Finance and Government Services — Issue No. 40 — Tuesday, September 30, 2014 (HTML)

Oak/Teak Banquet Room, Ramada Kelowna Hotel and Conference Centre
2170 Harvey Avenue, Kelowna, B.C.

Present: Dan Ashton, MLA (Chair); Carole James, MLA (Deputy Chair); Eric Foster, MLA; Simon Gibson, MLA; Wm. Scott Hamilton, MLA; George Heyman, MLA; Gary Holman, MLA; Jane Jae Kyung Shin, 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	965
C. Daniell
C. Grisch
H. Plante
G. Mandziuk
J. Gabriel
D. Nicholas
F. Steele
G. Lucas
J. Gordon
J. Oostenbrink
D. Groffen
K. Carmichael
M. Daley
R. Austin
J. Lar-Son
J. Skinner
T. Holler
K. Pullen
V. Connolly
B. Graham

D. Ashton (Chair): Good morning, everyone. I see everybody around the table again, all bright-eyed and bushy-tailed. My name is Dan Ashton. I'm the MLA for Penticton and Chair of this committee, the Select Standing Committee on Finance and Government Services.

We're an all-party parliamentary committee of the Legislative Assembly, with a mandate to hold provincewide public consultations on the next provincial budget. The consultations are based on the budget consultation paper that is released by the Minister of Finance. Following the consultations, the committee will release a report with recommendations for Budget 2015 no later than November 15, 2014.

This year we are holding public hearings in 16 — because we had to miss one yesterday, unfortunately — communities across the province. A video conference session is also scheduled for October 8 to hear from three additional communities plus, hopefully, the one that we were unable to attend yesterday — Dawson Creek, Quesnel, Smithers and, hopefully, Castlegar. This week we're in Cranbrook, Kelowna, Kamloops, Williams Lake, Campbell River and Courtenay.

In addition to the hearings, the committee is accepting written, audio and video submissions and responses to a short on-line survey. You can make a submission or learn more by visiting our webpage at www.leg.bc.ca/budgetconsultations. You can also follow us on Facebook and on Twitter.

We invite all British Columbians to take the time to make a submission and to participate in this important process. All public input is carefully considered as part of the committee's final report to the Legislative Assembly. The deadline for submissions is Friday, October 17.

Today's meeting will consist of presentations from registered witnesses. Each presenter will have ten minutes to speak, followed by five minutes for questions from the committee. Time permitting, we'll also have an open-mike period at the end of the meeting. Five minutes are allotted for each presenter. If you wish to speak, please register at the information table at the back.

Today's meeting is being recorded and transcribed by Hansard Services. A complete transcript of the proceedings will be posted to the committee's website. All of the meetings are also broadcast live via audio on our website.

J. Shin: Hello, good morning. My name is Jane Shin. I'm the MLA for Burnaby-Lougheed, and I'm the deputy spokesperson for multiculturalism, immigration and trade.

G. Holman: Good morning, everyone. Gary Holman, MLA, Saanich North and the Islands, spokesperson for democratic reform.

G. Heyman: Good morning. George Heyman, MLA for Vancouver-Fairview and spokesperson for TransLink, technology and green economy.

C. James (Deputy Chair): Good morning. Carole James, MLA for Victoria–Beacon Hill and Finance critic.

S. Hamilton: The best for last — good morning. I'm Scott Hamilton, MLA for Delta North.

D. Ashton (Chair): We're about to have our first debate this morning. [Laughter.]

Also assisting the committee are Susan Sourial and Sarah Griffiths from the parliamentary committees office. Hansard Services is also here recording the proceedings, with Jean Medland and Ian Battle over there.

Presenters, BCSPCA — Geoff and Craig. Welcome. Thank you very much for coming. Once again, ten minutes for your presentation. I'll give you a two-minute warning, if it looks like you're going to get close to that. We've allotted five minutes for questions. Gentlemen, once again, thank you for coming. The floor is yours.

C. Daniell: Mr. Chairman and members of the standing committee, thank you for the opportunity to address you this morning.

As you know, my name is Craig Daniell. I'm the chief executive officer of the British Columbia Society for the Prevention of Cruelty to Animals, the BCSPCA. With me this morning is Geoff Urton, who's our manager of stakeholder relations, and also Romany Runnalls, who is a Kelowna resident and a member of our volunteer board of directors.

The BCSPCA is unlike most charitable organizations in our province. It was actually created by a provincial statute almost 120 years ago, and it's the only organization in the province with a mandate to enforce provincial and federal legislation relating to the prevention of cruelty to animals.

With an annual operating budget of $28 million — of which $2.8 million, or 10 percent, is specifically dedicated to animal cruelty enforcement — the BCSPCA must rely on public goodwill and support to carry out its legislated mandate.
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The BCSPCA receives no government funding in conducting this work and is one of the very few provincial SPCAs that does not receive financial support from its provincial government. Many people are actually surprised to learn that the BCSPCA does not receive such funding.

For completeness, I should just mention that the BCSPCA is also ineligible to receive gaming funding.

Our organization recognizes the inherent difficulty that any government would face in providing operating funding for the BCSPCA for its enforcement activities, particularly at a time when there is such significant upward pressure in areas such as health care and education. With that in mind, we have consciously made a decision not to seek provincial funding for our ongoing operational needs but, rather, to formally seek support for urgently needed capital requirements.

Our organization operates 40 facilities throughout British Columbia. While some of these facilities are new, the majority are more than 20 years old, and some are more than 50 years old. Many of these older facilities fail to meet the human and animal health needs expected of the BCSPCA and simply must be replaced in short order.

Recently our board of directors approved a facilities development and services plan that could see our organization replace or enhance a total of ten of our oldest and busiest facilities across the province over the next eight years. The facilities in question include Nanaimo, the West Kootenays, Surrey, Vancouver, Kelowna, Kamloops, Prince George, the Peace region, the Fraser Valley and Shuswap.

The cost to replace or improve these facilities is projected at $50.4 million. For its part, the BCSPCA is fully committed to raising half of this capital funding itself, whether through capital campaigns, reserves and/or borrowing if necessary. Raising $25 million will not be an easy undertaking, but we believe it is possible to do so without compromising our ongoing annual operating needs, which include conducting nearly 8,000 animal cruelty investigations each year and providing care for more than 41,000 injured, abused and homeless animals across the province.

At the same time, we're seeking support and a commitment from the provincial government for the remaining $25.2 million that will be needed to complete the project. Recognizing that our plan will take place over an eight-year period, we are proposing that the government provide the said funding in three distinct phases. We recognize that an ask of $25 million is significant. However, it's the minimum that is required in order for the BCSPCA to successfully complete this desperately needed plan.

Without provincial government funding, our organization would simply not be in a position to move forward with all of these projects, and the society will be faced with making some painful decisions in how we provide services in some communities.

I certainly don't say this lightly, and I don't mean for it to sound like a threat, but the simple truth is that we do not and we will not have the resources to complete a $50 million capital build whilst also maintaining current levels of operating services at the same time.

In truth, some of our facilities simply cannot and will not last another two to three years. This is particularly the case in some of our smaller, rural communities that are faced with large animal numbers yet have smaller human populations that can support these services.

This request for capital funding will not just benefit animals. We are convinced that it will also provide significant benefits to the communities in which we operate. Some of those benefits to people include job creation. Based on recent BCSPCA construction projects, we project that 140 temporary construction jobs will be created during the construction of these ten facilities, and 31 additional permanent animal-related positions will be created once these facilities have been completed.

The BCSPCA is already one of the largest charitable employers in the province, with almost 460 full-time and part-time employees.

Secondly, an increased ability for the BCSPCA to support individuals fleeing domestic violence by offering compassionate boarding to the animals of women fleeing abuse. Studies in both Calgary and Ontario demonstrate that more than 50 percent of women delay fleeing a domestic violence situation out of a fear for what will happen to the family pet. Our new facilities can help support that need and play an important role in helping women, children and animals escape violent homes.

Thirdly, the ability to provide temporary housing and equipment for the owners of companion and large animals during emergencies, such as fires, floods, earthquakes and oil spills. Increasingly, emergency responders are recognizing the importance of including animals in all emergency plans. These facilities can help meet this need.

Fourthly, an opportunity to expand our very successful youth education programs, which focus on empathy development, which is critical to preventing future acts of animal cruelty, and it's also linked to the prevention of violent acts between humans, such as bullying and domestic abuse.

There will also be opportunities to expand veterinary services to the pets of lower-income residents in communities across the province. We'll be able to also expand our pet overpopulation programs across British Columbia, which really does provide the very best opportunity to lower the cost of administering animal control programs for local governments.

There will also be the ability to house large animals seized as the result of a cruelty investigation, something
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that's just not currently available, and finally, the ability to temporarily house controlled alien species for provincial conservation officers — facilities that simply do not currently exist across the province.

The BCSPCA has an excellent track record of ensuring that construction projects are completed on time and on budget. Recent facilities in Penticton, Maple Ridge, Powell River, Williams Lake and right here in Kelowna represent excellent examples of this, but they really do also demonstrate the community benefit that arises when the SPCA is in the local community.

In closing, I'd like to share with you some results of a recent independent survey conducted for the BCSPCA by Malatest and Associates, a Victoria-based research and polling firm. That research found that the vast majority of British Columbians — 89.1 percent — believe that the BCSPCA should receive some funding support from the provincial government. Less than 5 percent believe that the society should receive no direct funding support, and nearly 40 percent of British Columbians felt that the government should cover at least 50 percent of the BCSPCA's total annual costs.

The study also found that B.C. residents also strongly supported provincial government funding for a range of specific activities. For example, more than 90 percent of British Columbians supported B.C. provincial government funding for activities related to enforcement, capital costs for shelters and the operation of such shelters.

We thank you for the opportunity, and we'd be happy to answer any questions from the committee.

G. Heyman: Thank you for the presentation. I'm wondering if you can point to any examples, either at an earlier time in British Columbia or in other provinces in Canada, where government has contributed to a portion of capital costs.

The government of Ontario has provided capital funding for the Ontario SPCA. They have provided funding both for operational needs as well as capital requirements, so that would be one particular example.

In the past we used to be eligible for gaming funding, and when there was also a capital program associated with the gaming program itself, we also received funding from capital gaming for our facility in Penticton, for instance. Those would be the two that I can just think of, off the bat.

G. Heyman: If more occur to you in the future, I think there's an October 17 deadline for additional material to be sent to the committee.

S. Gibson: I'm hearing three themes to your presentation. One is the traditional, the domestic animals — the dogs and cats. Then there are the farm animals, and then, finally, those wild animals that come into your care.

In Abbotsford, for example, there's a lady that has…. Her whole role in life is collecting wild animals. I'm wondering: is this going to…? My feeling is it could complicate…. It's my personal comment. I'd like you to respond. If you go too wide, you end up blurring…. Your mandate was traditionally dogs and cats, domestic animals, and now you're going to wildlife and other things.

There are agencies around the province, people that have that as their kind of vision of life. I'm just wondering if you're going to complicate a little bit by blurring your mandate too much, to the point where the public is not going to really understand your role. I'm just wondering about that.

C. Daniell: Thank you very much for your question. In response to that, our mission as an organization is to protect and enhance the quality of life for domestic, farm and wild animals in British Columbia. We certainly do work…. With respect to wildlife, we operate a wildlife rehabilitation centre in Metchosin on Vancouver Island. It's the only wildlife centre we do operate. There are other wildlife agencies, as you correctly point out, across the province who do some amazing work with rehabilitating native wildlife.

The area that I think is really lacking relates to the controlled alien species. Those would be exotic animals that come in — either are bred here or brought into the province. It's now no longer possible to do that. But there are a lot of controlled alien species in the province. If those animals are seized by the provincial conservation officers, there are no facilities to accommodate those particular animals.

The wildlife centres have a licence to rehabilitate native species, not the controlled alien species. That's one of the gaps that is missing.

G. Holman: Thanks very much for your presentation. I have visited the facility in Metchosin, and it's just amazing, the work they do. Thank you for the work you do and for doing it for free.

I was on the committee last year, and I'm pretty sure that you presented. But I'm coming to understand the linkages that the SPCA has and the work you have with a whole number of other issues that you wouldn't normally think are connected — for example, domestic violence.

You seem to think, or your strategy appears to be, that government is constrained in terms of its operating budget. So you've got a better chance to go for capital funding, yet you provide a service to enforce provincial regulations. I just wondered if you could talk about that a little bit.
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Then on the capital side, you made a suggestion about seeking federal funding. Do you know offhand whether you qualify, for example, for the current round of infrastructure funding, like Building Canada? Have you investigated that?

C. Daniell: Thank you for those questions. In response to the two questions, we have looked into the federal funding. We're not eligible under the new infrastructure programs. Then the second piece was…. Sorry, I'm missing the first piece.

C. Daniell: That's a technical decision that we've taken, given the fact that governments of whatever stripe face some real challenges. We think this is the best solution to the problem from the BCSPCA's perspective. This is a critical need for us, and we hope it's something that's workable for governments as well.

C. James (Deputy Chair): Just following up on that same question or the same area, I appreciate the approach you've taken in trying to see if there is another opportunity to get funding. I would argue the same thing. I think you're talking about mandated responsibilities. It doesn't seem right that you're mandated and not receiving funding.

I wondered whether you had had any discussion with government since 2011, when the rules changed around gaming funding, about accessing those funds or about any opportunities through that route, recognizing that you're coming forward for capital right now. But I wonder what conversations have taken place since that time.

C. Daniell: Yes, we have had some discussions with staff in both the Ministry of Agriculture, where we have an indirect reporting relationship, as well as with the gaming office. The reality for us is that unfortunately, we would have to change our constitution and bylaws to become eligible. It's really not an option for us. Unfortunately, at this stage we're ineligible for gaming funding.

D. Ashton (Chair): Craig, Geoff, thank you very much for your presentation. Don't forget October 17 for any additional information you may want to put forward.

Up next we have the Okanagan College Students Union. I have Chelsea and Brianne. Welcome, ladies. Thank you very much for coming today. So ten minutes for the presentation — I'll give you a two-minute warning — and up to five minutes for questions.

C. Grisch: My name is Chelsea Grisch. I'm the services director of the Okanagan College Students Union. We are local 53 of the Canadian Federation of Students–British Columbia. Our local represents over 5,000 students across the entire Okanagan Valley, and our provincial organization represents students from 14 public post-secondary institutions from every region in the province.

The OCSU was formed in order to organize students on a democratic, cooperative basis for advancing student interests and to achieve a post-secondary education system which is of consistently high quality and publicly funded — an accessible education that is affordable for all prospective students regardless of family income.

Our province needs to remain a strong, viable place for citizens to stay and raise their families. We also need skilled citizens who can meet the demands in all sectors of the economy, and funding the public post-secondary education system is the most viable and sustainable means to achieve this end.

Over the years we've seen a structural shift in the way our institutions are funded. Students' share of the costs of post-secondary education has increased, while core funding to our institutions and availability of financial assistance have decreased. As a result, our members at Okanagan College have directed our organization to prioritize seeking government measures to reduce student debt, increase access and restore core funding to post-secondary institutions.

We urge you to consider the following priorities for improving accessibility and quality of higher education in British Columbia: (1) a reduction of tuition fees to 2001 levels, adjusted for inflation and (2) the restoration of operating funding to universities and college — again, adjusted to 2001 levels, accounting for inflation.

Tuition fees represent the biggest proportion of a student's cost of education and thus the most significant barrier. In British Columbia tuition fees have steadily increased over the last decade, from $1,727 in 1990 to an average of $5,029 this year. This translates to a 300 percent increase over the course of one generation. This shift in policy means that students today are being asked to pay a much greater share of the cost of a college education than ever before, which has greatly reduced or limited access.

You've heard us present on this topic before over the past decade, and we have not yet seen the investment into students that is greatly needed. Today I'm going to talk to you about how you can satisfactorily meet your own goals while simultaneously addressing our needs. We at the OCSU do not see our goals as adversarial to your own.

We know that a shortage of skilled labour is fast approaching, and you need to do what you need to do to ensure that this province does not suffer due to government inaction. The government must provide stable, predictable and adequate funding to enable students in post-secondary institutions to prepare citizens for the looming skills shortage and meet the labour needs of British Columbia. The budget needs to reflect this.
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The B.C. skills-for-jobs blueprint outlined that by 2022 we will be looking at one million job openings in all sectors, and a significant challenge presents itself in filling these job openings. The need for skilled workers can only be addressed by providing a system of affordable, accessible post-secondary education. The message from the Premier is one that looks for resourcefulness, innovation and a common purpose. An investment in post-secondary education is the most viable strategy to meet all these criteria.

Allocating funding into post-secondary education is an investment, not a cost. For every dollar you invest into post-secondary education, through a multiplier effect, $1.60 is reinvested from the student into the economy. The problem we are presenting to you is that when students are putting themselves through post-secondary education, they are forced to take on very large amounts of debt.

These are a barrier to participation for lower-income families at a time when most new jobs require some post-secondary education. Lower-income families, lower-income people — this is the demographic that is most underutilized in the workforce and under-represented among the academic elite. However, we need better access not just for those people — low-income families, aboriginal people and other marginalized groups — but for British Columbians in general.

The skills-for-jobs blueprint acknowledges that education is unaffordable in B.C. and outlines an investment in student loan forgiveness and loan reduction programs to help students repay debt faster and contribute more to society.

We suggest that instead of re-establishing the back-end grants system, why not implement an up-front grant system which allows a greater number of students to access post-secondary education and prevents them from ever taking on the burden of debt in the first place? Debt is a powerful disincentive for education.

One challenge to student success is that both students and institutions are underfunded. This limits access and increases barriers, especially for a budget that espouses to eradicate barriers instead of imposing them.

Currently post-secondary institutions are not funded for inflationary increases, which are very a real cost year after year. The lack of inflationary funding is, more than anything, to the detriment of students, who are forced to pay more as costs continue to rise. Institutions have to pay wages, perform maintenance and property management at the inflationary rates, which diverts funds that would otherwise be benefitting students. Institutions cannot adequately plan and strategically position themselves to help achieve maximum student success while the government does not address this systemic underfunding issue.

Furthermore, students cannot succeed in an environment where they are being forced to work more and study less just to attend school. The answer is simple: fund students to 2001 levels, adjusted for inflation, and provide adequate funding for post-secondary institutions.

When investments are made into post-secondary education, the net benefit is immense. As an example of positive funding, we have the great fortune of having a world-class learning facility on our Penticton campus, the Jim Pattison Centre of Excellence in Sustainable Building Technologies and Renewable Energy Conservation, better known as the centre of excellence. This investment has paid off immensely. We ourselves donated to this project because we strongly believe it offered value not only for our students but also for our community.

Since then the number of students studying on the Penticton campus has risen, and the community involvement and interaction on campus has increased. However, the success of this investment can only be maximized if students can actually afford to enrol in the programming offered. There's no sense in having a great building if there are no students in it.

We urge you to see, again, post-secondary education as an investment, not a cost.

We would also like to note that there are under-represented groups within the post-secondary education system. The blueprint highlights the need to engage aboriginal students, but we have also identified two other under-represented groups — women in trades and international students.

Aboriginal students are the youngest and fastest-growing population group within B.C.; however, they are facing enormous barriers to access. Many aboriginal students come from low-income families — we've already addressed the issues facing them — and often are the first in their family to attend a post-secondary institution.

We're fortunate every year to take part in the powwow on our Kelowna campus, the cultural event. It's huge. It's a wonderful opportunity for both the aboriginal and campus communities to come together and celebrate aboriginal cultural identity within post-secondary education.

The event includes First Nations singing, drumming, dancing, aboriginal artwork, traditional regalia and traditional food such as bannock and deer stew. Hundreds of community members come out and show their support for the powwow, and it's a wonderful reminder of how important it is to celebrate this growing segment of our student body and our provincial population and to celebrate diversity.

Coming from that, Tina Miller, who is a friend of mine, is a wonderful success story of a student from the Nisga'a Nation who is pursuing business administration. Tina is heavily involved in our Aboriginal Student Centre as a peer mentor, where she helps put on potlucks, and she facilitated a variety of social movements on campus, such as Idle No More and the forum on missing and murdered
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aboriginal women. She's a shining example of a student who faced great barriers to post-secondary and is now flourishing and helping to provide an enriched experience for her peers.

We mentioned women in trades. Another area we're happy to highlight is the women-in-trades training initiative, which is a great and accessible program at Okanagan College funded by the ITA, meant as a way to help underemployed and unemployed women get into the trades sector through a training program. There are dozens of success stories from this program, and it is helping to meet the demands of skilled labour shortages and reducing barriers to access.

Shy Pollon is an example of a success in this program. She's a 27-year-old single mother who left school at 14 to work in construction, where she was performing menial labour with little opportunity for advancement when she wasn't actually actively being laid off.

When Shy experienced a fire in her home, she was really uncertain about her future. When she realized she was eligible, she enrolled in the women-in-trades program, finishing at the top of her class in the heavy-duty commercial transport mechanic program. Now she's providing a much better life for her daughter. She's a spokesperson for the advantages of the program.

This initiative is one that we would like to see widely replicated, and we'd like to see similar stepping stones programs such as this one, because they really deserve further investment and would help meet the goals outlined in the blueprint.

The next group facing daunting barriers to education is international students. Unlike domestic students, international students' fees are not capped at 2 percent a year. Tuition costs are unpredictable for these students, and thus budgeting preparation for the upcoming school year really is a challenge.

Tuition fees rose by 8 percent at our institution last year, and these students are already paying three to four times what domestic students are paying for exactly the same courses. This unregulated fee structure prevents many international students from making B.C. their first choice for education and eventual residence.

We know the Canadian population is not growing fast enough to meet the needs of labour market shortages, and skilled immigrants have been identified as a valuable asset to B.C.'s prosperity, so B.C. is actually pricing itself out of a really valuable market.

One example we have of an international student — again someone I know — is Mohammed, who came from Bangladesh intending to become a Canadian citizen and be a strong contributing member of society. He's had to reduce the number of courses he's been taking, as his tuition fees keep rising beyond what his family can afford. He's capped at working 20 hours a week, as international students are, lest they face deportation. And international students are not eligible for loans or bursaries, so it's incredibly difficult for them to make ends meet.

We want to have more stories like Tina and Shy's, fewer like Mohammed's. Students — and I certainly can speak to this myself — can't afford the incredible expense of post-secondary education. We often hear that student loans are the answer, but the system of student loans with very high interest rates is not a long-term solution. It only compounds the problem of barriers to access and presents more of them.

Increasing access to post-secondary education is our recommendation for you today. The solution is to increase funding for students and to increase funding to post-secondary institutions to offer programming in areas that meet labour market demands and create opportunities for success in our province. We can be a strong, dynamic, thriving province, but only if we can make education an investment and not a cost.

Okay, ladies. Thank you very much for your presentation. Just one quick question: do you always talk that fast?

S. Hamilton: You said a lot in a very short period of time. It's pretty tough to bring it all in. But while people talk in this venue, sometimes I have a chance to go googling here and there. Tell me about Brilliant Dam Consulting.

C. Grisch: It's award-winning. Oh no, that was…. When I was a business student, we had a competition, and my team was called Brilliant Dam Consulting. There's a Brilliant dam by Castlegar.

D. Ashton (Chair): The committee is usually quite active checking on…. That's what they like to do. They're not doing Facebook.

C. Grisch: I'd like to state for posterity's sake that that was "dam" without an "n."

Greater Westside Board of Trade, South Okanagan Chamber of Commerce — we have Holly Plante and
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Glenn Mandziuk. Welcome. Nice to see you.

Thank you very much for coming in today. We have ten minutes for the presentation, five minutes for questions. I'll give you a two-minute warning if it looks like you're going to go into that ten, okay?

H. Plante: We're here today to talk about moving forward on the solid business case for the South Okanagan–Similkameen national park. Again, I have myself here. I'm the past president of the South Okanagan Chamber of Commerce, I'm on the board of directors for the Greater Westside Board of Trade. I am joined today by Glenn Mandziuk from the Thompson Okanagan Tourism Association.

I'll go through and just give us an overview. This here that I'm speaking to is the resolution that was actually moved forward at the B.C. chamber AGM in the spring. We'll start by making mention that national parks represent important economic drivers, and this is particularly true for B.C. B.C. has the opportunity to be the beneficiary of Canada's next national park, which has been proposed for the South Okanagan–Lower Similkameen.

This proposed national park maintains the continued support of the government of Canada, but to proceed requires the support of the government of B.C. Support for this national park continues to grow, shown by the list of support which we will include in a package for you all. As such, it is our recommendation that the provincial government work with the federal government to ensure that the proposed national park serves the economic interests of British Columbians.

A little bit more background. Canada's national, provincial and territorial parks represent a vital conservation in our natural heritage. They are a special contributor to our sense of identity and place and serve crucial ecological purposes. These parks also play an important part in B.C.'s economy. National parks have been shown to be a substantial and recurring source of economic stimulus, particularly through tourism.

Back in 2003 a joint federal and provincial steering committee began an in-depth assessment of the feasibility of establishing this national park reserve. The steering committee's report, which is available on line, can provide a link to that. It was submitted to ministerial approval in January of 2011. It confirmed that the proposed national park is feasible and recommended approval of a proposed park reserve boundary at the conceptual level.

The proposed national park would consist of 280 square hectares that contain Canada's only pocket desert, our home to 56 federally listed species at risk. And 11 percent of these species are in that area in Canada. They serve as a major migration stop for birds and include shrub grasslands and ponderosa grasslands found in no other continuation of U.S. wildlands south of the border, for a protected area of international significance.

Last spring Glenn and I put together a delegation — so myself; Glenn; Jim Wyse with the B.C. Wine Institute; Stu Wells, mayor, and chair of the Okanagan Basin Water Board, regional district of Okanagan-Similkameen; and Mel Woolley, representing Chief Kruger with the Penticton Indian Band and also the Okanagan Nation Alliance. We met with Minister Polak in Vancouver to present our case. Our case was very well received by Minister Polak, and she invited us to return this fall to elaborate on our goals for the region.

To recap, some of the benefits of the proposed national park for B.C. include increased employment, stimulus for land development, business starts and expansions, a boost in domestic and international tourism, opportunities for First Nations economic participation and economic diversification.

Published research on the Parks Canada website indicates the potential economics of the proposed national park. There are significant financial benefits for the province of B.C. Specifically, if the national park were to meet just the average economic performance of B.C.'s seven existing national parks, it would support 571 full-time-equivalent jobs and would generate annually $37.1 million in GDP, $25.62 million in annual labour income and $49 million in visitor spending. Glenn can elaborate on some of this and the impacts to tourism right away as well.

Most importantly, there are no costs to the provincial government moving forward with a proposed national park, since the government of Canada alone bears the cost of establishing and maintaining national parks. The existing minimal revenues to the province generated by this land base, which is approximately $40,000 per year, would be offset by the elimination of costs related to maintaining it and, again, would be absorbed federally.

Also, the provincial government can negotiate for the book costs of any lands that are transferred to the federal government, as it did with the southern Gulf Islands National Park, for example.

The province and government of Canada formally agreed in 2002 that there would be no negative impact on businesses proposed in this area. As a result, ranching, cattle grazing and helicopter training can continue to operate in the park. This is important to all of us as these are also important economic drivers in our region.

Since the federal-provincial steering committee's report was submitted, the federal government has awaited for the provincial government to follow the recommendation of the steering committee to take the next steps, bringing forward the economic benefits of the proposed national park to British Columbians. As mentioned above, the momentum of support for the proposed park
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continues to grow, as do our efforts to reach out to key influencers and decision-makers in our province to take another serious look at this opportunity.

In May of 2014 — I alluded to our resolution — the Kelowna Chamber of Commerce was supported by numerous other local chambers throughout our region to present a national park resolution at the AGM. The resolution, recommending that the provincial government sign an agreement with the government of Canada to continue formal discussions regarding the South Okanagan-Similkameen national park, was passed by the B.C. Chamber of Commerce.

A similar resolution was passed September 25, so just a week ago, at the Union of B.C. Municipalities. These resolutions, along with resolutions from the B.C. Wine Institute, the Thompson Okanagan Tourism Association and the Okanagan Nation Alliance show clear and undeniable provincewide evidence for support and a solid case for economic development opportunities that will be beneficial provincially, regionally and locally.

G. Mandziuk: Thank you very much for this opportunity to present to the committee.

I've had the great fortune of working in this industry in this region for over 20 years and to represent a region of this size and magnitude. We have 3,600 tourism operators in this region that employ over 15,000 people and generate $1.7 billion of revenue. It's amazing, the significant growth that has happened over the last ten years. We've seen $3 billion of new infrastructure from both the public and private sector in tourism in the Thompson-Okanagan over the last ten years.

That produced some of the greatest growth in terms of revenue than is ever seen in any other region in the province of B.C. What we haven't seen happen in that whole time is a change in the fundamental problem of the industry, your number one industry for this region, and that is seasonality. Eighty percent of revenue is generated in three to four months for the Thompson-Okanagan tourism industry. It's not a sustainable situation. We could have seen the same graph in 1970 as we can see just this last year.

The biggest problem this area has is its lack of opportunity around international recognition. We hear that time and time again. In the north, Wells Grey Park is being looked at for UNESCO World Heritage Site status, a real great opportunity because the number one reason international travellers come to Canada is to see national parks, wildlife in their natural habitat and UNESCO World Heritage Sites.

There's a great opportunity here that's been presented over this time to see a national park within our region. There's this opportunity here that's been presented, and one of the things that was established just recently, over a year and a half ago, was the very first regional tourism strategy in British Columbia's history. This strategy was endorsed by every jurisdiction in the Thompson-Okanagan. Every jurisdiction in the Thompson-Okanagan formally endorsed this strategy as the way forward.

One of the key messages of the strategy was to support the designation of special landscapes, including two UNESCO designations for Wells Grey country, and advocate for due diligence and transparency in assessing the impact of a Parks Canada proposal for the South Okanagan–Lower Similkameen national park reserve.

The industry has said very clearly they would like to see discussion occur and continue to occur. There's just a lot of unfinished discussion. I guess what the industry is saying is: "You know, we don't know what that conclusion will look like. We don't know if there is a national park at the end of that process. We're asking that the government consider to re-establish that process and to begin discussing it further."

There are a lot of people on both sides of the equation that feel their voices have not been heard. Obviously, from what Holly has just presented, there's a list of organizations that formally endorse the idea that we need to get back to the table and discuss the topic.

C. James (Deputy Chair): Thank you for your presentation. And thank you for the work that's been done over the years. I know in the beginning, when the discussion started around the park, there were a lot of concerns from ranchers and first nations. I've certainly seen a shift and much more coming together of all of the communities around the issue. So congratulations on that hard work.

Two quick questions. One is: was there any kind of follow-up given to you by the minister in May, when you had your meeting, around timelines or opportunities to be able to get this discussion going? The second one is: have you had any indication from the federal government about their timelines? I'm certain there are other jurisdictions who'd be happy to scoop money for a national park in the hopes that B.C. might drag our feet. So I wondered if you had any details.

H. Plante: We have been in discussion again with Minister Polak's office to set up our second part of the meeting. What we did is…. We spent the summer going through some of our goals, because we wanted to be able to sit down and go through and kind of go into specifics. I went back on behalf of the chamber. Glenn went back on behalf of TOTA. We compiled the list. We're waiting to get that next appointment, but she did seem very keen
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on hearing from us on some of our goals for our region.

And to answer the second part, from what I know…. I'd have to double-check on timelines specifically, but from what I know, the federal government is still very keen on speaking about this topic.

G. Heyman: Thank you for the presentation. In both your presentation and one received earlier in the process it's clear, as Carole said, that much has been done to address significant sources of opposition. But I've heard anecdotally that some opposition still exists, and you referenced it. I'm wondering if it's a particular segment within the communities or more random than that and if you can sort of identify any issues that are clearly still in play.

H. Plante: To my knowledge, one of the issues with the helicopter company HNZ, for example…. They have sort of opened up to more of the discussions because of the new proposal of being able to have a grandfather clause for ranching, cattle grazing and for the helicopter company to continue with their tenures and transfer that to the federal government to secure it for even a longer duration. There are some benefits with that.

I think that there are a few of those parties — I can't name specifics — that are more open to that part of the process. Whereas initially, with what was proposed, it was a larger land mass. There were more grey areas. So I think you're absolutely right. They have talked to sort of a more specific area and really opened up to the fact that this is a negotiation process, but the only way to get there to the negotiations is to, again, have the federal and provincial government speaking and then advocating on behalf of the different businesses and groups.

It's refreshing to see a group like yours advocating for protection of special places. I think it speaks to the broad support that you're getting across all sectors.

If there was a concern, it may be by existing tenure holders within the area, whether or not their sort of existing rights would be continued on. At least, that's one source of concern. Is there even a statement of principle from the federal government that grandfathering would be more than considered but supported?

H. Plante: Absolutely. In fact, I've spoken to a few representatives. Absolutely, they're open to it. The one thing that would be phased out would be hunting — in 30 years' time. Again, that would be something that could continue. It's been reported that only mule deer, quail and chukar are hunted in that area, which are sort of known as the lower value, in accordance with hunting.

That is one thing that might not be able to be honoured over the long term, so 30 years. But everything else, to my knowledge, is open for negotiation to grandfather and honour those tenures.

D. Ashton (Chair): Holly, Glenn, thank you very much, and please accept my apologies for my phone. I normally turn it off. I apologize for that interruption.

H. Plante: No worries. We'll e-mail a whole package with the list of support and whatnot.

D. Ashton (Chair): Would you, please? October 17 is the cutoff, so we need it before then.

D. Ashton (Chair): Welcome PacificSport — Doug Nicholas and Jim Gabriel, who is speaking. Is that correct?

You have ten minutes. I'll give you a two-minute warning, and then we have five minutes for questions or comments.

Good morning. I thank you for the opportunity. My name is Jim Gabriel. I'm the president of the PacificSport Regional Sport Centre Okanagan Society. This is Doug Nicholas. He is the general manager for the society.

We are a multisport training support centre for athletes and coaches. The non-profit society is based in Kelowna with satellite centres in both Penticton and Vernon. We are connected to a network of five regional centres and to the Canadian Sport Institute Pacific's three national campuses across the province.

The Okanagan Regional Sport Centre has developed a variety of programs and services to support Okanagan-based sport initiatives at all stages of the Canadian Sport for Life continuum.

Partnerships have been established with municipalities and sport service providers to assist in the coordination and delivery of events and sport development programs. Together we strive to provide purposeful program delivery that empowers our communities to play, participate and perform to their best through sport.

We thank you for the opportunity to present to you today and for your continued investment in sport throughout the province. The government's commitment to sport
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has been instrumental in ensuring that B.C. leads the nation as a culture that values sport excellence and, most importantly, sport as a vehicle for health promotion and prevention.

The sport sector has worked diligently to provide a strong return on the government's investment by becoming more efficient and effective in the delivery of its programs and services. Led by ViaSport, the sport sector is now being driven by a three-year strategic plan that is supported by four key pillars: the first, encourage sport for life at all ages and abilities; the second, engage British Columbians across the province in both urban and rural communities; the third is to leverage new and existing partnerships; and the fourth is to build a strong and sustainable sport system.

PacificSport Okanagan strongly believes that sport has the power to unite communities, break down social barriers, inspire people to live a healthier lifestyle and pursue excellence. We realize that PacificSport has an important role to play, whether it's working with local sport organizations to deliver physical literacy programs that provide healthy, active options and basic sport development tools or working with high performance athletes, coaches and sport teams to assist their training and help them achieve their goals.

The network of PacificSport centres, together with their partners, provides a sport pathway that supports our communities from playground to podium. The most encouraging element of our approach to community programming has been our ability to connect with the health, education, tourism and recreation sectors and partner in the delivery of programs to schools, recreation centres and health organizations.

Through our common goal of creating healthy, active communities and by sharing information and skills we are leveraging our collective resources to much greater benefit. This emerging multisector collaboration may be the largest return on leveraged investment, and we are starting to see the tremendous benefits of working together.

Some examples of how PacificSport Okanagan has been able to leverage investments include…. One of them is that we partner with the cities of Kelowna, Vernon and Penticton to provide sport development staff positions in each municipality. Along with over $40,000 in cash contributions, the municipalities provide significant in-kind services, including office space, utilities, phone, computer, Internet services and hardware, photocopying, fax machines, program promotion, registration services, IT and clerical support.

We receive approximately $100,000 annually from ViaSport that we combine with community grants, private sponsors and program revenue to invest over $250,000 into our local physical literacy programs.

We are a major supporter of sport tourism in the Okanagan, helping bring in numerous sport events, such as Skate Canada International coming to Kelowna October 30 to November 2. With an initial investment from the provincial government of $100,000 and the leadership from Kelowna Skating's Centre of Excellence, this four-day event is estimated to bring in over $5 million to the local economy.

From a programming perspective, thanks in part to the provincial government's investment, PacificSport Okanagan has developed and delivered a number of participation and performance-based programs that have benefited thousands of people.

This past year the XploreSportZ discovery program partnered with over 40 community sport organizations to provide an opportunity for over 5,000 children to test-drive a variety of summer and winter sports in a fun and supportive environment under the direction of certified coaches.

The physical literacy mentoring program provided resources, mentoring and expertise to over 200 Central Okanagan teachers and municipal recreation programmers so that children have the basic tools they need to take part in physical activity and sport, both for healthy lifelong enjoyment and for sporting success.

The IGNITE athlete development program used regionally based sport science service providers to train over 100 of B.C.'s up-and-coming, high-performance athletes with foundational programming based on explosive power, balance, strength and speed.

The sport education program provides innovative, current and interactive seminars, courses, workshops and conferences to over 25 local sport organizations and over 2,500 community members, giving them practical information designed to help them succeed both inside and outside of sport.

The Canadian sport school, Kelowna campus, introduced 30 student athletes to a high-performance lifestyle and offered a flexible academic timetable that supported their competitive training schedule.

These programs and others like them have had a tremendous impact on our sport community and have contributed positively to the health and well-being of our Okanagan communities as a whole.

Sport is an effective and efficient investment in health, education and community development. The positive results of strategic program investment are increasingly evident in the communities and on the podium, and we are committed to building on these results.

Thank you for your continued support for sport and, in particular, PacificSport. Together we will inspire our citizens to use sport as a vehicle for health and their pursuit of excellence in their own lives and to build vibrant communities through sport and life. That concludes our presentation.

G. Holman: Thanks for your presentation. I didn't hear a request there. I heard a lot of accomplishments. I think your arguments are well-founded, and the tourism link is quite interesting, the revenue that you generate with events. But I didn't hear a specific ask for the committee, or did I miss something?

D. Nicholas: There isn't a specific ask. We want to, first of all, just thank you for your ongoing support. The government has contributed, and we want to make sure that you're aware of how we're taking the funds and using them to lever within our community and successfully being able to do that, and want you know that the return on investment is very positive.

S. Gibson: One of the areas in my community that community leaders lament is the fact that there's a real separation between age groups. Many of the young people that I teach at the university level are floundering. The family unit is struggling, so they don't have any mentoring.

I'm wondering what you folks are doing in terms of having older people mentoring young people, to being role models for them to stay athletic and be involved in sports. That seems to be increasingly the missing link that I see in society, where the level of mentoring that would happen in a traditional nuclear family is being compromised.

D. Nicholas: Good question, good comment. I don't think, at this point, that we are doing a whole lot in that area. We do have a large volunteer team, and a number of them are middle age to older adult age. They support a lot of the physical literacy initiatives and a lot of the things that we're doing.

We haven't made a significant effort to get into that, and I think it's a real important comment, so thank you.

C. James (Deputy Chair): Thank you for your presentation. Just a couple of quick questions. You mentioned your program for children to test-drive skills in sports here, the 5,000. I wondered if there's a focus on ensuring that you have kids who are from low-income families so that there's access, if you could talk a little bit about that.

The second one is: what would be the priorities for your region? I know when you talk to ViaSport, there are different priorities, obviously, for each region to meet the needs of the community. What would be the priorities for your organization in your region right now?

D. Nicholas: First of all, with XploreSportZ we do offer to…. In fact, we make a concerted effort to get into lower-income schools. We partner with school districts 23 and 22 and, to some degree, school district 67 on trying to get our XploreSportZ programming into the lower-economic schools.

For our summer programs and the different things we're offering, we will never turn a child away because of funding. We have an open-door policy, and everybody's welcome to participate in that. We make that known in our advertising and in everything we do.

As far as our priorities, we didn't put it as an ask, but one of the key things that are important to us here is regional coaching. We've found that initially, when we started, it was based on Bob Bearpark's regional delivery system. There was a strong push for regional coaching within our region, within the province. Regional coaches were put into the regions to develop sport as a whole but develop it for their sport organization as well.

We found that over the years that program…. A lot of the regional coach positions have been pulled mainly into the Lower Mainland area, where they're now able to send a coach out once in a while to visit our communities, our region. That's not the same. It's not developing sport the same way. So we've put on a major push within, working with the municipalities. Jim represents, as well, the municipalities. We're pleased to have him as a member of our board.

We've put on a major push with municipalities to try to support us in developing community regional coach positions so that we could develop sport within our communities and within our regions. It would be a major priority for us in moving forward that ViaSport looks at that and that we look to come back to that regional coaching model.

J. Gabriel: It's the one strategy that's high on the board's list: how do we make this happen and bring the regional coach program back into play here?

D. Ashton (Chair): Gentlemen, there are no further questions, so thank you very much for coming today. We appreciate it.

Next up, British Columbia Fruit Growers Association — Fred and Glen. Welcome. Nice to see you gentlemen.

Gentlemen, once again, welcome. There's ten minutes for the presentation. I'll give you a two-minute warning, if it looks like you're going to push into that. Then we have five minutes for questions and comments. So please, the floor is yours.

F. Steele: First of all, thank you for your opportunity to comment on the 2015 provincial budget. My name is Fred Steele, and I'm president of the B.C. Fruit Growers
[ Page 976 ]
Association. It's actually an exciting time for the tree fruit industry, as it's now harvest time and the culmination of all the hard work that's gone on, especially at our place this morning. It was raining, we couldn't work, and our great-grandson's dog decided to have puppies, so it's been busy.

I personally harvest eight acres in the Glenmore area of Kelowna. Glen Lucas, our general manager and no stranger to many of you, will also be taking part in today's presentation.

G. Lucas: Thank you, Fred and committee members. The BCFGA has had the privilege of presenting a brief to the prebudget consultation each year since 2002. Our association represents 550 tree fruit growers in the Okanagan, Similkameen, Shuswap and Creston valleys. Based on the most recent stats available, the family-owned tree fruit farms in B.C. generate income of $74.5 million per year, with a packed value of $160.5 million and $552 million in economic activity annually.

F. Steele: We're an important and sustainable economic contributor to the regional and provincial economies. As evidence of our sustainability, we're celebrating our 125th anniversary this year, second only to Nova Scotia, which is the oldest horticultural association in the country.

Besides celebrating, though, we've been hard at work. We're developing a new tree fruit industry strategy. The previous strategy, from 2007 to 2012, saw important progress, including consolidation of four cooperative packing houses into one, now the largest grower cooperative in the country.

All tree fruit farms and packing houses are registered on food safety programs. We've had rejuvenation in the packing house sector, with industry investments supplemented by provincial and federal government agriflex investment in modern, energy-efficient storage.

There is also renewal through replanting new varieties and new high-density orchards. The cost to plant an acre is approximately $25,000, and we're fortunate to have the provincial replant program that provides funding up to $7,000 an acre. Several studies, beginning with the Lusztig Commission of Inquiry in 1990, concluded that without the replant program, industry renewal in the tree fruit sector would falter.

G. Lucas: Over the past five-year industry strategy we achieved 80 percent of the 29 objectives to move our industry forward. We are pleased with this result. Our new industry strategy is equally ambitious. The principles of the new strategy are a return to growth and job creation, niche markets and quality production, increasing exports, renewal and sustainability.

These principles are consistent with the provincial and federal government directions, including the provincial Minister of Agriculture's ag advisory committee, of which Fred is a member. That committee has aimed to increase exports from $11 billion to $14 billion by 2017.

F. Steele: Beyond common principles between industry and government directions, how does this strategy relate to the 2015 budget? The theme of this year's budget is successful, balanced budgets. We understand the government's desire for fiscal prudence. After all, tree fruit growers are business people, and we must live within our means.

Our farmers also understand that in order to produce future crops, investment is required. A government that invests in the economy will generate growth and increase the industry's future contributions by the means of tax revenue.

The BCFGA is therefore very pleased that the provincial government has stated a pre-election commitment to a long-term, sustainable replant program for the tree fruit sector. The replant program, in which growers invest 75 percent of the needed investments in new varieties and newly planted orchards, is still recognized as essential in improving our orchards and our competitiveness.

Growers are very anxious to have a replant program introduced in the 2015 budget. It should also be noted here that in the to-do list for the current Agriculture Minister, the Premier placed the replant program high on that priority list. Inclusion in a long-term, sustainable replant program for the 2015 budget is critical to our new industry strategy.

G. Lucas: In previous presentations to the committee, we noted the Columbia River treaty impact on our sector. Though the current treaty terms only recognize hydro power and flood control, both B.C. and the U.S. have recognized that stored and subsequently time-released CRT waters have a benefit beyond flood control, including the massive expansion of the tree fruit and vegetable acreage in the U.S. since this treaty was signed.

We are pleased that the province's position on the Columbia River treaty recognizes the value of these other uses of CRT waters as well as the impacts on B.C. producers. We encourage the province to continue to work to ensure that B.C. receives full value for the water that it stores for the U.S. In time we hope that this effort will assist B.C. producers negatively impacted by massive post-CRT growth in tree fruit and vegetable horticulture in Washington state.

F. Steele: Now, the budget discussion paper asks several questions, which we will briefly comment on.

F. Steele: With prudent management of expenditure through balancing social infrastructure needs with the ability to pay.
[ Page 977 ]

F. Steele: For the purpose of the tree fruit industry rejuvenation and strategy, the replant program is most important to producers.

F. Steele: The government should balance that growth with a benchmark of economic growth in normal economic times.

F. Steele: Industry looks at return on investment as well as affordability in the present — in other words, cash flow. Government infrastructures investment could make it the way industry investments are considered — return on investment.

Now, this may be difficult when there are social values such as freedom of movement and transportation and other things that don't often have a benchmark value. However, other investments could be held to this measure.

G. Lucas: In summary, the BCFGA appreciates the opportunity to provide input to the budget since the year 2002.

F. Steele: The BCFGA recommends the following: delivery of a long-term, sustainable replant program for the 2015 budget; achieving fair funding for water stored for U.S. irrigation and other purposes under a renewed Columbia River treaty; a commitment to prudent fiscal management. Those are the things that we recommend.

E. Foster: Thanks, gentlemen, for your presentation, as always. An early comment. You have 550 commercial growers. Do you have a size or a quantity of apples, or whatever, that would qualify you as a commercial grower? Or is it just anybody that sells to the packing house?

F. Steele: A commercial grower can…. You've got to understand that in the tree fruit industry in British Columbia, we're probably some of the most efficient people there are. You can actually make a living off six or seven acres, if it's planted well and done well in the proper high density. What we're working to do right now is to get into the new varieties, where the money is. Some of this has been done in past years. Some of it's been done in new varieties that are coming in now.

Basically, anything under five acres is a guess, but I would say five to six acres and more.

C. James (Deputy Chair): Thank you for your presentation. Just a question around one of the issues, over the last number of years, which we've certainly heard about in different regions, and it's the issue of apple dumping. I don't know any other way to talk about it — the American apples and the challenges.

I wondered if you could talk a little bit about marketing — any work that's going on around marketing and whether that's still as much of an issue around American apples, as it was — and the issue of research, I guess, just to follow up on Eric's point. What kind of research is being done, or what kind of support is there for research from government's perspective, to support varieties?

F. Steele: I'm glad you brought that up, because one of the things we've decided to do is not business as usual. We're looking at job creation. We're looking at increasing the volumes and replanting some of the areas that have gone by the wayside in past years. We're looking at a number of things.

The federal government, for example, has entered into some free trade agreements where tariffs as high as 45 percent will be eliminated in seven years. How long does it take to get a tree in the ground, get it planted and get a crop off it? Five to seven years, which is perfect timing.

As Dan knows, we're working on a program to expand our industry so that it not only creates jobs, but we're working with another country in the southern hemisphere in order that we can provide year-round jobs for both countries and, at the same time, produce enough apples to actually be able to get the orders.

You see, in many cases, what has happened in marketing is not so much even the American dumping as it is to fulfil 12 months of the year. If somebody says, "We need 10,000 cases a week," we've got to be able to do that 52 weeks of the year. That's what we're working on doing. In the meantime, we're working with another country so that we can build our reserves to do that.

G. Lucas: The research question, too, just to touch on that…. The Summerland research station is having its 100th anniversary, actually, this Saturday. They have an open house, and we'll be there with them. They've supported the industry tremendously — the whole horticulture sector in B.C., but specifically tree fruit and grapes. They're doing wonderful work in new variety development. The new late-season cherries — the cherry sector would not be here without that. It's expanding and doing wonderfully. That research is essential.
[ Page 978 ]

F. Steele: It's had a long and productive history. If any of you have ever eaten a Spartan apple, it was discovered at Summerland in 1936.

S. Gibson: You guys are doing a great job. The whole province — we love you guys, right?

I come from a blueberry area in Abbotsford, and I'm getting together with the growers. They're trying to look at value-added, and it's a challenge for them. I'm sure you guys think about this all the time. Like: "Okay, let's put chocolate on blueberries. Let's dry these little guys." It's struggling a little bit, the value-added. But that's the next step. They think that's where a lot of their profitability is going to come.

F. Steele: I'm glad you asked this too, because it's also part of a very ambitious strategy. One of the things we're getting into is the cider industry, as well, in a big way, and a new dry cider at that.

The one thing about this is if we could take all of the apples that we were going to put into a cider plant or other forms of value-added, which we're looking at…. If we could reduce…. Currently to the farmer it's 8½ cents a pound per cull. That's charged back to me. If I could bring that to zero, I've made 8½ cents, and we could expand beyond there.

Value-added is one of the key components that we're working on, but we have to get into the high-value apples that need to be planted and rejuvenated in this industry.

E. Foster: Fred, you ship all your apples into the packing house. They pull the culls and charge you 8½ cents a pound. Would you not be better off to cull those yourself and leave them on the ground, obviously?

F. Steele: It's an interesting point. I do some of that, but at the same, time you need value-added products in the industry. If we can find a way to salvage those…. Once they're on the ground, they're on the ground. That's just part of food safety. It's over.

If we could take all of that waste that's on the ground and turn that into something else…. That's what we're working on doing. There are actually innovative programs that are working on doing some of these things. Sun-Rype is certainly doing some of these things.

E. Foster: I totally follow that, but right now you're losing 8½ cents a pound.

F. Steele: The thing is that we're doing that as much as possible, or we're handling it through…. In order to eliminate some of this waste, the packing houses have gone along with what's called diversion. Instead of running it over the grader and charging you 8½ cents, they will charge you much less, and you divert it straight to the juice plant. That brings that portion of the cost down, but you do that in the case of hail or frost damage or things of that nature, which unfortunately I've had this year — a considerable amount of diversion.

One of the first steps to bringing that down is actually saying: "How do we not waste this product?" Food, water and oil are going to be the three things of the next decade, and we've got to start now in order to be able to offset that.

G. Lucas: I could just mention, as well, in terms of value added and use of the processed fruit, that I had a call from Summerland from people in Kettle Valley Fruit — that building. They're extracting phytonutrients, I'll call it, from the fruit and putting them in either pills or supplements to other foods, and they need to expand. I mean, that's good news. They employ 15 people, and it was researched from the Summerland research station — a good-news story there.

D. Ashton (Chair): Gentlemen, thank you very much, greatly appreciated. Mike Daley is in a little bit later today, from B.C. Tree Fruits.

Jane, welcome. Thank you very much for being here. I heard your other committee….

D. Ashton (Chair): We're back live again. Jason, thank you very much for coming today, greatly appreciated. Ten minutes for the presentation, I'll give you a two-minute warning if required, and we have up to five minutes for questions or comments. Please, the floor is yours.

Before you go, make sure you grab one of the delicious apples from the local growers.
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Thanks for your time today, folks. It's nice to see you enjoying some of our Okanagan apples. This is my hometown. I'm a third-generation Kelowna resident, so welcome to Kelowna.

J. Gordon: Gordon Drive, I think, may be one of them. My grandfather used to own a store here years ago.

I'm here today to represent the B.C. Association of Child Development and Intervention, BCACDI. We have 30 member agencies across B.C. that are accredited non-profit agencies that contract with MCFD to deliver services and support to the children and youth with special needs in our province.

I'd like to start off today just by thanking the committee for recommendations you have made in previous years. Last year in our presentation we talked about multi-year contracts and more flexible contract services within their sector, and I'd like to thank you for recommending that as well. I'm pleased to see in the government's new sustainability and innovation plan that some of those are actually coming to fruition. We're piloting a couple of those concepts, and I'm hoping that in a year or so we'll bear the fruit of that. So thanks.

D. Ashton (Chair): Jason, if I could just interject for a second, Eric just whispered in my ear that he has a perception of a conflict. His wife is the…

D. Ashton (Chair): …chair of a child development centre. He just wants to make sure, so that's why he has left the room.

What I'd like to do is draw attention to one of the recommendations you made last year — the recommendation to enhance the MCFD's budget to eliminate wait-lists, reduce social workers' caseloads and support community-based agencies. A portion of that is yet to be realized. We still aren't seeing any increase in our base contract funding for the non-profit, community-based agencies providing services and supports to children and youth with special needs.

It's a tough area to determine what the resources may be, so I just want to talk quickly a little bit about prevalence. Traditionally, prevalence of children and youth with special needs has been an estimate based on population. Stats Canada does surveys through the participation and activity limitation survey that shows about 4½ percent prevalence of children and youth with special needs in that population.

The cross-ministry framework for action group undertaken by government back in 2008 felt that the figure was about 30,000 children and youth in B.C. that had special needs, which is about a 3 percent prevalence rate. Regardless of the prevalence rate, some of the other research that's starting to emerge is that we're seeing an actual increase in the number of children with disabilities.

Some recent research out of the United States is suggesting a 15 percent increase from 2001 to 2011. Yet again, the base contract funding for agencies that provide supports and services to these kids has remained unchanged since 2009.

One of the challenges we're trying to face as an association is that we're actually developing a means of collecting information regarding the number of referrals our agencies receive and the number of children that we serve, to try to get a better idea — within our member agencies, anyways — of some reliable and valid data on what we feel the true need and demand for service is so that we can actually go beyond just making estimates based on population. We look forward to sharing that with you next year when we have the project complete.

In the budget estimates debate it became apparent that MCFD felt that that 30,000 figure was fairly stable, and caseloads remained unchanged. Our impression is that that's one way to justify the lack of improved resources to our sector. However, that's an assumption.

One thing that we don't need to assume is the rising operating costs that these agencies are facing. Since 2009 these agencies are responsible for paying things like MSP premiums for their employees, which have increased 26 percent. They're responsible for municipal pension plan premiums, which have increased 36 percent since 2010, and keeping the lights on. B.C. Hydro has increased 27½ percent since 2009. Operational costs are the furthest thing from stable, yet again these agencies have had no increase in their base contract funding and have been forced to absorb these increased costs since then.

Many of you are probably familiar with the cooperative gains process that our agencies went through for the past couple years because of an unfunded wage-and-benefit increase through government. That resulted in the vast majority of our agencies developing proposals, submitting them to their local regional MCFD offices to try to secure funding so that they could actually maintain existing service delivery levels without having cuts.

Those were greatly appreciated. That funding came through, in many cases, and helped us maintain service levels. But that funding was one time only and was intended as bridge funding only. We face another year where we're going to be requiring more of a similar pro-
[ Page 980 ]
cess to help continue to meet the demands faced with these rising operational costs without reducing actual service delivery levels.

Just a comment on why we need to improve investment in this area. There's some really good research even here in British Columbia out of UBC's human early learning project that has demonstrated that 29 percent of kids are entering kindergarten developmentally vulnerable.

We have Nobel laureate economists such as James Heckman, who has demonstrated that if we target interventions towards disadvantaged children in the early years, we have much higher returns than waiting until later. We know that poor investment now means we're paying more in special needs education supports, youth justice programs. And we know that every dollar we invest in this sector has anywhere from a $1.80 to $17 return on investment.

Just a comment. In B.C. throughout the spring and this fall, certainly, we had an issue with the Minister of Education and the B.C. Teachers Federation and the labour dispute that was going on. One of the key components of that labour dispute was class composition, special needs education teachers and supports. I think that it's a very strong link.

In 2009, the last time there was any substantial increase in service delivery for early intervention…. That child born in 2009 who faced increased wait times and watered-down service delivery because of big caseloads is now in kindergarten and into grade 1. I think we're going to see this throughout education — this continuing to grow the need for more special needs education services and supports in the school-aged kids — because we haven't been investing appropriately in the early years.

There has been some new money coming into the province. The Canada health transfer from the federal government has actually increased 52 percent from 2005 to 2013. The Canada social transfer has increased 37 percent from 2005 to 2013. Yet again we're not seeing any of these funds filter down to those community-based agencies in B.C. providing support and services to kids and their families.

We have one simple recommendation to make this year to the Select Standing Committee on Finance, and that's simply to increase base contract funding for the non-profit agencies in our province that provide the programs and services to children and youth with special needs and their families. Increase base contract funding so that we are no longer having to absorb the rising operational costs. Then we can actually focus on what we're good at, and that's providing effective and efficient service to children and youth with special needs and their families that we serve.

C. James (Deputy Chair): Thank you, Jason, and thank you for your work and for all of the centres around the province that do good work.

You mentioned the increase in percentage of children and youth with special needs. The other issue that we hear a fair bit about is the complexities that children are coming with. I wonder if you could talk a little bit about whether you're seeing that at your centre and whether that's also becoming a challenge when it comes to providing services.

J. Gordon: Thanks for your question. It certainly is. I mentioned before the program that we're taking on board to try to measure demand. We're looking at referrals, children served. We're actually trying to figure out a complexity measure, Carole, just so that we can have an actual valid data element to use to measure that change.

Subjectively, from all of our agencies we hear that's a real issue, an increase in complexity. But we want to make sure we can demonstrate that using a reliable data element so that, again, we're not making guesses on the type of resourcing.

Certainly, we hear it all the time, and we're hoping that by next year we will have the data that will actually measure complexity, moving forward.

S. Gibson: I am a parent of a special needs adult — of course, more as a child. I don't know if you want to comment a bit on the nature of the family, how the family unit struggles. This is one of the areas that I know government struggles with fiscally, that the impact on the family unit is challenged a lot.

As you know, the incidence of couples with special needs kids splitting up is significant. I don't know if you want to comment on a kind of general basis. I always think that's interesting information to share.

J. Gordon: Yeah, and thanks for your question. I think that's an area where we need those…. There are counselling services — something called a family support worker, which was a role that MCFD used to fund — that would really provide those types of supports to more of the family unit, to help make sure the family had the capacity to deal with the challenges they face in raising a child with special needs.

Unfortunately, again, with the lack of increase in base contract funding, we've actually seen a deterioration in the levels of family support workers that we have at our agency that are able to provide that. But a critical component that needs to be there for families, for sure.
[ Page 981 ]

D. Ashton (Chair): Jason, thank you very much. We appreciate your input. Have a good day. Don't forget to grab some of those apples too.

D. Ashton (Chair): Oh, I thought I'd heard that there was a conference. Okay, thank you.

D. Ashton (Chair): Wonderful. Good morning. Thank you very much for coming today.

J. Oostenbrink: Good morning. I have got some copies of my presentation for today. I guess I'll leave it with you as to your preference, if you'd like it to be while I'm presenting or afterwards.

D. Ashton (Chair): Actually, maybe while. Maybe Sue could just grab them and distribute them.

D. Ashton (Chair): Once again, thank you very much for coming today. The presentation is ten minutes. I'll give you a two-minute warning, if it looks like you're going to go into that. Also, five minutes are allotted for questions and comments. Jim, the floor is yours.

J. Oostenbrink: Well, good morning to all of you. I've presented in the past to different types of audiences, but this is the first time before a government input committee. I thank you for that opportunity this morning.

As you might know, my name is Jim Oostenbrink, and I work for CLAC. I'd first like to give you just a brief introduction to who we are and who we represent. CLAC is a progressive, multisector union that represents over 65,000 members nationally, and 11,000 of those members work here in British Columbia.

We work with many of the largest construction contractors in the province, and you might know some of these: Ledcor; PCL; Gisborne; Peter Kiewit; Stuart Olson Dominion; JJM Construction; and JVD Installations, who did the work at Highland Valley.

Our members have built the Port Mann Bridge; Sea to Sky Highway; Abbotsford hospital; Highland Valley Copper mine expansion close to Kamloops; the Spectra and Encana gas plants in Fort Nelson; and here in town, the Kelowna General Hospital additions. PCL is currently working on another one at the moment.

Labour and industry experts are currently developing the labour strategy for the upcoming megaprojects, B.C. LNG — you might have read about that in the news — and Site C. All parties have recognized the difficulties in finding available and skilled workers to complete these projects. CLAC has recognized and responded to these demands, spearheading new training initiatives and supporting apprentices throughout the province.

Coincidentally, today Minister Virk is going to be at our Langley office for the ribbon-cutting ceremony for our virtual classroom training system. I also included an invitation to our ceremony today, so if you grab a flight very quickly, you can get down there, but if you can't, I do have a plan B. We actually have a ribbon-cutting at our Kelowna office, which is two minutes away, beside the Target, and we'll have a simulcast ribbon-cutting at all of our offices in TRU and in Kitimat, demonstrating this actual classroom facility.

With this technology, we'll be able to connect instructors from certified training facilities with up to 15 remote locations. The virtual classroom removes barriers for rural training, such as travel and living expenses, and keeps employees on site — which has been a big issue for employers — keeps employees productive and earning a living while receiving quality training. In fact, one of my own sons — I have four sons — is actually a pipefitter and is in the apprentice program and is actively involved in that training right now.

In order to truly maximize the full potential of B.C.'s skilled workforce, government and industry must employ an inclusive labour strategy utilizing the managed open-site labour relations model. Whenever there is a major project, there will be a framework agreement that will cover safety, site rules and other general terms and conditions for the workplace.

Of these agreements, there are basically two types. The first is a traditional building-trades model where only signatories of the building-trade unions are allowed on site. Contractors — some of the ones that we're affiliated with — that are affiliated with another union or non-union contractors are not allowed to participate in the project. Within this restrictive model, less than 20 percent of the B.C. construction workforce can participate in these projects. We find that's patently unfair.

The second is a managed open-site model which establishes that any contractor and its employees are allowed to participate in the project based on their ability to complete the work required safely and efficiently. A managed open site may consist of not just independent unions but also non-union contractors and building trades.

On page 2: the government, industry and the British
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Columbia taxpayer all have cause for concern with respect to the building-trade model. The building-trade unions will claim that this model stabilizes labour and controls costs. However, historically, these models have gone hand in hand with strikes, lockouts and cost overruns. Some may recall that the costs for the Vancouver Island Highway were inflated by over $70 million as a result of building-trades-only project agreements.

Restrictive project agreements are typically avoided in B.C., and for good reason, but where these practices occur, the baggage still persists. For example, they have resulted in significant cost overruns and inefficiencies in Kitimat at the Rio Tinto Alcan project.

Rio Tinto Alcan's former chief executive officer said that difficulty in finding the right workers pushed the project off schedule and over budget. Basically, it was a 45 percent cost overrun, which is extremely significant. The overrun evaluation reported that an additional capital of $1.5 billion, which was on top of the initial $3.1 billion, was needed to complete the project.

Similarly, the construction of Australia's LNG facilities had been beset by delays due to well-documented shortages of skilled and mobile tradespersons. The full short- and long-term implications of these shortages have yet to be determined.

As our province faces challenging labour demands with LNG and Site C, we cannot rely upon any system that restricts labour supply and inflates costs. Fortunately, this government can secure labour stability and responsible construction practices by ensuring that these projects proceed by way of open-site management.

Managed open site gives access to the deepest labour pool possible. Project managers are able to select contractors and employees based on skill set and their competitive ability to complete the task required rather than just on union affiliation. On projects such as Site C dam and LNG, this will tap into the best and brightest that independent contractors, building-trade unions and independent unions have to offer.

This also ties into putting B.C. workers first, which is in your document. It requires that these groups cooperate to deliver a premium product. For example, at the peak of the Port Mann Bridge project there were over 1,200 workers on site. CLAC represented the majority of those individuals but partnered with numerous building-trade unions. The project was completed on time, on budget.

The managed open-site model can be utilized on projects or sites of any size. For example, it has produced years of steady labour supply and stability in the Alberta oil sands. With the managed open-site model, the question is not who we can exclude but who we can include.

There's considerable work on the horizon for B.C., and it will require the combined effort of government, industry and unions to meet the labour challenges ahead of us. Managed open sites not only ensure public projects are completed on time and within budget, but they also purport a model that makes B.C. an attractive province for investment.

A healthy, vibrant labour pool that is skilled, mobile and well represented will ensure the success and longevity of B.C.'s construction industry and will help facilitate our province's economic goals. In summary, a managed open site is fair to all B.C. workers and their families.

S. Gibson: I'm familiar with your successes with the Abbotsford hospital in my community. That went well, and by all accounts, it was, as you mentioned, completed on time and on schedule.

How do you respond to the reservations that people have about your union and the work that you do? I mean, there's a push-back in the community. How do you respond to that in a constructive way? That's the ongoing paradigm between the two models. Maybe you'd like to speak to that.

J. Oostenbrink: Yeah, that's an excellent question. I like the fact that you use the words "a constructive response." We certainly don't want to get into any type of mudslinging. I think that the operative word today is "cooperation." In no way is our presentation talking about just us or just anybody. It's about all of us together working on the same team, rowing in the same direction.

We try to take the high road in terms of what we do. I think our success stands on its own and our projects stand on their own — and our apprentices. We have 65,000 members now. We're very strong, and we're continuing to grow. So I think that we would just take that high road and say: "We're here. We're here to stay, and we're growing. And we're better together." That's going to be our new launch. We're rebranding our organization, actually, in two weeks. It's better together.

J. Oostenbrink: I would love to grab one of those apples. And if you do have time, the invitation stands at two o'clock, Kelowna office in the INvue building.

We'll take a quick recess until the next individual comes in. It's the Kelowna Chamber of Commerce at 12:05.

D. Ashton (Chair): Diana, welcome. Thank you very much for coming, and thank you for coming in a little bit early. It helps us out. Ten minutes for the presentation. I'll give you a two-minute warning for the ten minutes, if required. Then we have up to five minutes for questions or comments from the committee. There's some information that's been distributed. Thanks. Please go ahead.

D. Groffen: Thank you very much for allowing me this time. I've come here today to respectfully remind the members of this committee of the importance of adult literacy to both economic and community development in our province and to provide an overview of how Project Literacy, formally Project Literacy Kelowna Society, helps adults improve their literacy skills. My objective is to persuade the committee members to recommend that our provincial government increase its investment in community-based adult literacy programs like Project Literacy.

If I might start with the current state of literacy levels in our province. According to the last Statistics Canada census, done in May of 2011, almost 40 percent of the 62,250 workers in the Kelowna–Lake Country federal electoral district — almost 40 percent — had literacy skills below the level required by their actual occupations.

This isn't all that surprising considering that according to the B.C. Ministry of Advanced Education, 40 percent of B.C. adults have a hard time reading a newspaper, filling out a job application or understanding a lease document. Forty-nine percent struggle with calculating a tip, creating a budget or understanding credit card interest rates.

Our provincial government has stressed that if we do not address our skill shortages, B.C. would face an ever-greater labour crisis. We've all heard about the over a million jobs in ten years as northern development takes off, etc.

Therefore, some really good steps have been taken. The province has invested in skills training, and our own very innovative Okanagan College, for example, has benefited from that. They do a great job in that area. Unfortunately, a lot of people just don't meet their entrance requirements. They fail the language or math proficiency tests. Consequently, we get a lot of referrals from Okanagan College, either from their staff or from their students who know of other students who could use our services.

In fairness, Okanagan College has a very good classroom-based adult academic and career preparation program, but many learners who suffer with literacy skills deficiencies don't do all that well in classroom settings. They really need the one-on-one tutoring so that an individual can determine exactly where they're missing gaps in knowledge, what confidence issues might exist that are hampering them, what learning disabilities might exist to hamper them. Despite the fact that that classroom-based program is there, we still get tons of referrals.

Another solution to this whole problem, of course, is immigration. We hear a lot about recruiting foreign workers — which, frankly, I think is excellent as well. I think immigration is a tremendous way of adding to our team, building up the skills base within our population. We do get a lot of those new workers to Canada coming to us because they lack the English language skills. They may be excellent at their technical occupation. They may be fabulous engineers, but they have difficulty communicating with their colleagues, their clients, their supervisors. Once again, we fill that gap.

The good news in all of this is that a 2004 Statistics Canada survey, which has since been quoted by everything from the Canadian Labour Congress to the Howe Institute, states that a 1 percent increase in literacy levels would raise our labour productivity in Canada as a whole by 2½ percent, which translates to an estimated $32 billion a year in increased GDP.

Lately I've been talking to representatives of the Industry Training Authority. Their people who are out on the front lines talking to people wanting to get retrained tell me that that's actually an understatement, that the benefit would probably translate into far more dollars than that yet. They see tradespeople or wannabe tradespeople every single day. They understand the issues that they face because of their own lack of literacy, especially in the math field, and we do a lot of math tutoring.

The case for enhancing literacy skills, though, isn't just about economics. Literacy is also linked to individual and community well-being. When you think about it, one needs adequate language skills in order to participate effectively in one's community.

For newcomers to Canada, adequate English skills are needed to avoid isolation, loneliness and anxiety. Persons with adequate literacy skills are better able to communicate with their family doctor. They're better able to understand the prescription labels of prescriptions that they are taking.

We have a learner right now, just to give you another anecdotal example, that came to us even though she's been in Canada for ten years. She's a housewife. She never found it all that important that her English skills get upgraded. Her husband works full-time, very long hours, to make ends meet. Suddenly their daughter has been diagnosed with a liver disease, and it's a serious one. She has to now communicate with the doctor, so she realizes: "My god, I have to improve my language skills. I have to understand what he's telling me to do."

Likewise, we get many referrals from our school district 23 — parents who are new to Canada. Their children are getting special services in their schools, but the parents can't talk to their teachers. We get many referrals that way as well — so just to emphasize the importance of literacy skills to functioning in community and for citizens to get along.
[ Page 984 ]

I'd also like to point out — this is a little more philosophical, but I think most would agree — that a literate community is a dynamic community. The greater the literacy levels, the better citizens are able to exchange ideas and become innovative and take advantage of the diversity that we have in our culture. Ultimately, I think as well that that kind of increased dialogue that happens leads to greater mutual understanding, greater understanding of the concerns of others and greater community spirit.

Project Literacy's solution to improving literacy levels is through, as I pointed out, one-on-one tutoring. We get learners who want to improve their language skills and just as many who want to improve their math skills, or I should say not quite as many, but it is growing exponentially. And 80 percent of the learners who come to us ultimately have employment goals, so we are helping people broaden their employment horizons.

They come from a wide spectrum of ages and backgrounds. It might be somebody new to Canada who indeed, as I pointed out, is trying to integrate into our labour market and Canadian culture. It may be a young person who has been referred to us by a public or private college because they didn't meet the entrance requirements.

We do also get a large section of people who are middle aged. They've been working in the same job for many years, but, either due to downsizing or disability, they have to retrain. In order to do so, they suddenly find: "Oh my gosh, I got by with the limited language skills I had before, and I certainly can't convert decimals to fractions, but, by golly, now I'm going to have to learn how to do that."

In the last year, to give you an idea…. I should point out too that we've been doing this successfully since 1986, so we've got a track record. In the last year 472 community members received learning support from 125 tutors. At any given time we have somewhere between 110 and 120 active tutor-learner matches.

The province of B.C. values the tutoring that our tutors provide at $25 an hour. I say that because when we apply to the Gaming Commission for funds, we need to quantify the in-kind labour, and they have told us to apply $25 an hour to it.

Our — let's just say — 125 tutors on average volunteer 128.4 hours a year. If you multiply that times $25 an hour, they provide over $400,000 worth of community benefit each year. The bulk of the value, though — that's just the tip of the iceberg in terms of investment — comes from those 472 community members who are now better able to seek employment, interact in their community, contribute to our economy and support their families. Now, the tutors are the lifeblood of our organization, but it still requires hard cash to run our operations.

Our fixed budget each year is about $240,000. If you divide that amongst the learners, it comes to about $500 per learner. I think that's a pittance when you consider the economic stimulus you get by helping them and also the savings that you have in terms of social services and that sort of thing.

How we pay for that $240,000 is always a challenge. I will say that between the B.C. Gaming Commission — this is just Project Literacy — the United Way and local government, we are able to get about half of that. The other half, the $120,000…. We are constantly hustling to raise funds. Foundations and private businesses — and I go after them aggressively — are hesitant to fund administration. They want special projects with a lot of publicity so they can get marketing value out of it.

Community-based adult literacy organizations throughout the province struggle just like Project Literacy does every year. In fact, you are all perhaps aware that Literacy Victoria had to close its doors on August 31 because it couldn't raise the money to keep its doors open. What I'd like to demonstrate here — very, very quickly, last paragraph — is that organizations like ours do warrant government investment.

Each organization should have to prove its value each year through activity as well as outcome reporting. However, I truly feel that an investment in multi-year funding should be made available to those who carry out approved programs and reach the outcome targets that they set for themselves. It's not to say that we shouldn't continue to fundraise for special projects, because that type of fundraising is more feasible for us, and I think that local charities and businesses should have a stake in these endeavours. They should have skin in the game.

I do hope that this committee will see fit to recommend that adequate funds be allocated to help organizations cover their admin costs in the next provincial budget. Thank you very much for your time.

D. Groffen: Not very much. I will say that a couple of years ago we did get $20,000 to do a special project that led into our LIFT program. But as a rule, what we get from organizations like Decoda…. They will call us and say: "You know what? If you want to do a 20-hour workshop on work safety, we will give you $1,300." It takes, to do that 20-hour presentation, weeks and weeks of preparation, and you have to find learners that are looking for that. Our learners aren't necessarily looking for that.

We'll get resources. They'll say: "We've put out some…." Oh, we did a benchmarking project with them. We have adopted their benchmarks. We get some support, but it's not hitting the mark.
[ Page 985 ]

D. Ashton (Chair): I only have a couple of minutes left. Sorry, I let you run into your questions.

Thank you for your enthusiasm. Thank you for your work. Just wondered where you're seeing right now, in your community, the biggest pressure. Where's the biggest increasing need? You mentioned a whole range of needs and individuals who come for support. Where are you seeing the greatest need right now?

D. Groffen: I'd say it's consistent in terms of new Canadians, but we're seeing an increase in middle-aged Canadians, as well as younger Canadians who are wanting to retrain.

Unexpectedly, we came up here a little early yesterday, so I had the opportunity of having dinner with one of my two beautiful daughters, Paige, who attends UBCO. She was telling me the story of a situation she's in where they have groups that have certain assignments. They're doing business studies. Of the five young people in her group, three require ESL. It's a bit of a challenge, because she's probably the most literate of the group. She has really good skills that way, but she's doing the vast majority of the work in that area. She said that there's a problem with accessing ESL training for the young adults. We heard it from the folks at Langara.

My question is: do you get many referrals from the universities and the college here with regard to…? We do have limited ESL capability outside the Lower Mainland in a lot of the universities here, so maybe you could speak to that just for a second.

D. Groffen: Yes, last year the ESL classes were offered by Ki-Low-Na Friendship Society. This year it's being adopted more by Okanagan College. But we do still see…. We get people who are taking the ESL classes but need more, because they need to learn more quickly, and we get people who do not have permanent residency and therefore are not eligible for all the ESL.

I did teach a business course at UBCO. I know what your daughter's talking about.

S. Gibson: What's your relationship with libraries? Libraries are a source of literacy training. I don't see any mention of libraries in your report.

D. Groffen: No, I don't talk to our community partners here. We have many of them, and the library is a very strong one. We get a lot of resources from there, and oftentimes they'll donate to us if they know a book isn't being used by their population but we could use it.

We do activities together. We've partnered on…. You see, Decoda does have literacy outreach coordinators. Here we're called the Central Okanagan Partners for Literacy. The library's there, the Okanagan Boys and Girls Club, etc. We do all partner and do events, probably two or three times a year.

D. Groffen: They fund a part-time literacy coordinator who coordinates…. We're adult literacy. There's youth literacy, etc. She's actually employed by Bridge Family Services.

D. Ashton (Chair): Thank you very much for your presentation. Please don't forget to grab a couple of apples on your way out, if you wish. They're very good.

D. Ashton (Chair): I guess it's afternoon now. How are you this afternoon — good?

D. Ashton (Chair): Perfect. Thank you for coming today. We've allotted ten minutes for the presentation — I'll give you a two-minute warning if it looks like you're going there — and five minutes for questions and comments. The floor is yours.

K. Carmichael: I'll be brief. I'm Ken Carmichael. I'm the executive vice-president of the Kelowna chamber.

We have two items we're bringing forward that have more to do with tax reform. I'm an accountant in my day job, so it's something near and dear to my heart.

The first one we have is…. The Kelowna chamber and the chamber as a group in the province of B.C. are looking at the property transfer tax system. The property transfer tax came into effect many years ago, and really, its initial intent was to be a tax on luxury homes. Of course, that's changed. The thresholds that were in place many years ago are the same thresholds used today, and as we all know, the cost of homes has gone up substantially across the province.

Many ideas were thrown around on how to approach this. We're aware that it's a substantial revenue source for the province. We don't want to do that, because that
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money gets used for good things, like schools and hospitals and whatnot.

The proposal that was put forth here has been adopted by the B.C. chamber and is part of our policy manual. Really, what it does is it proposes more so to put in a grant, if you will, for first-time homebuyers, which would be people entering the market for the first time or people entering the market from outside the province. B.C., unfortunately, carries a bit of a stigma as being an expensive place when it comes to taxes, whether that's true or not. This is one of the areas where B.C. has a higher tax threshold, a higher tax amount that has to be paid.

There's lots of evidence and support that shows that when people get into the housing market, not only does that provide jobs for new homes and all of that, but there's lots of ancillary spending. We all know when we bought our first home that you've got to go out and buy a lawnmower and a garden hose and a couch and all those things that go with it. There are a lot of additional dollars that go into the marketplace with new homes purchased.

We also realize that there is a high competition with the other provinces, particularly with Alberta, for instance. I know for my work that when you're hiring someone, having them come and move to the province, it's something they bring up. Whether it's true or not, I don't know, but they bring it up.

This would be able to help lower that threshold or make it more beneficial for those people to move to the province. There's an example in here of what is suggested to be a grant. I'll leave that up to the powers that be, but at least the concept is there.

The other point that we're bringing forward has to do with the upcoming change to the taxation system for credit unions. What's happened is that the federal government changed some tax legislation. What it has done is…. Credit unions receive what is called a preferred rate, which essentially brings it to the small business rates that Canadian small businesses get in the province and in the country. This change to federal legislation removes that preferred rate for credit unions, and the province kind of piggybacks off that. The province has made a choice to defer that till 2016 to keep the small business rate for the credit unions.

With the way that credit unions work, with any financial institution, they need to raise capital in the marketplace. They do that by getting deposits and lending it out, being a stimulus to the economy.

This removal of taxes for the credit unions is estimated at…. Off the top of my head, I forget what the number is, but it's a big number. So $20 million would be the annual tax increase to the credit unions in British Columbia.

Many credit unions are small, one-, two- or three-branch credit unions, and this increase of tax will have a substantial impact on their ability to continue operating. There are about 40 communities in British Columbia where the credit union is the sole financial institution located in that community. As you all probably know, credit unions play a fairly large role in community events and special causes in every community. If these credit unions have to pay this additional tax, it hurts their ability to lend. It hurts their ability to stimulate the economy, and it hurts the contribution that they bring to their communities.

We would like to propose in our document that the province continues what it has done to not get rid of the preferred rate, at least at a provincial level. The chamber movement will be talking to the federal level, as well, hopefully. But at this point we would like to continue. Right now that's been deferred to 2016, and we'd like it to continue.

This is not a revenue loss for the province because, really, this tax was never there. Like I mentioned, I'm an accountant. What we've kind of seen with how this tax change has come about…. This is a repercussion of a bigger tax change. I don't know if this is the intent of the tax change, but it's what's happening for the tax change. It will hamper credit unions across the country — hopefully not in this province as much, if we could continue.

K. Carmichael: I can continue and go into more depth. But that's the gist of it.

K. Carmichael: The document has some more backup into some of the supporting information, I think, for the property tax. Like I said, we acknowledge that it's a revenue source for the province. This would reduce that slightly, but we believe the numbers that have been run — the extra spend, the extra tax dollars, the extra things that come with people moving into the province, buying homes, saving, building equity in that manner — should in the long run at least equalize if not outweigh it.

With the credit union proposal, we feel that the…. Like I mentioned, it's not a tax loss to the province. But it would be a definite loss to the lending.

The credit unions are in the small business field. That's their wheelhouse. That's really where they operate. Other larger financial institutions — some of them specifically are moving out of the small business market for whatever reasons of their own. It puts more on the credit unions by making them have to pay this additional level of tax. It's tough.

The current tax rules for credit unions, the way it currently functions, before this change…. Big credit unions, when we talk Vancity or, here in Kelowna, Interior Savings Credit Union…. This preferred rate gets ground down or eliminated as their size increases. As a credit
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union approaches being a significant financial institution, they lose this benefit — just as a small business would lose it once it crosses certain thresholds of capital.

We're not proposing changing any of that. We're just proposing that we'd like to continue helping the small credit unions, the small communities and the businesses they support.

E. Foster: Let me preface this by saying I'm a longtime member of a credit union. I'm a big supporter. The evolution of the credit unions over the last number of years…. We're seeing the small community credit union being purchased or amalgamating.

At what point do they stop being a community credit union and a large lending institution? I think that would be the push-back from the traditional lenders. At some point they are no longer the community credit union.

K. Carmichael: The traditional lender — as you speak, a bank — can always raise capital by going to the public market. They sell shares; they can do that. A credit union doesn't have that base, right? They're limited to their communities.

The way the preferred rate goes is…. Really, I think about it like a bucket. As deposits increase at a bank…. It's not based on loans. It's not based on anything else. It's deposits. They need to get members coming in, depositing money in the credit union. That fills their ability to have the preferred rate.

Then, as they have taxable income, to push it down to the lower rate, that decreases the bucket. As a credit union gets to a point of stagnant growth, the preferred rate goes away. As a credit union gets bigger, it's like a curve. The hill becomes steeper. There's a faster drain and a slower fill.

There's also a metric that has to do with capital, which for a credit union is kind of a nebulous concept — retained earnings, things like that. Once it gets to a certain size, that also grinds it down. That's what makes the hills steeper — to refill the bucket.

G. Holman: Thanks for your presentation. Just to be clear on the property tax recommendations, one is for first-time buyers, and the other is for foreign buyers. Have I got that right?

K. Carmichael: Thank you, yes. I missed that. The first-time buyer is as I spoke to.

The other would be…. Think about it like vacation properties or foreign investors from out of country. At that point, that's someone buying into the infrastructure of the province. We would suggest that maybe they need to pay a little bit more to get in. That would be an area where they could do it. You're exactly right. In the document you have, pages 3 and 4 kind of speak to that.

We would argue that there should be a slightly higher threshold to that, and that would offset the first-time homebuyers. We felt it was more important to encourage the residents and the homebuyers and the people living in the province and contributing to the province, rather than the investment properties.

There's lots of data to support it. For instance, in Vancouver there are lots of foreign investors. Even here in Kelowna, if you go up to Big White, there's a whole bunch of people from Washington State that own condos up there. Property transfer tax for them…. That wouldn't be a first-time homebuyer for them, because they're not moving here as their primary residence. It would be a supplemental or a vacation property, a rental property for them.

C. James (Deputy Chair): I'm just following along on the property transfer tax. I appreciate the approach of looking for options within the existing revenue, because, as you say, it's a large amount of money coming into government. But I think everybody agrees that the more we can do to make housing affordable, the better it's going to be economically, as well as for the individual.

One of the questions I've had raised to me is the fact that you may see sellers benefit if you get rid of the property transfer tax or lower the property transfer tax, because then they'll know that the buyer is not having to pay that tax. Therefore, the market will just increase the price of housing, and you'll end up seeing the seller benefit and not the buyer.

I wondered if there are any kinds of studies that you've seen, or any kinds of checks and balances that you would see that could ensure this actually is a benefit to the buyer and doesn't just become another tool to increase the price of housing in British Columbia.

K. Carmichael: That's a great question. At the end of the day, I believe there are market forces that will do it. That definitely could be something that happens.

When we looked at it, particularly from a first-time-homebuyer point of view, often we find that individuals can afford the mortgage payment. I think back to myself. My first mortgage payment was the same as my rent. I could afford it. But it's the hurdle of getting in the market. It's the hurdle of paying the lawyer, getting your 10 percent down, paying the property transfer tax.

Sellers sell and buyers buy, at whatever that price could be. If the property transfer tax isn't there, I would think that buyers could afford, potentially, a slightly more expensive house — or not, depending on where that is. I haven't seen anything specifically toward that. There are other analogies in other situations, but it's a market, right? It's a free market. There is a danger there, but then the buyers won't buy that house, and maybe the sellers will drop their houses a bit. I don't know.

D. Ashton (Chair): Thanks very much, Ken. I greatly appreciate it. One scenario, if you have a chance to have a
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look at it — I read about it late last night — is a development on a particular Indian band's property where there are 99-year leases involved. The property purchase tax is not applicable because of the lease. These things seem to be gathering steam.

K. Carmichael: In my practice. I'm an accountant. I'm a partner with an accounting firm. I work with several First Nations and the 99-year leases, and how they do those things is definitely a growing thing.

D. Ashton (Chair): Well, you've guided them well. But also the province doesn't have that ability even, whether it's first- or second-time buyers on it. A question that was raised in the piece that I was reading last night was why — so something to think about.

Thank you — greatly appreciate it. There are some great apples over there, if you want to grab a couple on your way out.

E. Foster: Kelowna Chamber of Commerce people would never have the chance to get apples.

K. Carmichael: No, I grew up in Kelowna. To tell you the truth, I've had so many apples in my life….

Up next we have B.C. Tree Fruits — Mike Daley. Mike, welcome, and Rick, thank you for coming. You left Seattle at what time this morning?

D. Ashton (Chair): Thank you, and glad you made it safely. Fred was here, and Glen was here a little bit earlier, and it was nice of them to bring those.

Mike, ten minutes for the presentation — I'll give you a two-minute warning if required — and then we have five minutes for comments or questions from the panel. The floor is yours.

M. Daley: Great. Thanks, all, for taking the time to chat with us. Rick will walk you through a little bit of the history of B.C. Tree Fruits, a couple of quick minutes, in case you guys aren't familiar with who we are.

I can tell you that I had the chance to meet with Eric and Dan and the Okanagan caucus last week. What we're proposing is pretty straightforward, and it seemed that we had the unanimous support with the more detail that we were able to provide in a longer period last week.

Rick, if you want to kind of give some background, if you could, on B.C. Tree Fruits.

R. Austin: Sure, B.C. Tree Fruit Cooperative. We're a company that's just under 80 years old in the Okanagan. As I say, we're a cooperative, owned by 500 growers. Those growers are based everywhere from down south, starting down at the border by Osoyoos and going as far up to Kamloops, even into the Creston Valley.

As you can see, our growers grow fruit, and we sell that fruit throughout the world but mostly into western Canada. Probably 85 to 90 percent of our fruit is sold into western Canada, with apples being the main product that we sell.

Just quickly, I guess, to give you an idea of what we're in right now, apples come in a standard 40-pound box. We sell about three million cartons of apples from B.C. Tree Fruits or in the valley. Washington, our main competitors this year…. Their estimate this year is 140 million cases of apples, compared to our three million.

One of the challenges that we have is the fact that of the fruit that we pack, about 79 or 80 percent of it goes to the fresh market, and 20 to 21 percent of that fruit goes to the process-grade market. For process-grade fruit, the grower actually has…. Last year, which was a very good year for a grower in terms of growing, process-grade fruit returned a negative nine cents — a reduction to the return to growers last year.

We are challenged all the time to come up with ways to improve that for our growers and get more money for that product. As the bar continues to go up for retailers, the quality they want, more process-grade product becomes available.

M. Daley: That's kind of where I've gotten involved. B.C. Tree Fruits is planning to go into the craft cider business to increase the profitability in that market segment for the grower families that we support. I'll just kind of read some of the points that I want to get across quickly.

Our winery licence that we applied for with the Liquor Distribution Branch…. Being that we're of a cooperative nature, our winery licence was not able to fall under a land-
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based model. You have to be on a minimum of two acres of agricultural land. Well, we have hundreds, if not thousands, of acres of agricultural land within our grower family.

As a result, as cider is included under the winery licence — just so you guys understand, cider falls under a winery licence — we were deemed as a commercial winery in recent months through the BCLDB. The current BCLDB model does not allow for this cider business to receive the benefits of a 100 percent B.C. product, as wineries do under the current model. That's really why we're here today. This would provide the opportunity for us in the industry to grow and thrive, similar to the wine industry that has done so well within our province.

All 100 percent B.C. agriculture products sold under a winery licence, regardless of the BCLDB financial reporting model, should receive the same quality enhancement rebate under a winery licence. It's very important for you guys, because you guys are looking at this from a financial side.

It is understood that for every dollar invested in the wine industry, the economic impact returned is $10 to the B.C. government. So there's a gain to the government, even if it is not reflected in the BCLDB bottom line. The BCLDB will most likely not be in favour of what we're requesting, as they are measured on their direct contributions to the government. It has its own operating system, and we fully understand that.

This is why we need your support to implement a change to the policy within the BCLDB. The job creation and economic prosperity associated with the agricultural products, as we have stated, will more than compensate for any direct BCLDB market reduction. Once again, we use the ten-fold, and I've attached within your literature an economic impact report from 2011 which talks to those numbers.

Our initiative is supported by the B.C. Wine Institute, as stated in their policy recommendations to John Yap, and aligns with Premier Clark's goals to promote 100 percent B.C. products and grow jobs within British Columbia.

What we're looking for, with request, is for the government to give direction to the BCLDB to treat all 100 percent B.C. agricultural products that qualify under a winery licence the same, whether fermented from grapes or from other fruits.

In conclusion, we're very excited about this opportunity. The cider industry is growing exponentially within the province as well as through the United States. The craft cider industry grew 74 percent in the United States last year. There's a huge amount of interest attached to craft ciders. It's now outpacing craft beer growth within the United States from percentage of growth. We want to be part of that wave, and it aligns very well with our business.

E. Foster: A couple of things. Are you planning on sticking strictly with apple, or are you going to go to peach ciders?

M. Daley: The business plan would be to move on to pears in our plan for next year. We'll have a pear offering in 2015.

E. Foster: Actually, you were kinder to yourself than the Fruit Growers. They said you were only dinging them 8½ cents for their juice apples. You said nine.

Right now would you say that…. For example, you're going to not take quite so much money from the growers for your product when it gets diverted.

M. Daley: We don't take it from the growers. We are the growers, basically. B.C. Tree Fruits is a cooperative.

Currently, just to give you guys an idea, Washington State is about 50 times the size of our apple industry in British Columbia, so they move fruit in at very low cost into our province — and juice. We deal with juice. This secondary fruit that we're going to use for the cider ends up going to juice and is a loss-leader to the growers. All that fruit becomes a loss revenue to offset the fresh fruit that they sell.

E. Foster: Maybe I don't understand this. If I shipped 100 pounds of apples, and 90 pounds of those apples went for the table apples and ten pounds were diverted into juice, I would have to pay 90 cents out of what I would have made off it. I lose nine cents a pound on those, right?

E. Foster: So instead of getting 20 cents a pound for all my apples, I'm going to get 20 cents minus the nine cents a pound I lost.

E. Foster: No, no, I hear you. In other words, the money for those diverted apples is deducted off of what you would have been paid for the table apples.

E. Foster: Okay. So are you proposing that with cider you're going to have a higher-value product at the end? You're going to be able to either lessen that or actually break even or pay a couple of cents for those cider apples.

And by the way, don't get into a long-drive competition with him. You'll lose your shirt. Just a word to the wise.

Well, thank you very much — short and sweet. Appreciate it. Rick and Mike, thanks.

R. Austin: Make sure you eat all of those apples before you go too. Actually, then buy some more. Don't just take the free ones, okay?

D. Ashton (Chair): Hi Jessica. Come on forward. Thank you for coming this morning — or this afternoon, actually, now. What we have is ten minutes for the presentation — and I'll give you a two-minute warning if it looks like you're going to push into the ten minutes — and up to five minutes for questions. It depends on the issues — as you saw here, not a lot of questions. Other times we have to cut everybody off because we run out of time.

J. Lar-Son: First of all, there was a little bit of a clerical error. I am the president of the Kwantlen Student Association, but I'm here representing the Alliance of B.C. Students.

The Alliance of B.C. Students is a new organization just kind of getting its feet under itself. We're representing over 165,000 students across eight schools and nine student associations. We include the UBC Alma Mater Society, BCIT Student Association, the Capilano Students Union, the UBC Graduate Student Society, the Kwantlen Student Association, Langara Students Union, the University of Fraser Valley Student Union Society and the Royal Roads University Student Association. Over the last few years we've also worked with both the graduate and undergraduate student associations from the University of Northern British Columbia and a few projects with the University of British Columbia Students Union Okanagan.

Just to let you know, we're going to be highlighting a few of the student priorities as far as the provincial budget goes — a few topics — starting with the student loan interest rates, student grants, support for trades through material costs, graduate student scholarships and deferred maintenance. I'm going to keep it pretty brief for you today, just touching on a few things that have been brought up to us across our institutions, starting with student loan interest rates.

In British Columbia students who take out loans pay back an interest rate of 5 percent prime plus 2.5 percent. I'm sure most of you are familiar with David Eby's report Declining Futures. One of the things that he highlights here in relation to high student loan interest rates is that the increased student debt often leads to students being unable to remain in full-time studies, which often leads to many students taking a very long time to complete their degrees but also means a lot of students will just end up not graduating.

Eby also states that the average amount of debt for a student in B.C. is approximately $34,886 upon the completion of their degree. He also includes a quote from a student. This is something that I have personally experienced not only firsthand but have heard from many other students across our institutions. "The students are putting groceries on their credit cards because they're barely able to make ends meet." A by-product of this situation is that student associations are stepping up their food banks, but at this point they're at their capacity in a lot of situations.

Moving on to student grants, one thing that could help, potentially, deal with the amount of growing student debt would be to increase student grants to supplement the provincial and federal loan programs. Even in the situation where students are willing to take on that debt, it often is still just not enough to make ends meet, essentially.

The Families First website, which gives information for individuals looking to come to British Columbia, gives an expected cost-of-living estimate of about $30,000 per year for a single person living in a small apartment and using public transit. Right now students can only expect to receive approximately $16,640 from their loans, which is the maximum. Personally, I've never received that amount. That's only about half of what the province projects as an expected cost of living.

It is the main concern of the Alliance of B.C. Students that students are supported by the province to complete their studies without being swamped by debt.

Moving on to support for trades, this is something that's a little bit near and dear to my heart, because at Kwantlen we have four different campuses, and our Cloverdale campus is devoted mostly to trades students.

The cost of raw materials can add an extra burden, especially for preapprenticeship programs. Students in trades can expect to pay hundreds of dollars on top of their tuition, books and other fees.

At Kwantlen in particular, we have heard directly from our students that this can discourage individuals from low-income families from pursuing post-secondary education, and considering that some of our main concerns at the ABCS are increasing affordability but also accessibility, especially to low-income families, this is a direct concern for us.

Graduate student scholarships. So far we only have
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one graduate student society as part of our alliance, but we are in discussion with the graduate student society from the University of Northern British Columbia as well.

Other provinces such as Alberta, Ontario and Quebec already have fairly robust programs and so can out-compete B.C.'s colleges and universities in this regard. This is something that myself, personally, looking towards my future educational career…. I'm looking outside of the province because there are more funding options.

Again, we have an issue where students will be looking to go outside of the province for education, are therefore less likely to bring their talents back to B.C. once their education is complete, and they are also definitely less likely to choose a university in British Columbia.

Deferred maintenance is another issue that was brought to me by the members of our alliance. Students across our institutions have expressed concerns related to deferred maintenance. They believe that existing money that the Ministry of Advanced Education has for new buildings should instead be used to revamp older buildings or repurpose those older buildings.

More often than not, we're seeing the burden of renovations and construction of new buildings being placed or taken on by student associations. For example, at Kwantlen most recently we have done renovations for our student athletes' lockers and are building lockers for our nursing students. We are also renovating the cafeteria area at our Langley campus to make it more student-friendly.

We also have the creation of many student union buildings. As I'm sure you know, UBC has one hopefully opening soon. The Kwantlen Student Association is also looking to partner with the university in creating a student union building.

Overall, the Alliance of B.C. Students would like to stress the importance of affordability and accessibility of post-secondary education in our province. We would like to see more support coming from government for essential services to meet the growing needs of students.

That's the gist of my report today. I just want to take a moment to say thank you so much for taking the time to listen to the public on these issues. It's something that we at the alliance think is a step in the right direction, for sure.

G. Holman: Thanks for your presentation. Just about the support for grad students. You're in that situation yourself and looking at your options.

G. Holman: Soon. Looking at your options, you're saying the supports in British Columbia…. I think we had a recommendation last year around fellowship programs for MA and PhD students. Aside from what specific kind of support, you're saying B.C. isn't as competitive as it could be with other provinces?

J. Lar-Son: That's what I'm hearing from the graduate students that are part of our alliance — particularly from the graduate student society from UBC.

S. Gibson: I taught at a couple of universities you represent. One of the things that a lot of students do…. They'll graduate with a credential, but they won't really have any work experience. Of course, one of the things I encourage a student to do is work as much as you can. Sometimes they get mad at me, and they say: "Well, I'm so busy. I'm studying for exams." I say: "I worked basically full-time when I did a couple undergrad degrees." Even though my social life was pretty nominal, I ended up with these credentials, plus I had the work experience, so when you apply for that dream job, you've got both the experience and the credential.

I know sometimes we've had students come to us and say: "Well, I don't want to work very much." But actually, it's a good thing.

J. Lar-Son: From my own experience, I have worked at least part-time, but most of the time, full-time for the entirety of my educational career. I'm now in the sixth year of my schooling, and I'm still working on my BA.

The issue for a lot of us when it comes to "you should work more" is that I think students now — or, at least, in student associations — have a better understanding of the fact that you need to holistically look at your health and that your mental health is just as important as your physical health. Driving yourself to the point where you're working full-time at minimum wage, you're still not making enough money, you're not getting enough student loans, and you're failing your classes because you can't sleep…. There are just so many issues that can come into telling students: "You should work more."

That would be great if all of us could be good enough at managing our time, but the fact of the matter is students are not always as good with that.

I mean, that can, again, start from many other issues: they don't have the support; they weren't taught to do that. Especially looking at first-year students or new students, that can be something…. They're moving out of their house for the first time, maybe living in residence, and they just kind of get thrown into the deep end without the support that they need.

Personally, I work. But it's not a reasonable thing to expect from all students, especially students with disabilities, students with disabilities that aren't recognized because they're mental health–related. There are just so many other issues that come into it. It's not that not all
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students can do that, but it's very few who can. Maybe yourself or myself are one of those few.

S. Gibson: My mental health was pretty good, I think. But no, I appreciate it. If I may, certainly for disadvantaged students or students with disabilities, the equation is different.

J. Lar-Son: But again, not all of those disabilities are always recognized, such as anxiety disorders and things to that degree.

S. Gibson: Yeah, and I also found that students that sometimes had the toughest times often did the best at university, and the students that were bankrolled and drove mom's Corvette didn't do so well.

D. Ashton (Chair): Good afternoon, gentlemen. Thank you very much for coming today. The presentation is ten minutes. I'll give you a two-minute warning if it looks like you're going to go up to the ten minutes. Then we have five minutes for questions or comments from the panel. I will leave it with yourselves. Who would like to start?

J. Skinner: I'm John Skinner. I'm here with two of my great friends in the B.C. wine industry, Kim Pullen and Tony Holler. Tony's from Poplar Grove, and Kim's from Church and State. My winery is called Painted Rock Estate Winery.

Our industry is in a very, very fun, dynamic and strong position right now. The three of us have been in…. We're kind of the new guard, and we don't mean it in a negative way. It's in a way that's very celebratory. We all come from quite varied business backgrounds. I was an investment banker. My good friend Kim was in the fish-farming industry, and Tony sold Canada's largest biotech company and committed all of those funds to the B.C. wine industry.

We're enjoying where we're getting internationally. We're really hitting marks that we're all very proud of. But the industry right now is simply a coming-of-age reality. I describe it as a bit of a realignment happening. We have goals for the industry that are perhaps not conflicted but are beyond what had previously been aspired to in the industry, and we're aiming at different goals.

To get back on my topic here, Terroir B.C. is an entity that we just created recently. It's an all-inclusive initiative inviting any B.C. winery that produces wine from 100 percent B.C.-grown grapes to be a part of it. We want to be inclusive. The purpose of that is really to take ownership of this dirt, this terroir. Every primary region in the world has an attachment to its dirt, and that's its signature, and that's its value. This is something that we have been juxtaposed — kind of at loggerheads — with the industry as it is, because it's somewhat conflicted with international wines that come in.

Terroir is a non-profit association focused on the growth of international reputation of wines of British Columbia. Terroir enjoys a positive association with the British Columbia Wine Institute, although evolving. The problem with the B.C. Wine Institute right now…. And it isn't a negative. These are evolutionary. I tell people this is an evolution, not a revolution. This is something that is very, very positive.

There are currently 260 wineries in B.C. Only 137 are represented by the BCWI. So who does that exclude? There are a myriad of smaller wineries in British Columbia that we call the disenfranchised. These are core, anchor….

Somebody described this a while ago as a splinter, and I said: "You're mistaking the splinter for the root." These are people who are engaged. They have invested massively in building something that is creating the jobs, tourism and all those ancillary things that really anchor our industry. It's not the big guys bringing in bags of wine that are producing copious amounts of…. We have no problem. That's not the fight here. We think there's a place for that wine.

Terroir B.C.'s mandate is to represent all wineries, including members of the BCWI, who produce wines produced from 100 percent B.C.-grown grapes. That's the simple mandate. Terroir B.C.'s mandate is broader to include important issues that have not become a priority of the BCWI.

T. Holler: John, I think it's worth mentioning that the BCWI's mandate all centres around VQA wines. That's what the basis is for it. Obviously, we believe that as this industry evolves, there are very many more important issues that are important to the growth of this industry.

J. Skinner: Indeed. And the thing about VQA…. VQA was a really necessary entity at a time when the industry was horrific. I grew up in B.C., and believe me, we needed a marshal there to make sure that you weren't selling stuff that poisoned you.

Well, that's not the case now. Now we're making very good wine, and that has become somewhat of a lowest common denominator. So we get it.
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Getting back to Terroir B.C., this was an organic evolutionary coalition of like-minded wineries that just said: "You know, we need to change the landscape a little bit, and we need to make it better." In our short history we've been together for two months. We've attracted the majority of award-winning wineries. We now have 56 members of the 250 wineries. We'll have 100 by Christmas. It's dynamic; it's inclusive. It's really invigorated, but in a complementary way where we want to work with the BCWI. We want this industry to grow beyond our borders in Canada and to grow beyond our borders internationally.

But the industry needs a little bit of a kick in the pants. You can see on the membership, we've got the founding eight members. These are all really serious wineries. These are collectively…. Kim, you referenced that the production of Terroir represents….

K. Pullen: This membership represents about 240,000 cases. It's estimated by a study conducted by the BCWI, the B.C. Wine Institute, that every bottle that is produced and sold in British Columbia has an economic impact of $45. If you multiply it out, this membership that has accumulated in just two months has an economic impact in this province of about $129 million. It's a significant and growing group.

J. Skinner: The key tenets of the Terroir B.C. initiative, or our grouping, are primarily brand recognition and establishment internationally; fairness in labelling — that's a line in the sand with us; strategic distribution of wines of British Columbia; and contributing to British Columbia's economic development.

In terms of brand recognition, one of the things that I notice…. I travel a lot. I'm shipping 2,000 cases of wine to China today. We sell 40 percent of our production there. I'm in London. I'm in Germany. We are getting beyond our borders. When I go to these places….

This dates back to my investment business. I used to go get the business. I'd jump on a plane, and I'd go wherever it was. The constant reminder we get is that we need to rebrand ourselves away from ice wine. Everybody thinks that Canada is just a producer of ice wine. We need to change the imagery from clusters of grapes in snow to clusters of grapes in bikinis. We've got a desert here that is absolutely something to be celebrated, and even the people immediately south of the border don't recognize that it's here. It's something where we just need to get out there and tell the story.

I'll get on to fairness in labelling. It's the elephant in the room. Fairness in labelling is something that we endure, unfortunately, because we have wine coming in, in great big bags, from foreign countries. When it gets sold in British Columbia, it gets sold as international Canadian blends. It's not. My mother buys something called Sawmill Creek, thinking she's helping our industry, and she's not. The only person that employs is a truck driver to bring the bag up.

All we ask is a simple label on the bottle, and that's it — "Product of Chile." Thank you very much. Let's clear that up.

Strategic distribution of wines. When our wines are available in liquor stores and in grocery stores…. This is a pivotal time. Decisions are being made in our industry right now that will be around for a long time. We're really happy that the government's addressing them. But we need VQA wines and non-VQA wines to be an anchor tenant in the grocery stores. We have to have space there. This is something that we need protected.

We're going to have to do studies and figure it out. We don't want the decisions made hastily. Contributing to the….

K. Pullen: Right now, as often happens in these kinds of industries, supply can outpace demand. We're heading into a three- or four-year period of that. During those times it's really the small farmer, in this instance, who gets hurt the most. They don't have the economic support to be able to weather the storm.

When we go into places like the government liquor stores — which was one of your own resolutions of your review, that there had to be greater support by the government stores of B.C. wine — we have to ensure that that's fair and open to small guys that don't often have a marketing department. It's usually either he or his wife who do the selling themselves.

Same thing as we go into grocery stores. That could be a game changer in this industry. For us, we're asking for caution, and we're asking for good shepherds. There's a time here for government to play a role in protecting the small players.

J. Skinner: Now I'm going to fast forward a little bit to the industry overview. The reality in B.C. is that in essence, today's sales of wines produced by only 100 percent B.C.-grown grapes is unacceptably low at 20 percent. The wines consumed by Californians in California — 85 percent of it is California wine. Ours is 20 percent in B.C. We can really grow that number. That's something that we're really intent on.

T. Holler: I just mention that that has a lot to do with shelf space at the B.C. LDB and other places. If you only give us 5 percent of the shelf space, it's not surprising that this is the case.

J. Skinner: We need to develop a strategic plan to promote B.C. wines in British Columbia.
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D. Ashton (Chair): We just need to wrap it up, if you don't mind. We're getting into the questions. I'm quite sure there'll be some questions, so I apologize.

J. Skinner: Okay. What we are asking…. We've got a wonderful champion in Michelle Rempel in the federal government. She wants to help us. She wants to help us grow the brand. We're preparing an application to Western Economic Diversification — that's her ministry — for $900,000. We'd like to leverage that with an ask of you for $300,000 to be able to get this ball rolling, to be able to work cooperatively.

This addresses things like interprovincial shipping. It addresses all these issues that are latent, that are part of the whole massive fabric. We want to work with the feds, get money from them and really anchor a new exploration of growing the B.C. brand and the Canadian brand.

S. Gibson: I don't know much about your industry, so thank you for teaching me a little today. My question is: why don't you guys just decide that you're going to have your own B.C. labels and have all of your members decide they're going to have some thematic graphic on all of the labels that says "B.C." so that when I come into your store, government store or whatever, I can see right away the image of your B.C. wines? That's my question.

K. Pullen: It's a great point, and I think we're going to get there. But if we deal with the government liquor stores…. Seven percent of all wine sold in your government liquor stores constitutes B.C. wine — only 7 percent — and since your policy, that number has dropped to 6 percent. It's no good for us to put a sticker on our bottle if we can't get it on your shelf.

J. Skinner: It comes back to the structure of the BCWI, that it's anchored…. The majority control is the big guys, and they're the guys bringing in…. Their feet are in two camps. They're in B.C., but they're in the CIC. We need to empower ourselves to be able to reframe the way that this business is conducted in B.C.

J. Skinner: Cellared in Canada. Originally it was product of Canada, and they'd bring in Chilean wine and call it that. Then people fought back, and they called it cellared in Canada. That's a nice way to say it. Now they call it international Canadian blends. It's the same stuff.

We said: "Guys, enough is enough. Tony has a lot of money invested in this business, I've got a lot of money, and we're calling it out." It's a coming-of-age thing. If they did this in Burgundy, they'd burn your house down.

T. Holler: In places like Washington state they don't even allow this. They don't allow international wines coming into their market, being blended and sold in Washington State. They don't even allow it, because they recognize that it hurts the reputation of that wine region.

I think it's a really important point that when we have wines that we sell and somehow associate with Canada or B.C. and they're not high-quality wines, it hurts our reputation. That hurts us guys because that hurts our ability to price properly, and it hurts our ability to sell certain volumes of wine as well.

J. Skinner: Jancis Robinson is the top wine reviewer in the world, and she recognized CIC when she was here. She said: "How can you abide it?" Well, we're saying: "How can we abide it?"

G. Heyman: Quickly, I want to get to what was my main question, which was: in addition to shelf space, which I recognize is a significant factor, what other factors do you think inhibit the growth of B.C. production being bought locally above 20 percent to, say, 50 percent? And how do you think the price of comparable-quality B.C. wines compares to the main competing jurisdictions like California, Chile?

K. Pullen: Right now B.C. wines, to the extent that they're sold in the VQA stores, have an average price point of about $17 to $18. That is a significant price point. What it shows you is the potential of Buy Local. B.C. is visceral about Buy Local. It will support our products, even if they spend a bit more. Our costs of production are much higher than any other country. Land around here is $100,000 an acre.

What you need is…. The consumer is confused. They don't know what B.C. wine is. They go into a store, and they think CIC is B.C. wine, or what is it? We have to develop a brand so that the consumers in this province understand what B.C. wine represents. There has to be a quality connotation to that brand — and growing that to brands, wines of Canada, as well.

J. Skinner: Yeah, we will never compete for the volume guys, who are all quality.

D. Ashton (Chair): I have one last question, and then we're out of time.
[ Page 995 ]

G. Holman: Just quickly, thanks for the presentation. I appreciate the passion, pretty clear. When you say shelf space, is that just government liquor stores you're talking about? That's a mandated percentage. Is that how that is handled?

J. Skinner: Well, there are decisions being made right now with respect to grocery stores. We need to be at the cutting edge of that. When these decisions are being made, we just want to be consulted. We want to be a part of that. We can't have the big guys saying, "Hey, this is where…. Let's…." We really want to be a go-to resource for government, to help make good long-term decisions.

K. Pullen: I would estimate, if you took all of your government sales of B.C. wine, that 85 to 90 percent of it is captured by less than 15 companies. It is unfair representation in those stores.

John, you and I had an opportunity to chat at the South Surrey Everything Wine last year. I was tasting some of your wines — very good. That facility is quite unique, Everything Wine.

J. Skinner: Do you know what? These places are our brand advocates. They hire people who know wine, and you need that. We need champions, as a young industry. The VQA stores have done that for us. The wine stores have done that for us. In particular, that has been….

I really work closely with those people. I probably know 95 percent of the sellers where my wines are held. It really is….

We are small family businesses, and we really look to you to help us get on the international stage and start showing how good we are.

Before you run, on your request for the finances with western economic development, is there some positive indication that we're getting?

J. Skinner: Very much so. Michelle Rempel — I talk to her every day. She's 34. She's a minister of the federal government. She's a sommelier, and she gets Canadian wine. I flew to Ottawa to meet her. She spent two days with me talking about how we can go about doing it, implementing Governor General of Canada awards, helping us fund Terroir B.C.

We're working with a group in Ontario to have Terroir Ontario, Terroir Quebec and Terroir Nova Scotia and then getting the show on the road. We're the nucleus of it, in the same way we started interprovincial shipping. We've really showed leadership there. We're showing leadership in this.

J. Skinner: Completely. It'll have a huge effect on it. It will have a big effect on that as well.

D. Ashton (Chair): Okay, so we're well on our way. Thank you very much for coming up today. I appreciate it too. There are some great Ambrosia apples over there. If you want lunch on the way home, grab one.

D. Ashton (Chair): Next up we have Fortis British Columbia — Vanessa and Brent. Folks, it's nice to see you again, and thank you again for your hospitality at UBCM. I just want to say that it was greatly appreciated.

What we have today is the opportunity of a ten-minute presentation — I'll give you a two-minute warning — and then we have five minutes for questions or comments. Everybody else will come back in half a sec. If you don't mind starting, that would be great.

V. Connolly: Perfect, sure. Well, thank you so much for the opportunity to present today. It's great to see so many friendly faces here.

My name is Vanessa Connolly. I'm the manager of government relations at Fortis, and I'm joined by Brent Graham, our manager of energy products and services. For those of you not familiar with FortisBC, we deliver natural gas, electricity and alternative energy solutions to over a million customers in 135 communities across the province. We are 100 percent Canadian-owned, and our parent company, Fortis Inc., is based in St. John's, Newfoundland.

We're here today to talk to you about an initiative we're working on to bring more energy choices to British Columbians. We want to make it more economical to bring natural gas to new communities and to customers in communities where we currently serve natural gas.
[ Page 996 ]
We've been working through a regulatory process and meeting with a number of stakeholders across the province. Most recently we sat down with a group of MLAs in the Okanagan area, who encouraged us to bring this forward to the committee for your consideration.

I'll start with a little bit of background. In 2012 FortisBC Electric brought in residential conservation rates. This is similar to B.C. Hydro's two-tier electricity rate. It was mandated through legislation, and it's designed to encourage conservation. It does so by charging a higher rate for electricity for customers' usage that exceeds a certain kilowatt hour.

What we found at Fortis is a bit of an unintended financial consequence for some of our customers. Those are customers in rural areas that don't have access to other fuel sources or other choices. They can look at conservation measures and energy efficiency investments for their homes, but if their heat and hot water load is all electricity, chances are they're going to stay within that second tier.

It's a pretty significant rate impact for them. For some of the customers, it's upwards of 20 percent and even higher for their bills. We've been looking at what kinds of solutions we can find that will address the concerns they have with respect to their bills and also continue to meet government policy objectives.

On the gas side of our business, we've been looking at our system extension policy, so how we connect new customers to the natural gas system, both new communities and existing communities with gas service, and looking at how we can make natural gas more accessible to more British Columbians.

An example I wanted to point to is that last week at the UBCM conference we announced that we're doing a study to convert Revelstoke potentially from propane to LNG. Revelstoke is currently a piped propane customer of ours. We're looking at the potential of bringing LNG from our Tilbury LNG facility in Delta on truck to Revelstoke and distributing it via the current pipe system they have. It's pretty significant. The economic impact for customers there is that 50 percent of their utility bills could be saved, so very significant for our customers in Revelstoke.

You'll see a slide here. We have B.C. households. This just gives you an indication of the savings that could be achieved for our customers that currently have heat and hot water with electricity, if they were to switch to gas. It's pretty significant cost savings. I think for us, in the conversations we've had with customers and with representatives, it really drives home an issue that, to quote one of the representatives, their constituents are facing: heat or eat. It's really a challenge for them. If they need to heat their homes and this is a significant kind of cost they're facing, how can we look to address that?

B. Graham: If we look at the slide entitled "System extension review," the process that we're underway right now with the B.C. Utilities Commission, because we're a regulated utility, all the constructs that we have to attach new customers — whether it's a service line or one of our bigger pipes, like a main extension — are governed by the Utilities Commission. Any time we go to change that, it has to be through that mechanism.

The forum that we've chosen to go through here is a consultative process. We've had a number of different workshops. We've got one coming up in about a week or so, and we have all of the utilities in the province represented. We have residential, commercial, First Nations. We have an MLA. We have a number of different government ministries participating.

Our role as a utility is really to try and facilitate the dialogue and balance the different interests at the table and come up with some sort of a compromise solution going forward. That's sometimes easier said than done, as you can imagine, as there are a bunch of potentially competing interests at the table.

The types of customers we're talking about that are affected, as Vanessa said, by this question of heat and hot water…. She talked about that at a household level. But when we look at it more from a type of an infrastructure and where we get our energy from, period, one market is in the new-home construction side of things. So of any new dwelling built in British Columbia, about 70 percent of them have gas service. Over time of that 70 percent, we used to get about 90 percent of those that would have heat and hot water from natural gas.

Today that number has dropped by about 20 to 30 percent. Generally, what we're seeing is whatever we're losing on the heat and hot water side is going to electric. On new home construction, that decision-making is being driven by the builder or developer who's got some sort of new development, and they're the ones making those energy decisions. You can see on this slide here from CMHC about 25,000 housing starts annually that would be affected in that type of scenario.

Another type of opportunity for customers is what we call conversion. This would be an existing home. It would be generally in close proximity to our infrastructure. On Vancouver Island is a very good example. There's a lot of heating oil where customers are actually on our system, but they aren't a gas customer, and it's an existing home. Instead of a new-home construction, this would be a conversion.

Provincewide there are about 100,000 customers that are within 50 metres of our infrastructure and that we would be trying to convert from some other fuel source. On the Island, for example, it would be heating oil, typically, to natural gas.

You can see the breakout there. It's about 65,000 on Vancouver Island, 20,000 or so in the Interior and the north and about 8,000 in the Lower Mainland. Typically, that's more around the Squamish area.
[ Page 997 ]

Then another group of constituents whose interests we're trying to address through this workshop process is what we're calling off-system communities. That's kind of utility-speak for communities that do not have any gas service whatsoever.

We talked about Sicamous when we came out to the Okanagan folks. Sicamous is about 15 kilometres from our nearest infrastructure and has a population of about 3,000 people. It's a relatively dense population, but currently we don't have any service whatsoever to that community.

Our traditional ways of attaching a new customer — it's an economic test. If we went through that mechanism, it would be quite difficult, if not impossible, for us to ever provide gas service to Sicamous. Through this process with the commission, we need to look at some more creative ways for us to try and fulfil…. I keep picking on Sicamous here, but if we're going to get to Sicamous, it's going to take a non-traditional means for us to get there.

One way of doing that, I think, is with government support and direction. For example, in Ontario they recently introduced a $200 million fund for off-system communities. They positioned it like that. They wanted those communities to enjoy the benefits of relatively low natural gas prices.

The government got behind that. Then the utility can quickly adapt and provide the mechanism to deliver the energy. But without that will and the push, it's very difficult for us to try and influence those kinds of changes, because we're a regulated utility.

Then in addition to the new construction, conversion and off-system, we have 750,000 residential customers with between 60 and 90 percent of them using heat and hot water. Every time your furnace or your hot water tank craps out, you've also got a decision. You can also change at that point from gas to some other energy source as well. That's an ongoing energy supply question that we're trying to address as well.

In terms of next steps, on the last slide here we have the third workshop coming up in our consultative process on October 8. What our intent is, is to have, hopefully, one more workshop after that. We're looking at an application to the Utilities Commission in the first quarter of 2015.

Our hope is that we'll be seeking letters of support from all those participants that I talked about earlier. In the regulatory process, if we don't have that…. It gets very difficult to try and push initiatives forward if we don't have the alignment, especially, of government for what we're trying to do as a utility.

These five principles that you see outlined on the slide here, with the top one being consistency with government objectives, have been defined by our stakeholders in the process.

We're trying to recognize that the government is trying to balance different interests in this process — of environment and economic growth and that kind of heat-or-eat idea — along with giving folks an energy choice and also providing access to natural gas for off-system communities and for First Nations communities that are more typically farther away from our infrastructure.

The last couple here are just some other considerations about making it easier to administer and making sure that any changes we do aren't going to negatively impact our 750,000 residential customers. In other words, we're going to be prudent in terms of how we propose growth going forward.

D. Ashton (Chair): Vanessa, Brent, thank you very much. We greatly appreciate it.

G. Holman: Thanks very much for your presentation. Some stupid questions from me. I'm trying to be clear about what the public interest is here.

You mentioned Ontario. Is it access to a cheaper fuel source? I do have a couple of other questions, but what is the public interest? I take it you're not asking for dollars. You're saying that Ontario established a fund. You're asking for regulatory support — go through the process, and that will come or it won't. So just as a start there.

V. Connolly: We're going through this regulatory process now. We don't have a specific budgetary ask at this time. From the committee's perspective, perhaps, and from government's perspective, it's looking at these various objectives and kind of reconciling what they are and finding a balance.

Encouraging energy choice for British Columbians and having those options available will lead to cost savings. It will provide economic development opportunities in new communities.

That was just an example in Ontario, of what they've chosen to do, but there are other ways that we could have support from government through this regulatory process.

G. Holman: Just quickly, for example, greenhouse gas emissions. Now, depending on the fuel you're switching from…. If it's heating oil, for example, maybe there's a greenhouse gas benefit there. That's one element of the public interest that I wondered if you had a response to.

In terms of LNG, if those projects get off the ground and suppliers start accessing higher Asian prices, is that going to pull prices up in British Columbia and reduce the price differential that now, in many cases, is an advantage? Natural gas is quite cheap. But as LNG comes through and starts pulling prices up, would it pull up domestic prices as well?

V. Connolly: I'll address the first one. I think that the greenhouse gas emission consideration is one that government is going to have to balance, along with the others. There are certainly some opportunities that would be reducing greenhouse gas emissions. I think Vancouver
[ Page 998 ]
Island is probably one of the best examples of that, since there are a lot of folks using heating oil.

Certainly, what we want to do is just facilitate this dialogue. Our customers are providing us with feedback on what they're facing in terms of their utility bills. I can tell you a lot of that is more on the economic considerations that they're having to face and their bills. So we wanted to bring those forward and kind of just more facilitate that dialogue, but we understand that balancing those objectives is something that government is going to have to take a look at.

B. Graham: The second part of your question related to future pricing — not to be facetious, but nobody has a crystal ball in terms of what the future is going to look like, whether it comes to B.C. Hydro's rates or to natural gas and the timing of relative export projects and what that would do to domestic pricing.

We get about two-thirds of our gas from B.C., roughly a quarter from Alberta and the balance from Washington State. There's a whole bunch of different factors that would play into gas pricing.

S. Hamilton: Thanks for your presentation. That was along the lines of the questions that I had. It seemed like Vancouver Island was the low-hanging fruit, right?

My questions were what the impediments are to conversion and what programs, if any, are available to households or businesses to convert. I mean, natural gas has been on Vancouver Island now for 20 years, possibly, and it seems that the conversion rates are extremely low, except for new housing, new buildings.

B. Graham: I'll take that one. Your question, the first part, was what the barriers are to attaching. It's kind of a two-part process. One is that we need to get gas to the home. In a nutshell, the way our mechanism works is each customer gets a cost allowance. If the cost for us to reach that home exceeds that allowance, the customer has to pay the difference. So if you have sidewalks or stuff like that that provides an impediment for us to get there, their cost goes up, and they have to bear the cost, the difference.

The mechanism that we're looking at with the commission is what that allowance is. Obviously, the bigger the allowance, the easier that piece is going to be to attach.

The second part of the decision-making process, and we talked about this in the Okanagan, is the appliance itself. Typically, a gas appliance is more expensive. For example, a furnace is more expensive than a baseboard heater and venting and things like that, so the consumer has to make a two-part decision around (a) get the service and (b) get the appliance.

Then the last part of the question was what we're doing to help bridge that gap. We do communications activities and talk about the benefits and whatnot. But specifically around incentives, it's called a switch-and-shrink program. If somebody is switching from a higher-carbon fuel to natural gas, we have up to $1,000 if they're doing their heat. Then we also have other energy efficiency and conservation programs for hot water and fireplaces as well.

You mentioned the crystal ball. I think that's two-thirds, three-quarters of the challenges that people are facing — those who switched over to electricity thinking it was going to be the low fuel cost and now are trying to decide what to do.

You mentioned Vancouver Island, and you talked about the conversion from oil to gas, which I think most people can see makes sense and can see the savings. Are you looking at the conversion around electricity to gas on Vancouver Island as well, and do you have numbers for folks around how long before the savings are seen by homeowners? Obviously, it's based on the numbers that are current around what you're paying. But are those kinds of numbers being factored into and presented at the Utilities Commission as well?

B. Graham: Absolutely, to your first question — are we looking at conversion from electric to gas if they're on our system? Definitely. That, to me, is also a low-hanging fruit.

C. James (Deputy Chair): Just asking around the savings seen by homeowners — how long before that occurs? Is that information being presented?

B. Graham: Vanessa talked about a typical household. At first they're saving $1,500 per year. The trade-off that they need to look at in terms of the payback is: what's the capital cost differential of their appliance? If they need to invest, say, $5,000 for a furnace and they're saving $1,500 a year, then you've got a three-and-a-bit-year payback.

To be candid, most consumers are not that sophisticated. We provide tools on line for people to do those sorts of calculations and encourage them. But most people barely know what their utility rates are, let alone what their payback would be on appliances. It's challenging, but we're out there trying to do that.

C. James (Deputy Chair): Pretty critical information, I think, when you're looking at the conversion, for most people.
[ Page 999 ]

B. Graham: Especially on the Island, with us moving towards amalgamated rates. We're doing a blitz this fourth quarter to get at exactly what you're talking about.

D. Ashton (Chair): Thank you very much, greatly appreciated. Vanessa and Brent, thank you for coming. As you go, grab a couple of great apples. They're Ambrosia. You'll like them. We'll talk to you shortly.

To the committee, the taxis are here at 2:30. There's a bite to eat next door. Don't be late, because we're on our way to Kamloops.

Access to on-line versions of the report of proceedings (Hansard)
and webcasts of committee proceedings is available on the Internet.

Chair:	* Dan Ashton (Penticton BC Liberal)
Deputy Chair:	* Carole James (Victoria–Beacon Hill NDP)
Members:	* Eric Foster (Vernon-Monashee BC Liberal)
	* Simon Gibson (Abbotsford-Mission BC Liberal)
	* Wm. Scott Hamilton (Delta North BC Liberal)
	* George Heyman (Vancouver-Fairview NDP)
	* Gary Holman (Saanich North and the Islands NDP)
	Mike Morris (Prince George–Mackenzie BC Liberal)
	* Jane Jae Kyung Shin (Burnaby-Lougheed NDP)
	John Yap (Richmond-Steveston BC Liberal)
	* denotes member present
Other MLAs:	Jane Thornthwaite (North Vancouver–Seymour BC Liberal)
Clerk:	Susan Sourial
Committee Staff:	Sarah Griffiths (Committees Assistant)

Witnesses:	Rick Austin (B.C. Tree Fruits)
	Brianne Berchowitz (Executive Director, Okanagan College Students Union)
	Ken Carmichael (Executive Vice-President, Kelowna Chamber of Commerce)
	Vanessa Connolly (FortisBC)
	Michael Daley (B.C. Tree Fruits)
	Craig Daniell (CEO, B.C. Society for the Prevention of Cruelty to Animals)
	Jim Gabriel (President, PacificSport Okanagan)
	Jason Gordon (British Columbia Association of Child Development and Intervention)
	Brent Graham (FortisBC)
	Chelsea Grisch (Okanagan College Students Union)
	Diana Groffen (Executive Director, Project Literacy Kelowna Society)
	Tony Holler (Terroir B.C. Wineries Association)
	Jessica Lar-Son (Chairperson, Alliance of B.C. Students)
	Glen Lucas (British Columbia Fruit Growers Association)
	Glenn Mandziuk (Greater Westside Board of Trade; South Okanagan Chamber of Commerce)
	Doug Nicholas (PacificSport Okanagan)
	Jim Oostenbrink (Christian Labour Association of Canada)
	Holly Plante (Greater Westside Board of Trade; South Okanagan Chamber of Commerce)
	Kim Pullen (Terroir B.C. Wineries Association)
	John Skinner (Terroir B.C. Wineries Association)
	Fred Steele (President, British Columbia Fruit Growers Association)
	Geoff Urton (B.C. Society for the Prevention of Cruelty to Animals)

1) BC SPCA	Craig Daniell
	Geoff Urton
2) Okanagan College Students’ Union	Chelsea Grisch
	Brianne Berchowitz
3) Greater Westside Board of Trade; South Okanagan Chamber of Commerce	Holly Plante
	Glenn Mandziuk

5) British Columbia Fruit Growers’ Association	Fred Steele
	Glen Lucas

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES