Finance and Government Services — Issue No. 42 — Wednesday, October 1, 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	1035
B. Mack
J. Moller
J. Ryll
G. Wonders
G. Fedor
P. Corbett
P. Rykes
T. Guenther
T. Hoffman
B. Carruthers
A. Thacker

D. Ashton (Chair): Well, good morning, everyone. Thank you very much for coming. My name is Dan Ashton. I'm the MLA for Penticton and Chair of this committee, the Select Standing Committee on Finance and Government Services. We're an all-party parliamentary committee of the Legislative Assembly with a mandate to hold provincewide public consultations on the next provincial budget.

The consultations are based on the budget consultation paper that is released by the Minister of Finance. Following the consultations, the committee will release a report with recommendations for Budget 2015 no later than November 15, 2014.

This year we are holding 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're in Cranbrook, Kelowna, Kamloops, Williams Lake, Campbell River and Courtenay.

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

We invite all British Columbians to take 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 for questions or comments from the committee. Time permitting, we'll also have an open-mike period at the end of the meeting, where five minutes is allotted for each presenter. 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 at the committee's website. All of the meetings are also broadcast through live audio via our website.

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

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

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

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

D. Ashton (Chair): He's the guy that forgot his computer in the hotel room. Oh, that's public. I'm not supposed to say that. Darn it.

Also assisting the committee today are four incredible, hard-working individuals: Susan Sourial and Sarah Griffiths — Sarah at the back, Susan sitting here — and two individuals from Hansard that do a terrific amount of work, Ian Battle and Jean Medland. They keep us all in line. I can assure you of that.

Starting off, Cariboo-Chilcotin Partners for Literacy — Bruce Mack and Janette Moller.

Welcome. Thank you very much for coming. I'll give you a two-minute warning close to the ten minutes if it looks like you're going that far. Then we'll have five minutes for questions or comments. The floor is yours.

B. Mack: Thank you very much. Welcome to Williams Lake. I'm really proud to say I think Williams Lake may be the only city that has addressing literacy as one of the official goals in its community plan.

Cariboo-Chilcotin Partners for Literacy has been operating for 17 years. We've been doing a lot of work building awareness, helping individuals. I'll just very quickly go through a couple of our key programs. You've got a copy of our brochure there that lists more fully what kinds of things we do.

Our partner-assisted literacy program works with individuals. It's a learner-directed program. Individuals can come in. It can be a 50-year-old truck driver that needs some help to pass his driver's licence so he can keep his job. It can be a young parent that wants to learn to read so they can read to their kids, someone that wants to go back to school, and so on. That's been, from the start, our major program.
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Financial literacy we've got into in a fairly serious way in the last few years. I started this 15 years ago as an employer when I realized the kind of stress my employees went through over financial literacy — being hounded by creditors and so on, not sleeping at night.

The stats are quite incredible. Something like 55 percent of Canadians are under serious stress because of financial issues. Financial matters are the single leading cause of marital breakup and divorce. There are estimates that it costs employers between $500 and $300,000 a year helping employees who are affected by stress issues, and finances are a big part of that.

Through our financial literacy we provide workshops at the pregnancy outreach program, at the friendship centre, at the Salvation Army, within communities, and we do a lot of one on one helping individuals get their finances back in order and get away from the downward spiral of payday loans and those kinds of things. Just understanding how finances and interest rates work and so on can be a huge help.

All of these things are big financial costs, but they're also huge human costs. One of the areas that we've done some work in and that we'd like to do a lot more if we had the resources is on clear and plain language and embedding literacy within all the service organizations within the community. We've had some significant success with that, but as I say, we'd like to do an awful lot more.

We all feel we're communicating, whether it's in the health sector or businesses, government. We're putting out information, and we're assuming we've communicated. But if we don't realize that a lot of our population can't absorb the material that we're giving out there, we really haven't communicated at all.

We're trying to work on the two sides: helping people improve their literacy so that they can handle this material but also helping organizations develop their material so that it is more user-friendly — so that we're using words that people can understand, we're using sentence structures that are more absorbable and so on. That's a huge task.

As I say, we've had significant success in helping organizations within the community recognize literacy as an important issue that a lot of their clients, customers and so on may be having to deal with. That's something that we really would like to put a lot more investment into.

Just very quickly, we've got our Books for Babies program. Every new baby in the Cariboo gets a bag of books. It's one of the pilot projects the provincial government started and stopped a few years ago. We've been doing that for 15 years.

We started, several years ago, our bright red bookshelves. We've got a dozen-odd bookshelves around the community in places where young families are spending time — at the arena, at doctors' offices, at some businesses and so on — where people are free to pick up a book, take it home if they like, or they can read to their kids while they're there waiting. We do computer training at the library. We have a large number of programs to reach different groups of people in different ways.

One of the major initiatives we started fairly recently was our regional education council we're coordinating. We brought the TRU — Thompson Rivers University — and the school district together with us to look at how we can better serve our population.

The school district knows it's turning out students that don't have the essential skills that they need to be able to get a job or to go on to further training. The university recognizes it's admitting students that don't have a hope of succeeding because they don't have the literacy and essential skills. We've done direct work in literally reading manuals onto disks so that students can hear the material, because they can't read it.

We can get into — if there are questions along that — how that has helped a number of people succeed and get some well-paying jobs.

This committee, this council, is looking at: what are some of the gaps? How can we better serve the people that we're not serving now? Who's falling through the cracks? Is there duplication? And how can we better coordinate our activities to make sure that more people are getting the services they need so that they can move on with their lives and be more productive? This is why we're here today.

We really appreciate the recommendation you made last year. It didn't get everything you had asked for. We're hoping the material that we provide you will better enable you to convince your colleagues of the critical importance of investing in people, who really are our most valuable resource.

I'd like to just very quickly give you a bit of an analogy. Bob Carter is a metal fabricator. His business is in trouble. He's losing ground to his competitors. His equipment is out of date. His staff don't have the training they need.

You suggest to Bob that he really has to invest. He's got to upgrade his equipment. He's got to provide training for his staff. Well, he can't afford it. All he's looking at is that he's going to have to lay off a few more staff and hope to survive a few more years.

Well, Bob Carter is B.C. By failing to invest in his business, he's going down the tubes. In B.C., similarly, by failing to invest in our people, we're losing ground to our competitors.

We talk about a high-tech economy, a knowledge-based economy. Who's going to provide that? We've got unemployment right now, but we have to bring in foreign workers to fill jobs that we don't have the skills for. Those aren't even high-tech jobs. Unless we invest in our people, we're not going to be able to take advantage of the economy as it's developing.
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I hope many of you are aware of the TD–Frank McKenna study of a few years ago. They quote from Stats Canada that a 1 percent increase in literacy levels will increase our national income by $32 billion. We're missing the boat on that.

We can't just look at balancing our budgets. We encourage people to invest. You wouldn't tell a 16-year-old kid to stay working at McDonald's because getting a student loan would put him in debt. You'd encourage him to make that investment. Bob Carter has to make the investment. We buy homes, and we make investments. As a province, we have to make those kinds of investments. That's the one side of the ledger.

The other side is the high cost of low literacy. The high cost to our health care system — the misuse of prescription drugs because people can't read the material they're given. WorkSafe accidents. Again, the high correlation between low literacy skills and high accident rates. Our justice system — again, those correlations. Our welfare costs. People who can't take advantage of the opportunities that are out there.

If we don't make those kinds of investments, we're going to continue down that slope. We need government to recognize that investing in literacy and in education generally is absolutely critical to the prosperity of the province.

Finally, it's not just about the amount of money. We've got to use our money smarter, and I can give you a lot of examples where we've thrown money at literacy programs — last minute, lots of dollars and totally ineffective.

The other big thing for organizations like us, all non-profits, is the short-term, pilot project approach, year-to-year funding. How do you attract and keep good staff when you can't promise them there's going to be money after March 31?

We really encourage you to push for secure funding, multi-year. "Okay, this is the funding for the next three years" — or preferably, five years, so that people can make plans on it.

One of the things I will include with our report — and I'll get you a copy of the written report — is some recommendations on a comprehensive literacy strategy, but working with Health and working with WorkSafe B.C. It shouldn't just come out of an education budget. This is a provincewide issue.

D. Ashton (Chair): Sir, thank you, but make sure that we get that additional information before October 17. It's imperative.

G. Heyman: Thank you very much for your passionate presentation. I think Williams Lake is very fortunate to have you as a member of the community, as are the residents.

We have had a number of presentations, as I'm sure you know, on this issue, and I'm sure we're going to have very serious discussions. Many people will have sent us a variety of material around different aspects.

I hesitate to ask you to do our research for us, but I suspect, from your presentation, that you've done a fair amount of reading yourself. If there are any particular studies that struck you as good examples of the return on investment by investing in literacy, please send us that so it'll be part of the official record of the committee. As the Chair said, October 17 is the deadline. That would all be useful in putting together whatever comments we make on this issue in the committee report.

S. Gibson: My question is: how do you…? I taught university students for many years, and a number of my students had very, very poor writing skills. In fact, it was predominantly boys.

My two quick questions — and just capsule answers is all I need…. How are you going after the boys, the ones often in denial? The girls tend to come forward.

Secondly, with adults our age, who suddenly find themselves in their middle years with extremely poor literacy skills, but they're embarrassed to come forward — how do you find those people? So two quick questions.

B. Mack: Addressing the stigma has been a huge part of what we've done, and I can say with a fair degree of confidence and certainty there has been a huge change in the willingness of people to come forward with that. We've had leading business people in the community speak up at our golf tournaments and write articles in the newspaper — how they struggled with literacy and how addressing that has been helpful. That's been a huge thing.

When we started our Reach a Reader program 12 years ago, people would say: "What's literacy? Why is that an issue? Doesn't everybody go to school?" Now people a block away are waving their $20 bills to help out. So there's been a huge change with that. Public awareness is a big part. That's a big part of the strategy.

S. Gibson: And the boys. The young boys, I find, are poorer writers and communicators than the girls.

B. Mack: They are. But we have found as they get older…. At university a lot of them are the ones coming to us. We had male students in a welding program concerned they couldn't pass the course because they couldn't read the manual. We put the manual on CD so that they could hear it rather than read it.

Again, I think that's all part of the stigma and the ap-
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proach. That's part of what we want to address, as well, with the school district and the university.

We work with young children and families, but school-age kids, to a fair extent, we have left to the school districts. We don't have the resources to do everything, so we haven't done as much of that as we would like to. But I think it is recognized increasingly, and that's something we have to continue to work on.

C. James (Deputy Chair): Quick question. Thank you, both of you, for the work that you do. I think one of the real strengths that we've been hearing around the province is the fact that each of the literacy programs meets the needs of the community. They all have some commonalities, but they all have some specific areas that they focus on to meet the needs of their community.

Is there a particular area that you're seeing the greatest pressure in or that you're adding in the literacy area, or that you're really seeing a great need right now in your community?

J. Moller: We have really noticed that technology, computer literacy…. We have had an increase of people really, really interested, especially our seniors who are in that age group where maybe they didn't have that opportunity when they were younger. We get a lot of people asking us to tutor them with technology, computers, phones, iPads and things like that.

B. Mack: I would just like to add to that. It really is across the whole spectrum, and we can't lose sight of helping young families and young parents prepare their kids for school.

Working with seniors. Something like 80 percent of those over 65 don't have the basic skills that they need. We lose the skills that we don't use.

Thank you very much for coming today. We do wish we had more time, but unfortunately…. If you have additional submissions, please get them in to us. Okay?

Up next we have the Williams Lake and District Chamber of Commerce. Before they come up, I would just like to recognize Donna Barnett, one of our peers — the MLA for this area.

Jason Ryll, pleased to meet you. Thank you very much. We have allotted ten minutes. I'll give you a two-minute warning, if required, and we have five minutes for questions and comments from the board. Please, the floor is yours.

J. Ryll: Good morning, and thank you very much for taking the time to tour the province and get a better handle on what issues are affecting us.

My name is Jason Ryll, and I'm presenting to you as the president of the Williams Lake and District Chamber of Commerce, although I do have to admit that I've just recently stepped down from that role in order to run for a seat on our city council. I'm sure I can count on you all for your support.

My presentation to you today is, I think, going to address a very serious issue that affects not only our community here in the Interior but also many others between Bella Coola, here and the Lower Mainland.

My presentation will touch on the basics of economics today over the issue of B.C. Ferries and their recent service reductions. I'll only touch on them in my presentation because it's my understanding that I'm not the only one who is going to be addressing this topic with you today.

To give you some perspective as to the reason why an interior community like Williams Lake is concerned about what B.C. Ferries does, it's not simply because we don't want to pay exorbitant fares when we go on holidays on the Island. We, too, here in the Interior are very much a ferry-dependent community, more so the many members that we have in the Cariboo-Chilcotin.

When the Minister of Transportation announced in November that there were going to be cuts in service as immediate as by April of this year, we were forced into action. A working group made up of tourism industry reps, business owners, politicians and myself met with Ministers Stone, Yamamoto and Bond back in March, hoping to educate him and them on the then potential impacts to business in our region and province using information provided from B.C. Ferries' own website and financial documents.

We were then told those numbers were incorrect. Clearly, our effort to delay any ferry service reductions was ignored, and the cuts were made anyway.

During our meetings with the ministers, we asked for clarification on a number of items stemming from B.C. Ferries' own financial documents. Some of those I'd like to share with you now. These are some of the asks that we left them with.

Clarification and explanation of the significant increase in operational costs being recorded for 2013 over prior years. The operating expense in 2012 is reported as $4.33 million, but it jumps to $5.97 million in 2013 without any explanation. This is a 38 percent increase without any increase to service levels. The magnitude of that increase is not reflected in any other routes in the B.C. Ferries system.

Explanation on the explosive increase in the amortization allocation to route 40. In 2011 B.C. Ferries allocated $233,000 in amortization on route 40; 2012 was $905,000. The books jumped up to $2.4 million in 2013. Again, no other route shows this massive increase in amortization costs being allocated to them.
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Why is a reasonable share of the federal subsidy not being allocated to route 40? For example, route 11, which is Prince Rupert to Skidegate, is allocated $5.8 million in subsidy while route 40 is only being allocated $286,000, or 1 percent of the overall subsidy. Route 11 carries 2½ times the volume of traffic but also posts positive earnings, making it appear irrelevant to allocate the subsidy.

Why are southern routes being allocated any of the federal subsidy? That was not the intent of the 1977 Canada–British Columbia coastal subsidy agreement, which was originally $8 million.

Even when we asked for some middle ground by determining a common and agreed-upon figure for historical capacity of route 40, specifically resolving the discrepancy in vehicles and, thus, individuals utilizing the service, we were met with disdain. The minister has clearly stated numerous times that the figures provided to them by staff show that only 500 vehicles utilize route 40 annually while figures obtained from B.C. Ferries indicate 2,643 AEQs — automobile equivalents — in the last fiscal year.

Those were only some of the requests that we left the ministers with at the time, and we have received, honestly, little cooperation in return. Our group of stakeholders and representatives presented viable solutions to maintain and even increase ridership. We got nowhere except to be told that the cuts are here to stay and, in no uncertain terms, to just learn to deal with it.

This simply cannot be the message that government is trying to send us. We are not willing to accept defeat or to be told that we can't. One thing you'll learn about us here in the Cariboo is that we don't take no for an answer lightly.

Another point to consider on this issue is that just recently at the UBCM convention in Whistler, a report was presented that echoed the sentiments that we tried to warn the government on regarding ferry service cuts. The report, commissioned by UBCM, argued that plummeting ferry use has cost the province more than $2 billion already in lost economic activity.

As a side note, of the $2 billion lost, we know for a fact that nearly $1 billion of that was lost prior to the cuts taking effect in the tourism sector alone, with Jonview Canada not booking tours to our area, as in western Canada, as a direct result of the uncertainty surrounding transportation problems and challenges with B.C. Ferries.

The reasoning for the drop in ferry usage is due mainly in part to increased fares for passengers, thus having that domino effect on tourists, businesses and communities that depend on ferries for their livelihood.

I would also like to share some of the other points that were raised in the socioeconomic impact analysis that was presented at UBCM. I'm sure you've all had a chance to glance at the document or at least know it's there, but I'll just highlight some of the key points.

All orders of government — federal, provincial and local — benefit from the annual tax revenues generated from B.C. Ferries, and all the regions of the province are impacted by B.C. Ferries, whether through the economic activity generated in both coastal and non-coastal communities or from the tax revenues that are returned to all regions of the province by the provincial and federal governments.

The forgone economic activity related to the historical fare increases from 2003-13, in that ten-year span, resulted in an estimated cumulative loss of $609 million in tax revenues, including $325 million to the federal government, $231 million to the province and $53 million that would go back to municipal governments. This is tax revenue we cannot afford to continue to keep losing.

Needless to say, the delegates at UBCM were all very concerned over the long-term continued impacts to communities and businesses if the financial challenges the Ministry of Tourism and B.C. Ferries are punishing us with are not dealt with in an immediate manner.

This is a sentiment that the B.C. Chamber of Commerce also shares. At the B.C. chamber AGM in May there were two policies that were proposed and accepted that dealt directly with B.C. Ferries. The one I'll speak to is the one we submitted and was accepted, addressing B.C. Ferries as a component of the provincial transportation infrastructure — including the maintenance and legislative review of the Discovery coast ferry route 40.

Paraphrasing from our policy, by making drastic cuts to the Discovery coast ferry service as well as systemwide cutbacks, B.C. Ferries is not just jeopardizing the health of the tourism industry but also deconstructing a vital component of our provincial highway infrastructure. Common knowledge indicates that this infrastructure change will isolate rural areas of Vancouver Island as well as the central interior in B.C., impeding trade, transportation and economic growth in the rural regions noted.

Our provincial government needs to acknowledge that B.C. Ferries and their transportation and trades routes are an important and essential piece of transportation infrastructure to British Columbia. This reduction in service, without consultation, will carry broad-reaching economic impacts on all communities, coastal or not, that are part of any circle route in the province that relies on ferry transportation as a part of that route.

The cuts to the Discovery coast ferry service involve the elimination of a key direct route between Bella Coola and Port Hardy, which economic studies show to be a profitable run in the province. It's also important for the government to understand that aside from the broad economic and infrastructure implications, elimination of this route or any further service reductions will prevent existing international tour operators from acknowledging B.C. as a tourism-friendly destination. That is already happening.

In conclusion, to date there have been multiple economic impact studies done by different companies and organizations. The common outcome amongst them all
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is that by service reductions and fare increases that have been implemented without any consultation whatsoever, the rest of the province has been thrown into turmoil, created solely by our leaders.

We ask for your help, as this multiparty representation of government, to help us continue to have a viable future for our travellers and businesses in the region by assisting us with clarification and taking our direction back to Victoria to have our voice heard by someone. Thank you for your time today.

G. Holman: Thanks very much for your presentation. I happen to be the Ferries deputy critic, so I very much appreciate your submission, and particularly from an Interior community, to make the point that B.C. Ferries doesn't just affect coastal communities. It's much appreciated, and I'm really glad you've presented this documentation here today.

I've looked at that report quite carefully. The most striking thing to me is the return to various levels of government — provincial and particularly federal — to their tax coffers from the operations of B.C. Ferries. That I find particularly interesting.

What's the state of play in terms of your communication with the minister, through your MLA? What's the status of your discussions? You've had discussions, which I take it weren't as productive as you would have liked. What is your next step that you plan on taking?

G. Holman: I mean aside from, obviously, presenting to us and hoping that we will relay your views.

J. Ryll: As far as the next step goes, to be honest, I'm not exactly sure. I'm quite thankful that our MLA has been of an incredible assistance in all of our discussions, has been a very strong advocate for trying to resolve these issues, and I couldn't ask for anything more from her.

As far as what we do next, now, as either a working group or as an organization, I have no other clear answer other than to keep banging on the door. If there was a clear way through, I would love to be able to be nudged towards what that path might be, but I'm not sure.

C. James (Deputy Chair): Just to follow up on that, I wondered whether you know of anyone, either through the communities or the municipality or your organization, that's doing a gathering of the impact of the reductions and the cuts in services. I think that supporting evidence will be important as you come forward — to be able to present it.

I think hearing the specifics that are happening as you see the route both be eliminated as well as be reduced will be very helpful information over the next while to be able to present.

J. Ryll: Yes, it's my understanding that you'll be presented some information that will deal more directly with what some of those reductions, those impacts, are.

Also, one of the…. I was thinking about our traffic counts. Is somebody doing…? Is the ministry — through the MLA — asking for traffic counts along that route? I'm just curious about numbers and where they might be or where they were.

D. Ashton (Chair): We hear the number…. I would just, personally, if it is available…. The actual traffic decreases or what they are.

D. Ashton (Chair): No, I understand. But if somebody would ask that question, then maybe they could look at those numbers and see what is actually transpiring.

J. Ryll: I'm pretty sure that that is happening — that there is a traffic count that is happening. Again, I apologize for not having those numbers, but I think that you'll get them today.

G. Heyman: Just quickly, and further to the Chair's question, if someone has those counts prior to October 17 and submits them to the committee, it'll be part of the record and something that we'll be able to consider.

I'm not sure this is a…. Well, it's a fair question. I want to make sure I understood correctly your statement about some of the meetings with the ministers. You were presenting them what you consider to be fairly substantial evidence about the future impacts of cuts to the service.

Was it outright rejection? Or was part of the answer: "We know that, but here's the reason that we have to do it." Is there any rationale that you've found, other than the imperative on the government's side of a year-over-year balanced budget as opposed to considering long-term economic impact and even tax revenue impact in the long run?

J. Ryll: There was some of the…. When we initially went, and through our meetings with the different ministers, there was a little bit of: "Well, yes, we understand
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that there's going to be impacts, but we have to do them to try and balance the budget."

We continue to present information that shows them that reducing — specifically, route 40 — does not help them in balancing the budget. In fact, what they stand to lose far outweighs what they stand to gain.

I didn't want to get into playing a numbers game with the province and B.C. Ferries, because I feel, from my position, that's a numbers game I'm well positioned to lose. It wasn't outright disdain after our first meetings. It was very much: "Thank you for your information. Now out the door."

G. Heyman: Well, what you're presenting us with is very useful because despite the fact that the program has been implemented, I think there's real reason for everybody on both sides of the House from communities around B.C. to actually look at the facts and see if we can reach a different conclusion that benefits communities and the economy.

D. Ashton (Chair): Jason, thank you very much. Sorry to cut you off. We're just a little bit over. Again, thank you for your presentation, and good luck in November.

Welcome, sir. Nice to see you this morning. Presentation — ten minutes. I'll give you a two-minute warning, and we have up to five minutes for questions and comments.

Ladies and gentlemen of the select standing committee, thank you for providing this opportunity. My name is Glen Wonders. I am the vice-president of government and technical affairs for the Association for Mineral Exploration British Columbia.

I've presented to you two items for your review, one being our actual presentation. The other one being a brochure for the annual conference we sponsor — the worldwide conference we sponsor in Vancouver at the end of January every year. Mineral Exploration Roundup this year for the first time is being hosted in the Vancouver Convention Centre after many years in another venue, which we simply outgrew.

Without further ado, I'll drop straight into my executive summary. The second and third pages following that are our summary of recommendations. Those are just collated for your use and for quick reference. Behind that is supporting material for all of that.

The Association for Mineral Exploration British Columbia, AME BC, is pleased to provide the Select Standing Committee on Finance and Government Services with recommendations for Budget 2015. AME BC is the lead association for the mineral exploration and development industry based in British Columbia. Established in 1912, AME BC represents advocates, protects and promotes the interests of more than 4,500 members who are engaged in mineral exploration and development in B.C. and globally.

AME BC encourages a safe and economically strong and environmentally responsible industry by providing clear initiatives, policies, events and tools to support its membership.

More than 60 percent of the mineral exploration development venture capital in Canada is raised by B.C.–based companies. Although there are global challenges in raising venture capital, mineral exploration expenditures in B.C. were strong for advanced-stage projects in 2013, reaching $476 million, the second-highest on record. Based on 2013 expenditure levels, 18 of the top 100 exploration projects in Canada are in B.C. — both metal and coal projects.

While exploration activity has likely slowed in 2014 due to significant recent events, B.C. attracted an estimated 20 percent of all exploration spending in Canada for 2013.

Exploration projects and operating mines spur regional economic development in over 50 communities, creating local demand for goods and services and supporting thousands of family-sustaining jobs throughout B.C. There are hundreds of mineral and coal exploration projects in B.C., and of the major mine projects from the past decade, Copper Mountain, New Afton and Mount Milligan have commenced production, and Red Chris is due to begin production in late 2014 or early 2015. B.C. holds world-class metal, mineral and coal deposits, and further deposits are likely with continued exploration.

Prospecting, exploration and mining are essential to B.C.'s export-driven economy, generating hundreds of millions of dollars in annual revenue for government in title fees, mineral taxes, corporate taxes and income taxes, and it helps offset the province's rising health care, education and infrastructure costs.

Successful exploration is the only path to discovering new mineable deposits, which once constructed and in production can spur responsible regional and economic development and diversification. B.C. is underexplored and vast, covering over 944,000 square kilometres. However, mineral exploration and mining in B.C. have impacted less than 0.05 percent of the provincial land base.

Although B.C. is seen as a world centre for mineral exploration and development expertise, the sector's long-term success is dependent on the provincial government's leadership and support of an open-for-business culture.

Subsurface minerals and coal resources in B.C. are generally owned and administered by the Crown and managed in the public's socioeconomic and strategic interest for the greater good of all citizens of British
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Columbia — aboriginal and non-aboriginal. The B.C. government must ensure a leadership role in managing the exploration and development of our natural mineral and coal resources for the good of the province and must include the ability to develop a project in an environmentally safe and timely manner, subject to appropriate laws.

Shifting to page 2, ladies and gentlemen, members of the committee. For Budget 2015, AME BC respectfully recommends the following to the government of British Columbia. In the subject area of improving mineral land use and access policies: assess the metal, mineral and coal development potential and socioeconomic impacts of any proposed land use changes before restricting exploration and development on metal-, coal- and mineral-rich lands; reaffirm the two-zone policy and adopt a no-net-loss of mineral lands policy; where lands are alienated and made unavailable for mineral or coal exploration and development, apply the principle of fair market valuation to compensate mineral or coal claims on the leaseholders.

In the subject area of tax policy: to clarify and improve tax policy, change qualified expenses under the B.C. mineral exploration tax credit — BCMETC for short — to include expenses and credits as a result of consultation with local and First Nations communities; renew the BCMETC at its regular rate of 20 percent and at an enhanced rate of 30 percent through January 1, 2020, to provide long-term stability for planning of mineral exploration programs; and extend the B.C. mining flow-through share tax credit at 20 percent of individual flow-through expenditures to January 1, 2017, and consider making it permanent to encourage companies to explore for more in B.C.

Regarding item 7, we're improving the permitting and regulatory system. Exempt prospecting and exploration fee activities from any Mines Act permit fees, as these activities generate no revenue for prospectors or explorers. That is an absolutely true statement. That does not see return to most early explorers until well into the development cycle.

Allocate an additional $10 million annually to the Ministry of Energy and Mines to address permitting, inspections, environmental assessment and regulatory issues in a timely manner. Continue to work with industry towards reducing red tape and increasing permitting efficiency to maintain a 60-day or better turnaround policy for notices-of-work permit applications, and continue working with the federal government to achieve a single effective and efficient environmental assessment and decision process that is science-based, consistent and predictable.

In the area of human resources and aboriginal capacity, we respectfully recommend that the government annually fund $500,000 to the B.C. HR Task Force, mining, to work on initiatives that will attract and retain women and new Canadians while enhancing lasting partnerships between industry and educational institutions. Support aboriginal capacity-building annually through a $1 million provincial commitment to the Aboriginal Mentoring and Training Association to complement the potential annual $2.5 million commitment.

Finally, regarding public geoscience, the first level of investigation for mineral exploration and development: support Geoscience B.C. with $10 million in annual funding — $5 million for mineral geoscience and $5 million for oil-and-gas-related geoscience; improve funding for the B.C. geological survey to $4 million annually to enable field programs that improve the understanding of B.C.'s geology, geotechnical hazards and mineral and coal to put development potential; and modernize and link the data systems of the Ministry of Energy and Mines.

C. James (Deputy Chair): Thank you for your presentation. I wonder if you could tell us a little bit more about the Aboriginal Mentoring and Training Association, some of the work that's going on and what additional provincial dollars would do to supplement the work that's already been started.

G. Wonders: Sure. That organization began several years ago. It was initially known as the Aboriginal Mine Training Association. It was led by an independent board with funding sources from both federal and provincial and a number of industry partners.

They've had extraordinary success at taking people that were either underemployed or unemployed and attracting and retaining them into the mining industry, providing them with very high-end jobs. Their training is beyond technical training. It's life skills. It's the whole gamut, including providing personal coaches and supporters as these people enter the workforce.

As I said, it's been extraordinarily successful. It's been a very good success story of getting First Nations people into the mining industry, and it's an organization that we have partnered with and directly supported since its inception.

G. Holman: Thanks for your presentation. I was looking through last year's report — I was on the committee last year — and I noticed a number of your recommendations where similar wording was reflected in the report. We did tend to shy away from the specific numbers to, I guess, achieve consensus on the committee. We tend to just shy away from recommending specific numbers.

I did have a question, though, on the first three points, about the land use and access policies. It's my understanding that these policies are in place now. The intent
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of your presentation today is to ensure that those policies don't change in the future. Have I got that right? Or is there something in the works that I'm not aware of? For example, it's my understanding we have a two-zone policy. I'm not sure about no net loss but….

G. Wonders: My short answer to that — it could go on at length — is yes, we have a two-zone policy. But we do see a continual shrinkage of those areas that are ostensibly open for mining and mineral exploration. They're restricted by seasonal commitments or some other type of restraint that restricts access.

For instance, you can have some high-elevation areas that for very good reason are held out of the active opportunity to explore for minerals in certain seasons. But that also negates the opportunity to explore for metals. I know some of the examples of that come from wildlife concerns or other ones: cultural, other reasons of interest to the general public.

We are currently completing an exercise to really show the restrictions on the land base from a database GIS exercise. Once we have that to a position where we're comfortable with the data and the presentation, we will be presenting that to government. It will show very graphically that, yes, there is a two-zone system but that there are significant restrictions to the "open for mining and mineral exploration" area.

S. Hamilton: Thanks for the presentation. Your recommendations 9 and 10, with regard to working to reduce red tape and turnaround times, etc…. My understanding is the ministry has been working very hard in that respect.

G. Wonders: Well, every day the act of permitting becomes more complex, for a number of reasons. We did see a significant drop in the lag time for permits recently as a result of a short-term influx of funding that the Ministry of Mines received in order to deal with the backlog that was there. We were very grateful for that. We acknowledged it was great work done by a lot of good people. However, it's not a sustained solution, so we're concerned that it may go back to that.

Secondly is that the complex role of actually permitting a major mine, between the interactions between the federal and provincial systems, is still very daunting. It is one of the most difficult jurisdictions in the world to actually get a mine approved. I personally helped lead Mount Milligan into production. I can attest to that.

Things have improved, but we have to be very careful about the current situation. There are still improvements that could be made.

S. Hamilton: Okay, thank you. I'll look forward to following up on this discussion.

G. Heyman: Just quickly to follow up on recommendation 10, which has to do with the assessment and decision process on the environment. I want to drill down into this a little more, about what's underneath it for you. In the wake of Mount Polley we've seen a significant impact on investment and the share value.

Is this, from your perspective, primarily about efficiency in getting decisions, or is it also about social licence and ensuring that the process addresses some of the concerns that have arisen in the public mind since Mount Polley?

G. Wonders: Well, first of all, I'll mention to you, the committee, that we are presenting in Williams Lake with due reason. We believe in mineral exploration in this community and its relationship to mining.

The short-term answer to you — and the Chair is motioning to me — is that we simply see more opportunities to improve the federal regulatory system and reduce overlaps, which are time-consuming and frustrating for every party involved in that. It does help, at the end of the day, having clear messaging, which helps deliver both the social licence and the technical matters that you need to address.

D. Ashton (Chair): Glen, thank you very much. Flying over on our way over to the Kootenays, we flew just south of Copper Mountain and south of — it started off as Corona — the Hedley pit and just north of the old Phoenix. It wasn't the mine structure, in respect to the area surrounding it, but it was the communities that I was looking at from the airplane and how those communities are based around that.

Thank you for your presentation, greatly appreciated. Thank you for your recommendations that will go forward. Again, October 17, if you do have any further submissions, please make them available.

G. Wonders: Thank you very much, Mr. Chair and committee members, and please come to Roundup. We look forward to seeing you.

Next up, we have the Cariboo Action Team. Good morning, Doctor. Welcome. Thank you for coming today. We have ten minutes allocated to the presentation and five minutes for questions. Please, the floor is yours.

G. Fedor: I'm Dr. Glenn Fedor. I'm a family doctor in Williams Lake, a special interest in mental health for years, and I'm presently co-chair of the Cariboo Action Team, which is part of the Child and Youth Mental Health and Substance Use Collaborative that started in June 2013.

I have a written submission, but I don't really want to read, because everyone else can read my report later. I want to speak from the heart, and I want to speak about
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care. Often, you hear doctors talking about money, and I know this is a finance committee, but I really don't want to focus on money. I want to talk about good care.

The collaborative was developed to talk about improving access to care, breaking down system barriers, developing local solutions. Part of my submission is including material the Finance Committee has seen already before, submitted by Val Tregillus. She allowed me to use some of her information just to provide consistency in numbers.

What I really want to do is focus more on the work of our local Cariboo Action Team and what it's been able to do and why I believe that its work needs to be supported to move throughout the province and allow other areas in B.C. to have this.

I just returned from the fourth congress that happened in Kelowna yesterday and the day before, where I heard some really amazing numbers — that something like 12.6 percent of youth in our province suffered a significant mental health illness within, I think, 2012-2013, and only 30 percent of those youth were able to access specialized care. That includes not just physicians but any sort of specialized care, whether mental health services in the primary setting.

It's a huge problem, and in my submission I read that B.C. has prided itself in being leaders in life expectancy, cardiac care, health care, but I'm looking at the other spectrum. I don't have figures for you, but I suspect if we were leaders in child and youth mental health care, we would be publicizing it. But I suspect we're not.

Our Cariboo Action Team is a unique team where we will be able to put together very significant leaders as well as clinicians. In that team, besides a family physician — myself — we've had an emergency physician, a pediatrician, the RCMP inspector in town, executive directors from Boys and Girls Club, an executive director from the Child Development Centre, two aboriginal clinicians, an aboriginal community leader, a parent, a youth, an adult mental health community administrator, an MCFD administrator and clinician — people that have a say in the system but also people that are actually connected with kids.

Quickly, I'll just go through sort of what was, what is and what we hope to be. Really what was, was that often it was fragmented care. People were in their silos. People didn't communicate well. The RCMP often worked in isolation. There wasn't great ability to do the information-sharing. MCFD wasn't necessarily the most collaborative organization in working with other agencies.

First Nations Health. There wasn't often a good idea…. People didn't know, really, what First Nations Health was doing and what was happening in the other communities.

Physicians often weren't trained very well in mental health problems in youth. The family physicians felt uncomfortable and didn't often know where the resources were.

Emergency care. Well, that's a whole other big issue. If anyone's ever been to emergency, you can sit there for hours. Often families were frustrated, and child and youth mental health didn't always take the priority.

We were able to put the team together and make significant changes — develop relationships, put names to faces. We had engagement events. We started working on protocols, developing some local solutions. Basically, what we've developed is a closer true wraparound care for youth.

I can tell you right now that I just had a youth in our hospital certified under the Mental Health Act. We were able to put together clinical coordinators that were more like patient navigators, which is another initiative that came out of the division of family practice. We were able to get some substance use workers, MCFD workers, an aboriginal clinician.

Within two days we were able to develop an adequate treatment plan with the family at the centre. The whole true thing about this collaborative and the action is that family involvement is the critical thing. We hear the government talking more about patient-centred care, and this is what the collaborative really has become — true patient-centred care.

Basically, this child and parents — within two days we had a care plan, a discharge plan. Everyone was happy. The kid was going to an NA meeting that night. The parents were smiling. It was one of these true success stories that we actually can be proud of.

We've got new emergency protocols that we're piloting and that our emergency physician here, who has a special interest in mental health, has been involved with. We've got a new information-sharing policy. The collaborative has rolled out, and that's been helped, sponsored, through the Canadian Mental Health Association. That's going to be rolling out soon.

One of the problems, and I'm sure some of us may have encountered this, is if you work with different agencies, you have to repeat your story over and over again to every agency, which is very frustrating, especially when you're dealing with families and kids. So if we can have true sharing of information, you don't have to have a kid or a parent tell the same story four times to four different people.

First Nations are basically becoming more involved. We have them on advisory committees and working groups. They're actually seeing this, going out and being able to truly work with them. We have physicians who go out to some of the reserves and who are making more contact, more relationships, and we're then bringing them back in to work with us. The list goes on and on.

All I know is that I'm passionate about it, and I really want to see the work done. I'm sure if you remember Val's presentation, she's always passionate when it comes to child and youth mental health. She has a whole new job now, through the Doctors of B.C., in child and youth
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mental health. I just want to support this whole initiative and make sure it doesn't die. I know we have funding that she got from the Shared Care Committee up until 2016, but I believe that after that there's nothing that's going to allow it to continue.

I'd be happy to answer lots of questions. Other than that, the rest of the information, I think, is mostly in there.

E. Foster: Doctor, thank you very much for your presentation. Congratulations on your success.

One of the struggles that we have, certainly in our business, is this sharing of information and the protection of privacy act, and so on. If you've found a way to — I won't say get around it, because that's not what you're doing — make that share work, please share it with the world. It's the biggest struggle I know in our community, and people coming into our office. You've obviously found a way to make that work. So if you could do a paper on that and publish it, it would be great. It is a huge challenge.

G. Fedor: It's coming out soon. We just saw the draft at the congress. The way it was presented is that there is some legislation, but I think that if you really read into the legislation, it's not to necessarily restrict the information. It's to give guidelines. We need the guidelines. We talked about green lights, orange lights, red lights — what sorts of things you need to share.

A lot of it is about continuity of care. As was said at the congress, no one's ever been arrested or put in jail for sharing information that has helped the care of a patient.

E. Foster: I agree with you. I think there seems to be a paranoia around it, and it just gets worse every day. You're obviously being successful, and if we could get that and share that with our communities, it would be great.

G. Fedor: We'll make sure of it. Like I said, the belief of this whole collaborative…. There were 260 people in Kelowna yesterday listening. We had people from all the different industries — teachers, social workers, MCFD, people from health authorities throughout the…. It was mostly Vancouver Island and the south and a bit on the north. It started in IH, and it's just spreading out.

C. James (Deputy Chair): Thank you for your presentation, and thank you to the collaborative. We hear a lot about child-centred approaches, and I think what I've certainly seen in the collaborative is that it actually works. You're actually looking at child-centred approaches. The other strength of the presentation that you've given is that people often think it's a lot of committee meetings and people talking, and I think what you've identified is that this is about direct service to child and youth.

I wonder if you could tell us, in your region, the kinds of pressures that you're facing and the kinds of issues that are front and centre that are priorities for your collaborative around this issue.

G. Fedor: Well, obviously, everyone's pretty familiar with Lost in the Shadows, which happened out west. First Nations is a huge concern — access to services. I can tell you examples where we've had First Nations youth, and they've been sent away for treatment. Sometimes the only way you can get treatment is a distance away.

We had one child once who was sent all the way to Cranbrook, because that's the only facility. If you know about First Nations, the whole family gathers around. They all travelled down there. There must have been, I think, about 12 or 15 people who travelled down to Cranbrook, and if you can believe it, the kid was discharged before the family got there.

We need true local care. That's what they want. People can't…. EMS says they travelled for 12 hours.

I can tell you one success we had with our action team. In the past we've had physicians meetings. When we have new physicians come, we'll gather maybe 40 people with the spouses and the physicians in a big room and have a meeting and try and recruit a physician. We talk about different things.

What we had is a visiting child psychiatrist from the States come up. We put together members of our action team and talked about true collaboration and basically what it can be like to work in this community. He was so excited, he sent e-mails to everyone. I believe Donna Barnett even got an e-mail from him.

He says that this is what he wants to see. It's not just talking about mountain biking and cross-country skiing and making a living. He wants to know that he can be supportive of the community. So our action team is now going to be a recruitment tool.

S. Gibson: To me, I think this is one of the more important issues that is facing our province. This reminds me of a discussion I had with my own doctor I've had for many years. His concern…. And we've had some good discussion. I'd like you to react to it.

He feels that we're over-professionalizing everything. He attributes it partly to the decline of the nuclear family, so people don't really have their own natural support group anymore. So if I, Simon, am feeling bad about myself or depression or some issue that I'm coping with, I'm now going to a professional or getting somebody that's sort of a paid adviser as opposed to going to my buddy here, Scott, and saying: "Scott, can we go for coffee and talk about this issue?"

He feels this is a real systemic problem, and the result is that we're over-professionalizing everything. So I go
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to a professional, and I immediately get diagnosed with something that maybe I can simply cope with through some normal social milieu. In fact, a study I saw by a psychiatrist in England said that 40 percent of his patients could be released if they knew that somebody loved them. So I'd like you to comment on that.

G. Fedor: Actually, I almost suspect you were in my vehicle last night on the way home from Kelowna.

G. Fedor: We talked about this with the social worker for MCFD. Troy and I drove back together for five hours from Kelowna, and we talked about the same thing. At the congress, the youth and families had a huge presence. You should have been there to hear the youth talk about this, even youth who struggled. There were youth who struggled from disintegrated families and talked about begging to be adopted and find some care and find a place to live. Just hearing their powerful stories, they talked about that.

One agency that's involved with this, FORCE, which is basically an agency that helps with youth and families and supports them and gives them ability to talk. Some of the youth there have been going to schools, talking about developing their own support networks. But it's true. It's one of the things we talked about. On the trip back we were talking about how families don't even have meals together.

I grew up with my grandparents. I spent time. We had all those great support networks. They're disappearing. They're just not there. This is why we hope…. This proposal has talked about more and more family input. We actually have a youth who just resigned from our action team, and we have one parent, but we want to see more involvement of them on our action team.

G. Holman: Just quickly. Thanks for your presentation. I know you didn't want to talk about money, but nevertheless, you are recommending here an investment of $20 million. Then there are a number of bullets under that recommendation. Those are subsets of that $20 million?

G. Holman: Okay. The other question I had, with respect to aboriginal, First Nations kids. Is there a federal government role here, in terms of funding or provision of service where advocacy is needed?

G. Fedor: It's a good question. I don't have an answer to that — other than, I know, the First Nations health authorities. We are working in partnership with them in trying to establish better relationships and a better understanding of what they are. We actually have one of the local aboriginal leaders working with our division of family practice, working with our action team. She's coming up with some proposals.

Part of it is trying to gain a better understanding. The Williams Lake area is fairly unique. I forget how many First Nation bands we have, but we have, I think, three First Nations. It's a real challenge to work with those different First Nations and coordinate care. I think there is money out there. There's ability to do partnerships. I just don't know what source of funding they have.

D. Ashton (Chair): Doctor, thank you very much. It was a very passionate presentation. If there is any additional information that you would like submitted, October 17, please. Thank you, sir.

P. Corbett: Thank you for coming to the Cariboo again. We are very sincerely thankful for that. Thank you for the opportunity to come before you all and tell you about something that I think is pretty critical. I'd like to talk to you about jobs in rural British Columbia.

I would like to put a light on it in the context of some of my background. Between my wife and me at the Hills Health and Guest Ranch, where we have invested our lives, I've continued to try to keep very involved at a national, provincial and regional level in the tourism industry.

What I'd like to quickly share with you is sort of the state of the tourism industry at a broader level and then bring it right down to us here in this region. I think there are some things that we can do together between government and industry to right the ship and to get jobs back in the Interior, but there are some things we need to do.

In context, I'd like to explain just how the industry across the country, particularly in British Columbia and right here in this region, has been so hard hit. What I will share with you is some of the markets that we operate in, both at the Hills and across this region, and across the country. For example, after 2008 there was a devastating collapse in all tourism markets. Virtually every market everywhere collapsed, and we're all quite aware of that.

For example, in the South Korean market, where we bring in 147,000 passengers a year, I can tell you that the 2014 year will go down as recorded as being the eighth highest in 25 years. That's out of the South Korean market.

Let's just quickly take a look at the Japanese market. The Japanese market in 2014 will achieve the 20th highest in 25 years. This is after huge collapses that occurred back in '08. What you will hear in various media reports is "recovery." I can tell you that in South Korea we have recovered about 4 percent. In Japan we're recording this
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year a growth of about 4½ percent as well. But it ranks as 20th highest out of the last 25 years.

Looking at China, that's a very bright light. We're bringing in 395,000 passengers out of China. That's being forecasted to grow at 17 percent, and we're recording the highest we've ever recorded. In Mexico, where we bring in 145,000 visitors, we grew at 4 percent, and it's still only the fifth highest in the last 25 years.

Carrying on, looking very quickly at just some more markets here. Brazil, which is a new, emerging market — we're bringing in 80,000 passengers this year, and it will be the highest, because it's an emerging market. It's the highest in the last 25 years. An established market, the United Kingdom — we brought in 602,000 passengers this year as visitors into this country, with a growth of 2.2 percent. So where does it rank? It's the 18th highest in 25 years. You will hear in media reports that there's growth, and it's true. It's growth after a catastrophic collapse.

Looking at France — 433,000 visitors, and we rank the second highest in 25 years. That's some good news there. It's not quite so bad, in other words. Let's look at Germany, which is really a vital market for our region — 283,000 passengers. They are the backbone for a lot of our region here and rural British Columbia. We had a 2.4 percent growth this year, and that will position us as the 13th-highest year out of the last 25 years.

I think you're starting to get the picture. And the United States is a whole other market. The United States reached the lowest level of inbound visitation into our country in history in 2011, and we're recovering from those kinds of numbers. I can say that there is recovery going on. But in the meantime, there's huge, catastrophic impact on the financial statements of just about every resort in British Columbia and particularly in rural British Columbia.

That's why I really want to passionately talk to you about jobs here in rural British Columbia. Our resort alone fell from 105 to 110 jobs. We're now running 65 jobs, 75 jobs.

What are we going to do to turn this around? I really believe you would like to help turn this around, because it's pretty important for rural British Columbia. There are four things I believe that we can do.

The first is, if you want to have an impact of 15 percent on the visitation to the resorts in the Interior, get VIA on the railroad tracks. If you get VIA Rail on the railroad tracks, you will see a boost of 15 percent volume within about a two-year cycle. It takes two to three years to open up new markets and to introduce a new product. Getting VIA Rail onto these tracks would accomplish that.

What do we have to do? I have talked and others have talked with Minister Stone, and he's open to the idea. We need full government services support and backup to inviting VIA Rail into British Columbia and get onto B.C. rail tracks. We need your support. It will be a dramatic turn. It will create a lot of jobs.

The second thing is we need to get a proper ferry back between Port Hardy and Bella Coola. I want to share with you…. I have relationships with people who impact the visitation to British Columbia.

Jonview is a name of a company that owns Air Transat. I work very closely with them in my work at the Canadian Tourism Commission. I can tell you. It's important that you hear this. I've told Minister Stone this face to face, but I want you all to hear this. The international wholesalers who sell British Columbia are nothing short of being flat-out angry. They are so angry. These wholesalers are the ones who send the people from Germany, from France, from Korea. They are so angry and so upset with what happened here on that run.

I know that B.C. Ferries would have you believe that the Nimpkish is a suitable replacement, but you need to know that this has been completely shut down by every wholesaler — including Jonview, who sends over 100,000 people into British Columbia. They spend over ten nights. We're talking about a million nights in this province. He is very angry to this day. I was with him just a week ago.

The next thing I'd like to quickly refer to. In the election promise we were assured that there would be a tourism assessment relief act brought for us. We desperately need that because the resorts in this area cannot handle the taxation burden through the property assessments that we currently are facing, and that's because of the devastation that's gone on in the marketplace.

With that, I will just stop. I want to thank you for this opportunity to present these truths.

D. Ashton (Chair): Sir, there's one more, air service. You still have a minute left.

Well, air service is pivotal. The way to understand air service from a tourism industry point of view is that aircraft are pipelines. The more pipelines, the bigger the flow. We've got to have more pipe. The pipe has got to be bigger.

Air Canada. Now, this is more of a federal jurisdiction, but where the provincial government plays a role is in helping to make sure that rural B.C. airports are very fully connected to YVR. In your intergovernmental relations with Ottawa, the one thing we need to do is to get more aircraft coming into YVR and Calgary and Edmonton — I could speak more to that — but there are restrictions in the airspace coming into this country, brought in because of the lobby efforts of Air Canada.

There are many airlines that have had to bypass Canada — British Columbia particularly — and are now landing in Seattle, Singapore Air being one and Air France being another. So your support in helping to lobby in Ottawa would be greatly appreciated.

G. Holman: Thanks very much for the presentation. Just on the passenger train on B.C. Rail tracks. Has that been in existence historically? Have we had VIA Rail on B.C. Rail?
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P. Corbett: Via Rail has not been on B.C. Rail tracks, and the reason why we want to get them here is because they've never been here before. I can be honest with you. I have talked with VIA Rail, and there is interest, but what they're waiting for is an invitation from British Columbia.

P. Corbett: It would be advocacy, and I think that we would have to look at some financial aspects of this, yes.

S. Gibson: Thank you for this. I like the passion you have. I appreciate that. My question is more to the branding and marketing. Tourism markets change, as you know. People will go to certain areas. There are trends, and then there are trends away. Are we still attractive internationally as we are, or do we need to rebrand or remarket? Is the product still attractive? I think it is, frankly, but I'd like your comments on that. I think you know what I'm asking.

P. Corbett: Yeah, British Columbia is still a powerful magnet. But what we are doing through this B.C. Ferry thing…. I can't tell you how deeply angry our wholesalers are. They're very angry right now.

The world of tourism is so competitive that we are up against emerging destinations across Africa and many other parts of the world. When you make somebody angry who is in Germany, as an example…. The German wholesalers are so flat-out mad at B.C. right now because of the ferry thing. They also are the same companies that market and sell other areas of the world. When you're mad at somebody, what do you do? You look at other people to spend time with. It's just human nature.

P. Corbett: Yeah. The world has opened up. The growth of tourism and travel is more than double what the growth is in Canada right now. We are not keeping up in the marketplace, and that's because people around the world are choosing other places to go rather than here. You don't want to tick off our main suppliers.

D. Ashton (Chair): Sir, a quick question: what are they mad at? I just want to drill down on this for a second. Are they mad at the announcement? Are they mad at how it was handled? Are they mad at the lack of resources that are now available to sell? How many numbers are involved in this? We have about a minute, so just some straight specifics on it.

P. Corbett: Okay. They are mad because of the lack of notice. Number 2, they are mad at B.C. Ferries' insistence that the Nimpkish is a reliable alternative.

In fact, I have permission to tell you what was just told to me by the people at Jonview. In talking about the finding of the ship on the Franklin expedition, Mr. Knowlton told me that I could tell you that the next ship he would like to see at the bottom of the ocean is the Nimpkish. That's how mad he is. That's pretty profound.

D. Ashton (Chair): Just before we get somebody else up, you've got 25 seconds. What's the next step? We want to hear this. There's lots of supposition. Give me what the issue is.

P. Corbett: We need to get a proper ferry back on between Port Hardy and Bella Coola, something that is a proper ship — not the oldest, slowest, smallest ship in the fleet.

D. Ashton (Chair): Okay, so the notice, how it was handled, the ferry alternative and re-establishing a proper ferry along that route. Is that correct?

Petrus, thanks for coming, sir. Ten minutes for the presentation. I'll give you a two-minute warning if required. Then we have five minutes left for questions and comments.

P. Rykes: I'd like to start off by emphasizing how important tourism is in a global perspective. It's the largest industry in the world — tourism. Everybody is a tourist at one time or another.

I know we're looking at pipelines and all kinds of things to stimulate the economy. All that stuff is important, but right now it's still pie in the sky. You've got a product called "Super, natural B.C." right at your footsteps, and you're ignoring it.

Jerry Mallett — who is the founder and former president of the Adventure Travel Society, an international organization that spans the globe — said to me
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over ten years ago that B.C. is at least a $30 billion to $40 billion tourism industry.

We just don't get it. We don't have the infrastructure. We don't have the support. We're reaching for pie in the sky instead of looking at what's around us.

I want to stress that tourism can do a lot for our province and our economy. I'll go into Jonview. I'll probably echo some of Pat's…. I've got statements from Jonview stating the fact — and we're leading into the ferry thing on this — that the central coast, Bella Coola, has an underutilized port. It has the Great Bear rainforest right at its doorstep. It's a world-class product. It's an area that's underutilized. It's an area that Jonview calls the cornerstone of future expansion for tourism in the province, because from the middle of the province you can go north, you can go south, you can create circle tours any which way.

Jonview, as Pat said, sends close to 100,000 visitors to B.C. every year, just that one company alone, and you're looking at from two to 20 days. You're approaching the billion-dollar mark in product that they send here, and that's just one outfit. The way it was done, the rug was pulled out from underneath them. There was no notification, as Pat says. That's partly why they were so upset. They're scrambling to….

You've got a ferry where if Rick Hansen was on it, he couldn't go to the bathroom. You start at six or seven in the morning. You leave Port Hardy, and by the time you get into Bella Coola, you're looking at midnight. The streets are deserted. Everything's dark. There are no lighting facilities at the harbour there. There are really no amenities or anything. If it rains, there's no shelter or anything.

The way it's set up right now, you have Klemtu and Bella Bella, two islands that have brand-new ferry terminals. They spent $25 million on Klemtu. Those places need it, but your third main port, Bella Coola on the coast, doesn't even have a facility that can handle the big ships. It can handle the Nimpkish. But it needs to be….

The main gist of this is you've got a product here. You need the infrastructure. That port needs to be upgraded. It's not a great expense, but it needs to be upgraded so that it's functional and can contribute to the economy of B.C.

I've talked to First Nations, the Nuxalk and Ulkatcho. In the Ulkatcho they have a mill, and they would like to see that port expanded so it can handle the bigger ships so that they can export their lumber to China. The Nuxalk are venturing into tourism, and they'd like to see that expanded too, in which case you'd have the federal government involved in that to give you a hand with that. It's a doable thing for an investment.

The Nimpkish, on an international scale, is a joke. Like I said, you can't even go to the washroom there if you're in a wheelchair. It doesn't meet a lot of standards, and that's one of the reasons why the big wholesalers will not subject their clients to something like that. There are liability issues with that. They've had a stroke of luck this year with the Nimpkish. The weather has been great all summer.

You still have the Queen of Chilliwack. It has had a retrofit, and it's still got two or three years of service left in it. My proposal, because they don't want to build another ferry, is that the No. 10, which goes from Hardy to Rupert…. If it were to dogleg through Bella Coola, you would create another circle tour, and you would kill two birds with one stone. You'd have a decent ferry that would service the central coast. You would open up the central coast for tourism product of the aboriginals.

The route itself is a doable route. The Queen of Chilliwack, when it ran, the one part that was making the money…. There are three routes in route 40, actually. There are the two milk runs through Ocean Falls and other little towns, and then there's the direct route. The direct route was 71 percent capacity, the second highest in the whole fleet after the Swartz-Bay-to-Tsawwassen run, which was 72 percent.

There's an economic generator there. To put this in perspective, if you had three car dealerships and two of them were losing money and one was making money, what would you do?

Well, what they've done here is they've got rid of the one that makes the money, and they've kept the two car dealerships that lose the money, which is 90 percent of the loss if they've kept that. They're spending more money now on the Nimpkish than they were on what they were saving by cancelling the direct route. There is a market there. We're business people. We're not going to fight for something that's going to lose money, because we realize that's part of the business. There's a great opportunity here to incorporate the centre portion of B.C. into the economy of B.C. It's by expanding the Port of Bella Coola.

P. Rykes: Two minutes? Let's see. I could get into a lot of statistics on the shell game that's been going on.

The Nimpkish was upgraded a few years ago. The money that was used to upgrade that was put into the capital costs for the ferry to justify the losses, but it was all put in last year. The thing is with the Nimpkish, or with the Queen of Chilliwack, it was used on other routes. All the capital costs were put onto route 40 to make it look bad.

There's a bit of a shell game going on to justify the losses. There's a game going on. That's what we have an issue with. The reason they kept the two runs that lose the money, the milk runs, is because they get a federal subsidy of $28 million for that. If you look at B.C. Ferries stats, only 1 percent of that goes to route 40.
[ Page 1050 ]

There are a lot of different things going on here, and we see it as a moneymaker for the province and for the economy.

G. Holman: Thanks for the presentation. I'm finding the data being presented a bit confusing. You were talking about 71 percent utilization. Were you referring to Queen of Chilliwack there?

P. Rykes: With the Queen of Chilliwack, the direct route went…. The milk run — that was two runs, okay? Then it has a direct run. The direct run went in daylight hours. The other went late in the evening, at night. That was 25.5 percent, but the direct run that was in daylight hours, so you could see the scenery, was 71 percent capacity. The losses were on all the other runs. People really don't want to be on a ferry for 33 hours.

G. Holman: Certainly, the utilization rates quoted by the minister in the House were much starker than that. I take the point about allocating costs in a way that you load them up on a particular route.

Are you suggesting…? My understanding is the Queen of Chilliwack does require an upgrade. Do I have that right? It's got some life in it, but….

P. Rykes: The Queen of Chilliwack ran since '96. The first two years that ferry ran, 18,000 people used that. Then they slashed the month of September off, and it dropped to 7,000 a year.

It is a doable run. It's a world-class run. It's a product that people just love. Even with the Nimpkish — the scenery and the crew — it gets high praise. It's just you're paying $740 for a run, for 16 hours, that really has no amenities or facilities. You want to give people value. That's part of the joke. You're marketing something to the world where people know better.

G. Holman: Just quickly — sorry, I know we've got limited time — I think part of the problem is the perspective of B.C. Ferries as a stand-alone entity and a particular ship as a stand-alone entity and whether or not it makes a profit versus the broader economic impact.

G. Holman: I think the difficulty that you have — and, quite frankly, that I have as an advocate for B.C. Ferries — is this difference between the numbers for B.C. Ferries or particular routes as a stand-alone entity versus the broader economic impact. That's exactly what the UBCM study tried to get at: how important B.C. Ferries is to that broader economy.

One thing I would hope B.C. Ferries…. The advisory committee advised that if they were to cut the one run on the Duke Point Nanaimo run, it would save over $10 million. You wouldn't have had to make any of these cuts, and it wouldn't have impacted on anybody.

I'm saying there are solutions out there. I'm into solutions. There are ways of doing things. There's an easy way, and there's a hard way, and they're doing the hard way here.

S. Gibson: You're a businessman, and of course, our government is business-minded. The subsidy, we were advised, was $2,500 per vehicle. How do you comment on that? I understand what you said earlier, and I am convinced, but how do you respond? Say you were sitting where I'm sitting, you as a businessman, and there's a $2,500 subsidy per vehicle. Speak to that.

P. Rykes: Well, first of all, that's not accurate at all. Those are based on figures, like I said, that have been inflated by dumping all the costs on to justify…. Yeah, I could dump a few more costs on there, and you could make it $3,000 or $4,000 a vehicle. Basically, it's more like a few hundred dollars a vehicle. That's what it actually is. If they were to run it properly and market it, and if they had listened to us….

For over a decade we've been trying to tell them that it's the direct one that makes the money. That's where their people want to go. They want to spend their money on that. When you have 70 percent ridership, it's an indicator. That's where you put your dollars. You keep all this other stuff, but it's a political football in the sense that you have to still….

I guess when they, the feds, signed over the ferries to B.C, that was part of their thing. That's why they get the subsidy. They have to supply those little communities. The thing is you can use the Nimpkish for that, for tourism. That's the other thing. It's not a ferry; it's been marketed as a minicruise, okay? There's a big difference.

I wish the government would listen to the tourism operators. We know what we're doing because we're in the business, as it were. If we don't do it right, we're not going to be in business. But they just don't seem to want to listen. We've been telling them for years: give us the facts and figures from the direct run because we can see that's where the volume was and the money was being made.

We're not trying to beat a dead horse. I'm not going to fight for something I know is going to lose money. It's not in anybody's interest to do that.

D. Ashton (Chair): Sir, thank you very much for your presentation. Great.
[ Page 1051 ]

Thank you very much for coming today. We have ten minutes for the presentation — I'll give you a two-minute warning if you're getting close to that — and five minutes for questions or comments.

T. Guenther: Thank you very much, hon. Members, for taking the time to allow me to come here today. I'm really honoured that you're here in our home community and that I have the opportunity to come and address you in this manner. I appreciate that you go through this process and allow us to come and speak with you.

I'll give you a bit of background about our school district. The board of education of school district 27, Cariboo-Chilcotin, is charged with providing kindergarten to grade 12 education for the students of the school district. In this dispersed and highly varied district, with declining enrolments and a changing funding formula, this has become an increasingly difficult task. Meeting the broad spectrum of requirements for educating all of the students over a very broad geographic area in underutilized and deteriorating facilities is very difficult.

We currently receive $3.2 million in funding protection. The board of education faces a decrease in funding of approximately $800,000 per year with the loss of the 1½ percent funding protection per year imposed by the ministry for recovery. Our continued projected decreases in enrolment compounds this issue. We're actually not decreasing our amount of funding protection because we are actually decreasing students further, which then compounds that loss over the period of time that it will take to actually come out of the funding protection.

In an effort to address these issues, the board undertook the task of developing a forward-looking educational plan supported by programming and facility changes to maximize the expenditures of funding on direct services to students.

To this end, the board began by setting out the following guiding principles. One, excellence in education, choice and opportunity. We were looking at minimizing transitions; relevant learning opportunities, such as accommodating 21st century learning; personalized learning and ensuring choice and supports for every student.

Our second guiding principle was clear and transparent communication: to have balanced communication in relationships that obviously require continued attention and efforts; ensuring we were able to get the word out and stimulate discussion and encourage meaningful participation of our community and our families and students; and to act with purpose and be very clear about our intended outcomes.

Our third guiding principle was sound and efficient fiscal management: to efficiently use the space that we have, to accommodate increasing or decreasing enrolments and ensure that we were being fiscally responsible.

Our fourth and final guiding principle was embracing our district's unique geographic factors, including our many rural and remote schools, our diverse geography and our cultural diversity.

The geographic area of school district 27, Cariboo-Chilcotin, encompasses most of the southern Cariboo-Chilcotin region, from 100 Mile House in the south to slightly north of Williams Lake, east to the Cariboo Mountains and west into the Chilcotin and the Coast Mountain range.

The communities of 100 Mile House and Williams Lake are the principal population centres and form the nodes for secondary education within the school district. The grades K to 6 and many grade 7 students are dispersed in many smaller outlying schools, as well as medium to large secondary schools in close proximity to our main centres.

School district 27 spans the traditional territories of three nations — the Shuswap, Chilcotin and Carrier — and 12 First Nations bands within our district.

We currently have 14 elementary schools, seven elementary-secondary schools and two secondary schools, as well as our GROW, skyline and distance education programs.

Our school district is the sixth-largest geographical within the province, and our boundaries are comparable in size to the whole province of New Brunswick. So it's a very large area to cover, with a lot of our communities dispersed throughout that area.

Declines in enrolment have resulted in challenges to providing a well-balanced education to many students and in most schools being underutilized, especially within our more rural and remote schools. This has forced more multigrade classrooms and class-size and composition issues, and a strain on both the education and on the operation and maintenance budgets. Additionally, many of our schools are older and have numerous issues, in terms of energy efficiency, air quality and requiring general renovations.

Throughout the school district, schools in small, isolated communities also function as a critical social infrastructure for that community. Many of them do not have any other facilities available to them for community functions. In many communities the school is the hub of the community, where everyone comes together.

While restructuring some of these schools and the facilities we have is definitely more feasible within our larger centres, it's certainly not feasible in those remote and rural areas, being that there is such a large distance between many of our schools.

To that end, after the board went through creating these guiding principles and looking at our budget and how we can be most efficient and still follow those guiding principles, there were a number of changes that we've made over the past school year. Many of these were im-
[ Page 1052 ]
plemented at the start of our previous school year.

We reconfigured our secondary school in 100 Mile House and closed the junior secondary school. So we now have one 8-to-12 secondary school in 100 Mile House. We committed funds to then having to upgrade that secondary school in 100 Mile House to take on the additional students and to provide more educational opportunities there.

We closed Buffalo Creek Elementary and consolidated those students into Forest Grove Elementary. We consolidated Glendale Elementary, sending our English track students to Cataline and our French immersion students to another school, Nesika Elementary. We also consolidated the Kwaleen Elementary School, which had a traditional school model, with the Chilcotin Road Elementary School. This resulted in the loss of the traditional school model.

We reconfigured our Wildwood Elementary from K to 3 to K to 6, to hopefully try to keep those students in their own community a little bit longer and try to increase the enrolment at that school.

We've also just at the end of this year, as of the end of July, discontinued our balanced calendar program. I believe we were one of the first in the province to offer the balanced calendar, and it has been here for a very long time — I believe 20-plus years. Unfortunately, again due to shrinking enrolments, we have fewer students that are able to take advantage of that. One of the other challenges was the inability to continue to offer that balanced calendar model at the secondary level. So once part of the family left, the whole family wanted to be on the same calendar.

Since the year of 2001 the board has found it necessary to close the following schools. We closed Chimney Creek Elementary, Anne Stevenson Secondary and Forest Grove Elementary, which was then re-opened a couple of years later. In 2006-07 we lost Poplar Glade Elementary School due to a fire. As well, in the last year we've made all the changes I previously outlined.

When we look at embracing our district's unique geographic factors, our rural and remote schools serve students distant from the major population centres, and they typically have long bus commutes to their school.

These schools typically receive extra financial support for their typically smaller population, and the school district recognizes the challenges faced by these families and supports the existence of these schools in their rural communities. Of course, with that brings the challenges of adequate funding to ensure that we can keep those schools in those communities and still provide a great educational opportunity for those students in their community.

We also have a very large population of vulnerable students within our district. For the purposes of the terminology, what "vulnerable students" means, it is many students who may be at risk in terms of academic achievement and social functioning. Many of these students come from lower socioeconomic homes and backgrounds.

We know that our district is rated eighth highest with the population of children in care, sixth highest for families with children ages zero to 14 on income assistance for one year or more. We are rated 11th worst in the province for percentage of 18-year-olds who did not graduate, and we are ranked sixth worst in the province for youth aged 15 to 24 who are on income assistance. So we have a very high population of vulnerable students. With that, we try as best as we can to adequately support them.

We face a number of challenges. I'm sure you've heard very similar stories from many other boards across the province because we are all facing many of these same challenges.

I have three recommendations that I would like to bring forward to you on behalf of our board. Number one is the funding stability, including full funding of any increased costs resulting from negotiated collective agreements with teachers and support staff.

For the past number of years, we've continued to face that declining enrolment, the loss of the funding protection, although we have faced increased cost pressures. Some of those have included the MSP premium increase; the wage settlement, such as with the support staff last year; benefits cost increases; and B.C. Hydro rate increases. These are things that we have had to find the way to fund out of our current operating budgets, which means that those dollars are taken away from the direct impact of educating our students — which is becoming more and more difficult as time goes on.

The board and staff work very diligently to ensure a balanced budget within the funding we receive. However, when this funding is unstable and additional cost burdens are downloaded throughout the year, this requires a significant amount of additional work and time for our staff and board. So we further recommend a revision to the funding formula to recognize the importance of maintaining vibrant elementary and secondary schools in our rural and remote communities. Perhaps the province could investigate further revenue opportunities from other sources, such as B.C. resource sectors.

Our second recommendation is to look at increasing funding to support the critical role of our schools in the lives of our vulnerable children and families through appropriate funding of services provided in our schools that are the responsibility of the Ministry of Children and Family Development and the Ministry of Health.

Our third recommendation is funding for the replacement of aging facilities. We've been recently informed by the Ministry of Education that this year the only capital requests that we may submit are for bus replacements. For the past many years, which I believe is over ten, we have had the replacement of 100 Mile House Elementary at the top of our capital plan. This continues to be an ongoing need in that community.

We need to ensure that there's adequate funding available to all school districts, including those that have needs for seismic upgrades and those that do not, to ensure that our schools provide safe and healthy environments to optimize learning for students.

To that end, it's recommended that the annual capital plan process be reinstated and revised to ensure that the needs of all school districts are equitably met.

D. Ashton (Chair): Tanya, I let you run into your questions so you could finish, so we have three minutes for questions or comments.

G. Holman: Thanks very much for the presentation. Just one quick question about the increased funding for vulnerable students. Are you suggesting…? Is that a class composition issue, so more funding to Education, or is it more funding to the Ministry of Children and Family Development?

T. Guenther: In the conversations we've had and that I've had with our northern Interior branch…. I also serve as the president of the northern Interior branch for the B.C. School Trustees Association. We've had many conversations about this.

The challenge is that there are many ministries involved. One may get funding for one piece; one gets funding for another piece. We need to find a way to bring those funding pieces together to allow those needs to be met for the individual students. Whether it's funding that's received through the school district to cover the costs of having those specialists come in and provide those services or whether it's a way to work interministerially to ensure that the needs of those students are met is, I think, what our board has been looking for.

C. James (Deputy Chair): Just a quick question. I think you've identified well the downloading of costs. I think you've identified the pressures and the reductions already done by school districts.

Just to add to Gary's question, I think a lot of districts that I've heard from are quite happy to provide the services and supports — school is the place where the kids are — but they need the funding to be able to do that.

You didn't mention transportation as an issue. I wondered if you'd want to talk a little bit…. I didn't think we'd come to a rural school district and not hear about transportation. I wonder if you could say a few words about that.

Transportation is a key issue. Of course, with the change in funding formula as well, when the transportation piece was changed and altered, it had a huge impact.

We have no choice. We need to get our students to school, and that's not an option. Certainly, any way that the funding formula can be revisited and looked at to address some of those more unique challenges in some of the larger rural and remote districts…. We have students who spend a number of hours on a bus to come in and actually are housed in town. We pay a boarding allowance for those students from our outlying communities to reside in town for grades 11 and 12.

It's not just our busing costs, the fuel cost; it's also that we have a huge budget that helps cover accommodation costs for those students to live in town.

Up next we have Tolko Industries — Mr. Hoffman. Welcome, sir. Thank you for coming today.

We have ten minutes allotted for the presentation and five minutes for questions and comments. The floor is yours.

Good morning. My name is Tom Hoffman, and I am the manager of external and stakeholder relations for Tolko Industries. I'm glad to have been afforded this opportunity to address you and express opportunities for rural British Columbia that I'll suggest as well as assist you with some recommendations for your duties that you have before you.

I have four key messages that I want to implore upon you, the first one being, with respect to the forest industry, creating a globally competitive, market-based operating climate. I'm referring to hosting conditions for the forest industry in British Columbia.

The second one is with respect to access to economical fibre to ensure that the industry is sustainable.

The fourth one is with respect to supporting the forest sector to meet the increasing demand for skilled labour in British Columbia.

Starting off again with creating a globally competitive, market-based operating climate or hosting conditions, I'd be remiss if I didn't first refer to taxes. There must be an improvement in B.C.'s competitive tax environment to ensure forest industry competitiveness.

What I'm referring to there…. The B.C. Business Council did prepare a document entitled A Note on Business Tax Competitiveness in British Columbia. It doesn't just refer to the forest industry, but it does offer jewels with respect to all industry in British Columbia. It talks about the conversion of HST to PST; the carbon tax, which we find very onerous in rural British Columbia. As well, it refers briefly to the municipal taxation.
[ Page 1054 ]

The current system with municipal taxation unfairly burdens large businesses. I refer especially to the situation that we have here in British Columbia. The Ernst and Young report that was published just recently certainly indicates some of the reasons for the increased costs and significant burdens. Industry bears much of that cost, and we don't vote, so much of that is an unfair burden.

There needs to be a review of the timber-pricing system in British Columbia. The review should ensure that the diminishing fibre supply that we will face over the next five years, especially in the mountain pine beetle–ridden areas — the reduced supply as a result of that — doesn't distort the timber-pricing system in the interior of British Columbia. So there needs to be a more thorough, robust review of that.

Rail infrastructure. It's deteriorating, and we have significant service issues. That needs to be addressed. Now, I don't know how that is best done through your committee, but certainly there needs to be some allocation of dollars with respect to discussions with the rail companies as well as the federal government.

The coast shipping infrastructure. Improvements need to be there to move lumber and other forest products offshore. We've seen the spring strike impacts as well as lack-of-capacity issues that I don't have time to discuss here today.

Resource roads and bridges. I will compare a direct comparison to operations that we have in Alberta. We are able to haul logs on nine- and ten-axle units in Alberta, which is a direct competitor to forest products generated in British Columbia. There need to be infrastructure reviews, as well as bridge upgrades, to enable those configurations to safely haul logs to our mills in order to be competitive with other jurisdictions.

I'd certainly like to recognize the government and previous governments for their efforts with their support and endeavours in exploring overseas markets. There needs to be continued support in that arena.

A strong provincial vigilance is required on the U.S. softwood lumber agreement. The preparations must be immediate. That softwood lumber agreement expires October of next year.

Those, with respect to the globally competitive market base operating climate, are my key points.

Access to economically viable fibre. The government needs to ensure BCTS effectiveness and provide a reliable, competitive supply to the market. There was a thorough review, just completed, that was done, and there needs to be some enactment of those recommendations. We haven't realized the opportunities yet that were forthcoming from that report.

Timber supply analysis. Now, here is a direct opportunity for the committee to make recommendations. Adequate funding for forest inventories, mid-term timber supply and mitigation strategies are required in order to sustain our industry through the mid-term.

The third key message with regards to First Nations opportunities. Now, I'm sure that all of the committee members are fully aware that on June 26 there was a decision handed down from the Supreme Court of Canada with respect to the Nemiah Xeni Gwet'in and their seeking of title on a tract of land in their traditional territory. This has generated opportunities as well as some barriers, and I'd like to focus on the opportunities.

More effort, resources and focus must be allocated to First Nations consultation, and that falls directly on to the government. We have seen significant delays in permit approvals since the William decision in late June.

Recommendations forthcoming from myself: revenue-sharing of Crown dues and/or the resource dividends concept that will be explored through the rural advisory council.

There must be a more expedited identification of strength of claim, and title and rights, in order to assist companies to assess their consultation, accommodation and consent obligations.

I guess where I'm going with this is that the government needs to allocate funding and resources to the Ministry of Forests, Lands and Natural Resource Operations and/or MARR to ensure that consultation is more expeditious as well as focused and that strength of claim is identified early. Opportunities can then be generated, rather than held in abeyance through the Attorney General's office and/or a do loop with regard to consultation efforts.

Again, the last key message is supporting the forest sector to meet the increasing demand for skilled labour. The province needs to set some firm targets. We need to, by way of example, graduate 10 percent more skilled trades each year for the next 15 years, and this is not unique to the forest industry. There's a severe vacuum and a need for skilled labour across rural British Columbia.

Finally, to continue to provide funding support to the First Nations Forestry Council is one of the recommendations I will bring forward, to steadily increase the employment levels of First Nations workers in the province of British Columbia.

With that, I'll conclude. I'll also express that I not only intend to present here — as, obviously, I've done — but also to the rural B.C. advisory council, which I look forward to — which the bulk of our industry and sector operates within.

G. Holman: Thanks very much for the presentation. There's a lot there, and we don't have copies at this point.

One question, around timber pricing. You related it to the beetle kill problem. Can you just explain that a little bit more?

T. Hoffman: In a nutshell — and I'm not an expert — suffice it to say that as supply decreases, demand will increase. The current timber-pricing system is a market pricing system. As the supply decreases, demand increases. The prices will go up, which does not reflect the value and/or the current…. I mean, is dead checked pine, which is in significant demand, as valuable as large green spruce? I would submit that it's not, based on a product outturn, but that's what we will realize if the current stumpage system is not reviewed.

G. Holman: Just on the rail infrastructure, you mentioned that you felt that the system was deteriorating. Is that something you just noticed kind of recently?

T. Hoffman: No, this is an ongoing scenario. It's not only through the province. We've had discussions with the rail companies as well as the federal government on this. There are competing values for the rail companies. Do they move grain first, or do they move forest products, by way of example?

Now, they're also running a business, and they need to see a profit. They need to turn a profit. But we're not seeing the dollars put back into the infrastructure that's required in order to maintain and sustain the transportation of our products.

J. Shin: Actually, that was the same question that I had. You also mentioned that we have infrastructure challenges that would give an advantage to, say, Alberta, which will be the direct competitor. With that in mind, would you be able to give us an idea of the industry forecast as to how we can stay competitive in the market with some of these challenges that you've mentioned?

T. Hoffman: Well, I certainly have outlined a lot of it, but with regard to infrastructure — it's not only Alberta; I use that as the example because Tolko has operations in Alberta — there are other jurisdictions in Quebec and Ontario where they are able to use nine- and ten-axle units to transport logs. They can haul up to 73,000 kilograms, roughly.

We're, for the most part, restricted to 52,500, so there's a significant amount of more wood that can be hauled on a log truck. That reduces the per-unit cost delivered to the mills, and the log costs are the most significant component of our costs. Whenever you can do anything to reduce your costs, it goes straight to the bottom line with respect to margin.

That's one example. I talked about the rail. Then the other opportunities that I outlined specifically for the government are obviously taxation opportunities, whether that's HST, carbon tax and/or municipal taxation.

E. Foster: Two things, Tom. One, on the timber pricing. The timber pricing is set, basically, by the sales value from B.C. Timber Sales. That was put into place to satisfy the softwood lumber agreement, as much as anything else, to come up with an open market price. What would you suggest would be an alternative that we could sell to the Americans?

T. Hoffman: There are other opportunities. Whether you go through the other associations, Mr. Foster, there are other solutions that have been brought forward through various committees. For me to elaborate on those would be prodigal at this time. I can't get into a whole bunch of detail. But open market sales, by way of example, are one way.

As much as there is opposition to log sales, it is an opportunity to directly…. If we sell logs to the United States and they pay $90 a cubic metre, then that tells you what the current market of those logs is worth.

G. Heyman: You may have partly or fully answered my question. You mentioned the renewal of the softwood lumber agreement. I'm wondering if you have specific areas that you think need to be improved for the B.C. industry and that are achievable.

T. Hoffman: Not so much improved, Mr. Heyman, as much as a focus needs to be put onto it to ensure that it is extended and that we afford the opportunity to move our product to the United States. It remains, for the forest industry, one of the most significant trade partners that we have.

D. Ashton (Chair): Sir, thank you very much for your presentation today. Appreciate it.

D. Ashton (Chair): Mr. Carruthers, welcome. We've allotted ten minutes for the presentation, five minutes
[ Page 1056 ]
for questions. I'll give you a two-minute warning, sir, if I think you're going to be close to the ten minutes. The floor is yours.

Thank you to the select committee for coming to our community, to start with. I'm supposed to be retired, but I'm president of one of the political party constituency associations, I'm a treasurer for a service club, and I'm a shareholder and director in a company that contracts with the government to do road and bridge maintenance. So I am supposed to be retired, but I seem to have a full-time job.

Anyway, thank you for the opportunity to speak. First of all, I would like to mention the ongoing saga of LNG exports. In the news this morning it talks about how there's going to be a fair amount of debate in the House in the fall with regards to the taxation issues. It is apparent that the government is trying to tie down a tax deal on the export of gas. I think a more representative process would be to look at the current investment cost structure in B.C.

The first thing that should be looked at is our sales tax structure that we returned to. This is like going from a BMW to a Model A Ford. I'm strongly suggesting that we have to figure out how to bring the HST back. I recognize that the introduction of the HST was a political disaster, but I encourage both parties to look at cutting a deal on the reintroduction of the HST.

One of the issues for foreign competition will be the existing tax cost structure on the initial investment. We are uncompetitive with other provinces and, more importantly, with other countries that have value-added taxes. This, along with other proposed taxes, could be a deal-breaker. I don't want to see the gas given away, but I don't want to lose an opportunity either. The LNG situation has the makings of a pretty big deal, and we lost out on it once before that I'm aware of, back in the early 1980s.

I also like balanced budgets. Don't waver from this line of thinking. We must learn to live within our means. Deficits should only be utilized to stimulate in very poor economic times and only for a short period of time.

Deficits are an economic tool and must be utilized prudently. There are no free lunches. That was from my economics professor back in the 1970s. Either we increase revenue inflow or reduce expense outflow. Increased taxation acts as an anchor on the economy and delays recovery.

According to the Canadian Taxpayers Federation, the percentage of provincial and municipal bureaucrats is the lowest, as a percentage of B.C. population, compared to all the other provinces and the federal government. It would be interesting to see if it is the same case for fiscal compensation.

It would appear that the public sector compensation is out of line compared to the private sector. I'd encourage you to keep the pressure on to bring reasonable compensation increases for all levels of the public sector, including Crown corporations.

Lastly, if I am correct, the province has, or is still negotiating, equalization payments with the federal government. Hopefully, our good fiscal management is not going to be clawed back because other provinces haven't got their house in order.

B. Carruthers: That's two years in a row that nobody has asked me any questions.

D. Ashton (Chair): Well, it's pretty thorough and to the point. We all like Cole's Notes here, so thank you for coming.

D. Ashton (Chair): Thanks, Amy, but we're still going to hold you to ten minutes and five minutes for questions.

A. Thacker: Absolutely. Thank you very much, ladies and gentlemen of the committee, for your time and commitment to visit our communities and to hear about issues and innovations that are out there. We acknowledge and understand the commitment that that takes.

I do have a Cole's Notes of top-level issues presented by the members I represent across the Cariboo-Chilcotin coast on tourism issues — many colleagues and partners you've heard from today. So there will be areas that I gloss over. I invite you, if you have questions in the future in your personal roles…. Our door is always open to speak to that.

The number one issue for tourism in our rural region is access. You've heard it across other sectors. If I make essential widgets and can't get my supplies in or my product out, it doesn't matter how great my business plan or how essential my widgets are. It won't be a successful business.

In the tourism industry we have the advantage of the product being right here in our backyard. You just have to look up. It's the combination of our stunning landscapes and our amazing people and cultures that makes the world want to come here. The piece that we need is a way to bring people in and out. We need road access, rail access, air access, and you've heard much about ferries today.
[ Page 1057 ]

The route 40 ferry issue has been a very active file on our desk, and I won't beat you with any more stats or information on it. I can share….

To an earlier question, there are ongoing studies on the direct economic impact and some innovative partnership work going on, with those reports due out sometime in October. So there is work still going on, on the ground with our international tour operator partners, First Nations communities and businesses.

But I do ask, in my role today, that you look at any opportunities to increase investment in those ferry routes that are critical to the economic well-being of British Columbia and that will stimulate a greater return than the investment given.

Additionally, rail access. Mr. Corbett spoke to the need to invite VIA Rail to the table. Our organization, too, has been active on that file, meeting with VIA Rail, communities and businesses about the opportunities that that, in Pat's word, pipeline would bring. There is a strong interest from our key markets. There is a strong interest from our tour operators, businesses and communities. I again ask for your support — whether it be government services, lobby efforts or a small investment — to look at whether we can bring that opportunity to reality.

The third access point I want to touch on today is roads. I want to acknowledge and thank the great work being done continually on Highways 1 and 99 and 97. The work is recognized by our tour operators and businesses. It's appreciated. Our local crews and departments do a great job within the budget constraints that they have. But the one area of investment or need that I continue to hear from operators is on secondary roads.

I fully acknowledge that in our world of limited budgets and priorities, this is not a carte blanche ask. But there are certain rural communities in situations in this province. Perhaps we could look at some sort of special classification where there is a greater gain than investment and where there are special needs opportunities to increase the investment in those secondary roads — acknowledging that they move resources, they move people, and they stimulate economic benefit.

The next point I have today Mr. Corbett also touched on. The Tourist Accommodation (Assessment Relief) Act — or, affectionately, TAARA — was enacted in 1996 as an acknowledgment of the heavy burden that seasonal tourism accommodation properties bore with the property taxation. At that time, I should say the act did what it was intended to do. It was appreciated. It stimulated economic growth. It relieved that burden.

But since '96, property values have risen. B.C. Assessment has changed classifications and the way they classify properties to best and most use. The tax burden is again very, very real.

The resolution is attached to the back of your packages. It was supported by UBCM and brought to government. It's previously been committed by past ministers in those ministries to enact those resolution changes and to modernize that act to provide some level of relief to rural operators and stimulate that economic opportunity.

All that I ask of you today as a committee is to consider that promise being implemented in the 2015 budget.

The last pieces I wish to touch on today are the tourism ecosystem and B.C.'s reputation. We have a new Crown corporation, and on November 4 we are told that Destination British Columbia will announce a new brand for British Columbia — a new strategic direction for tourism marketing and a new definition of relationships amongst our tourism ecosystem in this province, defining how we work together.

Just two points on that. One is also a previous government commitment that was in the creation of the Crown corporation: formula funding, to move back to a formula model to provide that Crown corp with long-term stability and budget management in order to guide new programs and innovation. That legislated formula has not yet become a reality, and industry across B.C. is very hopeful that we will be able to see that in this upcoming budget.

The second piece is concern expressed primarily by rural operators. While we support change and innovation and leadership, there is significant concern being heard about the new strategic direction being announced, specifically the lack of opportunity to have consultation with the industry and to look at the potential impacts.

I urge you, in your roles, to not let us walk down the same path of mistakes that we've made with B.C. Ferries and others. Our ask to our Crown corp and our government partners has been investment in strategic tourism planning at the regional level that will feed into a provincial plan and allow us the time for meaningful consultation with our communities, business partners and First Nations — to ensure that we all understand that we're going to have a net gain out of these changes and not to make change for change's sake.

There are some shining lights that I would like to share with you in the tourism world today. The Gold Rush Trail is a unique partnership led by our association that has brought together businesses and government of all levels between New West and Barkerville to market a driving route.

British Columbia's tourism is primarily based on touring. People come here to travel around and experience multiple things and see what's in our backyard and why we love to live here.

The Gold Rush Trail has been successful on a number of levels. It has brought together First Nations and non–First Nations communities to work collaboratively on common, aligned goals. It has created the first corridor management plan in British Columbia and the first MOU
[ Page 1058 ]
between three of B.C.'s tourism regions It continues to operate at the grassroots level.

However, we were invited to speak at PNWER in Whistler recently. The project was highlighted as a project example of excellence and an opportunity for international cross-border partnerships to strengthen the history of our gold rushes in the Pacific Northwest, from California to Alaska.

My only ask of you today on that is not specific, but when you make those hard and difficult budgeting decisions, look at opportunities where we can invest in innovation and things that will lead us onto the world stage, not just the status quo.

My final point is reputation management. It was interesting to listen today and hear the mining and forestry folks speak as well. If I may be so bold to say, tourism helps lead British Columbia's reputation.

You work hard as government reps to manage our reputation and fiscal prudence and credit ratings. But the reputation of how we conduct ourselves and what visitors think of us when they come — whether they're coming on vacation or to invest in LNG or in mining — really resonates on the world stage.

We have faced some setbacks. B.C. Ferries has damaged our reputation with our international tourism operators.

On August 4 when the Mount Polley tailings breach occurred, it was not only a mining and environmental disaster and impacted tourism operators, but there are key markets for us in the tourism industry around the world that believe they cannot come here because we have toxic water. They believe they cannot come here because we don't have sound environmental practices or the fish are no longer safe.

The impacts to the tourism industry of that breach are not what's being felt right now. It's the lack of bookings for 2015 and '16, and it's the damage not only to Likely and the Cariboo but to British Columbia's reputation.

We are working with our local MLA and key partners at a regional level to put together a communications plan that is aimed specifically at reputation recovery and getting out the facts that our pristine wilderness is still here; that our water is safe to drink; that the Mount Polley incident, tragic as it is, won't impact your visit; that it is undergoing the investigation; and that we are leading in concerns for environment and conservation.

I just ask you in your budget deliberations to consider investments into managing our reputation in a positive light. One of the challenges we face — and I heard it from the school board — is that the buckets of money exist in multiple places but there's no mechanism to pull it all together when we have unique situations such as this incident.

G. Heyman: Thank you very much for your thoughtful presentation and your focus on a number of issues, like appropriate and thoughtful long-term investment. Reputation management — I think you've highlighted an important potential economic benefit that goes beyond resource industries themselves by environmentally responsible resource extraction and development.

My specific question to you has to do with your note on B.C. Ferries. You talk about a $5.5 million stimulation to provincial tourism revenue, as well as three-quarters of a million dollars in provincial tax revenue. If you're able to provide the committee, by October 17, with the specific citations of this early research, as well, that you mentioned, that will put it on the public record and enable us to be very specific in any reference we may choose to make.

You mentioned some economic benefit studies that may come out in October. I don't know if they'll be out by the 17th, but if they're out by or on the 17th, please get them in to us by the deadline.

S. Gibson: A quick question. We know from marketing that your best clients are your current clients and those who know those clients. My question is: how are you getting people in contact with your current visitors, ensuring they're going to come back or to use them as a way to network with their friends or colleagues to get them back? That's the most economical way, as you know, of marketing. I'd like to know a bit about that.

A. Thacker: Absolutely, Simon. You're correct. There is great focus on visitor servicing throughout the provincial tourism system, not only with our Visitor Information Centres and the customer service training at the business level, but that's really where we've seen a growth in social media and engagement of social and on-line tools to enable our visitors to be our best marketers, to be our best advocates.

That's why it's so essential that while they're here they have that exceptional experience and are speaking to that with their friends and family and carrying that word home. We're very fortunate in this region to have the connection to those markets and passionate people.

An example I can give is a German family that has come here three years in a row. Every year they go home and travel across Germany with a slide show, speaking to people about why they should come to British Columbia.

C. James (Deputy Chair): Just a quick question around Destination B.C. I guess I'm a little taken aback that there wouldn't be consultation on new branding
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and a new approach, with all of the tourism associations around the province. It seems ridiculous.

But I wondered if you've been given any indication about whether there will be consultation. Are they going to put it out as a draft? Are they going to do consultation afterwards? And what is the response when you've offered to consult and provide your feedback?

A. Thacker: Absolutely. To clarify, the brand itself has had consultation and, I believe, will be strongly supported throughout the industry. It's the changes to program and strategic direction that are raising the concerns.

There has been some consultation, and regions remain in discussion with them. Our challenge is that the discussions are being asked to be held in confidence and not enabling us to speak to industry and the on-the-ground businesses that will be impacted. That's our direct concern.

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

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

Witnesses:	Bill Carruthers
	Patrick Corbett (Hills Health and Guest Ranch Ltd.)
	Dr. Glenn Fedor (Co-Chair, Cariboo Action Team, Child and Youth Mental Health and Substance Use Collaborative)
	Tanya Guenther (Chair, Board of Education, School District 27 — Cariboo-Chilcotin)
	Tom Hoffman (Tolko Industries Ltd.)
	Bruce Mack (President, Board of Directors, Cariboo-Chilcotin Partners for Literacy)
	Janette Moller (Cariboo-Chilcotin Partners for Literacy)
	Petrus Rykes (Vice-President, West Chilcotin Tourism Association)
	Jason Ryll (Williams Lake and District Chamber of Commerce)
	Amy Thacker (CEO, Cariboo Chilcotin Coast Tourism Association)
	Glen Wonders (Association for Mineral Exploration B.C.)

1) Cariboo Chilcotin Partners for Literacy	Bruce Mack
	Janette Moller

REPORT OF PROCEEDINGS(Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES