Finance and Government Services — Issue No. 41 — Tuesday, September 30, 2014 (HTML)

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	1001
P. Aylen
F. Clare
L. Douglass
J. Griffin
L. Ghosh
T. Friedman
C. Boomer
R. McColl
B. Holden
A. Shaver
A. Klukas
J. Olynick
K. Hayes
B. Cowan
J. Heighton
A. Raine

D. Ashton (Chair): Good afternoon, and Peter, thank you very much for your patience.

My name is Dan Ashton. I'm the MLA for Penticton and Chair of the committee, the Select Standing Committee on Finance and Government Services. We are 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 16 public hearings in communities across the province. A video conference session is also scheduled for October 8 to hear from four additional communities — Dawson Creek, Quesnel, Smithers and Castlegar. This week we've been in Cranbrook; couldn't get into Castlegar, unfortunately; 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, 2014.

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

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 as live audio via our website.

J. Shin: Hi, 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: Hi. Gary Holman, MLA for Saanich North and the Islands, critic for democratic reform.

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

D. Ashton (Chair): We have one missing, but he'll be here very quickly — George. Also, there's Susan Sourial and Sarah Griffiths assisting us, from the parliamentary committees office. Hansard Services are here to record — the great people over there, Jean Medland and Ian Battle.

First up, Peter — welcome. Thank you very much for coming today. As I said, we've allotted ten minutes. I'll give you a two-minute warning, and then at ten minutes we'll have an opportunity for questions or comments from the committee. The floor is yours, sir.

P. Aylen: I'm Peter Aylen. I'm president of Absorbent Products. We make all kinds of industrial and agricultural products as well as cat litter. We mine our materials from diatomaceous earth. We're the only mine in Canada and the only bentonite mine in B.C.

Just continuing on, I've got two points here. One is that the carbon tax for the manufacturers and processors reduces our ability to compete. It's particularly true within products that are exported from B.C. into other jurisdictions and within B.C. against products that are produced in other jurisdictions where there is no carbon tax. We're not an island.

The other is the materials management B.C. levies, which are two to three times what they are in other locations such as Ontario.

Looking at the carbon tax background, it was passed in 2008 with the expectation that there would be other jurisdictions that would pass similar legislation. There have been no other jurisdictions that have done so. Australia's carbon tax was repealed in 2014. It was in place for two years.

The carbon tax leaves the B.C. manufacturers and processors at a competitive disadvantage compared to companies located in other jurisdictions which shift their products into B.C. In our case, that's pretty well everybody that is a competitor to us.

The carbon tax has a significant detrimental effect on manufacturing and processing. That was explicitly recognized in Premier Clark's mandate letter to the Minister of Finance. Point 13 in that letter was: "Review the impacts of the carbon tax on British Columbia manufacturers
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and provide options to cabinet on how to ameliorate the impacts on local manufacturers."

Just to give you an idea of what the manufacturing industry is in B.C., the next page gives you some indication: 12,000 companies, third-largest employer, fourth-largest GDP contributor, over 179,000 direct jobs and 400,000 indirect jobs employing more people all the time, and an above-average rate of pay as well.

Comparing this to other jurisdictions…. It's often compared to Europe, saying: "Well, Europe has the carbon tax." Yes, they do have a carbon tax. The only problem is that there is an exemption which allows for pretty well every manufacturer in every significant-sized company to be exempt. If it's just 3 percent of your operating costs…. That's energy — not natural gas, not electricity, but any combination, so you can be 100 percent exempt.

In this context, the energy costs account for 5 percent of operating costs in most medium and large hotels. That gives you some idea of where it is.

How it harms the manufacturers in B.C. We're more energy-intensive. There are many processes where there is no feasible or cost-effective alternative. In theory, the carbon tax should cause industry to modify their energy sources in the production process. Often, in cases, there is no alternative. The result is that the carbon tax creates incentives for businesses to reduce their input in B.C., shift production to other jurisdictions and change investment plans to other areas where the cost of production won't be subject to additional carbon tax. An example might be Alberta.

The carbon tax is a cascading tax, and it increases the cost at all levels of distribution. It gets built into your costs all the way through. Not only is it a substantial additional cost to B.C., but these costs are hidden. It's much the same as the PST was.

Support for the elimination of carbon tax. Many organizations have supported that — B.C. Business Council, B.C. Chamber of Commerce, Mining Association of British Columbia. Since the budget is now balanced, or will be balanced, now is the time to eliminate it. If you're just passing things from one pocket to another, you can choose where it's going to be given up anyway. I'll show you that in a second as well.

In our situation we use natural gas in manufacturing-processing to dry materials mined in B.C., and to make consumer and industrial products that are either used here or exported to every other province in the country and are brought to the U.S. Our products are sold in every state in the U.S. as well as Canada. We use about the same amount of natural gas as the city of Kamloops.

We have incurred substantial capital expenditures to reduce our energy intensiveness. It's probably over $1 million so far. Nevertheless, our natural gas remains well over 10 percent and probably twice that number. I had a concern about this being confidential, so I didn't give you the exact numbers. Our processing costs in carbon tax by itself are over 5 percent. That's the carbon tax itself.

Carbon tax is imposed on all of our production, whether it's consumed in B.C. or exported to other jurisdictions. This puts us at a tremendous competitive disadvantage when selling our products here and abroad. We have lost contracts by amounts about equal to the carbon tax, and I mean ones that would have employed many, many people here.

The carbon tax has removed over $500,000 from our company. If these funds had been used to modernize our plant and market development, we would have had substantial increases in employment and additional tax revenue.

How can they be addressed? Substances that have carbon tax should be included in the list of items that are exempt from PST.

Carbon tax for companies that hold a PST licence…. They should be exempt. The substances are an essential part of the process and should be considered as exempt inputs for manufacturing and processing.

The effect on government revenue. Actually, when you go through the numbers and do the calculations…. I'm a chartered accountant, so I've spent a fair amount of time trying to work that out. Based on an estimate of maintaining the existing business that would otherwise be lost due to higher prices or additional new business obtained, government revenues would be increased by 94 percent based on the direct savings and 297 percent based on the indirect savings.

There's a schedule on the next page that explains that. I took out the top part because it's confidential. The average wage, using average wages in there, and the total wages for five employees would be about $150,000. The PST they would pay would be about $7,800 and other costs of $10,000.

There's an explanation of how that was calculated. B.C. personal income tax, B.C. corporate income tax and the provincial income tax on active income…. When you work all that out and compare that to the amount of PST and GST that would be currently paid, there'd be $17,000 more. If you carry that forward, it works out to $56,000 more overall, including the indirect.

On the MMBC. It affects manufacturers who produce products for resale in B.C. The rates charged are substantially higher. The closest jurisdictions do not charge these fees. There's substantial leakage for companies that do not produce in B.C., but their products are sold in B.C. The next page gives you an indication of where those numbers are. As an example, for boxboard, in Ontario it's eight cents a kilogram, in Manitoba it's ten cents, and we're 29.

That's a lot of difference. For companies like us, where packaging is a big part of our business, that's huge. How do you reduce the competitive disadvantage? Take the average of the three rates of the people closest: Alberta, Washington and Ontario. They're the ones that have the
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biggest effect on our business.

Then, if you take a look at "Improving the competitiveness." It's the final slide. You can reduce the impact of the carbon tax upon B.C. manufacturers and revisit the rates charged by the MMBC levies, create a tax regime that favours investment and manufacturing and does not penalize companies that are in B.C. and want to produce in B.C., implement an equitable tax regime that will help retain and grow our manufacturing sector rather than chasing it away to other jurisdictions — that is happening; whether you believe it or not, it is happening — and free B.C. manufacturers to become the enterprising engines for our economy and our tax base.

Now, I've also attached the mandate letter from Minister de Jong. If you look at point No. 13, you'll see that as marked. The last one is a presentation that I had done to Minister Bennett. Since we are both miners and manufacturers, we cover both areas.

C. James (Deputy Chair): Thank you for your presentation. Two quick questions. The first one…. You mentioned the mandate letter to the Finance Minister from the Premier. I wondered if you have done any kind of outreach or if the minister has done any kind of outreach to fulfil that mandate question.

C. James (Deputy Chair): So there has been no direction from the minister out to businesses, from your perspective.

C. James (Deputy Chair): Okay. The second one was MMBC. Similarly, many concerns were raised around MMBC and the costs and other issues. I wondered if there was a discussion about looking at those worries from businesses. Have you had any kind of formal opportunity to be able to present those to government or a chance to be able to raise your issues?

P. Aylen: I did raise the issues to Minister Polak, but it was a very informal type of situation.

G. Heyman: Thank you for your presentation. Can you cite the sources or describe the methodology for the estimates of added return from government from the elimination of the carbon tax? If you don't have them now, it's possible to submit them to the committee any time between now and October 17.

P. Aylen: Okay. Most of this was developed by myself. But the information on…. It was based upon what would happen to our company — the amount of carbon tax that we would pay on this amount of business and the amount of PST that would be paid on the carbon tax around the natural gas. The rest of the numbers are numbers that you could pretty well pull from anywhere, but I can give you some more information, if you'd like.

G. Holman: Thanks very much for your presentation, Mr. Aylen. There have been other industries come to the Finance Committee expressing concerns about the impact of the carbon tax on competitiveness, particularly cement and agriculture. You're probably aware that the cement industry has recommended an import tax, taxation of imports to make them more competitive. What's your view of that approach?

P. Aylen: The carbon tax is so widespread that it goes into so many products. You can do that for cement because it's one very small item. I mean, it comes from China, from Washington. There are all kinds of places where it can come from.

What I'm proposing here is something that is basically going to generate more money for the coffers of the government by just removing it from this particular sector, because more business is going to be generated as a result. You're going to be better off, and it's going to be less hassle than trying to put in another tax. Now you're going to have more people collecting the tax and all this kind of thing. This is the way around it.

G. Holman: To be clear, you're suggesting that the exemption apply to the same industries that the PST exemption already applies to.

P. Aylen: If you have a manufacturing and processing exemption for PST, which now a lot of people do — we do as well — then that should include items that are subject to carbon tax.

S. Gibson: Thank you for your presentation today. Under our "Situation" heading, you have a point — second from the bottom. It says: "We have lost contracts by amounts about equal to the carbon tax." I would like you to elaborate a little on that, please, sir.

S. Gibson: I'm not looking for it. But I think this is quite a significant point you're making.
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P. Aylen: It is. It's a huge issue. We've lost, with major companies…. We do a lot of business in the grocery industry. We do a lot of business with mass merchandisers. We do a lot of business with agriculture as well. Agriculture, for us, isn't the big issue. The big issue is more with package goods, the consumer goods — the cat-litter side and industrial absorbents.

Particularly for the cat-litter side, a private label, they'll go out for bids. The bargaining goes back and forth quite substantially. I've got e-mails on file that say: "Well, you were okay on three, but on the other four, you're high. Sorry, you're not going to get it." These are, like, $4 million or $5 million accounts. For a company of our size, that's very substantial.

D. Ashton (Chair): Sir, thank you very much for your presentation. We're out of time. If you do have additional information that you would like to put forward, it's accepted up until October 17. Thank you for coming tonight.

Next up we have Literacy in Kamloops — Fiona. Welcome. Thank you very much for coming today. The process is ten minutes for the presentation and five minutes for the questions. I'll give you a two-minute warning, if required, up to the ten. The floor is yours.

I'm here again. Unfortunately, this time our situation is really dire, which is hard to believe, in view of your committee's recommendation that you made to government last year on community literacy funding.

I'm Fiona Clare, literary outreach coordinator for Literacy in Kamloops, and I'm representing our task group today of 16 members from different organizations. Some of them are here with me today in support. We're here because we believe in the democratic process and the work of your committee, and we are happy for this opportunity each year to tell you about what is important to our community and what our needs are.

We thank you for your recommendation last year of $2.5 million of annual funding for community literacy work in B.C. We're grateful that the Ministry of Education provided us $2 million at the end of the 2013-14 fiscal year, though this is less funding than is required, and Kamloops was cut from $12,000 to $11,400 last year.

Fortunately, with supplemental funding we were able to maintain the LOC position. This position allows our community to enjoy diverse programming, partnerships and collaboration. It allows us to initiate new programs when needed, like Better with Technology for seniors, and to expand others like the bright red bookshelf.

Schools may have been out these past few months, but many children were reading in Kamloops. This was thanks to a new community literacy initiative, the bright red book bus. More than 940 children visited this bus over the summer months, many from economically disadvantaged neighbourhoods, and more than 3,300 free books were given to these children to take home.

Our dilemma now is that there is no funding committed for the 2014 fiscal year and beyond, and that makes literacy work not only in our community but across the province unstable and uncertain. We're disappointed that your recommendation about literacy funding was not accepted.

By being here today, we want you to know that we're not giving up on this process. We hope you can still help us because you believe in the work we do, as do our communities. In our letter-writing campaign to government last year, LinK had letters of support from the mayor and council, from the Thompson-Nicola regional board, from the board of education, from our superintendent of education, from the president of Thompson Rivers University and from numerous community organizations.

While our government invests in education, putting our students amongst the best in the world, there are still those being failed by the system. We likely all know someone who, for whatever reason, didn't make the grade. They deserve a second chance. We all know young parents who need support in building those early literacy skills so their children can enjoy success at school.

While StrongStart centres and the Ready, Set, Learn program are great, they don't reach everyone. That's where community literacy programs like Parent-Child Mother Goose can fill the gap. There is excellent professional support in our schools, but there are always those children who fall through the cracks.

Volunteer programs like one-to-one children's literacy make a difference in the lives of those children. Just the other day my son's 21-year-old friend told me: "Fiona, one-to-one reading didn't make me love reading, but I'm a better reader today because of that program."

Community literacy programs reach those who need the most help — people like Jody, a 27-year-old mother of two: Brooklyn, 19 months, and Braedon, nine years. Jody left school at 17 to care for her son. After fighting with her son almost daily about not wanting to go to school, Jody realized that she needed to be a better role model herself and finish her education.

She enrolled at street school in 2013. What made it possible for Jody to attend street school, not having any child care, was that a community literacy group offered a free and extended Parent-Child Mother Goose program twice a week at street school. Jody would first attend the Mother Goose program with Brooklyn and then was able to leave her child with the facilitators and work on her studies at street school.

Jody graduated this past year and is planning to continue her studies at Thompson Rivers University. Not only did Jody improve her literacy skills, but Brooklyn did, too, and expanded her vocabulary and started speaking in five- or six-word sentences. When we raise the lit-
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eracy levels of adults, we raise those of children too.

What we're talking about today is a relatively small amount of money — $2½ million just to have the historic funding level guaranteed going forward.

As your colleague Scott Fraser pointed out in the Legislature in April, there is no way that a government directly run literacy outreach system could do what the informal network of professional LOCs across the province does every day. There is definitely no way that government could do it on a budget of $2½ million.

The literacy problem is not going away. In fact, by 2031 the number of immigrants with substandard skills is predicted to soar by more than 61 percent. What we need is the sustained long-term effort and funding strategy to support it.

We so often hear that literacy affects everything from health care to employment to the economy to reduced crime, but it's the stories of real people that matter — people like Gail and her husband of 45 years, starting a new chapter in their lives, retiring to Logan Lake in 2006. Gail had no idea that meant she was going back to school. She attended a library session with a guest speaker who talked about ways for adults to obtain their high school diplomas.

Gail, realizing that it's never too late to improve one's literacy skills and with the support of the Logan Lake literacy group, went back to school and achieved her B.C. Dogwood diploma, with honours, at 67. Today she gives back to her community and volunteers for numerous organizations, and in 2013 Gail and her husband won the Citizen of The Year award.

Last year you were here on Raise-a-Reader Day, so I've brought you each a copy of this year's Raise-a-Reader rep, which highlights some of our literacy programs.

Minister Fassbender encourages us frequently to look for other sources of funding. I'm here today to tell you we do that and we do that well. Just last week Kamloops and surrounding communities raised over $55,000 to support family literacy work, and we're very grateful that the government has again committed $500,000 in matching funding to the Raise-a-Reader campaign. But this type of funding is never guaranteed.

The core funding from the province is essential for sustaining a strong, stable network. We're here to ask that the government continue to provide the minimum amount of funding required for the coordination of the literacy network annually, and that is $2½ million, according to the recommendation you made last year.

We then will continue to work hard to leverage that investment into a much larger one, not only in real dollars but also in a huge amount of in-kind support from businesses and organizations and hundreds and thousands of dollars in volunteer community hours.

G. Holman: Thanks, Fiona, for your presentation. The figure $2½ million is burned deeply within our brains as a result of presentations across the province. The Raise-a-Reader funding that you mentioned — that's separate from the $2½ million a year you're talking about? That's a separate program? I just wanted to be clear about that.

F. Clare: Yes, it is. Often it is confused, and it's kind of put into that amount. It's sort of mentioned that: "Well, we have given that $500,000." But that is separate, because a lot of that money is committed in matching dollars to the communities that do Raise-a-Reader programming. According to the Raise-a-Reader Foundation, that money has to be used specifically for family literacy programs, so it can't really cover the role, the wage of the literacy outreach coordinator, which is what the government funding does.

C. James (Deputy Chair): Thank you, Fiona, for your presentation, and thank you for your work. One of the things that I've asked of others who presented around literacy is: what is the greatest need that you're seeing in your community? I think one of the strengths of the literacy program is that it meets the needs of communities, which are different. Could you just talk a little bit about where you're seeing the greatest pressures right now?

F. Clare: It covers the whole spectrum. There's still a lot of work getting children ready for success in school. As much as there is a lot of work around the Ready, Set, Learn and the StrongStart centres and our Parent-Child Mother Goose, it seems that when you look at the EDI, sometimes children still don't have the skills in order to be successful at school. There's still a lot of work to be done there.

Of course, we're finding with the aging population, with seniors, there's a huge need for seniors to have technology support. The libraries do offer some computer programs, but again, like all our programs, the magic of all our programs is really that one-on-one tutoring and relationship. Seniors really respond well to the one-on-one time, too, because it can really match their needs and it can go at their pace. That's a huge thing as well, because so much of the information now is accessed on line.

I know even just from my parents that if grandparents want to have a connection or a relationship with their grandchildren or with their own children, they have to be able to text or e-mail, things like that, because kids don't pick up the phone anymore. So there's still that need.

Then of course, still in the schools, I was just talking today…. There is a lot of extra support for those children who just need that little bit of an extra hand, but it's still
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not enough. I mean, we don't have enough money to have that one-on-one support for everyone. That's where these programs can really make a huge difference. Most of them are volunteer-driven, but somebody has to coordinate them.

S. Gibson: Yeah, it's been my experience with my teaching and also in my involvement in my community, in Abbotsford-Mission area, that adults in particular who lack literacy skills are embarrassed to come forward. In fact, I know personally a businessman in my community who is actually illiterate, a very successful businessman. But he can't read or write. He's always been ashamed of that.

I guess my question specifically is: how do you find these people? How do you get them to come out? They're so embarrassed, and it's so awkward for them to acknowledge their deficiencies. They're the ones that often don't hit the radar. The ones that come forward often have better skills than the ones that are hiding. That's my question.

F. Clare: Absolutely. That is obviously one of the biggest challenges, and I think that's part of why our work is so important in raising the awareness around the stigma that is attached to low literacy and really creating that awareness that lots of people do struggle with it and just, really, how common it is.

In Kamloops we have been very fortunate to have what I refer to as street school, which is a school district–funded program, but it actually has received national recognition. They just won an award last year. It's an informal adult learning centre that is funded by teachers in the school district, but it's run out of the basement of an Anglican church over here on the North Shore. It's a very welcoming place. Students are absolutely allowed to just pop into that basement at any time during the day, stay as long as they want.

One of the things that has really worked well in reaching out to those hard-to-reach individuals is that they have an outreach worker as well, who is attached to street school. Again, we have had a terrible challenge funding her position, but she is now funded through Interior Community Services and through a CALP grant — through your advanced adult placement.

She visits all the work search centres and all those different support organizations where these adults often tend to end up because they can't necessarily get a good job. She reaches out to all those organizations, so they're all very aware of the service offered. That's really the key thing: building that relationship with these people.

She also works up at the jail so that when guys get released and are on probation, she is actually there meeting them as they get released from jail, and she takes them straight to street school. They start their school program in jail and then are able to continue it.

I understand, as far as the language services and programs are concerned, there are four broad-stroke areas — for settlement services, integration for some of our older immigrants, for example. Then there are the children going through our school system as well as professional language training as a prerequisite to get into different programs and services, for example, right? There are ESL funding cuts. There is the class composition and size issue in our K-to-12 system.

Out of all of those struggles that our systems are facing, I would imagine that there is a significant amount of downloading into services like yours. Out of the three areas — like K to 12, professional language training in post-secondary education, immigrant settlement and integration services — where do you find the most amount of volume coming your way as far as the demand increase is concerned?

F. Clare: I'd say nothing specifically in the last 15…. I've been involved in this work now for 16 years, mostly as a volunteer, and I don't see a huge change. Now, saying that, I know our Kamloops Immigrant Society has just lost their funding for their one-on-one support — tutoring support. They have come to us, and we have talked about using some Raise-a-Reader money to maybe help a position like that. It's a bit of give and take on all sides, and I think that's the way it works the best.

D. Ashton (Chair): Fiona, thank you very much for your presentation today. Don't forget, if you want to make an additional submission of additional information: October 17.

Good afternoon. Thank you very much for coming. The presentation is ten minutes — we'll give you a two-minute warning — and then five minutes for questions.

L. Douglass: First of all, we'd like to thank you for the opportunity to present today. My name's Leif Douglass. I'm the vice-president external of the TRU Students Union.

J. Griffin: Hi. I'm Jillian Griffin. I'm the campaigns coordinator for the students union.
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L. Douglass: The TRU Students Union is the membership organization of over 10,000 students who study at Thompson Rivers University here in Kamloops, British Columbia.

What we want to talk to you about today is post-secondary education as a budget priority. This can be looked at in a number of different ways. Economically, 78 percent of job openings by 2020 will require some post-secondary education. Fiscally, university graduates make up 22 percent of our population, pay 41 percent of all income taxes and receive only 14 percent of government transfers. Socially, there are all sorts of benefits to post-secondary education, including social mobility and things like community and democratic engagement.

In other words, post-secondary education is one of the most effective and necessary public investments that we can make.

J. Griffin: In this submission we're going to be focusing on post-secondary education outcomes. But first, it's important to note that the full social, economic and fiscal benefits of post-secondary education are not automatically generated. They can only be realized if spending into the system is directed at outcomes that promote these benefits.

We have identified these outcomes as participation rates, completion rates, transition rates and institutional mandate fulfilment. Furthermore, we have broken down these specific outcomes to the following: participation rates should meet labour market demands and should be equitable across all incomes; completion rates should be brought as close to that for full-time continuous study in each program, and in addition, participation and completion rates should be above 90 percent; and finance as a primary reason for discontinuing studies should be eliminated.

Transition rates from study to labour market should be 100 percent. Employment decisions should not be driven by debt, and debt should have minimal delay on major consumer purchases and family investments. Post-secondary institutions should be able to tangibly demonstrate progress towards fulfilling their mandates.

In this presentation and report we will provide a series of recommendations targeted to these outcomes as affected by fees, financial aid and funding.

L. Ghosh: This section will cover tuition and ancillary fees. Tuition at TRU has increased by 23.4 percent over the last ten years, which is 3 percent above inflation. Although the cap at 2 percent has been able to successfully maintain the current tuition fee level, it still fails to produce sufficient outcomes, as the overall fees still remain high.

By 2020, as Leif mentioned earlier, 78 percent of all job openings will require a post-secondary education, so investing in a post-secondary education to increase participation rates is a budget priority today. Despite the future expected scenario, the participation rates of 18- to 24-year-olds in British Columbia have declined over the past 20 years from almost 70 percent in 1993 to a low of 46 percent in 2006.

The upfront costs of education have been identified as having a significant role in the decline of participation rates. The youth in transition survey found that almost 71 percent of successful high school graduates who were facing barriers in post-secondary education cited financial issues as their primary obstacle.

In addition, we have provided details in the report about various policy experiments that show reducing upfront user fees increases participation rates. For example, when in 2007 the government of British Columbia eliminated fees for adult basic education, the enrolment rates in these courses here at TRU not only reversed a decline but increased by 16.3 percent in the following two years. Similar scenarios took place in Manitoba and Newfoundland and Labrador, where reducing fees increased participation rates.

Looking at the equitable participation evidence, tuition fees are a flat tax, and thus the outcome is predictable. The participation in colleges is roughly equitable across incomes where the average fees are lower, whereas participation in universities is highly inequitable across incomes where average fees are much higher.

The concern for the community of Kamloops is well reflected in the polls that we conduct every year with an independent marketing company. The polling reports concluded that 87 percent and 91 percent of the population of Kamloops in 2012 and 2013, respectively, supported increased tax spending to freeze or reduce fees.

L. Douglass: The next section we want to look at is financial aid. To give you some background, financial aid in British Columbia is overwhelmingly given out as student loans, at a rate of 72 percent of all financial aid. In other words, it's given by access to debt, but this defers costs at a premium. B.C. is the only province in Canada without a system of upfront, needs-based grants.

We provide 70 percent less upfront, non-repayable aid than the national average. Student loan borrowing in B.C. is also the fastest-growing in Canada. For example, between 1997 and 2005 it grew at the rate of 45 percent.

What effect does this have on our outcomes? Debt-based financial aid has become the most significant problem for effective post-secondary education policy. In terms of: it limits our participation due to debt aver-
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sion; it limits completion due to financial-based attrition; and it distorts and limits transition from studies into the workforce.

First, looking to participation, debt aversion is the most prevalent of all financial barriers cited. I'd also like to note that loan remission does not address debt aversion because it's uncertain at the point of enrolment whether or not you'll receive it. In other words, it offers debt-averse students an uncertain possibility of relief, so it does not improve participation or other outcomes. Debt aversion is also most common among lower-income groups and equity-seeking groups such as aboriginal persons.

In terms of completion, as student debt rises from $1,000 to $10,000 per year, completion rates drop from 59 percent to only 8 percent. The average annual loan borrower in British Columbia borrows $7,400 per year, and this large amount of debt suggests that financial aid is currently being poorly applied in British Columbia.

Repayable student aid may appear at first glance to be a cost-effective approach to student participation, but with a negative impact on completion rates, the return on investment is both economically and socially negative.

Finally, looking to transition to the workforce, a debt-driven model of financial aid hinders transition into the labour market and economic participation. The average B.C. student loan repayment requires $300 a month over ten years, and this significantly limits consumer or entrepreneurial participation in our economy. Studies also show that it causes significant distortion of career choices, particularly in professional programs, from lower-compensating but socially valuable services such as legal aid or family practice.

J. Griffin: This section is focused on funding. Per-student funding is the only effective means of financing post-secondary education in support of institutional mandates. At TRU the funding formula does not reflect its expansive mandate. Moreover, provincial inflationary pressures on per-student funding have worn down the value of the provincial operating grant.

In March of 2005 the University College of the Cariboo was redesigned into TRU under the Thompson Rivers University Act. This legislation gave TRU the most expansive mandate in the province, as highlighted in our submission. Following the expanded mandate, TRU received a cut of more than $4,000 in per-student funding.

Currently students at TRU receive 14 percent less than the average funding overall, and when looking at the provincial average of its comparators for each mandate, TRU receives less in every category. For example, TRU receives 10 percent less per student than institutions that offer ABE, 23 percent less per student than other institutions that have a provincial mandate and 20 percent less per student than the average post-secondary institution that conducts research.

Students continue to contribute their share of inflationary costs through fees. Unfortunately, public funding has not seen the same inflationary increases. The high-fee, low-funding model isn't working. Over the last decade, tuition at TRU has nearly tripled, funding has declined, and institutions have been working diligently to find efficiencies. This all corresponds with a 7.5 percent decline in per-student revenue.

Facilitating the fulfilment of institutional mandates requires that public funding maintains its purchasing power.

L. Douglass: In terms of our recommendations, we've structured them the same as our presentation. First of all, in terms of fees we're recommending to implement an outcomes-based tuition and ancillary fee reduction and, following that, to maintain the 2 percent cap on annual increases.

In terms of financial aid, we recommend to establish a provincial system of upfront, needs-based student grants, with the aim of reducing the average student loan per recipient per year to $3,000 over the next four years. We're also recommending to transfer the value of student loan remission grants to upfront, needs-based student grants, also for the next four years.

Thirdly, we're recommending to eliminate interest charged on the provincial portion of student loans.

Finally, in terms of our recommendations for per-student funding, we're recommending to re-evaluate the per-student funding formula for Thompson Rivers University to better reflect its expanded mandate; to index per-student funding to inflation; and lastly, to fully fund any reduction in tuition and ancillary fees required to meet our targeted outcomes.

D. Ashton (Chair): Well, thank you very much, and please accept my apologies. I just had to slip out very quickly, and I apologize. A very professional presentation.

E. Foster: I've got a couple of questions and a comment. You said that for an undergraduate degree, it's $7,400 a year and $29,600 would be the average debt that someone would incur over a four-year period — which is, basically, the price of a good used car. If you look at it from an investment point of view — and you commented on the earning ability of someone with a degree, how much greater it was than someone without a degree — $30,000, I would suggest, is a very small investment in a lifetime of earning.

The other question. We've had similar presentations — not, I must say, nearly as professional — from other student unions. It's not even close to this, and I appreciate that. Has anybody ever, in all the factoring that you do, come up with a number that this would cost the taxpayers?
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L. Douglass: I guess to address your first question, what I'd have to say about that is: sure, there is maybe a portion that you could say is maybe some sort of personal investment. But the problem, in terms of how we structured our presentation, is that we're not meeting our outcomes in terms of the number of people entering post-secondary education to meet labour market demands. Clearly, there's a disconnect between the participations we need and what we currently have, right? That's where our recommendations sort of come in.

E. Foster: We hear from every student union group in the province. What would the cost to the taxpayer be to implement everything that we're doing here — on an annual basis?

L. Douglass: We do have a breakdown somewhere in here. It's on page 21. Now, you'll notice…. In previous years usually we prepared a more detailed breakdown in terms of all the costs, but some of these costs in terms of evaluating our rate of tuition fees that meets our outcomes would have to be determined — which is why there are certain numbers in there that aren't reflected. But in terms of the other recommendations, those are on page 21.

J. Griffin: If I can address that as well, what we're suggesting is…. There's currently money that's invested in the post-secondary education system and that's not meeting the outcomes of participation, transition and completion. What we're suggesting is the money that's already invested in the post-secondary education system be reinvested to meet the outcomes.

E. Foster: That's a fair comment, but then when the faculty people or the president comes to see us, where do we tell them that we take the money from?

L. Douglass: Well, one example of where you could take the money from is, for example, loan remission grants. Those don't really help our participation or completion rates effectively and could be much better spent with an upfront, needs-based grant, for example. It's a reallocation.

E. Foster: Just quickly, if I could. The comments that we've received over the last…. I was on this committee last year as well. I would be more than happy to entertain supporting some sort of a results-based forgiveness, as opposed to upfront grants. That would be just my comment.

J. Shin: Thank you for your presentation. From me I share with you that education should be accessible to everybody who may not necessarily have the capacity, the availability and the ability as some of us do have. Not everybody is able to take on multiple jobs or, as in the case of someone with a disability or a single mother, for example, they don't necessarily have the kind of means to be able to invest in their own education.

With that said, though, I was curious to find out if you have done, or if you know of, any survey or study that shows the changing demographics, perhaps, if there is any, of the graduates of ten, 15 years ago versus today. Maybe we are only producing graduates of a certain calibre who can kind of afford or outlast the current educational climate right now. If you know of any…?

I have a second question. As far as the prime rate plus 2.5 percent interest that's applied to student loan repayment, what kind of conversations have you had with the ministry? What were the responses that were given, as far as the rationale? I mean, the interest rate, as far as I'm concerned, is more than mortgage payments. If you were given answers, what is your reaction and thought to the answers that were provided to you?

D. Ashton (Chair): As quickly as possible. We do have a 15-minute limit, so quickly, please.

J. Griffin: There was a youth-in-transition survey, I think, if that answers your question. But that survey was discontinued a little while ago. The majority of the research that we do have around continuing into studies is the information that we get from doing the groundwork ourselves of contacting institutions and getting that type of information from them as well as Stats Canada.

L. Douglass: In terms of your second question, I don't really have a specific response what I've heard from you as far as how they feel about that. But I mean, I totally agree that it's absurd that I could go out and buy a television and not pay interest, but if I want to get an education, then I have to pay interest, right? That's definitely one of our recommendations, to get rid of the student loan interest.

S. Gibson: A quick query. As my colleague has mentioned, we've had a number of folks coming to us with similar points. Thank you very much for your professional presentation.

I just came out of teaching at a sister university in the Fraser Valley. A number of my students, in taking a program, would find that that's not relevant for them or they find it doesn't have the best career opportunities in terms of landing a position, so they'll switch to another program because they see that they're not going to secure a satisfactory income or opportunity with that.

I guess my question is: how does that play into your case here? Students make decisions. They'll start in, maybe, a degree that's really not going anywhere. They
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liked the courses, but they say: "Well, this is not helpful." They switch into some other program that's more relevant, more instrumental, for their education. They're still incurring a debt, but when they graduate, they immediately land in a high-paying job, and they can pay that debt off quite quickly.

That's the decision that some people make. I think those are wise decisions made by students. Your comment on that.

L. Douglass: Yeah, I think, to be honest, we'd like to limit that to a certain degree, because I might term that "debt bias." You might say: "I'd really like to get this career, but it's going to take this many years, and I'm going to have to incur this much debt to get it. So I'm not going to do that, or I'm going to have to move out of province in order to get a job to do that."

I mean, in terms of switching programs, we definitely do need a diversity of students to meet the labour market demands to be the most effective for our future economy, to be prepared as a province, right?

D. Ashton (Chair): Leif, Jillian, Lahana, thank you very much. I apologize. We gave you a bit of grace there. Once again, thank you for this, to come forward with this. This gives me an opportunity tonight to digest some of this, so very well done.

Up next we have Thompson Rivers University Faculty Association — Dr. Friedman.

Sir, welcome. Thank you very much for coming tonight. We have a ten-minute presentation allotment. I'll give you a two-minute warning and five minutes for questions. Sir, the floor is yours.

T. Friedman: Thank you for this opportunity to speak about the priorities that our association would like to see in the 2015 provincial budget. I'm the president of the Thompson Rivers University Faculty Association, an association that speaks on behalf of 600 faculty both here, in Kamloops, and at our Williams Lake campus.

As post-secondary educators, we see firsthand the benefits that learning, research and scholarship have on our students and on the community in which our institution operates.

What we are looking for in the 2015 budget are measures that support better access and improve the prospects for students, not just here in Kamloops and Williams Lake but across the province as well.

I have a number of recommendations to make in that regard, but before I get to those details, I want to make a few comments about the role that our university plays in this region and the problems facing post-secondary education across the province.

TRU has a student base of approximately 13,000 full- and part-time students. We also have through the open learning university, which is housed at TRU, another 9,000 students who use on-line and remote classrooms to start, enhance or complete their post-secondary education.

When TRU was first launched in 2005, we were legislated to meet the post-secondary education needs of a significant region of the province. However, unlike many of B.C.'s established universities, TRU did not abandon its commitment to being a comprehensive learning institution. By comprehensive I mean providing a broad range of degrees, diplomas, certificates, apprenticeable trade credentials but also to allow adult learners the chance and the opportunity to upgrade their skills.

Providing this broad base of learning opportunities, including graduate degree programs, is part of our commitment to this region, like other post-secondary institutions in B.C.

TRU, however, struggles with the issue of funding as we try to fulfil our legislated mandate. Under the TRU Act, this mandate includes the responsibility "to undertake and maintain research and scholarly activities," to support undergraduate and graduate programs and to serve "the educational and training needs in the region." TRU, thus, is not like the provincial research universities or the special purpose teaching universities. We have a very different mandate.

While our mandate is regional, TRU's catchment area is the most extensive of any post-secondary institution in the province. Current funding levels are not allowing us to meet the educational needs of this vast region. An example has been the severe cuts to programming and access at our Williams Lake campus. In addition, underfunding means that TRU's research and graduate studies obligations under the act cannot be adequately met.

As both the TRU administration and the TRU student union, who you just heard from, will undoubtedly tell you, when measured on a per-student basis and adjusted for the impact of inflation, real per-student operating grants to public post-secondary institutions have been in steady decline over the last decade and a half. In fact, the February 2014 provincial budget and the three-year service plan for the Ministry of Advanced Education showed that by 2015-16 real per-student operating grants will have dropped by 20 percent since 2001.

The funding squeeze affects other parts of the system. As you've heard from the student union, rising tuition fees is a definite feature. As those fees have gone up, so, too, has student debt. The Canadian Federation of Students estimates the average debt is approaching $30,000 per student.

Just as troubling is the fact that institutional budgets now rely more heavily on revenue sources other than their provincial operating grant. Just to illustrate that last point, at TRU our provincial operating grant last year was $73 million. That seems like a lot of money, but it accounted for only 43 percent of the university's total
[ Page 1011 ]
revenue. In 2005, by comparison, the operating grant accounted for more than 55 percent of total revenue.

Those kinds of shifts — rising tuition fees, declining provincial operating grants — raise some serious questions about affordability, access but, more fundamentally, the public nature of this institution. We think that shift takes this university, and others that are facing the same funding pressures, in the wrong direction.

As we've been repeatedly told over the years from groups as disparate as the B.C. Business Council and the Canadian Centre for Policy Alternatives, public post-secondary education is the key to long-term success in the B.C. economy. The B.C. Business Council points out that 75 percent of all new jobs will require some form of post-secondary education. Currently about two-thirds of employees in our province have some form of post-secondary training. We need to close that gap, but closing it will be difficult to do if we don't increase the investment that the province makes in post-secondary education.

I have some specific recommendations to make on the budget, but before I detail them, I want to add our voice to that of many other faculty associations across the province who are concerned about severe funding cuts to the English-language training programs. These cuts do not directly affect TRU, but they indirectly affect us, because the more second-language training that immigrants to British Columbia get, the more likely they are to pursue programs at our institutions, including TRU. In our view, the cuts to ESL make no sense, and the 2015 budget needs to restore the $22 million that will be lost.

Another concern we have is the government's announced plans to "re-engineer post-secondary education." The announcement was made several months ago, and we have yet to see much on the way of details on what re-engineering will look like. We need full consultation with and input from all stakeholders before embarking on this proposal. In our view, the proposal needs a lot more work and, in its current form, may actually undermine the goals that the government seems so keen to advance.

One final point about the funding squeeze, and that is the direct impact it has on faculty. Our institution is shifting to what we call "contingent faculty." These are faculty members who are on the economic margins. They don't have job security, and they're severely underpaid. What that does in our institution is it threatens the quality of learning that students need to succeed. It's a lose-lose strategy over the long term, and we need to recognize that problem and fix it. Improved funding would be a logical first step.

In summary, the specific priorities we're looking for in the 2015 provincial budget include a direct and ongoing commitment of at least $22 million to support provincially funded ESL programs delivered by B.C.'s post-secondary institutions — this will enable immigrants to our country and our province to get the language training they need to become economic contributors to our society; a revitalization of the student grant program — and you've heard this from the TRU Students Union — that would help financially stressed students better cope with rising tuition fees and heavier debt loads. It would increase access and participation rates, and ultimately, it would improve completion rates.

Student support services have also suffered as a result of underfunding. We want to make sure that students succeed in our institution. The 2015 budget needs to provide funding support for those services as part of a broader effort by government to ensure that students are able to complete programs and degrees in a more timely way.

Finally, a comprehensive review of the post-secondary funding formula is essential so that regional inequities and core funding for the system as a whole are adequately addressed. The funding that post-secondary institutions receive needs to better respond to the cost pressures that our institutions face. Any proposal that maintains low levels of provincial funding needs to be reconsidered. For TRU we expect that such a review will result in a level of funding that will permit this university to meet its legislated mandate.

I used to instruct at both private and public colleges. I'm including BCIT and VCC. For example, in nuclear medicine and cardio perfusion programs, we would train half a dozen every two years, lose about half of them to Alberta for better-paying jobs, and the other half would struggle to keep up with the burnout from the stress that's imposed on them.

For me, it never occurred to me to question the colleges about their ability to fill the class or offer flexibility in the way in which programs are offered, but that can be the misconceived notion out here. Would you be able to speak a little bit on a rural college as far as the kind of flexible programs that you offer — nighttime, and what have you.

T. Friedman: I should tell you that we are a university, not a college, but we are a comprehensive university. That means that we have adult basic education. We have trades programs. We have remedial programs. What we have is a concept called laddering, which means that if a student comes in to take high school completion, for example, that student has the ability to ladder into academic programs. I think that's the great value of having this broad range of offerings.
[ Page 1012 ]

We're struggling with enrolment in some of our areas, but in other areas we're bursting at the seams. In fact, our physical facilities really need to be upgraded to meet that challenge, particularly in nursing and science, where the lab facilities are antiquated. I know that our administrators will be calling on more capital funding for building our campus.

Certainly, the comprehensive nature of our programming allows for the regional students to come in and get the full range of possibilities.

G. Heyman: Thank you, Dr. Friedman. The presentation that you've made is quite similar on a number of points to that of the students union and is similar to presentations we've heard in other places in the province, including from the administration of a variety of universities and colleges — particularly well stated in both cases today, I'd like to note — so thank you very much for that.

I'm going to ask a question I didn't have time to ask the presenters from the student union. There seems to be, understandably I think, concern about if money is devoted from the provincial budget to a number of the things that are being requested to deal with the issues of access, participation and completion. Where is it going to come from?

I want to turn the question on its head a little bit, because we're hearing constantly from the business council and others that we will not do as well in a global economy if we don't have the educated workers to fill the jobs that will, in fact, be the jobs of the current and future economy. We've heard that from the government. So I'm going to ask you to help us with our research.

There is time until October 17 to make additional submissions to this committee. If you're aware of any comparative studies that compare B.C. — or jurisdictions like B.C. that have lower levels of funding support for tuition or grants — with jurisdictions that have higher levels, in a way that demonstrates whether that actually translates into better economic outcomes and greater tax revenue from a greater percentage of highly educated participants in the economy, that would be extremely useful to this committee and our report, in my view.

T. Friedman: There are definitely reports. The OECD, for example, has conducted reports of European countries that provide a better level of access for post-secondary and thus a higher level of skilled workers in the economy.

That's really the challenge. If we're going to build a strong economy, our belief is that there has to be an investment in training, and we haven't seen that investment over the last decade, even though all the warning signs say that there is going to be a severe shortage of skilled workers — skilled not just in the trades area but in all aspects of the economy.

G. Heyman: I invite you to cite those in a submission that will put it on the record.

D. Ashton (Chair): Just before we go, quickly. I'm quite sure it happened here last year, and it did happen in numerous other places that we were at — about administrative creep, where faculty were pointing out an administrative creep. Is that still an issue?

T. Friedman: It's still an issue. We're working on that with our administration to see if we can address that issue. But clearly, there is some growth of what we call a managerial class in our universities, which is very contradictory to the academic environment. We want academic leaders; we don't want managers. So that's a concern of ours, obviously.

D. Ashton (Chair): I wouldn't have brought it up, but you opened the door for me. You talked about some individuals that come in that are not tenured, that are there at reduced salaries.

D. Ashton (Chair): What does an average tenured professor at TRU earn per annum, average?

T. Friedman: I would say the average is about $75,000 a year. It ranges from $50,000 up to $130,000.

T. Friedman: Yeah. Very few are at the upper level. And 30 percent of our faculty who teach our students are earning somewhere probably about $30,000 to $40,000.

T. Friedman: No. These are contingent. But in terms of tenure, I'd say the average is about $70,000 to $75,000.

D. Ashton (Chair): Doctor, thank you very much for your presentation. And don't forget — October 17.

Ron, welcome. Thank you very much for coming, and Carolynn, thank you also.
[ Page 1013 ]

D. Ashton (Chair): Ten minutes for the presentation. At eight minutes I'll give you a two-minute warning and up to five minutes for questions and comments. Okay?

C. Boomer: Thank you for allowing us the opportunity to speak with you today about the value of sport and physical activity and the importance of the continued investment that this province and the government provide to our sector.

My name is Carolynn Boomer. I'm the general manager for PacificSport Interior B.C., and Ron McColl is my chairperson and has been a founding member on our board of directors for many years.

We've both had the distinct pleasure of working in the sport and recreation field for a lot of our lives and, of course, are very passionate about this area. In fact, we are celebrating our 20th anniversary at PacificSport Interior B.C., which was a provincial government initiative back in November of 1994.

We're very proud of that. If you are back in Kamloops in November, at the end of the month, please come and join us. We'd love to have you — with Terry Lake and also Todd Stone.

R. McColl: We are a provincial network of centres. We have centres throughout the province. We have PacificSport Fraser Valley out of Abbotsford; PacificSport — here in Kamloops — Interior B.C.; Vancouver Island PacificSport in Nanaimo; we have PISE, who is also a PacificSport affiliate; we have PacificSport Okanagan out of Kelowna and PacificSport Northern B.C. in Prince George.

We consider ourselves a family of centres. We are independent boards of directors, non-profit boards, and we have a mission of healthy communities inspired and enabled to participate, play and perform.

Our mission is: through investment leveraging and collaboration with community partners, we strive to be resource hubs to inspire and engage British Columbians to excel and be active for life.

We do this under the auspices of, or association with, ViaSport, who is the provincial government delivery agency for sport. They have recently come up with a three-year strategic plan with the major drivers of encouraging sport for life for all ages and abilities, engaging British Columbians across both urban and rural communities, leveraging new and existing partnerships throughout the province and building strong and sustainable support systems for the sport system throughout our province.

We deal specifically with the local sport organizations, municipalities, coaches and leaders that are local and regional in nature.

C. Boomer: For the 2013-2014 year PacificSport provided…. We serviced 22 communities in our Interior region, right from Revelstoke, Golden, Salmon Arm, Kamloops, Merritt and the smaller communities in and amongst that. Just in that year alone we had over 10,000 registered participants in anything from coaching certification — so for sport development — as well as sport performance side.

Our centre thrives, as Ron mentioned, on community partnerships. It has been the key component to leverage the government's dollars in that investment with matching dollars and sometimes tripling every dollar that we receive when we factor in the in-kind support.

As you mentioned, the four sectors actually are education, recreation with the municipalities, the health and the private foundations that we've been able to access and actually have those partnerships, which are created for this investment leveraging.

I'd like to provide you three examples. Expanding the regional coach delivery program from what government has provided currently for our centre — I only speak to our centre here — was $40,000. We've been able to leverage that to $265,000, as an example. That includes $80,000 from the Kamloops Blazers, $27,500 from PacificSport Interior B.C., matching dollars from the LSO and PSO — local sport organization and provincial sport organization — as one example.

We believe that without a coach you don't have a program. PacificSport would love to see increased dollars to the regional coach delivery program that was originally initiated by the provincial government, because we can leverage those dollars. We've got sports that are wanting to come in, and currently we are limited on that.

The second point is the physical literacy mentorship program with school district 73 here in Kamloops. It provides matching dollars to support a physical education specialist to work with K-to-grade 3 students to develop their fundamental movement skills and mentor the generalist teacher, because as we know, we don't have physical education specialists in the elementary school any more. I mean, there are some, but it's not the norm. We believe that these children are not necessarily learning, then, the ABCs of physical literacy — the agility, the balance, the coordination and the speed.

This has been really successful around the province. We're not the only centre that does it. All the PacificSport Centres do it. Last year we had 829 students and the generalist teacher take part in that program over a 12-week period.

As you may or may not be aware, this is the first time in history…. This generation has a life expectancy less than their parents. There's evidence based on Active for Life provided — it's in the document — as well. We're hearing this more and more and more. That's, again, so crucial — to try and find those key partnerships so that
[ Page 1014 ]
we can at least work the back door if we have to, to allow children to have that physical literacy.

We applaud the government's support for physical literacy as we play an important role for the children to learn these valuable movement skills as a foundation for them to be turned on to a variety of sports with the confidence to try them. This in turn will be a catalyst for healthy, physically active children for life.

R. McColl: One of our major partners has always been the municipalities. The municipalities are very heavily invested in the sports system through facilities and staff, etc. Support and energy working with the municipalities goes a long way. Kamloops has been a heavy supporter of our program, and we have now moved to other municipalities in terms of moving out into the smaller municipalities.

We have a presence now in Merritt. We have an agreement with the city of Merritt in terms of operating some of these programs throughout those cities. We also do some work in Golden and Revelstoke. Our objective as PacificSport Centre is to have a presence in every community in the province of B.C. so that those municipalities can take advantage of these programs and physical literacy programs as we move forward.

C. Boomer: In closing, PacificSport plays a variety of roles, depending on the uniqueness of each community. We are front-line delivery agents in some communities, offering the educational programs and activity-type programs to facilitators where we're just connecting the dots for our potential community partners, as well — just for the mutual benefit, basically, of community engagement.

It does take a community to build a champion — we love that moniker — as excellence happens at all levels from playground to podium. Our Olympians and Paralympians — such as soon-to-be-awarded from 2008, Dylan Armstrong in shot put; as well as just recently at the Sochi Olympics from 2014, Jessica Hewitt with her silver medal in speed skating; as well as Elli Terwiel — are really seen as heroes in our communities. As role models, they ignite inspiration for endless possibilities for these children.

Basketball, as an example, has exploded with local champion Kelly Olynyk, who's now, of course, in the NBA playing for the Boston Celtics. Imagine that from a community of just 90,000. That's the endless possibilities.

Thank you for your continued investment to support physical activity in this amazing province we do live in. We hope you will continue to maintain and consider increasing contributions to the sport sector. Together as partners, PacificSport will continue to work towards everyone having a place to be active for life — whether you're a toddler, a high-performance athlete or baby boomers like Ron and me.

J. Shin: Thank you for your presentation. Your physical literacy mentorship program and your work with the school district — that's exciting. I was just curious to find out if this program is offered to every grade 3 student or if there's some sort of selection process, in which case: is there a fee applied? Do the low-income students get to access it? The profile of the 829 students that have gone through this program — if I could get a sense of their demographics, that would be great.

C. Boomer: Absolutely. We're heading into our third year of funding. Government provided $11,000 last year, and it was matched by school district 73. It happened, actually, in their embedded PE time. It is provincial curriculum that was developed by a side teachers group. We've hired a physical education teacher who just retired last year. She's mentoring with the generalists. There's emerging developing…. There's set curriculum to work with those teachers.

We target five schools in the first year. It's every day, K to 3, and the grades come down individually. Then the next day would be a different school. There are five schools per year. It is small, but we're all doing it throughout the province. It would be amazing if it was even more funding, because then we could touch…. We have six school districts in our region, as an example. The majority of the PacificSport Centres do have around that, and 73 is the largest.

J. Shin: That's really encouraging — that that's the approach you're taking. That way, working with the school, you ensure that everybody has a chance to be a part of the program. That's great.

C. Boomer: Right. And it's the ripple effect, you know — that confidence. The generalist teacher doesn't have the confidence to manage a field or a gym. I mean, it's dodge ball 24-7. Well, it's great to have physical activity, but you have to still learn the basic, fundamental moving skills.

C. James (Deputy Chair): Quickly, then, a follow-up again on the school program.

I just wondered whether you're doing any kind of tracking. I know it's been an early program yet. Are you doing any kind of tracking around physical education for those kids who've gone through the program? I think you've identified well that the key is starting early and making it fun and becoming a routine. I wondered if there's any kind of tracking being done.

C. Boomer: We had applied for the three years as sort
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of our pilot — you know, first year, second year, third year — with the hopes of…. Well, we're in our third year now, and we actually haven't got total confirmation yet on this year, but we're trying to go ahead anyway. We're hopeful that after this three-year segment, we'll see where government is with it, as well as the school districts — whether it grows.

In terms of factual information, we actually would like to continue it to grades 4 to 7, to where you close a loop. K to 3 learns fundamental movement skills; 4 to 7 then starts going into sport-specific skills. So that's what we're hoping.

Carolynn, Ron, thank you very much for your presentation. Once again, if you do think you have additional information, October 17 will be the cutoff, so please forward it.

D. Ashton (Chair): Pleasure, thanks. It's nice to be back in Kamloops, actually.

D. Ashton (Chair): Gentlemen, thank you very much for coming today. Thank you for the handouts. Once again, ten minutes for the presentation. I'll give you a two-minute warning, and then we have five minutes for questions. The floor is yours.

B. Holden: I'm Bob Holden, not Brian Ross. Brian apologizes. He couldn't make it today, so I volunteered to help him out. I'm a member of the board of governors at TRU, and with me is Dr. Alan Shaver, president of the university.

TRU is a unique asset and a great asset to the province of B.C. I think today we want to emphasize how unique we are and what we can do for the province.

TRU's new strategic plan is our commitment to ensure research at TRU continues to respond to the needs of our community and region and province. We've chosen and have a direct and useful impact on our communities through our Canada research chairs.

Pardon me. I'm on the wrong page. You should have said something to me about that already.

On behalf of Thompson Rivers University and the board of governors, thank you for inviting us today. We're here to participate in the public disclosure of the opportunities and challenges facing the province. We're proud to have Thompson Rivers University as the university in Kamloops. I grew up in this town, and it's an important part of my life. It's an important part of this community.

B.C. history provides that post-secondary education is the best long-term investment we can make for our children and our communities. TRU is unique to a new generation of students and a new generation of universities. It combines open learning, campus learning, and trades and technology all under one roof. The result is a differentially integrated post-secondary education like no other in the world.

The envy of the provinces across Canada, the B.C. system continues to build our province's prosperity. Yet significant changes are taking place in our world around us. We're concerned that over the past seven years of austerity, we're jeopardizing the post-secondary system in B.C.

A. Shaver: TRU was created in 2005, and Open Learning and the University College of the Cariboo were merged. They are one. There is one degree, and you can either get it on line or get it on campus.

Our utilization targets were 104 percent. We are 147 percent in health programs and 200 percent in the trades and technology. We'll speak to that a little later.

We are, I think, what I define as redefining what a modern university is. We have on campus; we have on line. This is exactly what new universities and old universities would like to have. We have open access so that students from all over can come here and get their education, and their parents can have confidence that they'll get in here.

We have over 2,000 aboriginal students. One of our missions is accessibility for aboriginal students. It's probably the highest in the country. We're starting to attract aboriginal students from the rest of the country.

We have over 2,000 international students, probably the second or third most internationalized campus in Canada. This has, of course, given us a tremendous cosmopolitan atmosphere at the university.

We're also very into experiential learning — learning outside the classroom, learning inside the classroom.
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We're very concerned about developing our students so that they can be successful in careers. We offer very useful courses and programs, all the way from trades to law. They're really designed to serve the needs of students and communities.

We're very entrepreneurial. Over our history we've built over $100 million worth of capital assets, four buildings. Two residences are from P3s and two are self-funded buildings, a campus activity centre and an international building.

We're going to continue this entrepreneurial tradition. We've got a university village project which will further enhance the life on the campus and generate market housing that will generate some income flow to fund the university's efforts.

B. Holden: I'd like to speak for a minute about research and community solutions through innovation. TRU's new strategic research plan is our commitment to ensure that research at TRU continues to respond to the needs of our community, region, province and nation.

Research is important to us in our community and in the Interior of B.C. We're an outlier to the coast, and we have an opportunity to research what the Interior needs. We've chosen to direct our useful impact through the communities.

Example: Dr. Rod McCormick, TRU's regional innovation chair in aboriginal child and maternal health, leads an interdisciplinary team of TRU researchers working with members of our local First Nation communities to respond to the current needs of maternal and child health, helping to strengthen aboriginal communities across B.C. It's a program that's working well. It impacts the province in the long term, in health care and everywhere else.

TRU innovates. TRU's research partnerships and enterprise creation office is delivering a program called the Generator. This program is new venture acceleration. We're designed for economic development, economic impact within the Interior in our communities.

It will provide work and meeting space for applied industrial research collaboration and will support pathways to commercialization of research to drive innovations. It provides a vehicle for technology transfer and knowledge, mobilization and enables industry partners to access TRU research resources.

The goal is to develop entrepreneur talent on our campus that will move into our region, stay within the region and act as an entry point for start-up in the B.C. interior communities.

Advancements like these are being made through innovations like these. However, research opportunities that benefit from our broader communities are being missed due to inadequate funding for that type of research.

A. Shaver: The key for this kind of innovation, of course, is involvement of students, particularly graduate students, in the projects that are designed to solve problems for our communities. B.C. doesn't have a graduate student fellowship program.

Universities in Ontario and Quebec are coming out here and offering fellowships to our students to go back there for their training and their graduate work. We need to attract students here. The future is all about brains and knowledge, and we really are not being competitive by not having this.

In addition, we need to fund all the seats that we need to have for TRU in order so that we can afford to continue this kind of effort. We're not asking for money for the university. We're actually asking for money to help solve problems for Kamloops and the regional community. They deserve access to a full-service university. This is really the drive that we think is important.

B. Holden: Trades and technology. We've had a very successful trades and technology program at TRU for a long time. The bottom line is that we are running at 200 percent capacity when the rubber hits the road. We're requesting a capital grant to expand that. It goes along with the province's needs and capacity needs. We're very uniquely positioned to be able to expand on that very quickly, grow it. We're already, as I say, running at twice the capacity that we should be running through that size of facility.

A. Shaver: We also have an ask in with the Advanced Education Ministry for a new facility for nursing and health programs. This will increase our capacity in health education.

B. Holden: To finalize, B.C.'s funding for post-secondary education has been effectively static since 2007, due to both the recession and slow recovery and the resulting austerity programs. While this is fine, along with this come escalating costs, and the capacity and the quality of our outstanding post-secondary education is being threatened due to lack of funding.

TRU is delivering on its provincial mandate to provide access to excellence in learning and research for the benefit of people locally and globally. TRU is determined to reinforce the traditional funding innovation and external funding sources and to find internal efficiencies.

It's important to plan for success. It's even more important to plan for it in the future. We urge the government to plan for the recovery that's coming and help create that recovery by setting priorities for the future investments in post-secondary education and the development of B.C.

As stated at the start of this submission, the history of B.C. suggests that reinvestment in post-secondary education is not only a crucial step in ensuring long-term prosperity; it's the best investment the province can make.
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Investing in our colleges and universities, our students and our innovations is in the best long-term interests of the people of B.C.

J. Shin: I'm really excited to see the numbers on the space utilization, because I think some of the misconception is the fact that some think that our school spaces are underutilized. It's really good to see these numbers.

Now, I understand that the health authorities have limited capacity, growing restrictions on their ability to accommodate students to train clinically as part of their clinical placement. There are simulated labs, and I can see here that the capacity is really limited there as well. In the case that there is this growing pressure and there is lack of funding, if it continues, what kinds of consequences are we looking at as far as the number of students that are committed to the program? Are they going to be able to get the clinical training that they need?

A. Shaver: It is a challenge. If we're stagnated, we will stagnate, and everything that goes along with that — the numbers of students and the ability to innovate in new areas.

If we increase the number of students in the health professions, we certainly will have to work with the hospitals here in the Interior to accommodate their practicums, etc.

J. Shin: I know one private institution specifically. They couldn't put their students through the second-year clinical portion because there was no opening in the hospital to accommodate that.

A. Shaver: We don't operate that way. We won't accept students if we can't give them their clinical.

D. Ashton (Chair): I have Eric, Gary and Simon, and about two and a half minutes left.

E. Foster: Gentlemen, when we're all done this major road trip that we're on, we're going to have to sit down as a group and talk about probably a couple of billion dollars worth of asks — and none of them, probably, being not worthy.

A. Shaver: The trades is $30 million, and the health professions is $24 million.

A. Shaver: Those are the capital costs. Well, no. I think that probably includes….

G. Holman: Thanks for your presentation. A couple of quick questions. One was the administrative creep that Dan asked Dr. Friedman…. Your view of that.

Also, I'm interested in…. You were talking about the village that you were establishing — it sounds really interesting — for the campus. How are you financing that? Other universities and colleges have told us about constraints they have in terms of being able to borrow. How are you financing those kinds of projects?

A. Shaver: With respect to the administrative creep, we've done a survey and looked at the spending of our budget as a percentage. Over 61 percent of our operating budget is in the faculties. It's one of the highest, if not the highest, amounts spent in our comparative groups, and that includes all the other universities in B.C.

That means we are way underspending in library and way underspending in facilities. We're way down on the list on administration. We are spending well on student services, and we rank pretty highly in that. So if you take what we spend in the academic units and take student services, they cover well over 80 percent of our total spending. So by any measure, we are administratively lean, and we are leaders in that.

With respect to the funding, we did a lot of P3s and self-funding for the buildings that we already had. There is no taxpayers' money in it. The university village will be funded through a trust, which is called….

We're applying to the government for a government business entity status, so we will be getting developers, and they will be taking the debt. We will then be leasing land in much the same way that some of the other universities across the country are doing. So there will be no taxpayers' money involved in the university village project. That's part of our entrepreneurial tradition.

S. Gibson: The previous speaker, Dr. Friedman, when asked by one of our members about enrolment, said — and I wrote this down: "Some of our programs struggle with enrolment." In other words, there are not enough students.
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Even though it's painful — maybe it's a question that is controversial — are you able to direct students away from under-enrolled programs and put them in programs that are more job-ready and where there is more energy?

A. Shaver: We don't need to direct students. They're directing themselves. The shift is happening right across this province. Students are going into the trades. I'd just like to tell the government that yes, it's working. All that publicity on choosing trades — it's working, and we're swamped.

In terms of going into the sciences and business, you can see in our numbers that it's already happening spontaneously. So this is happening, and part of our budget methodology is to have the budget serve the academic needs of our students.

D. Ashton (Chair): Just a quick comment before you go. You said that some of your trades are running at 200 percent, and a 92 percent graduation rate and placement rate on it.

D. Ashton (Chair): You've really set the bar, and it is a question that maybe that 200 percent is the baseline.

A. Shaver: Well, there are all kinds of issues about accommodating that and burnout, not to mention safety.

D. Ashton (Chair): I appreciate it. Gentlemen, thank you. Very good presentation. Have a good evening.

Next we have Western Convenience Stores Association — Andrew Klukas. Welcome, sir. Thank you for coming. Presentation is ten minutes. I'll give you a two-minute warning, and we have up to five minutes…. You can see the panel does have lots of questions. So I'll keep it tight on the presentation.

A. Klukas: Good evening, distinguished committee members. I've met some of you before. It's a pleasure to see you again. Thanks for giving us this opportunity to present to you. My name is Andrew Klukas. I'm the president of the Western Convenience Stores Association. Thanks for the opportunity to present on behalf of our retailers.

The WCSA, as we're known, advocates on behalf of more than 2,700 retail sites in B.C., employing over 20,000 people. We pride ourselves on being a significant contributor to the provincial economy, with our stores and gas stations providing a wide range of products from various industrial sectors. Our sector serves as a vital economic and social hub, providing services in areas across the province, including rural, suburban and urban centres. Our retailers serve the equivalent of one-third of the B.C. population every day. So we have a lot of contact points with people.

As community members, we pride ourselves on upholding the highest standards of professionalism and ethics to support public health and safety. For example, over the past few years we've been developing an on-line, state-of-the-art occupational health and safety training program, with support from WorkSafe B.C. We have support from SAFE Work Manitoba.

We've developed some self-audit tools that we're launching, hopefully before the end of this year — very excited about that. We also are beginning to partner with various organizations funded by the Public Health Agency of Canada to address obesity.

Given that we contact so many people, we're on that fine edge where we can actually…. There's a lot that we can do to promote public policy objectives like that. We have a lot of operations around schools, so lots of opportunity that we're trying to build on in partnership with those organizations and to really transform our industry into something that can actually contribute in that respect.

Our responsible retailer program marks our commitment to this and includes programs such as "We Expect ID." This is an age-verification training program that's designed to ensure that products like lotto, tobacco and fireworks are sold in accordance with B.C. laws and regulation. We offer this course free of charge to all of our members as long as they sign a code of conduct, essentially a policy statement committing to doing age-testing.

Our industry is an historical partner with government in preventing the sale of age-restricted products to youth. A Health Canada study found in 2009 that B.C. had the highest compliance rates in the country — 94.3 percent and still improving at that time. Honest retailers are committed to keeping tobacco products, restricted products out of the hands of youth, and we do a very good job at that.

That brings me to discuss…. I'd love to talk about these other projects — the health and safety. That's my thing. But this brings me to discuss really the core of our prebudget submission, which is the issue of contraband, or illegal tobacco, in B.C.

This May we commissioned the contraband tobacco study. To the best of our knowledge, this is the first study of its kind in this province. Our assumption had been that the issue of contraband was a central Canada prob-
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lem, but we were wrong. In reality, we found that sales of illegal tobacco in B.C. have surpassed those of Quebec and are approaching those of Ontario. That's an alarming finding for us. That was not expected.

Contraband is sold without regulatory controls or applicable taxes, and it's sold to anybody who's willing to buy. Rock-bottom pricing is attractive to youth who are able to purchase the product without any age-testing whatsoever. People who are selling it out of a bag or the trunk of the car are not there to age-test. And as the price of contraband does not include the applicable provincial taxes, the province is not able to collect revenue to support programs and services. Meanwhile, organized crime and gangs are allowed to reap the benefits of the sale and collect all the profits.

Our study examined discarded cigarette butts at 48 sites throughout B.C. Not glamorous work — hands-on stuff. It revealed that illegal tobacco rates are as high as 51 percent, in one location in particular. What's most troubling is that the highest rates were found in secondary schools and universities. For example, Simon Fraser University had the highest rate, 51.6 percent; followed by UBC, 46.8 percent; and Tamanawis Secondary School in Surrey at 24.1 percent. The average rate here in Kamloops was 24.2 percent, the second-highest rate in the province.

Overall, from our study, contraband consumption rates across all sites we tested was 17.3 percent, and it's probably rising. In Ontario right now it's 20 percent. That's down from 50 back in 2006 to 2009. In Quebec the rate is 15 percent. So we're between those two, and we're getting closer to Ontario. That's our concern. For me, as president of the Western Convenience Stores Association, who had assumed that it was a central Canada issue — that I had one border in Manitoba to protect the region…. Well, obviously, I haven't done my job.

We weren't aware of what was really happening here in B.C. There's stuff coming from Asia and also from central Canada. We can talk about that later. But I think we can all agree that this issue has moved from central Canada, and it's arrived squarely in our backyard.

Having said that, convenience store owners abide by provincial and federal laws and regulations, while collecting taxes that fund our public programs. Small business owners generally are the backbone of the economy. When illegal products displace legal sales, it affects their business. In this case, it also undermines B.C.'s successful effort to control youth access and reduce consumption. We've done very well in B.C. relative to the rest of Canada on that front.

We ask today that this committee and the provincial government take action on illegal tobacco by tabling and passing proactive legislation designed to combat it. This legislation would target traffickers, specifically those who are selling products to youth.

The legislation could include the following provisions: new enforcement measures for the Ministry of Finance revenue division; provide municipal police officers the authority to seize illegal cigarettes while on duty; allow municipalities to prosecute offences related to illegal cigarettes and to keep the proceeds of crime; grant powers to municipal police forces to launch anti-contraband investigations.

Imposition of harsher penalties and increased enforcement provisions are necessary to stop the sale of illegal tobacco in B.C., but we also support the launch of an awareness campaign — many people simply are not aware — aimed at consumers to ensure that the public is aware that purchasing products without taxation is not a victimless crime.

We're hopeful that with these two initiatives, we would achieve the following goals: reduced youth access to tobacco, increased tax revenue for the province, reduced criminal activity and a fairer business climate for our members.

For your information, I've included copies of our contraband study and also a map that shows how we compare to the rest of the country — provincial averages from similar studies that have been done in every other province except Alberta. We're doing that. Hopefully, it'll be done next week.

Thank you once again for the opportunity to present. I welcome any questions that you have.

D. Ashton (Chair): Andrew, thank you very much. If that study does come forward, could we get a copy of it, please, before the 17th, just for our information?

S. Gibson: Thank you, sir, for your presentation. I notice that my alma mater…. Notable locations: Simon Fraser University. A majority of the cigarettes purchased on that campus — or go through that campus — are contraband. It's quite shocking.

Could you just back up a little, though, and tell, maybe for my benefit…. I'm not sure where these cigarettes come from. How do they get here? You don't really explain the background. Who's making these? Where do they…? Just a bit of that would be helpful.

A. Klukas: Historically, it's been manufactured in central Canada: Ontario, primarily; Quebec, Akwesahsne reserve, I think. There's a reserve bordering Maine, Ontario and Quebec, an ideal place from which to ship either products from America or manufactured in Canada. Grand River Enterprises is a manufacturer. Rainbow enterprise is another one.

However, in B.C. we're also exposed to products from Asia. Double Happiness brand — I've seen posters advertising cartons of tobacco for under $50.

Counterfeit products. Some of them look identical to the products that you would buy in a store.
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A. Klukas: Knockoffs. Very good quality knockoffs too. We couldn't identify them in our study because they look exactly the same.

G. Holman: Thanks for the presentation. I assume you would have support of health associations in your efforts and are working with them.

Do you think our tobacco taxes are too high? Now, that's not a personal view I have, but is that partly what's driving this?

I guess the third question is…. I suppose that you would suggest that the cost of the new enforcement measures — like, for example, Ministry of Finance — would be more than offset by the revenue increases to provincial government and to your own stores. Is that…?

A. Klukas: Two questions. The second one, offsetting the costs. We estimate that at 17.3 percent the province is losing approximately $120 million per year in excise tax revenue alone. There are other costs to that as well. I don't know the math, but potentially there's the win.

As for the question about taxes, do I think taxes are too…? I don't know if they're too high. The purpose of taxes, like with alcohol, is to have people pay up front the future costs of health impacts and so on.

I'm not an economist. However, we do know that there's a correlation between…. If there's a gap between the price of a product that can be bought legally and the price of the product that can be delivered illegally, the wider that gap is, the greater the likelihood that it will be served illegally through those channels.

We've seen tax increases. The government of Canada increased their taxes at the beginning of this year, as did B.C. So of course, our recommendation is: if you want to, on the one hand, maximize revenue from taxation, don't do things that are going to make the revenue go in the opposite direction.

We've seen that consumption patterns, according to Health Canada, have been relatively flat. Tax rates have gone up, but revenue has not. It's actually gone down a bit, according to some sources. That's telling us that something's taking a chomp out of that. What is that? Well, we don't know.

This research has raised more questions for B.C. than we have answers to right now, but it's a start. Definitely, we always recommend…. Don't raise taxes as your first mechanism right now for getting these things under control, because there is a tremendous appetite in central Canada for selling products illegally, and it's getting here, obviously.

C. James (Deputy Chair): Thank you for the presentation. I would agree. I think most of us around this table are probably surprised at the numbers. Certainly, I expected it was more an eastern Canada kind of issue than western Canada, so I think you've opened a lot of eyes.

I wonder if you've had any discussions — a lot of your recommendations relate to municipalities — on this report with the Union of B.C. Municipalities? We've all just come back from a convention.

C. James (Deputy Chair): It'd be a great opportunity, from my perspective. Particularly since a lot of the recommendations fit with municipalities, it might be a good opportunity to have that discussion. I think government would certainly ask them if they were looking at legislation.

E. Foster: If we were to suggest lowering the price of the taxes on tobacco, the Cancer Society would hang us all around the yardarm, so I can pretty much guarantee that's not going to happen.

I sympathize. I would like to see you out of the tobacco business, like everybody in the country would like to see everyone out of the tobacco business. Prohibition doesn't work. It didn't work with alcohol. It certainly hasn't worked with entry-level drugs, for sure. I don't know if putting the chase on people now, possibly the users…. I mean, it's fine to go after the people that are selling it, but as long as there is someone to buy it, they'll keep selling it. We've seen that from the thirties right up through.

I guess if we can somehow convince people that if they're caught with illegal cigarettes, they're going to have to pay a fine. Maybe they'll stop buying them if the fine was more than the cost of buying legitimate. Just a suggestion.

A. Klukas: Yeah, a very hard one to enforce, I would imagine, but definitely the awareness. A lot of people simply don't understand. My long-lost aunt, daughter of a minister in Ontario…. I told her what I do for a living after 30 years, and she pulled a pack of smokes out, and it was contraband. She bought that from Grand River. People don't know. They think it's a way of saving money, and there's a lot of that going on.

Definitely awareness but not done in such a way that you simply alert them to the fact that they can find a cheaper product, because it could backfire on you. They found that in Europe. I suspect enforcement would be very expensive and difficult at the personal level.

I think people need to understand that when they engage in these activities — poof! — there goes a nurse, there goes your hospital, and there goes your funding for your teachers, for your schools. That's what this is about. That money is being taken from not just our in-
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dustry. It's also a tremendous…. It's the public purse. If people understand that — that it's not victimless. That is my point. I guess that would be my first strategy: simply informing them of that and then enforcement definitely.

Those who are trafficking…. The federal government has not collected levies in three years. Ministers didn't even know that, but they have not collected any. So the people out there doing trafficking, they don't even get a slap on the wrist. They go home scot-free. That's another angle, but that's not your job.

D. Ashton (Chair): Andrew, thank you very much. Greatly appreciated. Thank you for the information.

If that survey does come from Alberta, we'd like to have it, if at all possible.

Ten minutes for the presentation. I'll give you a two-minute warning, if required. We have up to five minutes for questions, and we are full of questions.

J. Olynick: Okay. Just so you know, I'm not Terry-Lynn, so I'll answer them the best I can.

Good evening. My name is John Olynick. I'm a registered social worker and a life skills worker with KBIA. I'm going to call Kamloops Brain Injury KBIA for my own saving time.

I'm representing Terry-Lynn Stone, the executive director of the Kamloops Brain Injury Association. She's also the director of the 2014 Brain Injury Alliance. I believe Alison Hagreen from Prince George and Carol Paetkau, who are also directors, have presented to you.

I'll go into a bit of history here. The Kamloops Brain Injury Association has served the citizens of Kamloops since 1984. KBIA is dedicated to providing specialized life skills services to survivors of brain injury, as well as support and education to the survivors, their families and caregivers. KBIA is a leader in the areas of education and accident prevention. Serving over 400 clients, KBIA, like all brain injury associations in B.C. struggles to find stable, long-term funding.

Until fairly recently, the term "brain injury" conjured up a variety of images. People who were living with a brain injury were often seen as unlikely to improve, dangerous, maybe even homeless. Survivors were left to their own devices and were often placed in long-term care beds.

All of this began to change in 1989 when the B.C. Ministry of Health published Restoring Hope, which formally recognized brain injury as a discrete disability. The province subsequently committed to the creation of a provincial brain injury program, whose objective was to set standards and to fund community services. Acute and post-acute services would remain the responsibility of the Minister of Health, which is our regional health authority, and a provincial brain injury program would fund community rehabilitation, cognitive and other therapies, case management, social inclusion and preventative education programs.

B.C. quickly became a national leader in the field of service development for this population. Progress was slow, but services began to evolve and grow. In 1997 the B.C. government adopted a program of surcharges on motor vehicle fines. Modelled after several similar funds in the United States, these funds were to target services and projects directed toward researching and preventing neurotraumatic injury and toward rehabilitation. Unfortunately, the benefits of this $2 million annualized fund have not been made available to provide rehabilitation or supports to the very people who the fund was designed to serve.

In 2002 the Minister of Health made a decision to dissolve the provincial brain injury program. The approximately $10 million annualized funding was divided among the health authorities. At that time there were 42 community-based brain injury service groups in B.C., and now there are only 16. Services are deteriorating, and we hear rumours of even greater threats to the service.

Across the province survivors of brain injury are not getting the services that they need. Where programs exist, there are often long wait-lists, and many exclusionary criteria have been set up to block access to these services. In some jurisdictions, community brain injury rehabilitation and supports are being replaced by generic programs and drop-in centres designed for anyone with a label who isn't able to manage on their own.

Ironically, this is occurring at a time when awareness and understanding of brain injury is increasing, a time when possibility of recovery is becoming a probability and the ability of survivors of brain injury to again become contributing members of society is a definite reality.

The Kamloops Brain Injury Association and the Brain Injury Alliance are not advocating for soft services such as drop-in centres or free meals, although we agree that these are very important services. What we're advocating for is funds to provide case management, therapeutic activities, cognitive rehabilitation, relationship supports for families, employment and housing assistance and other mid-range professional services.

B.C.'s reputation as a leader is long gone. Saskatchewan, with a population of only 1.1 million, provides over $5 million annually to community-based brain injury recovery over and above what is provided by their health
[ Page 1022 ]
system. Ontario is the leader. With a population of 13.8 million, they provide $71.6 million.

And B.C. — what do we provide? Anyone? Zero dollars. Unlike many other Canadian provinces and American states, here in B.C. there is no provincial vision or strategy for brain injury. We are no longer leading the pack. We're now, basically, close to the bottom of the barrel.

We're very grateful here in Kamloops to the Interior Health Authority for their annual contributions, but the funding accounts for less than 50 percent of what it takes to provide the services that we currently provide at the Brain Injury Association.

We also understand that Interior Health is going to a system of request for proposal starting in 2015. This is what they did in the Fraser Health Authority, which devastated services to brain-injured survivors as contracts were awarded to generic agencies who thought that people with brain injuries could be treated as any other client. It didn't work, and as brain injury organizations declined, survivors' vital needs became more and more unmet.

There are four issues. I'll run through these quickly. Issue 1. British Columbia is one of the only jurisdictions in North America where there is no targeted government funding.

We offer a special thank you to all the MLAs who have met with brain injury program leaders over the past 12 years and who have expressed support to the brain-injured community. But listening and offering support is not enough.

We are keeping our fingers crossed that this government will address the issue of targeted funding. But we're here to tell you that even if this issue is addressed and the government gives us access to a portion of existing neurotrauma funds or initiates a similar fund, we're talking about a maximum of $2 million annually. That's for the whole province. That would be a good start, but in reality, it's just a start.

Our recommendation is that the Kamloops Brain Injury Association supports the Brain Injury Alliance in its quest for the creation of the brain injury legacy fund — I believe you guys have a copy; I do have another copy, but I think you got one from before — which would access funding not only through the neurotrauma fund but also from the Ministry of Justice, from ICBC and from the new incarnation of the Ministry of Transportation, RoadSafe B.C.

Issue 2 is that brain injury is not just a health issue. It is also a justice issue. The Prince George Regional Correctional Centre's statistics indicate that 82 percent of inmates at that time were living with a previous brain injury.

Our recommendation is that the Ministry of Justice funds allocated as recommended by the Brain Injury Alliance would provide brain injury recovery programs, education and supports to both institutionalized and non-institutionalized survivors of brain injury. Training for corrections service personnel would also form an important aspect of this service.

Stats just mentioned make us wonder how many of these individuals might have avoided the whole criminal justice system if they hadn't sustained an injury to begin with, which brings us to issue 3.

Eighty percent of brain injuries could have been prevented and so can 80 percent of future injuries. This fact must, of course, be put into context. Life itself can be dangerous, and like the Prince George Brain Injured Group, who presented to you earlier in the month, we are not abstinent from life. We are not against contact sports or cell phones. We don't think throw rugs, stairs or motor vehicles should be banned. But we do think that we should be doing more to prevent injuries.

Our recommendation: education, engineering and enforcement are the three necessary components of injury prevention. We support the recommendations contained in the Brain Injury Alliance document — British Columbia brain injury legacy fund, which again, I've got a copy of — endorsing the use of a portion of the brain injury legacy fund to be allocated to hands-on, community-based injury prevention programs.

Historically, community brain injury associations and organizations have assumed this role, but as funds have dwindled, many organizations reduced or even stopped providing this programming as they must allocate their minimal funds to provide life skills services to survivors.

This leads us to the fourth and final point. However we look at it, brain injury is one of the most expensive medical issues. Why, then, would we invest so much money and effort in saving a life and then not invest in that person's potential to resume their role as a functioning citizen of this province?

I'll just give one example of what life skills have done. In one case a woman with a brain injury — who, might I add, is not funded under our Interior Health program because she is over the age of 65 — and her disabled adult son faced imminent eviction from a home deemed uninhabitable. Both would have had to have gone into a long-term care facility, and they both would probably be separated.

Networking with other agencies and managing to get the Public Guardian and Trustee involved, the staff at KBIA were able to orchestrate repairs, cleaning and sufficient improvements to keep this family in their home. Without this professional help from a person trained in the brain injury community, these two people would have become another number in the list of those who cost society.

In B.C. we are increasingly saving lives, then not providing people with the services they need to rebuild their lives. I guess if this response was without economic im-
[ Page 1023 ]
pact, government would wipe their hands of the issue. But there is a huge economic impact.

Our final recommendation. We support the funding proposal submitted by the 2014 Brain Injury Alliance ensuring post-acute retraining, rehabilitation and support so that survivors of brain injury can return to their rightful roles as contributing citizens.

Midwives Association of British Columbia, Kelly Hayes. Kelly, nice to see you again. Welcome.

D. Ashton (Chair): Yes, Williams Lake tonight. After this, we're on our way there.

Kelly, ten minutes for the presentation. I'll give you a two-minute warning, and we have up to five minutes for questions.

K. Hayes: Good evening, everyone. I presented last year to the committee on behalf of the Midwives Association of B.C., and I appreciate and thank you all for the opportunity to be here again this year.

My name is Kelly Hayes, and I am the vice-president of the Midwives Association of British Columbia. I am here tonight to reiterate the benefits of midwifery and the services we provide and how they are continuing to lead to better health care outcomes while simultaneously providing efficient, more cost-effective maternity care in our province. There is an opportunity in front of us for government to realize a net cost savings of $83 million by 2020, and I intend to show you the money.

By way of background, you may remember that midwives are highly trained. We're university educated, publicly funded, and we're regulated by the province of British Columbia.

Midwives in British Columbia are playing an increasingly significant role in providing primary maternity care. In fact, when I presented last year, the statistic for midwifery-involved deliveries for 2010-2011 was 10 percent. Well, I can proudly tell you that as of last year that percentage has risen to 17 percent.

The MABC has set a very realistic and reasonable goal: have midwives deliver 35 percent of primary maternity care in B.C. by 2020. Why 35 percent? Because it's realistic, and it's reasonable. Midwives are experts in low-risk birth, and 70 percent of pregnancies fall into the category of low-risk birth. In fact, in countries such as New Zealand and the United Kingdom, midwives are already providing 70 percent or more of the maternity care.

What would 35 percent by 2020 mean for British Columbians? It would mean improved maternity care and health outcomes for moms and babies — and who doesn't love babies? — increased accessibility to essential maternity care in B.C., a building of capacity by freeing up hospital beds and a substantial accrued savings for the province.

B.C. midwives provide the full spectrum of primary maternity care. We work with women from early pregnancy through labour management and delivery, provide extensive postpartum care for both the mother and baby until about six weeks postpartum.

This comprehensiveness includes all aspects of maternity and newborn care. We are primary providers, so we do all the ordering and assessing of prenatal laboratory tests, genetic screening, diagnostic tests such as ultrasounds. We have prescribing rights, and we do direct referrals to other practitioners like obstetricians, pediatricians, neurologists — whoever we may need to consult with.

Like physicians, we practise independently. Some midwives work solo, while others work in teams of two to four midwives, and some are working in collaborative care clinics. We all hold hospital privileges. We provide assessments, emergency care and labour and delivery services in hospitals, but we also provide those services out of hospital when appropriate.

So here's a show-you-the-money moment. Hospital stays in B.C. cost on average $2,000 for every 24 hours. The average hospital admission under midwifery care is reduced by 18 hours. With the current 17 percent of births being midwifery led, this already results in significant health care savings and a building of capacity by opening up those beds.

However, if midwives had the supports in place to be doing 35 percent of maternity care, those hospital savings have been projected to be $60 million by 2020.

Home birth is another example of an out-of-hospital service that midwives expertly and safely provide and is another show-you-the-money moment. Each birth attended at home with a midwife saves, on average, $2,800. Last year midwives attended over 1,200 home deliveries in B.C. If midwives were supported to attend 35 percent of B.C.'s maternity care, the home birth savings alone would be $14.4 million by 2020.

The demand for midwifery services is continuing to grow. Most midwifery clinics in B.C. have increasingly
[ Page 1024 ]
large wait-lists. For example, this is an excerpt from an e-mail that I just recently received from a midwife in the Fraser Valley: "With the addition of essentially five new midwives, we still maintained wait-lists of 20 to 25 women a month who could not be accommodated. We are working full caseloads to meet as much demand as we can, but it is impossible to grow the profession when new midwives face a year-long process to obtain privileges."

Privileging is just one example of a barrier that needs to be addressed in order to grow the profession and to help increase access to maternity care for women of the province.

On that note, while more and more women and families are opting for midwifery care, for many other women and families that option does not exist. One reason is the continued widening gap in maternity care services in our province. I encourage you to read the op-ed that's in your package, written by Dr. Michael Klein. He's the former head of the department of family practice at B.C. Children's and Women's Hospital. He very succinctly explains the dynamics around the existing maternity care gap and the cost-effective solution that midwifery services can bring.

However it might be described, the maternity care gap is forcing many pregnant women and families in rural B.C. often to travel hundreds of kilometres in order to access care, and that's really unacceptable. This problem is particularly acute for women and families in First Nations communities. Statistics show that a greater travelling time of two hours to access care increases bad outcomes: morbidity and mortality rates.

These increased poor outcomes are associated with increased rates of neonatal intensive care admissions, which range in cost to the system from $1,300 to $2,500 a day. That's just for the care of the baby. This doesn't even touch on the emotional costs for the family involved or the financial ones for families when they have to leave their communities, often for weeks at a time.

The solution: more midwives, and better supports and infrastructure for those midwives that are already working in rural-remote parts of our province as well. I might note that one-third of our membership is working in rural and rural-remote B.C. at the moment.

Further complicating matters and compounding the challenge before us in the maternity care crisis is the rate of Caesarean deliveries in B.C. This kind of makes me sad. The rate has increased 50 percent in 15 years. We are now the second highest in Canada, at 31 percent. For perspective, the World Health Organization maintains that a Caesarean delivery rate over 15 percent indicates a problem with the model of care. We have a problem.

According to Perinatal Services B.C., the Caesarean rate for family physicians and obstetricians was approximately 32 percent in 2009, compared to 18.8 percent for midwives. Let me show you the money. C-sections cost the health care system approximately $4,600 each. In 2009-2010 there were 13,435 Caesarean sections in British Columbia. In 2010-2011 midwives eliminated the equivalent of 833 C-sections, saving the province $1.5 million.

The proposed growth in midwifery to 35 percent would decrease the provincial Caesarean delivery rate further, to 27 percent — still well above where we want it — and would save the province an estimated $6.6 million by 2020.

In summary, midwifery services result in improved outcomes for newborns and for the women, reduced intervention rates, reduced hospital admissions, reduced lengths of stay for those that are admitted to hospital and reduced Caesarean rates. Those are just a few of the examples where cost savings can be found under midwifery care. All of this results in significant cost savings while building capacity in our already-stressed health care system.

What are some of the specific challenges in front of us? Midwifery services continue to increase in demand, and existing midwives are unable to meet the needs. Our numbers need to grow. We just have about 224 currently in B.C. practising.

Barriers need to be addressed and removed — for example, the issues around privileging, which I touched on a little earlier; the lack of support for sustainable care practices, particularly in the rural and rural-remote areas of our province; the need for alternative payment models to support low-volume practice and the high-needs populations; the need for collaborative care models, so midwives and physicians can work together in an equally supported manner; and the need for midwives to be included in maternity care decision-making at the policy and administrative levels.

With adequate supports in place, these barriers as well as others can be addressed and removed. So what will it take? Allocating $3 million a year to 2020 will address this priority. This investment would help allow British Columbians to realize all the health benefits and more that I've spoken of today, grow the profession and result in a savings of $17.7 million a year. By 2020 the gross savings would be $103 million, so subtract the $3 million a year, and we've got a net savings realized of $83 million, which could be utilized towards other health care priorities.

As you can see, it's a win-win. For the families of the province, improved access with improved outcomes; for the profession of midwifery, growth and sustainability of the profession; and for the government, significant cost savings and increased capacity within the health care system.

We understand that in the current fiscal environment government must control expenditures and spend money wisely, and we agree with that absolutely. That is why we are coming forth with a solution that will allow govern-
[ Page 1025 ]
ment to make an investment in midwifery that addresses the existing crisis in maternity care to the benefit of women, babies and their families.

In fact, in respect to maternity care, midwifery services fulfil the objectives stated in the Ministry of Health service plan published this past February: "The care needs of British Columbians must be addressed in a way that encourages efficiency and maintains fiscal discipline while ensuring high-quality, patient-centred care. This will ensure that British Columbians will continue to reap the benefits of a world-class health system for generations to come." Guess what. Midwifery — check.

J. Shin: Thanks for the presentation. You don't need to sell me on the value of midwives. I'm a big fan of this occupation. I did my third-year clinical training obstetrics in England, so I saw there that midwives are the first natural choice for an expecting mother unless there's a complication. Then you would then seek specialist help.

With that said, in the urban areas especially there's a tendency for new expecting mothers to go straight to the obstetrician, for example. I'm just curious to find out if the association has done any…. Sometimes it's not about accessibility to a midwife. Sometimes it's the lack of public awareness or understanding of the value of midwives.

K. Hayes: There's definitely still a lot of education that can happen, but saying that, I work at B.C. Women's and St. Paul's and my practice at False Creek — waiting list every single month. So even in the urban areas, because we don't have the numbers right now in midwives, we're not able to meet the demand.

K. Hayes: It's really through the model of care — the time that we spend with women in terms of education, working with them in order to find out what their needs are, removing a degree of fear around labour and delivery. But the fact that we're with women from right when they're needing us in labour throughout helps to reduce the number of interventions. And interventions in themselves end up snowballing at times and leading to Caesarean sections. So that's one way.

E. Foster: Second question: how do you get along with the Canadian Medical Association?

K. Hayes: I would say that we have a very growing positive relationship. We met with the B.C. doctors earlier this year, our executive director and myself. We have been working together in a number of committees and groups in order to find ways that we can all be working collaboratively to increase maternity care, because it really is about the women and the families of the province, and we want to be able to be working together to increase access.

G. Holman: Thanks, Kelly, for the presentation. Really great. Both my daughters were born with assisted midwife.

Two questions. Does the B.C. Medical Association endorse this proposal? Also, the cost is $3 million a year, so I take it from what I'm reading here that part of that would be allocated to fee increases for midwives.

G. Holman: The other part would be for training for additional midwives. Did I get that right?

K. Hayes: That would be a part of it, exactly — increasing our numbers. So increasing the number of midwives that we're having come into the province. Yes, there's a small incremental bit that….

In terms of pay increase, midwives have not had an increase to their phase-of-care service that we provide since 2009. This is where we're finding it's just becoming less sustainable for midwives to run their practices and be able to meet their cost of….

K. Hayes: We took this vision to them. In fact, we've had a number of them speak for this, including Dr. Klein — so very much on board in terms of looking at the full picture of how we can improve maternity care.

C. James (Deputy Chair): Just a couple of specific questions. I think you have a lot of fans around this table.

C. James (Deputy Chair): I was there when my grandson was born at home with a midwife, so thank you.

On the issue of spaces, do you have a rough estimate of how many additional spaces you think would begin to address this supply problem around training for midwives to go in?

I think you've answered the second question, but there used to be much more of a concern around — and I think
[ Page 1026 ]
you heard it in Eric's question — a clash between the medical profession and midwives. I certainly don't see that same kind of pressure. I see much more a willingness, particularly with new docs coming into the system, to work together as a team. I'm just wondering whether you see that as well.

K. Hayes: Absolutely. I definitely do. I mean, I've been working since pre-legislation, so it's certainly been a growth factor and an understanding and a lot of education on everybody's part. Those relationships have certainly shifted, specifically, I would say, over the last five to ten years. That's been where we've seen a significant change in the work together in terms of collaboration.

In terms of spaces, we were very fortunate to have a doubling of the seats in 2012, thanks to Minister Yamamoto at the time. We went from graduating, historically, ten midwives a year through UBC to now having 20 seats. We won't see that first graduating class of 20 until 2017. But unfortunately, simultaneously, we lost what was called the bridging program.

The bridging program was how we integrated internationally trained midwives into our province. Unfortunately, the funding wasn't available to continue that program, so we actually ended up at that sort of net-zero place in growth. We really need to see that reinstated, and we need to know that we can continue increasing the seats at UBC. For example, in Ontario, I believe, they're graduating about 70 a year.

D. Ashton (Chair): Kelly, great presentation. Thank you very much. You came forward with solutions, and that really helps us out.

Bonnie Cowan. Bonnie, welcome. Thank you very much for coming tonight. We have allotted ten minutes for the presentation — I'll give you a two-minute warning — and then we have up to five minutes for the questions. The floor is yours.

Good evening, ladies and gentlemen and Finance Committee members. I'm very pleased to be here tonight to participate in what I would consider to be some grass-roots democracy. It's encouraging for me to know that we who are presenting this evening have the ear of government, so to speak, regarding a diversity of issues.

My purpose this evening is to speak as a private citizen about the need for animal welfare in British Columbia to be recognized and funded by the province. I come to this topic fairly well-prepared, as I have researched and served what is and is not available to those organizations dedicated to the safety and well-being of animals.

I am an activist and an advocate for animals. I have been involved with a number of rescue groups in my community of Merritt, including the Kamloops and district SPCA, which encompasses Merritt and the outlying area.

The BCSPCA provides the majority of animal welfare services in this province. The SPCA is the largest animal welfare agency in North America and has been providing services for over 115 years. The society is funded by charitable donations from more than 80,000 donors and delivers mandated animal protection services under the province's Prevention of Cruelty to Animals Act. Operating on an annual budget of approximately $28 million, the SPCA addresses the needs of more than 42,000 animals in distress on an annual basis.

There are 27 full-time special provincial constables as well as two part-time special provincial constables and three additional constables working in the branches full-time, conducting cruelty investigations in communities such as yours and mine.

These constables receive extensive training and education in the area of animal abuse and neglect and are charged with investigating animal cruelty in British Columbia. In 2013 these SPCA staff investigated 7,839 cruelty allegations and removed 1,340 animals from distressing situations.

The cruelty investigation staff work closely with law enforcement agencies and Crown prosecutors, as some of the cases may involve criminal charges. It is incumbent on the SPCA constables to provide the expertise, documentation and recommendations to Crown counsel in cases of animal abuse, neglect and cruelty.

In 2013 the budget for cruelty investigations undertaken by the BCSPCA was just over $2.7 million. There were 23 criminal charges referred to Crown counsel. Because of understaffing, time constraints and nearly 8,000 cruelty complaints logged last year, this number may not accurately reflect the actual number of cases which could have gone forward had the SPCA the time and resources to do so. Nonetheless, the society leads many jurisdictions in addressing the ongoing and persistent problem of animal abuse and neglect.

There is now a provincial hotline in operation funded by the SPCA called the animal cruelty hotline, which is available to anyone wanting to register a complaint or concern. This is a new service to B.C. within the past 18 months, and it is proving to be very well utilized. All
[ Page 1027 ]
animal abuse and neglect investigations are confidential. This is a big factor in encouraging the public to make complaints without fear of repercussion or reprisal.

SPCA cruelty investigators carry a daunting, formidable responsibility that is difficult and complex, yet the importance of the work cannot be denied. Only in the past decade or so have we as a society come to realize that animal abuse and neglect may be closely tied or linked to child abuse and neglect as well as to domestic violence. Research indicates that there is frequently a continuum in some instances of abuse and neglect which may encompass all three types of abuse.

Already in some jurisdictions child protection workers and SPCA cruelty investigators work collaboratively together to coordinate interventions and investigations into child abuse as well as animal abuse. No matter what the circumstances, animal abuse and neglect do not occur in a vacuum.

I would like to raise some points for the Finance Committee to consider when it comes to animal protection. Given that the legislation the BCSPCA enforces regarding animal protection is provincial, it would seem incumbent upon the province to fund the SPCA constables working across B.C. to address the problems of animal cruelty, abuse and neglect. For decades the SPCA has worked tirelessly to provide these protective services. The province has not ever funded the resources needed to enforce the provincial legislation regarding animal protection.

Other provinces have chosen to fund certain services provided by the SPCA, especially animal protection services. For example, in 2013 the Ontario SPCA received $5.5 million from the province to conduct animal welfare investigations. Alberta received $1.13 million, and Saskatchewan, $530,000. These provinces have in fact stepped up to the plate and taken on some of the responsibility for animal protection.

We do not expect the RCMP to fundraise in order to provide services to the public, nor do we expect child welfare authorities to fundraise in order to provide child protection services to the public. It seems unfair that an agency such as the BCSPCA, charged with the mandate of animal protection provincially, has to fundraise in order to provide protection services to animals. Less than 1½ percent of funding for the organization comes from government — specifically, municipal government.

The province should take into account that all animal protection in the province is conducted without benefit of provincial financial resources. It should take into account that all the work regarding animal protection is conducted by a non-profit, private society, namely the BCSPCA. Surely the domain of animal welfare should at least be a shared responsibility between the private and public sectors.

We need the province to take a committed, strong stance on proactive animal welfare and to partner with agencies such as the SPCA in providing much-needed services, not only cruelty investigation services but also services that address the welfare and well-being of thousands of animals in distress or in need.

Where would B.C. be without the many rescue and animal welfare organizations currently in operation? It is difficult to envision what might happen were these agencies to become nonexistent.

Fundraising in order to provide a service such as animal protection can prove to be tricky and unpredictable. The SPCA has to constantly fundraise in order to survive, and valuable resources are taken away from direct animal welfare services in order to address funding issues.

Core funding for an organization such as the SPCA would make it much easier for the society to plan and execute services, creating a climate of financial stability as well as sustainability. An organization such as the SPCA does much advocacy work and public education, and it needs the financial resources to provide these services as well.

If we do not intervene at the level of socializing people, particularly children and upcoming generations, towards sound animal welfare practices that speak of respect, compassion and empathy toward animals, the problems we face in this province regarding animal welfare will remain virtually insurmountable.

Mahatma Gandhi, the great Indian pacifist of the 20th century, said it very well when he stated that we must become the change we want to see. If we want provincial funding for animal welfare organizations in our province, we need to let government know that animal welfare services cost money and that private fundraising does not always provide for a consistent baseline of financial resources.

Tonight I am here to ask the government to look at the whole issue of funding animal welfare organizations and define within its parameters a means of allocating resources to combating the problems of animal abuse and neglect.

We can't become the change we want to see unless there is recognition of the problems, a willingness and commitment to making things better for animals in general, and a financial undertaking on the part of governments — particularly the provincial government — to ensure that animal welfare is a priority in this province.

To the Finance Committee I say: please look at the provincial budget for the coming fiscal year and find ways to incorporate the work of animal welfare organizations, especially the SPCA's work, into the province's cost of doing business for 2015. At the very minimum, fund the mandated animal welfare services to the province — specifically, the SPCA cruelty investigations branch.

We have only to think about the recent case involving alleged abuse of the dairy cattle in Chilliwack to realize that the citizens of British Columbia are strongly invested in animal welfare. We are, however, sorely lacking
[ Page 1028 ]
in government-allocated funding for animal welfare in this province.

To the Finance Committee I say: please take this message back to our Premier and to our cabinet. You and they are our elected representatives, and we need you and them to come on board in strengthening and enhancing animal welfare in this province. Animals cannot speak for themselves.

Tonight it has been an honour and a privilege to speak to you about the needs of animals in this province. Thank you for your kind attention and a willingness to probe the issue of funding for animal welfare further. Together we can make excellence in animal welfare not only a priority but also a reality in British Columbia.

A special thanks to Fraser-Nicola MLA Jackie Tegart for her ability to listen well to her constituents. I'm here tonight due to her encouragement and the encouragement of the BCSPCA, as well as the Kamloops and district SPCA. Thank you for your help and support.

In closing, let us remember what Mahatma Gandhi said: "The greatness of a nation can be judged by the way its animals are treated." All my relations.

J. Shin: Thanks, Bonnie. Thanks for making the drive from Merritt. We actually heard from BCSPCA earlier in Kelowna, so this advocacy work that you're doing…. I appreciate it.

I had no idea that the SPCA had its own constables and cruelty investigators that are responding to these calls that come in.

If I were to see an abuse and call the RCMP, is that not being addressed by our police currently? Why is it ending up with the SPCA?

B. Cowan: Well, they have been created in direct response, to provide a provincial response to cruelty and animal abuse and neglect. They are charged with that. The RCMP can, but it usually devolves to the SPCA to actually do the investigations. Then they work closely with Crown counsel if there are to be charges.

J. Shin: You're saying that the SPCA is legislated as a mandate, but there is no funding that's attached to it.

G. Holman: Thanks, Bonnie, for your presentation. I'm not sure if you were aware, but the presentation that the SPCA made to us took a different tack on the funding. Rather than the operating, which they saw as perhaps more of a difficulty for government to build into its budget, they were focused on the capital needs of the organization throughout British Columbia. Just so you know that.

The committee will have to consider those alternatives, but they felt that was a better way to get to yes, I suppose — to go for the capital side of things rather than operating.

D. Ashton (Chair): Bonnie, thank you for your presentation tonight. Great. Thank you for coming. Have a good evening.

Kamloops Chamber of Commerce — Jeremy. Welcome, sir. Thank you for coming tonight.

J. Heighton: Good evening. I was told that I was allowed to tell you I missed the meeting where they voluntold somebody to attend.

We have allotted ten minutes for the presentation, five minutes for questions, if required. Once again, the floor is yours.

J. Heighton: On behalf of the Kamloops Chamber of Commerce, I'm pleased to present to the committee. We've got six items we wanted to touch on. All of the items are, of course, wrapped in a cloak of fiscal accountability and, wherever possible, revenue neutrality.

As you probably already know, the Kamloops Chamber of Commerce feeds into the B.C. Chamber of Commerce and Canadian Chamber of Commerce policy process as well. There are three items in here which currently exist in the B.C. Chamber of Commerce policy book and three items which are ours.

The first item we'd like to touch on is fiscal discipline. There are some key messages we'd like to send. First and foremost, we are commending the province of B.C. for achieving a balanced budget. Now that the balance has been achieved, the government should be focusing on debt reduction. The provincial government, again, is commended. We're one of only three provinces in Canada that have achieved a balanced budget. It's a significant achievement.

However, we'd like to see some spending restraint rather than significant tax increases used to ensure that we are moving forward fiscally. Now that we've achieved balance, the chamber believes that government must fulfil their electoral commitment to dedicate at least 50 percent of future surplus revenues for debt reduction. This was, of course, a plus recommendation of the chamber network.

The second item we're interested in is sales tax reform. This, of course, is specifically in reference to the reinstatement of the provincial sales tax from the HST. We believe that the decision had a significant negative impact on
[ Page 1029 ]
B.C.'s competitiveness, and we believe that the province should re-engage with the business community in alternate forms of a value-added tax.

Speaking as a business consultant myself, it is an extremely complicated system. You know, is parking GST or PST or both or neither? Six doughnuts have got one tax, whereas one has a different tax system. It can be rather complicated and overwhelming, especially for small business.

A combined value-added tax creates greater simplicity, greater streamlining and greater process for small business. We think that the government should immediately commit to a dialogue on the development of a B.C. value-added tax, in the short term providing a fully refundable investment tax credit, claimed on business income tax returns, equal to the PST, based on all acquisitions of machinery and equipment, which would include computers and software but would exclude buildings and structures with a capital cost allowance rate of 5 percent or less.

The third item we'd like to just touch on is the carbon tax. As you probably well know, the chamber was cautiously supportive of the carbon tax when it was introduced. Since then we've seen no other jurisdictions introduce a carbon tax as broadly as British Columbia has .

To be honest with you, at the beginning the chambers endorsed it with the understanding that other jurisdictions would pick it up and it would become more readily acceptable. Since the tax was introduced, we've seen no other jurisdiction follow in introducing the broad-based tax on carbon. It is, in our opinion, placing B.C. businesses, particularly exporters, at a significant competitive disadvantage.

We welcomed the review of the carbon tax in 2013, and it resulted in a freezing of the tax at the current rate of $30 per tonne and an exemption for aspects of the agricultural sector. While the government is to be commended for its commitment to retaining tax revenue neutrality, we are concerned that the way in which the money is being returned is lacking focus and not focused on outcomes of reducing B.C.'s greenhouse gas emissions. We feel it's funding niche tax initiatives.

We also believe the government should continue to review the tax measures introduced under the carbon tax. The review should include a regular review of the tax measures to ensure they're producing effective results and, more importantly, said review should look to shift the tax measures towards assisting the sectors negatively impacted by the tax, particularly those who are exporting to other jurisdictions.

There are three other messages that we think are important. The first one is reforming local government finance. Local government property tax continues to be an area of significant concern for chamber members. Kamloops has one of the highest heavy-industry tax rates, at a per-thousand-dollar value, in the country. It has become particularly challenging, given the continued increase in local government spending.

To address the issue, we feel a comprehensive review of local government financing structure must be undertaken. The fundamental principle that must underpin this review is fairness and ensuring competitiveness.

There are actually four policies currently on the B.C. chamber books that deal with this: British Columbia municipal property tax, fair taxation for business; improving the efficiency and accountability of local government in B.C.; creating equity in the property tax system; and, finally, supporting accountability and transparency for local government. Again, they're in the B.C. chamber book.

Our fifth item is housing affordability. We believe that housing affordability has reached a level of crisis in communities across B.C. Even this week we saw stories all about Vancouver and how much of property is held by overseas investors, and difficulties getting back into the first-time homebuyer market. We believe the issue is having a negative impact on the communities' ability to retain and attract workers and families. It has broader implications here.

We believe that a significant contributing factor in the price of housing is the level of costs imposed on the sector by various levels of government, including the property transfer tax. The chamber recognizes government's fiscal reality, so it's proposing a number of proposals that will not negatively impact government's budget of revenues.

Again, three policies currently exist: property transfer tax — affordable housing is good for the economy; rent control — phasing out provincial control of rent increases; and, finally, changes to the property transfer tax.

The last one we would like to put before the committee is a new strategy for B.C.'s arts and culture sector. We believe a vibrant arts and culture sector is an integral part of economically vibrant communities. Changes made to the funding structure of this sector have undermined the sector's ability to plan and invest.

The chamber recommends that governments undertake a review of the funding structure for the sector with a goal to ensure sustainable funding is available that provides multi-year certainty and includes a specific capital fund.

Specifically, what we're after here is that many of the arts groups don't know year over year over year whether they will receive a grant or won't receive a grant. It makes it extremely difficult for them to plan, not just in the year they're in but in the coming years and coming years beyond that. Every year is a bit of an uncertainty.

With the issues we're running into, especially in remote communities, regarding attracting effective business and creating dynamic communities, art and culture are a key part of that, so the weakness that is inherent in community arts organizations because of this deficiency impacts right across our entire community.
[ Page 1030 ]

G. Heyman: Thank you for the presentation. I want to drill down a little further into your comments on the carbon tax. You talked about the failure of other jurisdictions to mimic in some way pricing carbon. Certainly, that was both a hope and an expectation. Hopefully, that will come in the future.

You talked about the initiatives of the tax lacking focus and suggested that the tax could be used to target support for industries that are negatively impacted by the tax, if I understood you correctly. Are you simply suggesting tax offsets? Or are you perhaps suggesting support and programs that could assist those industries to reduce carbon emissions and, therefore, pay less carbon tax?

J. Heighton: I think either or both. The reality is I think the tax has not achieved what it was intended to achieve and has, in many ways, not necessarily done a disservice but sort of hobbled some businesses. I think anything we could do to open up the conversation and look at how we make a more competitive playing field is to the advantage of both the province and business together. I'm not limiting it to one or the other, because I think it's open for discussion.

G. Holman: Thanks for the presentation. About local government and the concern about high, increasing tax rates. Local governments complain that they have huge responsibilities around infrastructure, in particular — the infrastructure deficit; you've heard of that term — with only a very small proportion of tax revenue sources.

When you talk about a review of local government financing structure, are you thinking about that at all? For example, the UBCM fiscal fairness paper was talking about the possibility of alternative revenues for local government. Are you thinking about the revenue side, as well, and alternative sources, or more the cost and the spending side?

J. Heighton: I think there has to be balance on both sides. I think one of the challenges in government finance…. You look at a community like Kamloops. We have a difficult time, because of the taxation rates on industry, to compete with other communities.

When you have that difficulty in play, what happens is there's a disincentive for new industry to move here, so there are more burdens on the tax system, whereas if you had a standardized formula, a standardized approach to government financing, then you could create a more level playing field that I think would open up business development to more communities.

We're in a situation now where we're finding that it's difficult for businesses to strategize coming here when they can go to other communities where they have a broader tax base or a deeper tax base. So there's less requirement for each business to sort of pony up to the trough, so to speak, and put tax dollars in, right?

I think there's an ability to rebalance it. Is that revenues? Is that expenses? I think it's both sides again, right? Like any good business, you want to be looking at governance as: what can we do? How can we effectively manage our finances and our expenses to find the best possible balance? That's what we're saying here. We want to find the best possible balance that's as close to revenue-neutral as we can that gives as many of the interior communities in British Columbia an opportunity to compete on a level playing field.

J. Heighton: I think housing affordability is an issue everywhere. I think it's more succinct in some of the major centres. Just this week they were talking about Toronto and Vancouver and the inability. But I think that any time you're looking at the ability of a start-up, a family, a first home, their ability to get into a home has far-reaching implications. It's not just about the property transfer tax. It's about the money they invest when they move into a home.

My neighbours just sold their house, and a new couple just moved in. They're doing a complete renovation. That has rippling effects across the entire community. Getting the real estate market moving, getting that dynamicism going in a community, has implications far beyond property transfer tax. It has implications for a dynamic community.

Again, if we can spend those dollars within the community, because there is affordable housing that is available, then we can create that movement in the community that creates deeper economic viability.

D. Ashton (Chair): Jeremy, thank you very much for your presentation. We're all the architects of our own destiny, and you have the opportunity. And to be frank, a lot of it isn't a provincial issue; it's something that can be addressed locally. You have that opportunity coming up in November in regards to property tax and city operations.

D. Ashton (Chair): I'll leave it at that. Have a good day, Jeremy. Thank you for coming.

Your Worship, welcome. Always a pleasure to see you. You and I crossed paths last week.
[ Page 1031 ]

D. Ashton (Chair): Your Worship, ten minutes for a presentation. I'll give you a warning at eight minutes, and we've allotted five minutes for questions if required.

A. Raine: I'm not sure…. Maybe I should ask the question: how many people understand the resort municipality initiatives fund and the MRDT?

A. Raine: I think I can go through this quickly. Hopefully, it's not so heavy in terms of some of the presentations you've seen.

In Sun Peaks the impact is really quite critical for us as a community that really only has one industry — tourism. You can just see the municipal taxes. The municipality is at 36 percent, with $1.4 million; schools are at $1.3 million. The problem is that when your assessments get high in a region, you end up paying larger portions. But a lot of municipalities are telling me that they want to be at 60 percent of the funding.

You can see on the next page there is a comparison between Whistler and us. Their municipal taxes are 59 percent; ours are only 38 percent. The reason why is that when it comes to regional district and hospital, there are different circumstances here. The regional district is much bigger, and there's a much bigger administration.

In Whistler they're in the Squamish-Lillooet area, where the population is fairly small and the regional district is not so well developed. And then the hospital is the same thing. Kamloops is a major centre for hospitals for this part of the province, and in Whistler a lot of the hospital things actually happen in Vancouver, so they overlap onto the Vancouver area.

Just jumping over to the next page, you can see that our municipal taxes reflect our $1.4 million, and we've got $330,000 that comes in, in the resort municipality initiative fund, which is a portion of the hotel tax. Then we have $220,000 that goes directly to Tourism Sun Peaks, which is the MRDT program — an additional 2 percent. That's on top of the provincial tax, which was approved by the hotel sector.

We've chosen to move the $330,000 over to Tourism Sun Peaks for them to carry on marketing of events all focused on summer, the weakest season for us. It's money that they wouldn't normally have to market because they're really focused more on the winter. We've kind of said it's time to grow the summer because, obviously, nobody can survive with a strong economy for four months, and eight months you're giving it all back.

Lastly, if you flip over, the Sun Peaks community focus is really on developing a livable community. One of our first focuses when we became a municipality was trying to get a school going in Sun Peaks, trying to retain the employees that we had. When you look at protective services — just fire and things — $561,000…. I apologize. There's an error there. It's 39 percent of the municipal property tax, not the budget. It's certainly less of the total budget.

Then the public works side — just snow removal and streets and waste removal — is $565,000, which is also 39 percent of the actual municipal property tax.

In starting up the school, we made a contribution of $231,000 in the first three years, because the school district wouldn't support us. We've kind of grown the school from 22 students to 65. We see ourselves in a few years being at 100, but we had to really kick-start that. We in fact own all the classrooms. I won't even tell you how we did it for $231,000, but mostly buying up portables that were being sold by other communities — dirt cheap at $6,000 or $8,000 — and then cladding them and putting roofs on them. We got decent classrooms.

We did that as a municipality to grow. We now have the school district, which has taken over the cost of the teachers for K to 6. We were paying even the teachers' costs in the initial years, just to get ourselves started.

We've got some projects in terms of health care, getting a doctor to the community, some recreational facilities, looking at employee housing. With a limited amount of money, we're really kind of tight. We need some growth in order to grow our budgets. I mean, we can't tax the people more. We've got to grow, obviously, and get more development happening.

We're focused on those things, but part of growth is really kind of encouraging the tourism industry, marketing yourselves, building the right tourism infrastructure. We are very appreciative that the resort municipality initiative fund and the MRDT funds have really allowed us to market tourism and start the community growing.

I think we're fair contributors to the economy. We collect about $1.1 million in hotel taxes and sales taxes of over $2 million. We've got 520 employees year-round, and we've got 1,200 in the winter months.

Since we've had the RMI funding, we've been able to stimulate the summer growth 37 percent in two years. That's a significant difference. Businesses that were just all losing money…. Now some of them are starting to make money or get closer to breaking even in the summer. The MRDT funds have really been very important for Tourism Sun Peaks to keep marketing the resort. Neither one of those programs could be funded from property taxes.

Really, I just wanted to make sure that the Finance Committee understands that for the small resort com-
[ Page 1032 ]
munities, these tax programs are very important. I think the key thing for us is that the MRDT is an additional tax. We haven't come hat in hand saying: "Please give us some money." No, we're prepared to go and add a little bit of money but make sure we provide a great service for our customers so that they're not reacting to the additional 2 percent.

We are very appreciative of the MRA funding, which has really given us an opportunity to build our weak season. We hear rumours from time to time that these programs are going to be changed or axed. I just want to make sure the committee understands that these are really important for small communities who don't have too many financial resources.

At UBCM we kept hearing that everybody wants a share of somebody else's pie or some bigger chunk of money. I think the good thing about this program is we're reaching across saying "Hey, we'll accept an additional 2 percent tax. We're not looking to the province for that." The RMI money, I mean, it could be maybe administered better, but it's certainly very important for small resort communities, so thank you.

D. Ashton (Chair): Your Worship, thank you. Just a quick question. How could it be administered better?

A. Raine: Well, the RMI money has been capped at this time. Whistler gets 80 percent, and 13 other communities divide up $2 million. I'm not so sure that…. I don't want to take away from Whistler. I mean, Whistler is a big engine in British Columbia tourism, and they've done a heck of a job in building the resort. But as soon as you cap the fund, then there's no initiative when you keep growing.

They have been looking at the smaller communities that are growing, and passing on a little bit more money, but that has come at the expense of Whistler's money. I'm sure Whistler is thinking about…. You know, they obviously don't want less money. But I think there should probably be more incentive. It should be based maybe on your growth rate. You'd get a base rate, and then you grow.

I looked at ours from the time the municipality was formed till today. The $330,000 that we get…. We've increased the tax by $270,000. If we can increase the taxes, and then a portion of the increase is coming back to the communities, there's an incentive on both sides to work hard to make sure you increase business. The province isn't getting cut out, and communities have an incentive to get a bigger portion. So I would make it an incentive-based program.

G. Holman: Thanks for the presentation. Just a couple of quick questions. Resort municipalities are a bit of a black box to me.

G. Holman: The forest fuel treatment grant — is that an annual grant? And the other…. On the expenditure side, I don't see policing in there anywhere.

A. Raine: Yeah, policing is in there, in general administration. And we do get it…. There's a cost from the province. We have RCMP there, and then the province sends us a bill for that.

A. Raine: We've had it, actually three times. It's a very good program for us. As you know, not so long ago we had forest fires all around the community. We are continuous forest, so we have been reducing forest fuel all around the resort.

S. Hamilton: Thank you, Al, for your presentation. Again, I apologize for testing your memory banks there. It's been 40 years.

I understand the circumstance you're in. I see the capital projects that you want to move forward with, with regard to health care centres, recreation facilities. There are tipping points in any community, where you want to build the infrastructure to get the people there, but you can't really build the infrastructure till the people come because you rely on your tax base the way you do.

One of the things I noticed that stood out the most here, as compared to Whistler — of course, they're a little further detached — is you pay almost three-quarters of a million dollars to the regional district. What services do you receive from the regional district?

A. Raine: A lot of it's in solid waste management. The new requirements have…. It's unbelievable. The bill regionally was, I think, $10 million or $12 million. They've got a $6 million gas tax grant a couple of times. Still, that's a huge cost on the regional district. The facilities they're building are unbelievable, but unbelievably expensive, too.

S. Hamilton: That three-quarters of a million dollars, then, was based on a mill rate, essentially.

A. Raine: Yes, that was one of the motivations for Sun Peaks to become its own municipality, because we could
[ Page 1033 ]
provide a lot of the services that the TNRD was providing for us at a much lower cost, but we paid a higher cost because our assessments are 2½ times higher than the rest of the region.

S. Hamilton: I certainly continue to support the objectives that you're trying to achieve here, so good luck with that.

S. Gibson: I think you've got an amazing community. My question is: because to some extent it's seasonal, as acknowledged in the report, are you able to diversify and still maintain your resort municipality status? Can you diversify into some other ways of growing your municipality to different customer bases, if you know what I mean?

A. Raine: We could. There's nothing keeping us away from that, but it's easier said than done. Really, a high-tech industry…. We have a few people that are in the finance industry that are working out of the resort, but you can count them on a couple of hands.

D. Ashton (Chair): Your Worship, thank you very much. A pleasure. Thanks for coming down.

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
Clerk:	Susan Sourial
Committee Staff:	Sarah Griffiths (Committees Assistant)

Witnesses:	Peter Aylen (President, Absorbent Products Ltd.)
	Carolynn Boomer (PacificSport Interior B.C.)
	Fiona Clare (Literacy in Kamloops)
	Bonnie Cowan
	Leif Douglass (Thompson Rivers University Students Union)
	Dr. Thomas Friedman (President, Thompson Rivers University Faculty Association)
	Lahana Ghosh (Thompson Rivers University Students Union)
	Jillian Griffin (Thompson Rivers University Students Union)
	Kelly Hayes (Vice-President, Midwives Association of British Columbia)
	Jeremy Heighton (Kamloops Chamber of Commerce)
	Bob Holden (Thompson Rivers University)
	Andrew Klukas (President, Western Convenience Stores Association)
	Ron McColl (Chair, PacificSport Interior B.C.)
	John Olynick (Kamloops Brain Injury Association)
	Al Raine (Mayor, Sun Peaks Mountain Resort Municipality)
	Dr. Alan Shaver (President and Vice-Chancellor, Thompson Rivers University)

3) Thompson Rivers University Students' Union	Jillian Griffin
	Leif Douglass
	Lahana Ghosh

REPORT OF PROCEEDINGS(Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES