enough to get into programs that they wish to study further.

B. Routley: It's obvious, listening to speakers from all over British Columbia — whether it's chambers of commerce or business or certainly post-secondary institutions — that post-secondary is going to be the core of what we need to facilitate the transition with the tsunami coming and workers leaving the industry. Everybody is talking about the need for skills training. That just doesn't square with cutting post-secondary 9 percent. I'm shocked and alarmed that it would be that high.

Could you tell us…? I've heard about lack of completion from some students. If you have any information about the number of students that aren't able to complete because of…. I heard students talk about being debt-averse. Also, about wait-lists for education — we heard about wait-lists for nurses and that kind of thing.

C. Oliver: Yes, we do have wait-lists. We have a wait-list for occupational programs such as nursing, whether it's registered nursing or LPN, and also wait-lists in the various trades.

When institutions are funded, there's a system called block funding. Some of it is targeted. Some of it says that you must provide trades or something like that. But what happens is that with limited funding, they can only provide so many seats, so many spaces. A wait-list means they've maxed out on being able to train more than a certain number. It may be 20; it may be 15 — whatever they have enough equipment for, whether it's nursing or trades.

That creates a backlog, for one thing. It also creates problems in the fact that we're not filling those jobs. We've heard other people talk about that at these hearings. We're not graduating enough people to fill those jobs, and then you have a wave of temporary workers coming into areas.

We need to be able to train our citizens. I mean, it makes great sense to do that and to close that skills gap. When 75 percent of jobs require some kind of post-secondary education, and 60 to 65 percent have that education, there's a great gap to fill in that regard. Certainly, the economy of British Columbia counts on that to be vibrant and for everybody to be working. That's a desire, I would think, for most governments.

D. Horne (Chair): Thank you for your presentation. We've now reached the end of our allotted time, so unfortunately, I'm going to have to end it there.

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1) BC Sustainable Energy Association	Tom Hackney
	Guy Dauncey
2) BC Colleges	Jim Reed
3) Victoria Real Estate Board	Shelley Mann
	Ian Mason
4) Royal Roads University	Dr. Allan Cahoon
5) Rick Hansen Foundation; Rick Hansen Institute	Colin Ewart
6) Accountability Council for Co-operative Education in BC	Norah McRae
7) Sustainable Prosperity	Alexander Wood
	Brandon Schaufele
8) Peter Lawless
9) British Columbia School Trustees Association	Michael McEvoy
	Sherri Moore-Arbour
10) West Coast Environmental Law	Andrew Gage
11) Organizing for Change	Lisa Matthaus

18) Business Council of British Columbia	Ken Peacock
19) Canadian Home Builders' Association of British Columbia	M.J. Whitemarsh
20) ORCA Children's Advocacy Centre Society	Fred Ford
21) Private Forest Landowners Association	Rod Bealing
22) Research Universities' Council of BC	Dr. David Turpin
	Robin Ciceri
23) Federation of Post-Secondary Educators of BC	Cindy Oliver
	Phillip Legg

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:	Susan Sourial
Committee Staff:	Stephanie Raymond (Administrative Assistant)

Witnesses:	Rod Bealing (Executive Director, Private Forest Landowners Association)
	Dr. Allan Cahoon (President, Royal Roads University)
	Bruce Carter (CEO, Greater Victoria Chamber of Commerce)
	Robin Ciceri (President, Research Universities Council of B.C.)
	Patrick Corrigan (ProArt Alliance of Greater Victoria)
	Joanne Curry (Simon Fraser University)
	Guy Dauncey (Interim Executive Director, British Columbia Sustainable Energy Association)
	Colin Ewart (Rick Hansen Foundation; Rick Hansen Institute)
	Fred Ford (ORCA Children's Advocacy Centre Society)
	Oriane Fort (Greater Victoria Chamber of Commerce)
	Andrew Gage (West Coast Environmental Law)
	Tom Hackney (British Columbia Sustainable Energy Association)
	Paul Lacerte (Executive Director, British Columbia Association of Aboriginal Friendship Centres)
	Kathryn Laurin (President, Camosun College)
	Peter Lawless
	Phillip Legg (Federation of Post-Secondary Educators of B.C.)
	Peter Lockie (CFO, Camosun College)
	Michael McEvoy (President, British Columbia School Trustees Association)
	Norah McRae (Accountability Council for Cooperative Education in B.C.)
	Shelley Mann (President-Elect, Victoria Real Estate Board)
	Ian Mason (Victoria Real Estate Board)
	Lisa Matthaus (Organizing for Change)
	Sherri Moore-Arbour (British Columbia School Trustees Association)
	Cindy Oliver (President, Federation of Post-Secondary Educators of B.C.)
	Bruce Parisian (British Columbia Association of Aboriginal Friendship Centres)
	Ken Peacock (Business Council of British Columbia)
	Jim Reed (President, B.C. Colleges)
	Nicole Rogers (Simon Fraser University)
	Peter Sandmark (Executive Director, ProArt Alliance of Greater Victoria)
	Brandon Schaufele (Sustainable Prosperity)
	Dr. David Turpin (Research Universities Council of B.C.)
	Barbara Ward-Burkitt (British Columbia Association of Aboriginal Friendship Centres)
	Kyle Warwick (Alma Mater Society of UBC Vancouver)
	M.J. Whitemarsh (CEO, Canadian Home Builders Association of B.C.)
	Alexander Wood (Sustainable Prosperity)

12) BC Association of Aboriginal Friendship Centres	Paul Lacerte
	Barbara Ward-Burkitt
	Bruce Parisian
13) Greater Victoria Chamber of Commerce	Oriane Fort
	Bruce Carter
14) Professional Arts Alliance of Greater Victoria	Peter Sandmark
	Patrick Corrigan
15) Camosun College	Kathryn Laurin
	Peter Lockie
16) Alma Mater Society of UBC Vancouver	Kyle Warwick
17) Simon Fraser University	Joanne Curry
	Nicole Rogers

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