Finance and Government Services — Issue No. 2 — Tuesday, September 10, 2013 (HTML)

Present: Dan Ashton, MLA (Chair); Mike Farnworth, MLA (Deputy Chair); Mable Elmore, MLA; Eric Foster, MLA; Scott Hamilton, MLA; Gary Holman, MLA; Marvin Hunt, MLA; Jackie Tegart, MLA; John Yap, MLA

2. The Committee reviewed correspondence received from Elections BC dated July 15, 2013 and a submission received September 9, 2013.

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

4. Resolved, that the Committee meet in-camera to consider the requests for supplementary funding from Elections BC. (Scott Hamilton, MLA)

7. Resolved, that the Committee recommend that Elections BC be granted access to additional funds in the amount of $549,600 for fiscal year 2013/14 in order to defray the administrative costs incurred in support of the Westside-Kelowna by-election on July 10, 2013; and further, that the Chair advise the Minister of Finance of the recommendation of the Committee. (Eric Foster, MLA)

8. Resolved, that the Committee recommend that Elections BC be granted access to additional funds in the amount of $410,000 for fiscal year 2013/14 in order to defray the costs to administer the initiative petition process related to "An Initiative to Amend the Police Act"; and further, that Elections BC be granted access to additional funds in the amount of $610,000 in order to defray the costs of a full verification process should the petition be returned with an adequate number of signatures; and further, that the Chair advise the Minister of Finance of the recommendation of the Committee. (Eric Foster, MLA)

10. The Committee reviewed a submission received from the Office of the Representative for Children and Youth dated September 9, 2013.

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

12. Resolved, that the Committee meet in-camera to consider the request for supplementary funding from the Office of the Representative for Children and Youth. (Jackie Tegart, MLA)

15. Resolved, that the Committee recommend that the Office of the Representative for Children and Youth be granted access to additional funds in the amount of $300,000 for operating expenses and $30,000 for capital expenses for fiscal year 2013/14 in order to defray the costs incurred in support of the Office's expanded mandate resulting from amendments to the Representative for Children and Youth Act; the Committee supports and acknowledges that 2013/14 contingency funds in the amount of $300,000 operating and $30,000 capital have already been allocated in support of the expanded mandate; and further, that the Chair advise the Minister of Finance of the recommendation of the Committee. (Scott Hamilton, MLA)

17. The Minister of Finance, Hon. Michael de Jong, MLA, appeared before the Committee, presented the Budget 2014 Consultation Paper, 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
Statutory Officers Supplementary Funding Requests	7
N. Western
A. Boegman
M. Turpel-Lafond

Presentation by Minister of Finance	18
Hon. M. de Jong


Committee Meeting Schedule	22

D. Ashton (Chair): I'll call the meeting to order, and then maybe we can just go around and make an introduction, especially for our guests today.

If you don't mind, if I could start with the guests, and then we'll come around the table, to my left.

N. Western: I'm Nola Western. I'm the Deputy Chief Electoral Officer for funding and disclosure, Elections British Columbia.

A. Boegman: Anton Boegman. I'm the Deputy Chief Electoral Officer for electoral operations, Elections B.C.

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): Good morning, everyone. I'm Kate Ryan-Lloyd. Today I'm assisting the committee with respect to its funding requests from the statutory officers.

S. Sourial (Committee Clerk): I'm Susan Sourial. I'm the Committee Clerk for the budget consultation portion.

D. Ashton (Chair): Good morning once again. My name is Dan Ashton. I'm the MLA for Penticton.

Opening is Elections B.C., supplementary funding request. Anton or Nola, I'm not so sure…. If you don't mind a first-name basis, if that's okay? With that, I'll put the ball in your court.

N. Western: Okay. I'm going to start. It's a pleasure to appear before this committee again, although most of you are very new to this committee, and we are lacking the presence of the Chief Electoral Officer. Keith Archer does send his regrets, but he's out of the country. As you can imagine, his holiday is long overdue and very well deserved.

Anton and I each have a short address to make to you. Then we'll be pleased to answer any questions that you have about this funding request.

Since most of you are new members to this committee, I think it would be valuable to give you a brief description of the budget process that Elections B.C. goes through and an explanation of the different types of budgets that we have.

Traditionally, EBC appears before this committee in late November as part of your annual consideration of the budgets of all of the independent officers of the Legislature. At that time this year there will be more detail about the nature of the expenditures that we incur.

Budgeting at Elections B.C. is dependent on the type of the event that needs funding and the type of expenditure required. We talk about a budget, but we actually have several separate budgets: an ongoing operating budget, a capital budget and event-related budgets.

The ongoing operating budget covers costs incurred every year, regardless of whether there's an election or other event. Such expenses include permanent staff salaries, rent, warehouse rent, computers and amortization.

The capital budget is the budget for purchasing or developing capital assets that have an expected useful life of over one year, as defined by the office of the comptroller general — for example, information technology systems and specialized warehouse equipment such as the forklift. We've consistently tried to minimize investments in capital assets, partly because they all need to be amortized, and amortization is charged against our ongoing operating budget, and partly because we're always trying to be prudent about the use of taxpayers' funds.

However, the election business is highly reliant on technology, and there are some capital assets that absolutely must be developed in order for us to meet our mandated and strategic priorities.

Event budgets cover expenses specifically incurred in relation to the delivery of the electoral events mandated by the legislation that we administer — for instance, general and by-elections and initiative petitions.

In our annual budget proposals to this committee, each of these budgets is shown separately, and the committee makes separate recommendations on each of them. In its annual report last December the committee
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recommended an ongoing operating budget of $8.210 million and a capital budget of $700,000.

Furthermore, as there were electoral events scheduled for the current fiscal year, 2013-14, the committee also recommended $33.125 million to administer the May 2013 general election, complete the provincial enumeration and support the independent panel on Internet voting.

Rather than submit the event funding of $33.125 million to a vote in the Legislative Assembly, the Minister of Finance formally provided Elections B.C. an allocation of up to that amount in the 2013-14 contingencies vote. You will hear from Anton, in a moment, that we're not asking for an increase to that contingencies vote allocation.

Although British Columbia was the first province to implement fixed dates for general elections, much of the work that Elections B.C. does is not scheduled. Rather, by-elections, initiative petitions, recalls and referenda are what we call on-demand events. Their timing isn't in our control.

Since the need for such on-demand events isn't known in advance, funding for delivering them is not usually included in our annual budget presentation to this committee. Rather, it has been our practice since 2001 to write to the Select Standing Committee on Finance and Government Services advising of the estimated cost of the event in question and, if necessary, requesting access to the contingencies vote.

Two such letters were sent this past summer — one for the by-election in Westside-Kelowna and one for the initiative petition titled "An Initiative to Amend the Police Act." Anton will address those events and their estimated costs in more detail.

I do, however, have one more brief comment to make before I turn the floor over to Anton. Yesterday the government issued a White Paper on Local Government Elections Reform, and it outlined government's intention to introduce legislation in the spring of 2014 that would significantly change and increase the mandate of Elections B.C.

Specifically, the proposed local elections campaign financing act would make Elections B.C. responsible for the campaign financing and third-party advertising of local government elections, including ensuring the compliance and enforcement of those provisions. This proposed increase to our mandate will have significant implications for Elections B.C., and we anticipate submitting a further supplementary budget request in due course so that we can ensure that we're adequately prepared if such legislation is introduced and passed.

If we could just save our questions, and then we'll ask, once both the presentations are made.

As Nola has mentioned, I'm going to provide you with a more detailed review of the budgets for the by-election and the initiative petition. That information is contained in the supplementary funding request handout that you should have in front of you.

Before I start, however, I'd like to just provide a brief overview of how Elections B.C. develops event budget estimates. Within our organization, we've put in place a detailed and comprehensive event-planning methodology that's based on the standards and best practices as put forward by the Project Management Institute. In this, we're recognized as leaders by our colleagues in other Canadian electoral agencies.

This rigorous approach allows us to plan very thoroughly for both scheduled and on-demand events incorporating best practices in event implementation, control and risk management.

Our event-funding requirements have been developed using a proven bottom-up process whereby the specific deliverables required for each event are first identified, scheduled and then fully costed.

To the budgets. I'll begin on page 4 of the document before you. The budget for the recently completed Westside-Kelowna by-election is broken down into two components: central office expenses, which include those costs incurred by Elections B.C. headquarters in Victoria to administer the event, and the district electoral office costs, which are those incurred by the district electoral officer in the field.

Central office expenses total $259,800 and include salaries of temporary staff, information systems cost, voter notice printing and postage, as well as by-election advertising, which includes statutory ads as well as a householder.

The district electoral office expenses total $289,800, and they're driven primarily by the staffing costs for the DEO and the deputy district electoral officer, for election officials and the district electoral office staff. Together these represent 83 percent of the DEO office costs.

Other expenses include rental of the district electoral office and voting places, costs for ballot printing, general postage and office expenses.

The total estimated expenses for the Westside-Kelowna by-election are $549,600, and this is actually $10,400 less than what was requested in the July 15 letter from the CEO to the committee. Primarily, the difference is due to lower than anticipated staffing costs.

If you'll now move to page 5, I'll review the estimated expenses for the initiative petition to amend the Police Act. This initiative petition is currently underway, with the proponent, Mr. Dana Larsen, applying for the petition on July 9 and the actual petition being issued yesterday.

In essence, the petition seeks to amend the Police Act such that provincial police resources are no longer able
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to be used on the enforcement of current laws in relation to simple possession and use of cannabis by adults. The proponent now has 89 days remaining, to December 9, to canvass signatures from at least 10 percent of the registered voters in each electoral district in the province.

The initiative petition budget is also broken down into two components. In this case, those expenses related to the issuance and administration of the petition and canvassing, and a separate amount that will be spent if there are sufficient signatures to require the Chief Electoral Officer to undertake a full petition verification process.

Expenses related to the petition and canvassing administration are estimated at $410,000, mainly driven by advertising requirements, which include two provincewide advertisements, one which is a statutory advertisement on petition approval in principle and the other one a know-the-rules advertisement just prior to petition issuance.

Other costs include information systems, temporary staff to process canvasser registrations and for B.C. Stats services to plan and prepare for petition verification.

If the proponent submits sufficient signatures to require verification, the Chief Electoral Officer will have 42 days to complete this activity and require a further $610,000. Verification costs include staff costs for 60 verification operators; B.C. Stats services to administer a verification survey of petition signatories, which will ensure that those individuals whose names and signatures appear on the petition did indeed sign the petition; scanning and data entry services to transform the paper records into electronic records and information systems.

The overall estimated cost for the initiative petition, should it go through full verification, is $1.02 million. This compares very much with the costs that were actual costs for the petition on HST, to extinguish the HST, which totalled $1.069 million.

Therefore, in total, Elections B.C. anticipates approximately $1.57 million in on-demand, event-related costs for the by-election and for the initiative petition. However, as Nola mentioned, we will not require access to any additional contingency funding for these two events.

At present we have sufficient funding available in the current contingency allocation to fully meet these event costs. This funding is available as a result of savings achieved in the delivery of the recent provincial general election. Efficiencies were gained in information technology use, in advertising costs, as well as in lower-than-anticipated election official expenses. These efficiencies together enabled Elections B.C. to realize a general election surplus of just over 5 percent, which will fully cover the approximate $1.57 million requirement for on-demand event funding presented today.

This completes our presentation to the committee on the estimated costs for the Westside-Kelowna by-election and the initiative petition to amend the Police Act. We would be pleased to respond to any questions that the committee may have.

D. Ashton (Chair): Thank you, Nola, and thank you, Anton, for that presentation. I'll go to the committee. I'll start, if you don't mind first names, with Eric and then Mable.

E. Foster: Just a couple of quick questions on this, and they pertain to legislation. I think I know the answers.

The proponents for the petition have, obviously, gone through all the steps that they need to go through. Really, then, according to the legislation, this is a courtesy call, because we have to pay for it. Would that be…?

M. Elmore: Thanks for your presentation and update. Interested to hear about the results from the work you conducted on Internet voting, just the status of that report, when you expect it to come forward.

Also, in terms of the white paper and the possibility of taking up responsibility for municipal elections. I'm just interested in terms of other jurisdictions. Is that also a similar practice in other provinces?

N. Western: There are provinces in Canada where the provincial electoral agency administers part of or all of the work around local government elections. New Brunswick is one. Quebec is another one. I think it's basically those two.

A. Boegman: And in terms of the independent panel on Internet voting, the panel has been in deliberations and discussion, obviously, since it was formed. The panel had to take a bit of a back seat through the election. The Chief Electoral Officer wasn't available during that time, and, of course, over the summer some panelists were not available to meet the panel's requirements.

There are still two meetings that are scheduled to help the panel conclude its deliberations. There's a meeting on September 27 and then a meeting on October 8. A lot of work has been done on the initial report of the panel to this point, so we're anticipating that shortly after the second meeting we should be able to publish the initial report of the Internet voting panel.

M. Hunt: I'm trying to catch information that you said rather quickly, and I think I got it right, or at least I'm in the ballpark. I believe you said that the general election cost about $32 million. That was the appropriation for that. Did I catch that right?
[ Page 10 ]

N. Western: That appropriation included finishing up the provincial enumeration and some work for the independent panel on Internet voting. The budget for the general election was just about $32 million, I think, and the appropriation was $33.125 million.

M. Hunt: Just doing quick rough math — $32 million, 80 constituencies — that ends up at about $400,000 per constituency, the ballpark cost of the election. I take that, and then I want to compare that to the by-election. If we look at the by-election, if I can look at the second category, which you describe as the district electoral office expenses, that's in the ballpark of $300,000. Okay? So I'm just calling that the hard costs of running the election. Most of that, obviously, is election fees, those sorts of things, the actual people on the ground doing it.

My question is this. Is that the general ballpark? I'm looking at $400,000 per constituency for a general election. A by-election — you've got some efficiency because some of the work has already been done, but you still have that cost of the actual people doing the election and processing the election. I'm going to assume we are going to have a similar number of polls, those sorts of things, so the ballpark would be that we're somewhere in the order of $300,000 to $400,000 per constituency during an election.

A. Boegman: It depends on…. Obviously, in a general election we are able to achieve a lot of efficiencies in terms of the conduct. For the central office expenses you can support your 85 constituencies at a lower unit cost than you are for a single by-election that has to take place.

M. Hunt: Yeah, that's why I actually left that out of my calculation. I realized those ones are going to be separate and distinct because of the extra cost of the one-off election type of thing.

N. Western: You can see that most of the DEO office costs in a by-election are staff. It's election officials.

M. Hunt: Which then becomes an issue of how many polls you actually have within that….

S. Hamilton: If you wouldn't mind, first of all, with regard to the Westside-Kelowna by-election, I'd just like to break out a couple of costs for a couple of these line items — specifically with regard to the central office expenses.

Information systems at $103,000. Now, these are information systems that otherwise wouldn't have existed or wouldn't have been used had there not been a by-election? I wonder if you could expand on that a little bit for me, please.

A. Boegman: Certainly. The information system costs are primarily driven by costs that we pay for our contractor, HP, to provide support services to ensure that our systems are up and running.

In the case of the by-election, they're actually higher than they would usually be in a typical by-election because at the time the by-election was being administered, we were still doing post-election processing for the general election. So we were having to maintain, in essence, separate versions of our system so that we could continue to do the post-election processing as well as do all of the by-election processing.

I believe that in the budget approximately $90,000 of that $103,000 was for the support services costs. Then we also have some costs in there that we pay for, obviously, for use of network, for use of equipment, making sure that we have, through our central contract, in terms of getting the network into the new office that the district electoral officer will have, and making sure that we have connectivity.

S. Hamilton: Thank you. So when it says "central office expenses," that's the electoral office in Kelowna, essentially?

A. Boegman: No, it's the costs that are incurred by Elections B.C. headquarters in Victoria. But those costs are all directly related to supporting the office that's in the field.

S. Hamilton: Thank you. And if I may, with regard to salaries, is this particular…? It's not a lot of money, I know, and maybe I'm nitpicking, but is this over and above staffing complements that would not otherwise have been present? We're talking about hiring someone that would not otherwise have been working in that office had there not been a by-election?

A. Boegman: That's right. Those are direct salary costs related to staff that were brought in to work specifically in support of the by-election.

S. Hamilton: Thank you. If I just may ask a question with regard to the petition. A lot of these things — I'll be subjective here — tend to wither on the vine. I'm not saying this one will or won't. But with regard to the petition costs only, what are the tipping points? Are we in for that total $410,000 as of day one, or is this a process that we're going through over a period of the petition, the 90 days or the 80 days? Will we incur all of those expenses, let's say, if in two weeks they decide to give it up?

A. Boegman: If they give it up in two weeks, not all
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of those expenses would be incurred. At this point we have spent pretty much the full advertising amount there. We've run two provincewide ads — one per the legislation, and then we also do an ad right before a petition is issued to inform the public on what the rules are around signing a petition. Information systems, of course, are spread throughout the total course of the event, so some of those costs would not be incurred if the petition was ended early.

B.C. Stats services are currently working on their plan for petition verification so, again, depending on where we are — for example, should the petition be returned early — then some of those costs would not be incurred. But right now this is where we're moving towards. If everything goes to the full hand-in of the petition on December 9, then those costs should all be incurred.

S. Hamilton: Thank you. Just on that, with regard to the verification process — I'll see if I've got that right — that funding would essentially be held in abeyance until such time as we know we have to go through the process? There's really…. I notice it's virtually a duplication of what's gone on under the "petition only" category.

A. Boegman: There are a lot of those costs that we need to…. You know, we'll start identifying and recruiting staff because we have a very limited time period to conduct the petition verification — 42 calendar days — so we need to be ready to do that when the petition is submitted.

There are some costs, though. If we do our initial review of the petition submission and find out that there are not sufficient signatures, then we wouldn't need to spend any of the B.C. Stats services for their petition verification. Our staffing costs would not be anywhere near the full amount that's there. The other costs for information systems, again, would not apply because we wouldn't need to deploy the workstations and wouldn't need any support over that 42-day verification period.

G. Holman: I'm sorry. Did you say earlier that the election expense was about 5 percent less than budgeted, that it was about $1½ million less? And so then the budgeted cost of $33 million, whatever — it was $32 million-something?

A. Boegman: Our overall annual budget for the election this fiscal was $32.377 million, and we were able to achieve just over 5 percent efficiency in that through…. Some of our costs came in less than what we anticipated.

G. Holman: So my question is…. Maybe you said this and I'm missing something obvious, but what's the implication for the supplementary request, then, if you've got a surplus in the election?

A. Boegman: It means that we already have been given event contingencies that will cover the full cost of this supplementary request. So we do not need access to any additional contingency funding for these two on-demand events.

G. Holman: Another just in terms of how…. I should know this, but…. If in any particular ministry or office, like yourself, you have a surplus over expenses — like in this particular example — does that get carried over into the next…? How does that work? Is there a carryover provision?

N. Western: No. If you haven't spent it by the end of the fiscal year, by March 31, it's gone. No carryover.

M. Elmore: Just to follow up on the efforts at enumeration. Have you broken out the budget and the expense dedicated towards that? And is there a report outlining the work that was done on that in the main…?

N. Western: There will be a report early, I think, next calendar year detailing that sort of thing. As you can imagine, we're still up to here with some big invoices, especially for the general election.

Folks, thank you very much for coming. I think at this point in time, if you don't mind, usually we have our chance to have a chat, and then we'll get back to you a.s.a.p.

To the committee, as soon as these folks leave we'll have a motion to go in camera for discussion, and then we can come back into the open, if so wished by the committee.

E. Foster: I move that the committee recommend that Elections B.C. be granted access to additional funds in the amount of $549,600 for fiscal 2013-14 in order to defray the administrative costs incurred in support of the Westside-Kelowna by-election on July 10, 2013. Further, I move that the Chair advise the Minister of Finance of the recommendation of the committee.

E. Foster: I move that the committee recommend that Elections B.C. be granted access to additional funds in the amount of $410,000 for fiscal 2013-14 in order to defray the costs to administer the initiative petition process related to "An Initiative to Amend the Police Act."

Further, I move that the committee recommend that Elections B.C. be granted access to additional funds in the amount of $610,000 in order to defray the costs of a full verification process should the petition be returned with an adequate number of signatures. Further, I move that the Chair advise the Minister of Finance of the recommendation of the committee.

D. Ashton (Chair): We'll just take a 1½-minute recess here till we get these new folks up.

D. Ashton (Chair): Good morning, everybody. If you don't mind, with those in the gallery, if we could start a little early. Do you have everybody present? If you don't mind a quick introduction, we'll go around the table ourselves and we'll take it from there. Thank you for coming this morning. Welcome.

M. Turpel-Lafond: I'm Mary Ellen Turpel-Lafond, the Representative for Children and Youth for British Columbia. I'm joined, to your left and my right, by the director of finance and facilities from my office, Tanis McNally-Dawes. On the other side of me is John Greschner, who is the Deputy Representative for Children and Youth.

K. Ryan-Lloyd (Clerk of Committees): Good morning. Kate Ryan-Lloyd, Deputy Clerk.

S. Sourial (Committee Clerk): Susan Sourial, Committee Clerk, budget consultation portion.

D. Ashton (Chair): Good morning once again. My name is Dan Ashton, MLA for Penticton. John Yap will be back a.s.a.p. But please start, and thank you again for coming this morning.

M. Turpel-Lafond: Thank you to committee members for finding time to allow me to make a very brief presentation.

The presentation pertains to a supplementary request for support for the work of the Office of the Representative for Children and Youth. In March 2013, in absence of an existing Select Standing Committee on Finance and Government Services, my office made a submission through Treasury Board to the Minister of Finance to support some new work that had been assigned to us by virtue of a legislative amendment to the Representative for Children and Youth Act.

The amendment was designed to allow my office to advocate for young people between the ages of 19 and 24 who were aging out of either the foster care system or out of a system of supports for children and youth with special needs and navigating the Community Living B.C. and other supports and services.

Because of the timing of that legislative amendment and the timing of a general election, there wasn't a standing committee to appear before, so the submission was made through Finance to Treasury Board and to the minister. I'm just here to speak to that issue, to file with you a copy of the budget submission and to give a bit of an update on the work that has taken place as a result of some of those transitional decisions that were made.
[ Page 13 ]

The Minister of Finance indicated to me approval of up to $300,000 of operating and up to $30,000 of capital and bridge funding until such time as this committee was reconstituted and was able to provide further direction and decision on this point.

So I'm here today to make the same requests I made to the Minister of Finance, through Treasury Board, earlier this year.

The regulation that expands the mandate pursuant to the Representative for Children and Youth Act has been prepared. It comes into effect on September 30, so we are literally weeks away from expanded mandate for my office and a responsibility to respond to and address concerns of those who are between the ages of 19 and 24. Having been in a planning process to prepare for that mandate, we have hired and trained the staff for the new mandate, and we are operationalizing our outreach and communication plans. Our mandate up until September 30 was just for young people between, well, the age of birth to 19. This will expand it over another five years.

The services that will be designated, in terms of the services for which we will provide advocacy, support and information to British Columbia citizens, are designated services and relate almost exclusively to services provided by MCFD and CLBC and others who have provided special needs services. The advocacy mandate requires that I have a strong cadre of advocacy staff who are familiar with programs and services in a number of ministries and organizations that have been deputized or asked to support young, vulnerable people transitioning to adulthood.

The range of services covered or designated by the regulation is currently under review. We are hoping to specify not only special needs or young adults with developmental disabilities but also mental health and addiction services and some specialized health services and support such as those that are provided to children and youth with special, fragile health needs. These will be prescribed services for which we would provide advocacy supports.

Significant public education and outreach and relationship-building with service providers are required in order to launch this new mandate and make it effective. There have certainly been a variety of different announcements.

I appreciate that some members of this committee are new to the Legislative Assembly of British Columbia. Some have been around for some time and will know that the issues affecting young adults with special needs transitioning into adulthood…. The desire that the government expressed to expand this mandate to 24 years old was announced, I think, on several occasions over a 14-month period and will become effective at the end of this month.

This means that there will be, of course, an added workload, and the budget submission describes how we will manage that workload, the types of full-time employees and other resources that will be required for us to begin this work.

First of all, I wanted just to note that when we opened the representative's office, at the direction of the Legislative Assembly of British Columbia, on April 1, 2007, we had to estimate what our workload would be, what type of advocacy load we would have. I can say that earlier this year we passed the threshold of having had 10,000 individual advocacy cases over that period of time.

Certainly, when I became the Representative for Children and Youth, it was suggested to me that the number of advocacy cases would be much smaller than it ended up being. Everyone at the time said: "We really can't estimate what it will be. You'll have to find out." It's one of those things where you learn on the job.

As we look at expanding this mandate for 19- to 24-year-olds, of course we've tried to discern: what exactly does that mean, and what is the potential cohort of individuals that might be contacting the office and will require support with services and with a transition, say, to CLBC and so forth?

You'll see in the formal submission that we've projected, based on just the 650 young people that age out of the Ministry of Children and Families' special needs services in a year, that there's a potential cohort over the six years of about 3,250 individuals eligible for advocacy services, sort of, as of September 30. That's probably the narrowest cohort.

In addition to this group — those who are already receiving and will be eligible, as it now stands, for CLBC supports — there are other groups of adolescents that will probably be captured because Community Living B.C. has changed a number of its programs and services to expand its eligibility. Many of these new definitions have not reached the point where citizens have applied and yet been supported.

Some of its eligibility criteria were changed in 2011. They have a new program called the personalized support initiative, partially to address the situation for young adults with fetal alcohol spectrum disorders that previously were not covered by supports under the old definitions and eligibility criteria for CLBC.

As of June 2013 there were about 390 individuals registered in this new program in the 19-to-24 age group with CLBC. We don't know how many of these individuals will be eligible for advocacy services, but it's another cohort that we're looking at and that we've taken into account in preparing and submitting this brief to you.

Although we can describe the cohort of young adults who will become eligible, it's not possible to predict with accuracy how many of them will seek support, nor it is possible to predict at this point the intensity and depth of the advocacy support that might be required.

Certainly, based on our experience to date with advocating for young people as they reach their 19th birth-
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day, in our files that we've had, our active advocacy files, we have had some files where there is intense work year in and year out with reviewing annual contracts around residential services, nursing and home supports for young people as they approach that birthdate of 19 to ensure that they have a seamless transition into adulthood. So it can be that a small number of cases take an intense amount of work, particularly because of the depth of the issues here.

Given our specialized knowledge and experience, we have retooled our advocacy function in anticipation of launching this program on September 30. We now have a specialized young adult stream within the advocacy program, which will serve approximately 16- to 24-year olds. So we will be preparing to provide more specialized support to adolescents and young adults.

We are also responding to the requirement to do public education outreach and ensuring that we have the administrative and other support to be able to respond to the expanded mandate demands.

You will see, just in summary — and I won't go into a lot of detail because I submitted the brief in advance and I'm here to answer any questions — that in support of this mandate I've requested an additional $600,000 in operating funds for 2013-14, based on the first-year costs for nine months. This annualizes up to $694,000 in 2014-2015. In addition, I've requested capital funds of $60,000 for 2013-14. That reduces to $5,000 for 2014-15.

In terms of the budget request and how it impacts on staffing, it breaks down to a number of FTEs: one full-time FTE director, three full-time employee advocates, a half-time intake officer, a full-time research analyst, a half-time communications officer and a half-time administrative support person. We anticipate that we may have to make some adjustments there as we see that roll out, but that's our best prediction, and we've staffed up accordingly.

There are also expected small increases in travel, professional services, information systems and, of course, office and business expenses and building occupancy costs in order to fund the costs associated with the additional staff complement. I think that the details have, as I say, been outlined.

I particularly want to take a moment just to say how much I appreciate the support of Treasury Board in having to deal with this in abeyance of a committee. We were able to sort of come to some terms about the work that might be expected. The submission that you have is pretty much identical to the submission that we made to Treasury Board earlier.

G. Holman: Have you already started hiring staff, then? You've made the FTE…. You've already hired the staff that you've summarized here, and what's been committed thus far by the minister was roughly half of what you're requesting today.

M. Turpel-Lafond: That's right. Given the hiatus in terms of the general election situation, the Minister of Finance and Treasury Board proposed that a portion go ahead and be approved to be able to commence the hiring, because it will be very important for us as of September 30 to be able to respond immediately. So we have done that. We've been able to hire, and we have a complement of FTEs, yes.

G. Holman: What would be the implication, then, if we said no? You'd be laying some staff off, presumably.

M. Turpel-Lafond: Well, the implication would be that we would not be able provide advocacy services to 19- to 24-year-olds.

G. Holman: At all? Sorry. What's at issue here? If $300,000 has already been committed, is essentially what's at issue an additional $300,000?

M. Turpel-Lafond: Well, the responsibility for independent officers, of course, is…. The approval of budgets rests with this committee. We had an interim arrangement. As I understand it — and I appreciate that the Clerk and others can advise more wisely than I can — in those unusual situations, there are some measures, such as we pursued with Treasury Board and the Minister of Finance, to give some stopgap funding.

Obviously, the government made the commitment to move forward in this way and made a financial commitment to see that we're properly resourced. The anticipation was that the full budget submission would come here for your deliberation and approval, because it is the responsibility of this committee to decide on budgets of independent offices of the Legislative Assembly.

M. Elmore: Thanks for the presentation and update in terms of the progress moving forward with the increase to the mandate that was legislated to your office. I just have some questions, if you could walk me through it a little bit more in terms of the specific cohorts.

I know you mentioned it in terms of the existing cohort of children you expect to age out of — is it? — CLBC at 650. So just that. Also, in terms of the inclusion, the expansion, of the personalized supports initiative and the expansion of the eligibility criteria to include FASD. That's often an area that's difficult to address. So those specific numbers and just, yeah, the overall global num-
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bers around those cohorts impacted by this change — the aging out at 19.

M. Turpel-Lafond: Yes. Our best estimate…. We've looked at the number of young people who are transitioning year in and year out from Ministry of Children and Family Development special needs supports through to CLBC.

That is a cohort of young people who have met the existing eligibility criteria, which is fairly restrictive in terms of the number of deviations beneath the norm, in terms of IQ. There is a particular formula in place that is used to consider CLBC eligibility.

There was, prior to 2011, a fairly strong advocacy initiative to expand that. We were finding groups of young people that were not served and that didn't fit the narrow…. So CLBC opened up its eligibility. The door has opened a bit, but the applications have really only been for one year from a small cohort.

We estimate about 3,250 individuals would be eligible as of September 30 for advocacy supports from our office — that's in that age cohort — as well as a smaller number that have been coming in through this new door, which is the PSI door.

So the best estimate we have is that probably close to 3,600 citizens would be eligible. That doesn't mean that we won't hear from a lot of other citizens that want to call us about their 30-year-old son or daughter or relative that has a concern. So we have to be able to respond to a number of questions. We also have to be prepared to respond to cases that CLBC will bring us.

Our experience in doing advocacy more generally in the child welfare system, in the child-serving system, was that a majority of the case advocacy came from staff at the front line of the child-serving system, often employed in programs and services, who had difficulty finding and matching needs and services for children and families.

We're anticipating that the cohort that approaches us…. Of course, it's really important and incumbent on us as a public office to make sure that it is known that these services are available, that we're there and, if we cannot support a citizen, that they also be directed to other offices that might be able to support them because, let's say, they're over-age or what have you. We need to be ready to go with a full complement to be able to do that work.

M. Elmore: Just to follow up. Is there discussion around further expansion of eligibility or recommendations? Also, specifically, I'm concerned about the high incidence of aboriginal children, indigenous children, in care and in the system. Can you just outline some approaches taken to address that?

M. Turpel-Lafond: First of all, with respect to the aboriginal children, there has been a very significant problem with CLBC, which is that, for some reason, the number of aboriginal people that they serve is not representative of the projected number that they should be serving. CLBC has taken the position at different times that they don't have the resources to go out necessarily and serve that population, or that some of them live on reserve, and therefore the province isn't responsible. It should be a federal government responsibility.

There are a range of jurisdictional issues. For some reasons, historical and others, that's a vulnerable population that has not been served.

In the lead-up to September 30, I have had a chance to visit First Nations communities and talk to, primarily, child welfare officials who are managing residential services for children in care that are turning 19 or have recently turned 19 and who would be in the CLBC category but have never applied for CLBC.

What we're seeing, with the role our office has — particularly because we have close relationships with the delegated aboriginal agencies in British Columbia and we do outreach in First Nations communities — is many cases where someone never received services to begin with. They're now turning 19 and for the first time require services.

What that exactly will mean, in terms of service responsibility for CLBC or our advocacy, we're not sure. We expect there is an untapped area where citizens are not having their needs addressed and haven't been considered.

We have incorporated that into our plan specifically. We will probably be working very closely, as a bridge between many First Nations communities and CLBC, to talk about how we can build on some of their existing resources — for instance, foster care resources. So a young person with developmental disabilities who's in care and is turning 19 can maybe stay in their foster home and be funded on reserve as opposed to being suddenly removed from their foster home on reserve and sent into an urban centre, where they don't have any support.

I have had an opportunity to have cases brought to me already, particularly around young people that are homeless, 19 to 20, who have basically come out of the foster care system and haven't made the transition but probably are eligible for services.

The point is very well taken. We're not sure what it's going to mean. We think it's going to mean a lot of work, but important and valuable work, to actually try and connect people up to services that they may not have received for whatever reason — particularly because a lot of the work has not happened in the north and other rural and remote locations. We do have to anticipate some travel, service and discussion in rural and remote locations to better serve the needs of these vulnerable young adults.
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E. Foster: I look at the graph of the number of youth turning 19 — at 631, 652 and so on — from '10-11 to '14-15. I appreciate it's a guesstimate, but what percentage of those people will you anticipate serving?

M. Turpel-Lafond: Well, again I can't give you a very ironclad answer to that. I think we have to be prepared to serve all of them because they may all contact our office. The challenge we face is we've had a very close relationship with the Ministry of Children and Families staff in the special needs area, and they are responsible to support a transition process. When a young person is getting close to the transition age, they help prepare a transition plan with CLBC.

In the last number of years there has been a lot of difficulty with preparing a plan and then turning 19 and losing a resource. I would like to think it will be a small number where there are problematic issues. However, I'm anticipating there's a bigger cohort, because the experience for many families was that there was a sudden disruption at age 19.

The idea of the plan is you're supposed to continue…. Turning 19 doesn't change the situation for a young adult that has a significant developmental disability. It's not a magical birthday, really. It's just that continuity is important. But it did, for a significant period of time, mean a complete regime change and often a change in residence, health care supports and other things, and enormous stress to families.

I don't think we are fully over that period. Because the MCFD staff has had challenges with transitioning many of these young people, I'm anticipating a fairly significant caseload. Now, some of them might be easier to work in. Some of them may have issues that have been festering for some time, which means we're really going to have to look at: do we have appropriate residential services and supports for the young people in the transition?

The degree of advocacy involved can depend…. Sometimes it's just directing people. Sometimes it's actually intense, case-based advocacy that's very time-consuming and requires a great deal of collaborative work.

M. Hunt: As a new MLA and new to this whole provincial thing, ignorance is bliss, so I'm having a delightful time. My question is concerning the staffing side of things. I have no argument with your estimate at three FTEs for advocacy. I'm questioning a director. Can you give me a description? Like, what is this? Why? How is this working when we're dealing…? What I see is sort of an expansion of three more advocates. A director for that, I'm questioning.

M. Turpel-Lafond: Well, the director in the stream will be a director for advocacy services between the ages of 16 and 24. That's how we've put it together. It's unique because what has happened…. For instance, if you look at mental health or even pediatric services, when a young person approaches the age of 16, they will lose a class of health care professionals and get a whole new group of health care professionals.

Sometimes the services are divided by some chronological ages. Serving a child with a very fragile medical need and a developmental disability that's two and serving a child that's 16 are very different. There will be different health professionals, different service streams.

The idea of having a separate director is important because also youth itself is a bit of a different developmental stage. We're dealing with a pretty broad group. The types of protocols that have to be put in place with health authorities, for instance, as opposed to just MCFD…. Protocols with Community Living B.C. require a director to have specific expertise in that area.

It is a leadership position in terms of training, ensuring that the advocacy work is done, but the director also carries an advocacy caseload. So our directors are not managers. We have two — one for the earlier years and one for the 16-and-over years.

If you have 12 advocates with one director, it's just not practical to be able to have the type of supervision that they need. Sixteen to 24 requires a particular type of supervision and knowledge and expertise around the service streams.

We're dealing with health services, including mental health services, residential services, sometimes employment, education and training programs. And it's a unique stream that then branches out, like adult education is different than K-to-12. So the director function requires a dedicated director, in our view, in terms of the performance of that role.

M. Hunt: So if I can rephrase things in a certain way, you're actually taking this opportunity to sort of reorganize how you're doing things, in that sense that you're taking…. Where this particular mandate is 18 to 24, you're saying: "No, actually, let's take it back at 16, and let's reorganize how we're doing things so we can do things in a more efficient manner across the whole spectrum of what we have to deal with."

M. Turpel-Lafond: Yeah, I think that's a fair comment, because many of the policies in this area call for things to happen by the 16th birthday. Let's say you have a young person, a 15-year-old, with significant developmental disabilities, perhaps has Down syndrome, maybe has a fragile medical situation with a chronic heart condition. They require a pretty significant degree of support, but they're turning 16.

At the time of turning 16, the Ministry of Children and Families will begin a transition process to adulthood — new physicians, residential services, changes in school
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placement, etc. They start a planning process. This is an opportunity for us to kind of also adjust to that period. So the officials that we'll be working with across the regions of the ministries and health authorities will be the ones responsible for that age group as well. So it's got a good fit.

We will, of course, like anything, try it for a period of time and see if it's working. If it isn't working, we'll come back to the drawing board and see what we're going to do, but we think it's the best division out of the starting gates to….

We've taken advice from those who work in the community sector with young people with special needs. So we have an advisory committee comprised of parents, families, caregivers, physicians and others who have suggested this would be a good way to organize the work to make sure that we can reach that population.

J. Tegart: As a new MLA, I'm very enthusiastic about the job but quite ignorant also. Your comments about rural and north being underserved — how many positions are actually in the rural and north area?

M. Turpel-Lafond: That's a very good question. As an independent officer of the Legislative Assembly, I think I'm the only one that actually has an office outside of the Lower Mainland and Vancouver Island. I have an office in Prince George.

My advocacy staff travels the entire province. We believe in, you know, not just responding by e-mails or texts but having face-to-face meetings. We cover the province. It's not easy to cover the province from three locations.

One of the challenges with these services is always…. You know, the population is amassed in the Lower Mainland and somewhat on Vancouver Island, but we forget about the needs of citizens everywhere. We have seen that repeatedly with children with special needs and parents and caregivers of children with special needs.

We have had to, leading up to the 19th birthday, really promote meetings in communities with families where they live, particularly because the parent is often the caregiver, as well, of a child, so they can't travel to Vancouver from Quesnel to have a meeting. So this is really significant.

At this point all of these positions are in our current offices. We're not opening a new office in a new location, but we do get out. We positively get out to talk to families, to meet teachers, front-line staff in the child welfare system, front-line staff in the special needs system, health care professionals, health authorities. We get out to say: "What's happening in your community and your area?"

We frequently get called in because a lot of the assessments that are done for these young people happen at, say, Children's Hospital or major medical centres or assessment clinics. The families will come and get an assessment and then go home. What's the follow-up and support?

For some, if you live in the Lower Mainland, it's just a short bus ride or car ride to Children's Hospital, where they have a fantastic quality of care and support. Others are elsewhere, and they don't have that support. So we really have to go out of our way to make sure we reach those communities. First Nations communities, in particular, can be very isolated, and other rural communities, where people can be very isolated.

Also, there are not always residential services. What we found with the whole issue of the transition was…. Someone was turning 19 and suddenly was going to be moved to the Lower Mainland from the north and separated from family. Is that a good transition? Is that a positive transition? Can we look at developing some proper residential services in other communities? While we're dealing with individual advocacy, you can see that some of the systemic issues are already coming to bear.

CLBC, while it has a provincial mandate, really has not done work on First Nations communities, for instance. It just says it couldn't. Well, that doesn't really sit very well for citizens. If you're someone with complex developmental needs, it doesn't really matter if you're black, white, red, green or orange. You're a citizen with significant needs, and we need to really get out there and support those families and understand how we're going to overcome some of these historic barriers.

That has been built into our submission, where we anticipate that type of work requires us to go out. We can't expect families coping with caregiving responsibilities to come to our offices. We have to go to see them and serve them a little differently than perhaps they have been served in the past.

Well, thanks, folks. Mary Ellen, John and Tanis — thank you very much for coming in. We're going to go in camera now and will be getting back to you a.s.a.p. Thanks for coming today.

S. Hamilton: I'll move that the committee recommend that the Office of the Representative for Children and Youth be granted access to additional funds in the amount of $300,000 for operating expenses and $30,000
[ Page 18 ]
for capital expenses for fiscal year 2013-2014 in order to defray the costs incurred in support of the office's expanded mandate resulting from amendments to the Representative for Children and Youth Act.

Furthermore, the committee supports and acknowledges that the 2013-2014 contingency funds in the amount of $300,000 operating and $30,000 capital have already been allocated in support of the expanded mandate, and further, I move that the Chair advise the Minister of Finance of the recommendation of the committee.

Just a quick question. Marv, thanks for asking that question. I always like feet on the ground, and that was one of my questions. My comfort level went way up when I heard the reorganization and that there's going to be more feet on the ground, hopefully, with addressing some of these issues.

I'm always a little apprehensive, also, about administration staff in the sense of maybe not carrying the load. It was nice to hear that the administration staff was carrying some of the caseload. That's always good to hear. Thank you for asking that.

We have the Finance Minister coming in at one, so we'll do a quick recess. He is scheduled to be here at one — so a quick recess until one o'clock for everybody.

D. Ashton (Chair): Good afternoon. Minister, welcome. Thank you very much for coming. We'll turn the floor over to you at this point in time, and we'll take it up from there. Once again, thank you, sir, for coming.

Hon. M. de Jong: Mr. Chairman, members of the committee, thank you. I hope everyone had a good summer.

Here you are about to embark on your consultation tour. I've seen the schedule, and it strikes me that no region of the province has been left out. It will be a tiring schedule, and I know some around the table have been on these exercises before. Good on you for that work.

What I thought I'd do is give you a summary of what I said to the media in the first quarterly report about an hour or an hour and a half ago, setting the context in which you conduct your deliberations and consultations. There is a consultation paper, and you're going to be asking people for their views.

From the government's point of view, there is clearly a bias. That is the expectation that whatever recommendations emerge or become part of a budget in February of next year, they will be accommodated within the context of a balanced budget. The degree that all members of the committee share that view or assign the same measure of importance, I guess, will reveal itself during the deliberations — or how to accomplish that, I guess. There is a variety of different ways. That'll be the magic of the deliberations.

I don't want to take too much of the committee's time. I'll go through, quickly, the presentation, and then you might have some questions about some of what you see. Let's carry right on.

Bottom line here is in the good-news, bad-news department. The good news is that revenues increased by $69 million when you net everything out. That's the good news. The bad news, as it were, is that spending is now projected for the fiscal year…. These, again, are projections. These are updated projections based on data that has been collected and trends that have revealed themselves in the first quarter of the fiscal year.

Based on those trends, based on that data, we believe that there will be increased net revenues of $69 million, but we also think there will be increased spending of $86 million. Most of that, the largest bulk of it, is for direct fire for this year and flood control.

Those are the two areas where we have seen the additional costs. Happily, most of those additional costs are being offset against the revenues, and I'll tell you where those additional revenues, we believe, will be coming from.

So the bottom, bottom line is that the surplus that was forecast at $200 million in February, which became $156 million in June, is now $17 million less than that — $136 million. The forecast surplus, based on the information we have right now, would be $136 million at year-end.

On the revenue side, I'll pick a few of these. As you can see, the biggest positive boost on the taxation revenue…. It's interesting. Personal income tax based on 2012 assessments is actually anticipated to be reduced by $116 million. That is offset by increased corporate income taxes of $165 million.

The other thing that is tracking upwards that contributes to additional taxation revenues is property transfer tax, which we are presently estimating to be $25 million more than was anticipated in the June budget.

Natural resources are up slightly, $23 million, mostly from forestry. The market pricing system, particularly in the Interior — stumpage is moving upwards. Less of the fibre being harvested is 25-cent stumpage wood, and that is contributing to additional revenues from the for-
[ Page 19 ]
estry side, somewhat offset on the natural resource side by lower-than-anticipated coal prices. At the end of the day, it still works out to be positive.

Natural gas is pretty much where we thought it would be. So those extra-cautious projections at this point seem to have been the appropriate thing to do. We'll see where it goes as the weather starts to turn colder. I'm told that the trend is to see increased prices. For the moment, what I can tell you is that the projections that were contained in the budget in June seem to be what is revealing itself right now. So we haven't really changed that up or down.

You may have some more questions. You see there are positive negatives on a $44 billion budget, but the upshot is about $70 million to the good.

Expense changes, spending. I mentioned the bulk of that being statutory spending. There are some new folks here. Statutory spending refers to spending…. Most of the spending government does requires a vote — a vote from the Legislative Assembly. Statutory spending is spending that the government is authorized by statute to embark upon, mostly in emergency circumstances — so fire, flood control — and doesn't require a voted appropriation, per se.

The fire season this year is by no means the worst we've seen. We've had years of $300 million. We budgeted in the neighbourhood…. I thought it was $70 million in the June budget.

In any event, it's anticipated to be $71 million higher than was provided in the budget. The budget…. It's a difficult thing to assess in February. By March, April, May, there's a little bit of a better sense of how dry it's going to be.

What's interesting about this year as compared to last, on the fire side, is that we're not done yet. There are still fires burning and can start. But it's starting to get a little wetter and cooler.

In 2012, 52,000 hectares burned — 1,328 fires. The cost associated with that was much less. This year there were only 12,000 hectares that burned and more fires — 1,700 fires — but it's where they were. They tended to be further south and closer to populated areas, which meant more rapid-attack, aerial firefighting and more cost associated with that, so not the worst year but pretty pricey. It's eating up a big chunk of spending and some additional costs on the flood side as well.

Let's go over to the debt side. Taxpayer-supported debt on, admittedly, a pretty significant portfolio is forecast to be $29 million lower, as you see there. The traditional measure of the debt-to-GDP…. In the February budget it was forecast to be 18.2. In the June update reintroduction of the budget, that ticked up to 18.4. We now think it will be 18.3 — so a pretty modest change, happily in the right direction.

But I do need to tell you that one of the things I've learned in meeting — and I'm going to go to Toronto and New York — the bond-rating agencies is they sure do watch this stuff in terms of their analysis. The fact that it's…. At 18.4 we were getting close to the upper end. Setting the target and hitting the target…. I'm actually happy to see this adjustment in this direction.

The forecast outlook, as you might expect, continues to be pretty cautious. Not a lot of change here. For 2013 the numbers are the same as in June. We get an update not from the full Economic Forecast Council — not from the full gang of 12 or 13 — but a subset. They're holding firm at 1.6, and we're holding firm at 1.4 for 2013.

Just in terms of breaking that down and where that analysis comes from…. I won't try to summarize the pages and pages of analysis. In the positive and not-so-positive department, the positive signs right now are that B.C.'s exports are up nearly 5 percent, which is interesting in light of what's happening in the world.

Our share in China continues to grow relatively significantly. Admittedly, ten years ago we started from a pretty small base.

At a time when China's economic growth is slowing…. For us in North America and Europe, we'd still get pretty cranked up about 8 percent growth rates. By Chinese standards, that represents something of a slowdown. Our share of trade there continues to grow at a healthy rate, so our exports are showing steady growth. The U.S. is helping there, on the housing side — some modest improvement on the housing side. So that all fits into the good-news category.

Housing in B.C. — some positive signs. I mentioned the property transfer tax. In terms of transactional evidence of movement, there were some new housing numbers today. Overall, we are still a little bit below the 20-year average for housing starts.

The dial seems to be moving in the right direction, but I'd still apply the term "fragile." I'm not an economist, but I tend to place a lot of importance on housing numbers as an indication of consumer confidence, of how families are feeling.

Less positive than trade and housing are retail sales, which continue to move up but at a pretty sluggish rate. I'm kind of, of two minds. I think it is fair to say that retail spending is an indication of consumer confidence. On the other hand, having people spending beyond their means and incurring unsustainable debt levels isn't my idea of fiscal nirvana, either at a collective macro or a micro level. But retail spending has tended to be fairly sluggish.

On the employment front I don't think we're where we want to be. I mean, we continue, comparatively speaking, in Canada to perform reasonably well, and in the last two years the overall job numbers are up by the thousands. But I think we have to do better. I think the projection is for employment growth at 0.7 percent. I think the government's objective is to do better than that, and we'll be
[ Page 20 ]
working with the private sector to try and achieve that.

What are the risks? You know, on some of this you'll look at that and go: "Oh, these are always risks." You know, on the third one there, I don't know what's going to happen to the flood season next year or the fire season next year. Those are standard risks that are difficult to assess.

The global market stuff is important. There does seem to be a direct correlation now between how Europe is performing…. I mean, Europe is not our biggest trading partner, but they are China's biggest trading partner. When Europe is in recession, they're not buying as much from China, and China is not buying as much from us.

That cycle and that interrelationship are obviously far more complex than I've just described them, but the essence of the interrelationship is there. You'll have to talk to Henry Kissinger about what the impact of what's going on in the Middle East is going to be. I wouldn't profess to offer a detailed analysis of that, except that it represents instability. That generally reveals itself in a negative way, as opposed to a positive way.

All of those…. The lingering uncertainty in the U.S. The impact of budget sequestration. And you've got a very fragile bounce-back on housing starts. That's helping right now. Will that be sustained? I still think the risk is to the downside. If you are assessing what your forecasts were, is the risk that you've underestimated or overestimated? It's probably the latter. If you've got it wrong, it's more likely that it's coming down than that it's going up. That's my sense, and we have to, I think, be guided by that.

I talked about this other stuff, so you may have some questions about the methodologies.

Property and asset sales have attracted a measure of attention. I had promised the media earlier that we'd keep them apprised. I think, Mike, in the estimates we talked a little bit about this.

Here's where we're at on the portfolio. Five-twelfths of the way through the year, we're at about 42 percent. You can sort of see what's under contract for sale, where the negotiations are. The key, probably, for those that are interested in this, is: I've said that by the end of October the properties that are slated for disposition in this fiscal year will be listed publicly.

So that's the timeline going forward. Jamie, I showed…. You don't have to…. We can give you this: the schools and the properties that have been sold and the ones that are likely to be on the market in the immediate days or weeks ahead.

You'll see the LNG reference, which is up in Kitimat and relates to some of the exciting stuff that's happening there. I mean, the investment in LNG is happening now, although there is a ton of work to be done in terms of finalizing the taxation structure for the operation of the LNG industry in British Columbia, and I hope you will see the construct of what that model looks like by the end of the calendar year. So that'll be a significant thing.

Here you are in terms of the work that you're going to do and the questions that you're going to put.

Here's the last thing I'll offer as the Minister of Finance. We're not out of the woods yet. On a $44 billion budget, to be talking about a surplus that is now $136 million…. That's razor-thin, and it doesn't leave room for any additional spending. You'll hear me say that over and over again in the public domain.

However, having said that, from the point of view of the committee and the questions you're asking, I think it is fair to say that the conversation is or can begin to shift from, "How do we eliminate a deficit?" to, if not this year or probably next year but in the year beyond that: "How do we begin to allocate modest surpluses?" What are people's views on the importance of debt reduction versus programming spending, rewarding the folks that work hard in the public sector who have for some time been confronted by net zeros and cooperative gains?

It's not an opportunity that is at our doorstep today, but I think the committee is entitled to pose questions looking ahead two, three years about where those opportunities might exist.

The schedule, by the way, just in terms of the role we all play in this…. Have we got the schedule on the slide?

That's you folks at the top. The government will be working on the budget through fall, will get the report from you folks on the 15th. Shortly thereafter is the second quarterly report. It's interesting because it's the second quarterly report — data from half the year — but in fact we're a lot more than halfway through the year.

The Economic Forecast Council gathers in December. Mike, last year I made that a public meeting. I invited the media. Bruce came for the afternoon. He may have come for all of it. Very few media did. The Economic Forecast Council is that body that comes and says to the government and the Finance Minister: "Here's what we think is going to happen next year." If you want to come, by all means come.

Hon. M. de Jong: And I won't be…. I thought what was important…. The budget process over the last 20, 25 years has really evolved. I mean, I can tell you this. We get the data, and the economists and the officials within the ministry plug it into their formulas, and they come and say: "These are our projections. Here's what the Forecast Council is saying." They usually add in that prudence. So if the Forecast Council is saying the economy is going to grow by 2 percent, they say 1.8 or 1.7.
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I've never said to them: "Well, can you just tweak this a little bit?" If those are the numbers, those are the numbers, and we operate on that basis. It's actually interesting to see these economists argue amongst themselves a little bit, too. They weren't used to doing it in a public setting. They're sort of more used to sitting in a room with the Finance Minister behind closed doors and having a nice little chat. If you ask the right questions, it's interesting — the differing answers and the range. Depending on whether it's the Bank of Montreal or B.C. Central, you can get some divergent views on what's going to happen in the budget in February.

That's kind of the track we're on, and you folks play a significant and relevant role in all of that as you engage with folks across the province. Really, what I hoped, wanted you to have and will be sure to provide to you through the Chair…. If you need additional information — technical, data-related information — make sure we know, and we'll get it to you.

D. Ashton (Chair): Thank you very much, Minister. We greatly appreciate that update.

Questions to the minister? I know his time is a bit limited today. Any questions, comments?

M. Farnworth (Deputy Chair): Just on the LNG framework agreement. We're still on track. That's going to require legislation. Is it going to have to be the format that's in place by the end of the calendar year like we talked about in estimates? Or when is it going to have to be that the legislation is going to have to be passed?

Hon. M. de Jong: I don't use the term "agreement" because, although we're discussing it with the proponent, I am sort of sensitive to emphasizing that at the end of the day, they'll make their submissions but the government will decide what the taxation regime is going to be, informed by the desire to get a fair return for the citizens and have a competitive structure that doesn't chase away all the proponents.

Our hope, Mike, is that by the end of the calendar year we've got the structure in place and can make that public. It's a ton of work translating that into legislation. That work will begin immediately. I can't tell you for certain whether or not that would form part of the spring legislative session.

You will know, and members of the committee will know, the proponents who are contemplating the investment of literally billions of dollars will want as much certainty as possible. For them, legislation equals, on the taxation front, a measure of certainty — though not absolute certainty, because most of them have been involved in jurisdictions where surprises have revealed themselves after the fact. But I'm hopeful that members of the Legislative Assembly will be able to see the construct or the framework of what the government proposes to be the taxation structure by the end of the calendar year.

G. Holman: Two questions. The layman's version of government's perspective on the Auditor General's view of the budget.

G. Holman: Uh-huh, and I have another question too. But is there a layman's version to that?

Hon. M. de Jong: Well, you're asking the right guy if you want a layman's version of it. I'd regale the committee…. This was in advance of the release of the public accounts, and they got the report that…. I'm going to be a little careful. We have an acting Auditor General who inherited some positions and approaches from his predecessor, so I don't mean this to disparage the acting Auditor General.

The position taken around how to account for the transfers of money from, for example, the federal government as it relates to a large, jointly funded project for which there is an agreement that calls for…. The approach favoured by the comptroller general is that we deal with that in the same way we deal with the auction of natural gas drilling rights. So you may…. Gary, you'll bid on natural gas drilling rights, and you'll bid $50 million. We don't actually book all of that in one year. It's amortized over a period of time.

The comptroller general says that when you are receiving funding from, for example, the federal government for a large capital project, we should do the same thing, because we have ongoing costs associated with the maintenance of that. So we don't book the block amount in its entirety in one year on those transfers.

The Auditor General disagreed, and by applying that different approach in this fiscal year, we went from having an extremely modest surplus to being $1 billion plus to the good, which is an interesting problem to be confronted with as Finance Minister, when your officials say: "You don't have to convince anyone that you're going to balance the budget, because according to the Auditor General, you already have."

As a layperson, it struck me that the argument advanced by the comptroller general was more defensible than the argument advanced by the Auditor General, and I opted for the comptroller general. Not to do so would have…. I mean, you'd have to go back and rework all of the…. Because that's the way we've been doing it.

Both sides of the profession point to the evidence. Most Canadian jurisdictions do it…. Not most. The vast majority of Canadian jurisdictions, I am told, do it the way the comptroller general advocates, but the profes-
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sions have got to work this out, because it's confusing for people. It's a significant difference.

G. Holman: I had a question about ferry tariffs. I realize I'm a little further afield here. I was told this morning by the Greater Victoria Chamber of Commerce that the tariffs on ferries, which were waived for the German vessels because of the size of the investment, may not be waived this time around. I just wondered about your view on that or if you had information on that.

If the tariff stayed in place, that of course would constitute a significant cost advantage for B.C. or Canadian shipbuilders. I just wondered if you have any information on that.

Hon. M. de Jong: I don't. I'm not sure I can enlighten the committee on the specifics of that. It is, though, for those that may appear before the committee, a relevant question to put to people. I'm not trying to avoid the question. The short answer is that I don't think I have information that will enlighten.

You know, this is one of those questions that we as legislators are confronted with. It is the principle that says "We are going to get the best value for the taxpayer" that exists side by side with that other principle that we all probably hold in our hearts: "We want the most work possible for local folks." How do you reconcile those two?

I mean, I've been around here long enough to remember the time when we ordered the ferry — you mentioned the transaction with Germany — and there was a price to be paid in the public domain for that. I can tell you this. B.C. shipbuilders responded by sharpening their pencils, and they were far more competitive the next time because they knew it wasn't a gimme. They knew they were going to have to be competitive, and they were. Happily, they were.

Again, one is entitled to one's view on that. And you've mentioned one of the components of the calculation that goes into it. But I don't have anything really specific right now.

Minister, thank you very much for the update. To you and your staff: thanks for filling us in on the outlook. And travel safe. We know that you're on your way to the east.

Hon. M. de Jong: Okay. Thank you. Well, you as well. You're going to log some miles in some beautiful parts of British Columbia. Good luck.

D. Ashton (Chair): We are going to reconvene, actually, Friday between one and seven, which is the week of UBCM, September 20, in Vancouver for the first public hearing, which is scheduled for six hours.

S. Sourial (Committee Clerk): We have numerous new members on the committee who haven't travelled with the committee before. Essentially, our office looks after all your travel arrangements while we're on the road, but members are responsible for getting themselves to Vancouver on Friday and then to Surrey for Monday morning. Now, some members may opt to go the night before, Sunday night, in which case we'll book hotel rooms. I think our office staff have been in touch with your LAs by now to figure out who's staying Sunday night.

Monday after the hearings, so at five o'clock, some members will opt to go home that night, especially those in the Lower Mainland. Those that aren't, we'll have a minivan to drive people to Port Coquitlam, where we'll spend the night. The same thing there. From there we drive to Chilliwack, and then from Chilliwack we'll fly to Kamloops.

So wherever you see "drive, fly, drive," we will look after those arrangements. We'll have either a minibus or, if it's a shorter distance, sometimes a cab. We'll have cabs to get you from the airport to the hotels, from the hotels to the airport.

Traditionally, what happens is that we have the hearings, and then it takes about an hour for broadcast and recording to take everything down. So while they're taking it down, we're either having lunch or dinner, and then we go out to the airport, get on to the next location. It takes about an hour for Hansard to set up, and we go through the hearings. That's why you see the big gaps between a morning hearing and an afternoon hearing.

We will probably be sending out a more detailed itinerary later this week. Go through it once you receive it. Go through it carefully, and make sure that what matches up with you matches up with what your schedule is. If there are any questions, any concerns, contact me. My phone number will be on the e-mail, or you can contact me by e-mail. Certainly, if you wanted to discuss any aspect of the schedule, also let me know.
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E. Foster: So when the next itinerary comes out, you'll have the hotels and everything? I'm just thinking of, for example, on the Monday night, week 3, we from the Interior will come down. And all it says here is "Surrey." So we'll know where the meetings are, which hotels we're staying in, in Surrey?

S. Sourial (Committee Clerk): Yeah. The detailed itinerary is incredibly detailed. It tells you exactly where you are at what time, who's going to be there, who's joining later. It's incredibly detailed.

D. Ashton (Chair): Got to be on the airplane and the bus. We'll be leaving on time.

Folks, thank you very much. I look forward to this. It's going to be a great opportunity for each and every one of us. So we will see each other on the Friday.

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

Chair:	* Dan Ashton (Penticton BC Liberal)
Deputy Chair:	* Mike Farnworth (Port Coquitlam NDP)
Members:	* Mable Elmore (Vancouver-Kensington NDP)
	* Eric Foster (Vernon-Monashee BC Liberal)
	* Scott Hamilton (Delta North BC Liberal)
	* Gary Holman (Saanich North and the Islands NDP)
	* Marvin Hunt (Surrey-Panorama BC Liberal)
	Lana Popham (Saanich South NDP)
	* Jackie Tegart (Fraser-Nicola BC Liberal)
	* John Yap (Richmond-Steveston BC Liberal)
	* denotes member present
Clerks:	Kate Ryan-Lloyd
	Susan Sourial
Committee Staff:	Byron Plant (Committee Research Analyst)

Witnesses:	Anton Boegman (Elections B.C.)
	Hon. Michael de Jong, QC (Minister of Finance)
	John Greschner (Deputy Representative for Children and Youth)
	Tanis McNally-Dawes (Office of the Representative for Children and Youth)
	Mary Ellen Turpel-Lafond (Representative for Children and Youth)
	M. Nola Western (Elections B.C.)

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES