Finance and Government Services — Issue No. 71 — Wednesday, September 16, 2015 (HTML)

Cedar Room, Ramada Hotel and Conference Centre
2170 Harvey Avenue, Kelowna, B.C.

Present: Wm. Scott Hamilton, MLA (Chair); Carole James, MLA (Deputy Chair); Dan Ashton, MLA; Spencer Chandra Herbert, MLA; Eric Foster, MLA; Simon Gibson, MLA; George Heyman, MLA; Mike Morris, MLA; Claire Trevena, MLA; John Yap, 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	1581
T. Rezansoff
R. Bauml
T. Styffe
A. Coyle
G. Creelman
C. Grisch
B. Berchowitz
G. Askeland
P. Rennie
J. Gordon
L. Mossman
S. Courtney
L. Cosco
J. Hansen
D. Wall
J. Robinson
T. Warshawski
P. Macklem

S. Hamilton (Chair): Good afternoon, everyone. My name is Scott Hamilton. I’m the MLA for Delta North and the Chair of 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 was recently released by the Minister of Finance. The committee will issue a report by November 15, 2015, with recommendations for next year’s budget.

We’ve had to modify our planned schedule of in-person community meetings this year as the Legislature has been called back into a fall session starting September 28. In order to accommodate as many presenters as possible, we’re holding public hearings in communities across the province through an in-person session or via video conference, teleconference or Skype.

British Columbians are also invited to participate by sending a written audio or video submission or completing an online survey. You can make a submission or learn more about the consultation in general by visiting our webpage at www.leg.bc.ca/budgetconsultations. We invite all British Columbians to make a submission and contribute to this important process, and for those of you in attendance, we thank you for taking the time out of your busy day to participate.

All public input will be carefully considered by the committee as it prepares its final report to the Legislative Assembly. Just a reminder that the deadline for those submissions is Thursday, October 15, 2015.

Now, the meeting format will consist of presentations from registered witnesses. Each presenter will have ten minutes to speak, followed by five minutes for questions to the committee and from the committee. If time permits, we will also have an open-mike period at the end of the meeting. Five minutes are allotted for each presenter, and if you wish to speak, please register with Stephanie at the information table.

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

I’ll now proceed with asking the members to start by introducing themselves. I’ll start on my left with Claire.

S. Chandra Herbert: Spencer Chandra Herbert, MLA, Vancouver–West End, Coal Harbour.

S. Hamilton (Chair): Thank you. Also assisting the committee today, on my left, is Susan Sourial, our Committee Clerk, and Stephanie Raymond, from our parliamentary committees office. Michael Baer and Alexandrea Hursey from Hansard Services are also here to record the proceedings, as I mentioned.

Without further delay, I’ll ask that Teresa Rezansoff, British Columbia School Trustees Association….

Ten minutes for your presentation. I’ll try to give you a two-minute heads-up when we get close and then we’ll go to five minutes for questions from the committee.

T. Rezansoff: Thank you. I appreciate being here today and welcome the opportunity to present to you.

As locally elected financial stewards of public funds, we recognize our responsibility in helping to ensure that the greatest value is provided through every dollar entrusted to us, and we are entrusted with a sizable chunk of taxpayer moneys.

Likewise, we recognize that there are limitations on both personal and corporate taxation as sources of funding for government initiatives, including public education. That being said, I will put forward to you what I believe is a strong case for public education being a spending priority for government, as well as a core public service that is in need of attention.

We trust that the committee will view our input as essential and valuable insight into a system we contend is tremendously important to our citizens’ social and economic future.

Increasing expectations and the expanding mandate of the public school system have outpaced current funding.
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Boards of education across the province tell us that they have reached the limits of program and facility sustainability within current budgets and that further unfunded expectations cannot be met without cuts elsewhere in the system.

Current school district operational budgets, already under inflationary pressures from rising energy, transportation, infrastructure and labour costs, simply cannot support current programming unless overall funding is increased or service cuts are made.

So yes, I am here advocating for the ongoing, sustainable, stable, predictable funding of our public education system at a level that will realistically allow us to sustain what is widely recognized as one of the top jurisdictions in the world.

We shouldn’t kid ourselves that trying to do more with less will allow us to maintain the system that, as it currently exists…. Investment by government in the K-to-12 education system is an appropriate policy choice and one that can be justified by any measurement of financial or public priorities. With that being said, I’m also here to provide you with a number of specific recommendations on how current funding might be better utilized and how we can jointly improve the management of the $5.5 billion for the kindergarten-to-grade-12 education system.

Through the resolutions and the will of our membership, I, therefore, respectfully make the following recommendations to you. The first three should be simple to support, because, really, good work with the Ministry of Education is already underway on these first three.

The establishment of common financial management terminology and measurements across the Ministry of Finance, Ministry of Education and school districts.

Clear policy guidelines and reporting measures regarding appropriate financial reserves for school districts currently misreported and misrepresented as school district surpluses.

Co-creation of a more streamlined and transparent process for the approval of major capital projects.

Rescinding of the current stipulation for the $54 million in additional administrative savings by school districts in the 2016-2017 year, knowing that boards will continue to meet the requirement to table balanced budgets.

A review of the current Ministry of Education funding formula, with specific attention to the distribution models for school district funding protection and student transportation.

A review of the exempt staff compensation freeze as it applies to the K-to-12 education sector, allowing for fair and equitable compensation improvements in line with the unionized staff contracts.

Immediate resolution of the temporary appointment of a public administrator overseeing the B.C. Public School Employers Association, including the return of a co-governance role for school trustees. How can boards of education properly manage the education system when they have no real voice in the bargaining or labour relations processes?

Co-construction of a professional development program for school trustees and senior management officials to address areas of concern identified by the Auditor General and other system audits.

These recommendations are intended to both ensure the future of a world-class public education system and improve financial management practices and policies within the sector. Putting them into practice will require the cooperation and support of the Ministry of Finance, the Ministry of Education and all boards of education.

At present, a great deal of time and effort is wasted arguing about whose figures are correct or what the real truth is behind how money is being spent. This is counterproductive and certainly harmful to the public reputation of our education system. It’s time to put aside the politics of education funding and instead focus on actually improving on how we all do business.

There is a common misconception often promoted through the media that boards of education are maintaining large financial surpluses during tight economic times. This is simply not true. School districts have acted responsibly and hold only minimal cash reserves. The real fact is that every board of education in the province has delivered a balanced budget year after year while maintaining only the reserves absolutely necessary to meet future obligations and long-range plans. It is in everyone’s best interest, and certainly that of the education system, to put aside the rhetoric and, instead, work together to determine and foster best practices.

We believe there is also room for improvement in how funding is allocated and its effectiveness is measured. This cannot, however, be accomplished without a willingness to work effectively together as co-governors of the education system. It seems foolhardy not to address known problems while we argue about the real needs of students.

There are also significant financial policy issues that need to be addressed. Asking boards of education to effectively manage a system where they have no representation in the governance of their employees’ union contracts, including pay scales, cannot be appropriate. Likewise, singling out a small group of employees, such as school district administrators, to unilaterally shoulder the burden of cost-cutting measures is simply bad public policy. BCSTA and boards of education are seeking change to these previous financial management decisions.

While we embrace the challenge of system transformation and improvement, boards of education must also insist that corresponding funding accompany these additional responsibilities. We’re seeking your support for sustainable and stable, predictable funding for a K-to-12 public education system whose primary focus must remain on our students.
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We are also willing to do our part in ensuring that sound financial management practices and policies are implemented, and your support must include recommendations for policy changes as well as appropriate long-term funding.

S. Hamilton (Chair): Thank you very much for the presentation. I will go to the committee for questions.

C. James (Deputy Chair): Thank you, Teresa, for your presentation. I appreciate the recommendations. I think we all expect that we would see funding recommendations, but I appreciate the recommendations, as well, that talk about a common understanding about the money. It’s there. I couldn’t agree more. I think the time and energy that’s wasted debating on numbers is time and energy that could be used for education.

Just a couple of pieces I wondered about. One of the other arguments that often comes up — and I wonder if you could talk a little bit about that issue — is the issue of dropping enrolment. I often hear arguments that because enrolment is dropping, therefore school districts should be able to absorb costs that are downloaded. I wonder if you could talk a little bit about that.

Then the other one is the downloading of costs and whether you have any kind of estimate around, in particular, MSP and hydro, of course — which are the two most recent ones where costs have gone up — and what kinds of costs school districts are having to find to be able to cover that in addition to the administrative cuts.

T. Rezansoff: I’ll start with that one. I can say right off: I don’t have that exact figure for you, but I can certainly get it to you and to the committee — what that figure is. We work with BCASBO to approach those figures.

Then, as far as the piece about declining enrolment…. Even with declining enrolment — that’s true for some school districts, and that’s starting to level off; it’s changing — there are school districts that are growing. Even if you take all of that into account — those inflationary pressures and those unfunded pieces that come to boards — they don’t balance out. Declining enrolment does not make up the difference.

The other piece about declining enrolment is it’s not neat and even and perfect. A school might have student decreases as enrolment decreases, kind of hopscotched all around. It’s not conveniently: “Oh, we can cut a whole grade 2 class.” It’s just not…. It doesn’t work that way.

M. Morris: Thanks for the presentation. Vacant schools, or schools where the population has decreased below 50 percent, pose a bit of problem. Certainly, I’m sure, a bunch of trustees around the province are scratching their heads on how they’re going to deal with that.

Are there plans in place to deal with the decrease in school populations in some of these more rural settings? There are some schools in the province where 35 percent capacity is the norm there. Has that been addressed by the trustees association at all?

T. Rezansoff: That’s a local decision-making process, and it’s pretty complex, because every school district is different. I think when you’re in a more urban area and you have schools where you can pretty well almost see the other school very close, it’s easier to manage your capacity and your buildings, because you can more easily move students into another one.

When we’re in the more rural areas of the province, there can be quite a significant distance between schools. Whole communities can be apart. Often those schools, the way it’s kind of fleshed out now…. The majority of those little schools are primary schools. A lot of them are for young children. And to put those young children on a bus for, conceivably, an hour or more one-way to get to school….

That’s the exact case in my school district. We’re keeping a little school open, but it’s K to 3. Those kindergarten kids would be on the bus for up to an hour or an hour and a half to get to the next closest school. It’s quite a burden to put on those little guys.

I know that what is happening in a lot of school districts to help with the school capacity issue is that they’re reaching out to their communities. You’ve heard of community-based schooling, so you’re welcoming in co-location of services for those people that live in that community to be able to better utilize the space in schools.

StrongStarts are taking up spaces in schools, trying to make sure to utilize as much space as possible. That being said, boards all across the province have made very tough decisions, through public consultation, to close schools. A number of schools have also been closed to address that capacity issue.

M. Morris: I’m just basically wondering whether the association itself is developing a strategy provincewide that would deal with those kinds of issues.

G. Heyman: Thank you, first of all, for the work you do on behalf of young people who are getting started in their lives and will be the people who continue to build this province. It’s important. I think we’re all concerned that they get the best start they can.

I have two questions for you. First of all, the ministry is introducing a new model of education, and there have been some concerns expressed by teachers that, while they are pretty sure they support the model, they’re concerned that in order to implement it effectively, some training is required, and they’re not sure that money exists in the budget for that training. So my first question is for your comment on that.
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My second question is…. In my couple of years of attending budget consultations at the Vancouver school board, as well as visits with parent advisory committees in my constituency, there has been a lot of concern expressed about steps that were taken in Vancouver to reduce the availability of certain non-core programs — programs that were considered very important for certain students, like orchestra and band — and, in other cases, having to charge families more for the equipment or for the actual experience.

That makes it out of reach for low-income families, as well as the fact that more and more parents are being asked to supply materials, even such basic materials as photocopy paper, in order to help the class have the materials and equipment they need.

My question around that is: is that a common story around the province, or is that more unique to Vancouver?

T. Rezansoff: Starting with your first question, I’m assuming you’re referring to the new curriculum. That new curriculum was written by teachers. I think the support and the enthusiasm is there for what the curriculum will do. But clearly, concern about finding the time through in-service or pro-D or whatever to be able to dive into the curriculum….

I think it’s going to look different across all school districts. There could be some that have already designated days within their schools that they’re going to spend time looking at, for now, the K-to-9 curriculum, as it’s the piece that’s going to be in place for next September.

I do believe that there is room…. I think school districts would welcome that availability of funds from the ministry to be able to support in-service for looking at the new curriculum. I don’t think we would ever turn that down, but I think we also have a responsibility as governors within our own system to help support that happening in our own school districts, if we can do it. I think it needs to be a shared responsibility.

The other question is about some of those things that can make school very special for students. I don’t think it’s necessarily unique to Vancouver. I think that’s part of…. When we talk about that sustainable, stable, predictable funding, those are some of the choices that boards have been having to make over the last number of years to meet those inflationary pressures.

You’re having to balance paying…. It’s like that commercial where if you switch the light switch on, the roof goes over your head. If you turn the light switch off, the roof comes back on. It’s not that extreme, but it serves to illustrate where boards are struggling.

They’re doing everything they can to protect, absolutely, those core courses and everything for students and working to protect those other special pieces. But the reality is that it’s increasingly difficult for that to happen. But they are working as hard as they can to ensure that those are in place.

I wouldn’t say that they’re being slashed and burned everywhere, but there is certainly heartache in many districts for trustees when they’re sitting down, preparing their budgets, on where they’re having to make those choices.

G. Heyman: I didn’t want to leave the impression that Vancouver is slashing and burning either, but I know they’ve had to make tough choices and they’ve had to download some costs.

S. Hamilton (Chair): Unfortunately, we have run out of time on this session. I’m sorry. Very long questions, and some long answers.

C. Trevena: I’ll keep very short. Mine’s on the transportation question. I see that you want a review of the funding, with specific attention to student transportation. A number of school districts are already starting to charge for parents to use school buses.

I represent a rural area, and there are many rural school districts around the province where, as you say, you’ve got an hour to get kids to school when they’re in a high school situation. Is this something you’re looking at for a provincewide policy on how to avoid charging or to get some sort of equity across the province? What are you looking for in the transportation side?

T. Rezansoff: Thank you for the question. It’s buried right in the funding formula. It’s called a student location factor, and that’s what determines the amount of funding that you get for transportation for students. It doesn’t make sense for some of the districts in the province. They’re actually penalized because of this location factor. So it’s just us opening it up and looking at it. Can we more fairly and equitably disperse those moneys that are available for transportation? We’re not trying to find a strategy for charging or not charging. It’s simply as it flows through the funding formula.

S. Hamilton (Chair): Thank you very much for your presentation, taking the time out of your busy day to be here. I appreciate it.

S. Hamilton (Chair): Next, Advocis, Financial Advisors Association of Canada — Mr. Bauml.

Welcome. Ten minutes for your presentation. I’ll try to give you a two-minute heads-up, and then we’ll go to five minutes for questions. Thank you, Mr. Bauml. The floor is yours.
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R. Bauml: Good afternoon, everyone. My name is Rob Bauml, and I’m here today as a member of Advocis, which is the Financial Advisors Association of Canada. I’m a financial adviser, I’m a certified financial planner and also a business owner from Vernon, B.C. I’ve worked in the industry for 17 years now, and I appreciate the opportunity to speak today.

I’m going to do a little different kind of presentation here. What do financial advisers do? When most people think of financial advisers, they think of charts and graphs, percentage rates of return, stock and bond quotes and that kind of thing. That’s not how I view my job at all. I spend most of my day dealing with people like you. They need life advice on their finances. They need help. They want to be able to be successful in their jobs, successful with saving money so they can retire. They want to be able to withstand curveballs that life may throw at them.

The most rewarding part of my job is providing a safety net for clients, whether that’s savings or insurance or whatever it may be. The bottom line is if they have that safety net and something does happen, they’re able to withstand it and they’re able to maintain their lifestyle, able to maintain their homes, able to be successful financially.

When I sit with clients, clients overwhelmingly tell me this: they want to feel safe and secure with their finances over their lifetime, whether they’re raising a child or getting close to retirement. They especially want to live the life that they want to live in retirement. They’d like to choose how they live, and pretty much all of them say they want to carry their own weight. They do not want to be reliant on government funding and on pensions. They want to have their own money saved so they can live the way they want to.

Lastly, because they’re seeing somebody like me, they’re saying they don’t understand how the system works completely and they need help. They need somebody to help them do the right things at the right time so that they can do the right things.

Advocis believes that we have a solution that will allow British Columbians to accomplish all of those things. What we would like to do is create a profession for financial advisers.

I’ll back up a little bit and just give you a refresher on Advocis. I know some of you know who we are. We are the Financial Advisors Association of Canada. We have 2,000 members in British Columbia, and we have been advocating for professionalism, consumer protection and financial literacy for over 100 years. We work with decision-makers, the public and regulators to promote financial literacy, and really, we try and make sure that people get the financial advice they need when they need it.

If you want to be a member of Advocis, what’s expected? It’s pretty simple. The first is that you have to follow a professional code of conduct, and the first line of that code of conduct is that you have to keep your clients’ best interests first. You also have to accept the disciplinary process. If you don’t keep up that code of conduct or don’t do the right things, you can be disciplined and you can be removed from the association.

Lastly, they expect that you have high continuing education. If you’re going to be in the financial services industry that changes so dynamically, you have to stay up to date on tax changes and product changes and all of the new things that happen in the world. That’s what we’re expected to do.

I’m talking about independent financial advisers now. We call them small business financial advisers. That’s people like me. It’s not somebody who’s an employee at a bank. We actually have a very large impact on the British Columbia economy. We did a study just a short time ago that showed that impact. It showed the footprint.

We represent about $2.8 billion in direct GDP in British Columbia, 24,500 jobs and about $648 million in tax revenues collected by the province of B.C. We are a very large industry.

Now, I just told you that there are 2,000 members of Advocis. We don’t generate all of that money ourselves. There are actually 14,000 small business financial advisers in this province, and only 2,000 of them are members of Advocis. Therein lies the problem.

Today anyone can hold themselves out as a financial adviser, and there are no mandated standards that would say: “This is what you have to do to be a financial adviser.” If any of you guys decided to retire tomorrow, you could open up an office and say: “I’m a financial adviser.” There’s not a thing that any regulator or anyone could do about it.

Our solution would require that all of the people who call themselves financial advisers become a member of this association. If they want to use the title, they have to have some minimum standards.

There’s a problem. There are some people who are part of the association and other people who aren’t. The financial world is very complicated. I’m not saying that the people who aren’t members of our association are bad people. I’m saying that they just chose not to be part of the association. It’s because of the way our system is set up. We have different silos of regulation.

Regulation in British Columbia is set up…. There’s an insurance regulator, a mutual fund regulator and a securities regulator for stocks and bonds. What this patchwork does is it creates opportunities for people to not be part of something if they don’t want to be. Each silo has its own set of regulations, its own product-specific rules, its own licensing and its own methods for dealing with financial advisers, with the people who offer their products.

We believe that that gives us an expertise problem. Right now the main thing that regulators should do is advise the adviser-product relationship. So if I’m licensed to provide insurance, there’s an insurance regulator that will make sure that I have my licence and I’m providing those products in an appropriate manner.
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What happens is that there are different standards because of all of the different areas. What they’re trying to do is they’re trying to have an expertise. They’re trying to regulate not just the product-adviser relationship but the client and adviser relationship. This is when I sit down and I meet with a young family, trying to talk with them, and they’re trying to tell me what I should be doing at my desk during the day.

I’ll use an analogy, and I hope this strikes home for you. It would be similar to a pharmaceutical company inventing a drug and then telling the doctors: “This is what this drug does. These are the kinds of things it treats. These are the standards that we have for using this drug.” Then turning around and saying: “By the way, when you meet with your clients, you have to tell them this. You have to do this. You have to tell them how to do it. We’re going to tell you when you should actually even dole it out and how much you should give to them.”

I think it’s clear that they have the expertise in the product, but they’re not doctors. This is the same problem we have in our industry. We have product experts, but most of these guys and girls are lawyers. They’ve never sat across the desk. They have no idea what it is we do. That creates an expertise problem. It’s one that they don’t have.

The silos also create a falling-through-the-cracks problem. I’ll call it that. In my world, I can be licensed. I’m licensed for insurance and for mutual funds but not for securities. I could be licensed in one or all of those or none of them.

What happens is that having these separate silos allows advisers and unscrupulous people — one out of every 10,000 is going to be that way…. If somebody runs afoul of the mutual fund world, there’s nothing stopping them from saying: “Okay, I’m out of here. I’m going to go and get an insurance licence.” They can prop up there, and because they can call themselves a financial adviser, no consumer would be the wiser.

Even worse, people are not regulated by anybody. I think you guys probably all know the name David Michael Michaels. He stole $65 million from the great residents of Vancouver Island — a fraudster. He was not regulated by anyone. These separate silos basically allowed him to operate in the periphery. No client is going to understand what questions to ask, and the regulators…. I’m not sure. Probably one regulator thought another regulator was taking care of him, and in the end, no one did. He pulled off this massive fraud, and people lost their life savings. It’s just not acceptable.

The way I view it is that consumers are going to be looking for financial advice. They’ll encounter a lot of legitimate stockbrokers, mutual fund, insurance, bank employees — all of that sort of thing. That’s confusing enough. All of these people will provide good financial advice, but the public really doesn’t understand where to go or what should be expected of these people.

That’s where our proposal of creating a financial adviser profession would help. We wouldn’t change provincial licensing. There would still be insurance rules and securities rules and all of those sorts of things. But the client-adviser relationship would now rest with the association — with advisers who meet with clients and who likely should know the best way to deal with clients in the most honest way.

It would solve this falling-through-the-cracks problem and the expertise problem, because our proposal would remove the regulation of the client-adviser relationship from those regulators. Let them do their job regulating the products, and we’ll regulate the adviser-client relationship.

The best practices would come from people who are in the industry, and I think the most important thing is that it would provide a one-stop place for all of the consumers in B.C. to go and say: “Is this person somebody who is really an adviser or not?” They’re going to be able to find out who is actually legitimate or not.

If we went ahead and did this, what would this mean to the people of B.C.? Well, it would mean that they’d be able to verify the credentials of somebody and if they have any discipline history. They’d benefit from knowing that their adviser had initial proficiency requirements. They met some standards before they became a financial adviser. They’d know their adviser was following a code of conduct and can get removed from the industry if they don’t. Basically, they’ll have one place to go to find that information.

But I guess the most important part — this is why I’m here — is that this is a budget consultation. And what would the outcome be for government? I’m saving this for last because we all know that we have an aging population, and the potential cost of reliance on social programs could be staggering. It likely will be staggering.

S. Hamilton (Chair): Mr. Bauml, you’re cutting into your question period time, just as long as you know. It’s ten minutes. Thank you.

R. Bauml: Okay. I’m pretty much done anyway. The bottom line is that if people have well-managed finances, they’re going to contribute to society. If they don’t have well-managed finances, they’re going to be a drain on society when they get to the end of their lives.

S. Hamilton (Chair): Terrific. I’ll go to the committee. Thank you very much for your presentation.

S. Gibson: You mentioned — and thank you for your presentation; I do recall some additional information you presented earlier on this year, so it was helpful — 14,000 advisers in the province, but only 2,000 of them are registered at this time. My question is: the 12,000 that aren’t registered — are they, for the most part, incompetent or
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providing advice that’s vastly inferior to those who are registered? That’s my question.

R. Bauml: No, certainly not. I would say that the bulk of the advisers I know are good people who do an honest job. Membership in Advocis is voluntary. You don’t have to become a member. It’s one of the problems in our industry. So these people are likely just choosing to say: “I’m not going to pay a membership fee. I’ll still do a good job, and I’ll handle my clients properly.” But no membership, no mandated standards — I think that’s where it is. They’re good people.

S. Gibson: A supplementary question, then. If there is a registration process where everybody becomes a member and it’s now compulsory, would this provide additional protection to consumers? For example, if you were my adviser and you gave me poor advice, I could now go to the professional association and have you disciplined, I guess. Is that part of the process?

R. Bauml: Absolutely. It’s to make a place so that clients can go to one place to find out whether their adviser…. Regardless of what silo they’re in, they can go there and say, “This person has a discipline history, or they don’t. They’re licensed to sell this product or that product” — whatever it is. It’s a simple information stop for a client to go to, to find out if their adviser is legitimate or not, or to lodge a complaint, if that’s required.

S. Hamilton (Chair): I’m going to go to John next, and I’ll come back if we have time.

J. Yap: Having spent a bit of time in the industry, I appreciate your comments. I thank you for your presentation.

It follows up on what Simon asked on the 2,000 members in B.C. Does that include those who are employed by large institutions — the banks, for example, where they have financial planners?

R. Bauml: What we’ve done is we’ve defined it as small business financial advisers. Most of them are independent, or they run their own offices, as opposed to people who would be in a bank or a credit union. That does not stop somebody from a bank or a credit union from becoming a member of Advocis if they choose to. But mainly we’re representing independent financial advisers — people like me who run an office in the town of Vernon.

J. Yap: My point in that initial question is: what is the position of the institutions that do have a lot of people that are held up as financial advisers, financial planners? Is there a dialogue between Advocis and the institutions — whether it’s life insurance or the banks or the wealth management firms, brokerages — to have a common platform and association?

R. Bauml: I would say that there’s the start of a dialogue. Obviously, some of those larger financial institutions may have a different direction they’d like to go. At Advocis, we just believe that if somebody’s going to be in the industry, it’s fair to say you should have at least this much training and you should have a code of conduct. Regardless of where you’re providing your advice, that’s something that’s important.

In the proposed legislation we have, we do carve out some areas to say if somebody’s a bank teller, they may not be held up to the same standard. They’re taking deposits. They might do a GIC. It’s not the same as being a financial planner or an adviser, so we try to address that in what we’re proposing.

C. James (Deputy Chair): Thank you for your presentation. I think there’s great strength in taking a look at the proposal for your profession, where often the first story people hear about financial advisers is the bad apples. It’s not the good folks. It’s the bad apples that get on the news at night with folks who’ve been ripped off. I think mandated standards and that kind of support are a positive direction.

What does your association think is holding it back? I mean, I’ve heard people talk about the complexity, because there are so many different kinds of financial advisers. I’m asking you to speculate, I guess, but what do you think is holding governments back from moving in this direction?

R. Bauml: I hope I don’t get in trouble for saying this, but I believe that a lot of it has to do with the regulators. The regulators have their turf, and they’re not interested in losing any of their turf. As a matter of fact, it almost feels to me like some of them are saying: “Well, we’ll come out with a proposal, and we’ll be the regulator for this.”

I think that that’s something that holds it back, but the bottom line is that our whole industry is just so disjointed. There are so many different angles, different products. We’re trying to bring it together to say: “Look, from a consumer perspective, you’re sitting across the desk from someone. What should you expect of that person you’re sitting across the desk from?” We’re the only real association who encompasses all of those kinds of advisers. That’s why we’re here.

Welcome. Ten minutes for your presentation. I’ll give you a two-minute heads-up toward the end, and then
[ Page 1588 ]
we’ll go five minutes for questions from the committee. The floor is yours.

T. Styffe: Thank you very much, Chair Hamilton. As you mentioned, Tom Styffe, board chair of Okanagan College. I have with me our director of public relations, Mr. Allan Coyle.

I’d just like to start out by saying, unfortunately, I’m at the end of my six-year term as board governor of Okanagan College, which means that this is probably my last time addressing you and your committee. I’ve really enjoyed it over the years, and I thank you very much for the opportunity once again.

Thank you again. I just want to start by saying that I really don’t envy the decisions that you and your colleagues must make annually in apportioning the public purse to worthy undertakings.

That said, I hope we can make the job a little easier for you today. When I’m done, I hope you’re convinced that one of the best investments you can make is in educating and training our youth. Whether it is health care costs you want to control, megaprojects you want to see go ahead, social service costs you want to constrain, a more robust tax base that you want to develop or innovation you want to inspire, the answer is in the shops and classrooms and labs of B.C.’s colleges and universities. Better educated people are less of a burden on our social safety net, and they contribute more to the social, cultural and economic fabric of our province.

I’ll give you just a couple of facts and figures to remind you of the magnitude of what it is that B.C.’s colleges — and Okanagan College, in particular — have to offer. With a government grant of $56.2 million, Okanagan College creates an annual economic impact within the province approaching $900 million. Almost 20,000 people a year find their way through our doors at four campuses and ten other locations to partake in our programs and courses. In our region, that’s almost one in every 20 people who comes to OC every year.

Those numbers say a lot, but nothing communicates the success of our organization more than coming across somebody like Amanda Morley, which I had the pleasure of doing recently on the tour of the new trades building. She’s one our proud graduates, working as a field engineer in a career she loves, where she has put her diploma in civil engineering technology to work.

There are a lot of Amandas out there. For each of the past ten years, we have exceeded our government’s student targets, an accomplishment few others in this sector can boast. This is at a time when there is real concern about ensuring that our young people have the skills necessary to take advantage of career opportunities. We have worked with our area school districts to increase the region’s transition rate from high school to post-secondary education and have seen dramatic increases in the number of aboriginal students attending Okanagan College, from approximately 450 a decade ago to more than 1,500 now.

We have the largest women-in-trades program in the province. More than 650 women have been through that program in the last six years. To bring the importance of that kind of programming to light, let me tell you about Kaitlyn, a resident of our region on social assistance who took our program. After taking the women-in-trades program, she decided to take our welding program. About two months after she finished the program, she found lucrative work.

She showed up on campus to get more information on tax incentives for apprentices and happened to show the instructor her first T4 slip, with an annual income over $120,000. By the way, that was her first income tax form that she had to file that showed any reported income.

Our international student numbers have grown significantly. Since 2012, our student numbers have grown by more than 50 percent. This fall, we have more than 530 international students on campus.

As board chair of Okanagan College for the last three years, I can proudly say that there has been a great deal of effort and energy devoted to these achievements and a host of others too numerous to outline here today. We have worked closely with other institutions and the province to realize progress on significant provincial policy objectives, whether it’s responding to the skills-for-jobs blueprint or finding savings through shared services.

I only have to look at a partial list of recent and ongoing partnerships to give you a sense of our willingness to innovate. We just announced a sustainability-focused construction and research project with UBC Okanagan, a developer and a construction firm, which involves Okanagan College students helping build two homes and UBCO researchers monitoring them for the next three years.

We have worked with NVIT to have Okanagan College instructors offering trade programs in the Merritt area. Just last Friday, we announced a partnership with the Justice Institute of B.C. that will see our criminal and social justice students able to complete a bachelor of law enforcement studies degree in Penticton. This comes at a time when the province is preparing to open the 378-cell Okanagan correctional centre.

We have an evolving partnership with Capilano University and the Okanagan innovation society to offer a digital animation diploma program in Kelowna. This is a program that our growing high-tech industry in the
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Okanagan has been clamouring for, and it builds on the recent announcement, with Accelerate Okanagan, of a coding program being offered starting October 1.

We worked with Interior Health and other health authorities and organizations and have just introduced Canada’s first on-line gastroenterology course for practising nurses. This is at a time when the demand for these skills is mushrooming.

In partnership with the Okanagan Indian Band and the Osoyoos Indian Band, and with support from the province, we have offered a Stepping Forward program that nearly 50 aboriginal students have benefited from. These are learners who were experiencing barriers to employment.

Our communities have come forward in remarkable fashion to support our efforts as well, and I’ll give you an example. As many of you know, we’re in the throes of completing a $33 million expansion and renewal of the 50-year-old trades-training complex at our Kelowna campus.

We are supplementing the government’s much-welcomed $28 million investment with a $7 million fundraising campaign that will also support student scholarships and bursaries. I’m pleased to report that we’re past the $4 million mark of that campaign. We have the best track record of any college in B.C. in terms of fundraising.

I’m inspired by these things and our ability to move forward, and I hope they inspire you as well. What is clear is that Okanagan College has the inclination and the drive to be entrepreneurial and innovative. Those efforts are bearing fruit and are enticing others to want to work with us.

There are ways that the government could help fuel this engine of economic development. And I suppose this is the wish list.

One is to provide industry with additional incentives to work with us. We find a great deal of support from businesses and organizations that realize the need to invest in education, both for their future employees and to help upgrade the skills of their existing workforce. With our fundraising expertise, I can tell you that with a matching provincial funding program, we could engender a far greater level of industry and community support, not just for capital projects but also for programs.

As this committee has heard from me in years past, we also ask for your help to allow colleges to escape the straitjacket of provincial rules that restrain us in the use of reserves over a multi-year window. Fixing that would let us engage in a multi-year program development that would permit us to continue to grow access to programs and services.

B.C. colleges have collectively been asking government to consider increased investment in our part of the post-secondary sector. We believe we have demonstrated the effect we can have on meeting this province’s educational goals at a time when skilled labour shortages are forecast. And I wouldn’t say that if I couldn’t boast on the record of success that I’ve only begun to outline for you today.

As you contemplate on improving provincial economy, I respectfully request you choose to invest in that which will bear a solid return on the future of our young people and the province as a whole. I realize you must balance competing needs and limited resources, but I can honestly see no better investment to make than in post-secondary education.

I’d be glad to answer any questions, but if you want to get into specifics, I’m definitely going to defer to Allan Coyle, our director of public affairs. There’s a reason for that. A few years ago, Mr. MLA Hunt asked me a question which I got distinctively wrong, and Allan had to give this committee a correction. I don’t want to do that again, so I brought Allan with me. Thank you very much to the committee.

S. Hamilton (Chair): Thank you, Mr. Styffe, for your presentation. I appreciate it.

D. Ashton: Well, Tom, I’m sorry to hear that this will or may be your last opportunity of presentation to the committee. You’ve always done a great job, and you and the gentleman sitting beside you, Mr. Coyle, are part of a group of individuals that made Okanagan College a heck of a lot better today than it was yesterday. The legacy that you leave and your peers leave will make Okanagan College substantially better tomorrow than what it is today.

Congratulations on an incredible job. Keep up the good work. Sorry to see you go. Whoever the replacement is, Allan, I hope you use the same big stick that you always use to keep them in line and in dues. But what a difference Okanagan College is from the fall of 1973, the college of K.L.O. Road. I can remember it well — the trailers. So thank you.

I want to get your views on what’s been referred to as a system approach. In our last hearing, we heard from the president of UNBC, and he talked about this. It’s out there, about how colleges and universities should strive to think of themselves and maybe try to have a dialogue about being a system as opposed to individual institutions. You referred to partnerships with the likes of NVIT and Capilano, and there are probably others.

As you contemplate your departure from your role and look forward to the continued development of higher education in British Columbia, any thoughts on how we can actually do something about having a system approach, where students would have the opportunity to go to an institution, and it’s not just one but a number? Any thoughts?
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T. Styffe: That’s a great question. One thing that’s intrigued me, even back as far as when I graduated from Douglas College many years ago — but more recently, when I started on the board — is that the old notion used to be that you took your first year or two at a community college, and then you transferred to a university to complete your degree and so on. Allan can expand on this.

What’s really striking to me is that those numbers have now changed. We have more transfer students from UBC and other universities back to college, for various reasons, than ever before. So that, in itself, works toward the system.

When I get towards expanding the system, I would like to expand the system to include industry as well, more than we have. It used to be called Flightcraft. I think they’ve changed.

T. Styffe: We have partnerships with various industries, local industries, that require the use of their facilities and UBCO and our facilities. Those kind of things develop savings in the greater scheme of it. We’re cheaper than a university, and if we can educate a whole bunch of the programming before they get to UBCO, it’s a better way to go.

A. Coyle: We’ve done a lot over the years to implement system thinking, whether…. I think it was probably eight years ago or so, Mr. Yap, where the trades-training providers of the province got together and started talking about how best to approach the province to apportion out seats and where it made the most sense, where there were demands. So there’s been a system approach on that front.

I think you’re seeing Tom reference the cooperation and collaboration with the UBCO, and I think you’re seeing more of that. We’ve got a program that we offer in conjunction with UBCO where students can do the first two years of their bachelor of science in nursing at Okanagan College and then complete at UBCO.

We’re seeing a lot more of that transpiring, and I know that at executive levels there’s more interinstitutional discussion about how we can work together.

C. James (Deputy Chair): I’ll add our thanks, too, Tom, for the work that you’ve done and the commitment that you’ve made to the province — bigger than the community, but to the province as well.

I think you’ve touched on a little bit of this — both of you touched on it — which is the connection between colleges and universities. I’m a huge supporter of our community college system. I think for many students it’s the success place that they start, whether they stay there or whether they transfer back and forth.

We’re certainly hearing that at Camosun as well — the number of students coming into the trades program who come in with undergrad degrees already, who are coming back into the college system — so I think those old barriers are breaking down. I think that’s healthy, and I think that’s good.

But I wondered. You touch on a couple of pieces. Are there other barriers to having that kind of seamless approach for students? I mean, you hear sometimes that the credentials become an issue because of a professional body, not necessarily because of the colleges and universities.

I just wondered if there are any areas that you want to touch on that you think need to be supported or looked at to keep that transition and to build both strong systems.

A. Coyle: At risk of endangering myself, I’ll say that one of the issues that we look at, at our own college and other institutions as well, is the length of time it takes to get things done. It’s that nimbleness and flexibility. I can tell you that’s a constant discussion point around our leadership table.

There are good reasons. Having looked at this system for nearly 20 years now, there are good reasons that those processes are sometimes slow and thorough, which is to ensure the quality of education. I think that’s a barrier that we’ll perpetually have to work on.

I think that we do have to give credit where credit is due. British Columbia still has one of the best transfer systems within the province. The announcement with the JIBC last Friday is an example of how you can put two and two together to make things work in different ways.

We’re really trying to do that, but there are fiscal barriers, sometimes, and there are the process barriers, but we’re conscious of this.

S. Hamilton (Chair): Thank you very much for taking the time to present to us. On a personal note, my daughter, shortly after she moved here to Kelowna, attended OC. She’s gone on. She’s bucking that trend you were talking about, because she’s finishing her degree up at UBCO, but your college served her quite well in the time she spent there. So thank you on a personal note.

S. Hamilton (Chair): Next we have the Interior Savings Credit Union — Gene Creelman.

Mr. Creelman, welcome. Ten minutes for your presentation. I’ll try to give you a two-minute warning. Then we wrap up and go five minutes for questions. The floor is yours.
[ Page 1591 ]

G. Creelman: Good afternoon, Mr. Chair, Madam Chair and members of the Select Standing Committee on Finance and Government Services. My name is Gene Creelman, and I’m the senior vice-president of member and community engagement at Interior Savings Credit Union based out of Kelowna.

Our credit union is a member of peer group 2 of Central 1 Credit Union. We proudly serve the residents of the Thompson-Okanagan region in British Columbia. Those include credit unions in Osoyoos, Revelstoke, Salmon Arm, Summerland and district; VantageOne in Vernon; and ourselves, Interior Savings.

I’d like to first thank the committee for providing British Columbians across the province with the opportunity to comment on the upcoming 2016 budget and also want to express our appreciation for your past recommendation to the government that the temporary deferral of the tax increase be made permanent.

It is our hope that credit unions will have your support again this year, as 2016 is the first year for the preferential tax treatment to be phased out. I’ll speak a little bit later on that. For now, first let’s tell you about some great things credit unions are doing in our province.

Peer group 2 includes those six credit unions I mentioned. There are six credit union head offices in this region and 33 branches throughout the Thompson-Okanagan. Within these branches and head offices, credit unions provide direct jobs to 625 British Columbians. That number doesn’t take into account subsidiary businesses such as insurance and wealth.

Credit unions are proud to be B.C.-based businesses and are committed to ensuring that our deposits, jobs and profits remain in the province. I should note that credit unions are not solely about maximizing profit. The money we do make gets reinvested back into our communities. This includes footing the bill to ensure that financial services are available in those communities where there is no other financial service provider.

Interior Savings specifically was founded in 1939 with 20 members and $96.50 on deposit. Little did those founding members know that 75 years later, this year, their credit union would grow to be the seventh-largest in B.C. in terms of assets and the fifth-largest in terms of number of members.

We’ve grown from one branch in 1939 to 21 branches and two commercial services centres. We’ve expanded ourselves…. We serve 14 communities ranging from the size of Kelowna and Kamloops to small communities such as Barriere and Okanagan Falls. Perhaps of interest is that that includes two communities where Interior Savings is the only financial institution and four communities where we are the only financial institution next to one of the federal banks. Interior Savings provides permanent, full-time employment collectively to 450 people over our operation.

At Interior Savings we are only as strong as the members in the communities we serve, which is why community involvement is a key part of everything we do. The federal banks are known to provide 1 percent of their profits to community investment. At Interior Savings, we provide 3 percent of our operating earnings to community investment.

Last year Interior Savings invested $141,000 in sustainable community programs through our community investment fund. When we add that value to our community sponsorships, our total community investment in 2014 was $576,000 over the Thompson-Okanagan. In addition, the credit union two years ago created our $1 million bursary program, where we fund up to 1,000 students with $1,000 each for their post-secondary education. This is part of our member rewards program, where patronage earnings of just over $3 million were paid out last year.

We know — consumer research tells us — that community investment is important to them. So 86 percent of consumers agree that Interior Savings is the best or one of the best at providing community support in terms of their financial institutions.

Before leaving community, I want to tell you one story about one program that will have lasting impacts. Beginning in 2012, Interior Savings funded a program that has now been implemented in 30 public high schools across our region. Teacher-training resource materials, mannequins and automated external defibrillators, or AEDs, have been provided to every public high school in our trade area.

Going forward now, every graduate of these schools, which is about 5,000 each year, will know how to conduct CPR, how to use an AED and, most importantly, how to save a life if they should ever be called upon to do that.

The economic environment, starting with the Thompson-Okanagan, has an impact on the credit unions’ ability to support the community. It’s anticipated that there will be positive economic growth for the region, driven by tourism, demographics and forestry, but the oil bust does have its impacts and poses a risk to the Thompson-Okanagan residents, simply because we have people working in the oil sands and the secondary housing market is impacted by the oil bust. However, a plummet in the Canadian dollar over the past little while is contributing to a rising flow of American visitors to British Columbia.

Manufacturing plays a relatively more important role in the Thompson-Okanagan than in other areas of the province, particularly as it relates to wood products, metals, machinery and wine. The low dollar will improve competitiveness. However, a low commodity-price environment is likely going to keep some projects on hold for a while, such as the Ajax copper mine near Kamloops.

While business conditions will improve, the region faces some headwinds. It’s estimated that about 6 percent of the employees in the Thompson-Okanagan work in
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other provinces — mainly in Alberta, in the oil patch — and we expect this to limit regional employment growth and dampen consumption in housing.

Retirement and lifestyle choices, however, do drive population flows to the Okanagan area, despite the lingering impacts of the recession. Gains will be stronger in Kelowna just simply due to availability of amenities and services.

Another factor impacting credit unions’ ability to do business is the phase-out of our preferential tax treatment. I know you’re well aware of that tax, but it’s important to underline what kind of impact the phase-out will have on our credit unions and what it means for communities and businesses in the Thompson-Okanagan.

Retained earnings are the highest quality of capital for credit unions. This is where we draw from to fund the good things we do in our communities. It’s estimated that the scheduled tax increases will reduce the retained earnings of those six Okanagan credit unions that I was talking about by $1.6 million annually. This means that there will be $1.6 million less to donate to local programs, charities and bursaries for our members.

The new tax rate will also have a negative impact on the amount of lending that credit unions are able to do in our communities. It’s anticipated that the new tax rate, once fully phased in, will reduce the amount of household and small business loans that we are able to make by almost $19.2 million per year. In realizing the importance of businesses that we serve in our region, we’re very concerned about the negative impact on our region that phasing out of the preferential tax treatment will have.

I’d like to conclude by telling you a small story about a business in one of our rural communities of approximately 2,500 people. This was a local business person that lived in that community and wanted to purchase a property in their town and retrofit it to be a gas station. The response he was getting from the national banks was lukewarm. There are a whole bunch of issues with gas stations and tanks in the ground and so on.

As a financial institution with local in-depth knowledge, Interior Savings was able to consider and approve that loan. The gas station has been operating successfully, and the owner is now considering setting up a winery in the South Okanagan. The result is fostering of more local jobs in small communities. It’s businesses like this that we need to keep the regional economy constantly growing and evolving. But these businesses are threatened by the phase-out of the preferential tax rate.

Although credit unions will continue to support small businesses, where our bread and butter come from, we worry that it could be businesses like the gas station owner that end up being one business we can’t assist, simply because we don’t have the available capital as a result of the preferential tax rate.

S. Hamilton (Chair): Wonderful. Thank you, Mr. Creelman. I appreciate you taking the time to present to the committee.

J. Yap: Thank you for your presentation, Mr. Creelman. We heard earlier from another one of your colleagues.

J. Yap: Yes. He said that of the 20 top corporate donors to a community, four were credit unions. I see your credit union. You used the metric of 3 percent of profit. That’s tremendous. In terms of that measure, where is Interior Savings Credit Union? You say 3 percent….

J. Yap: Yes, in absolute dollars. Are you in the range of your colleagues in the credit union movement? Are you a little ahead? Where are you?

G. Creelman: Just to clarify, the federal banks use 1 percent. It’s a standard set by the Imagine group of companies, based out of eastern Canada.

Our credit union has set that benchmark at 3 percent — so 3 percent of our net operating earnings, averaged over three years. The reason why we average it is so we don’t have ups and downs, because our bottom line can impact. We don’t want to be making a three-year commitment to an organization and then run into a problem in year 3, when in the previous year we didn’t have strong earnings.

About 3 percent is our credit union’s commitment of our operating earnings. So in 2014, that was about $545,000 that we contributed throughout the year to our communities. Then, on top of that, was our $1 million bursary. We haven’t reached $1 million yet. Believe it or not, when it’s free money, you still don’t get enough students to apply. This year we’ve had about 738 students apply. Now that September has started, they have to show us that they’re actually in school.

S. Gibson: I had the privilege of working for a credit union for eight years. I think you may know that.

A little question I’m going to ask you, and I don’t want to embarrass you here. How come you don’t have “credit union” here? Why is that missing? I’m a little disappointed.

G. Creelman: It’s on my business card, Mr. Gibson — one piece here. Our letterhead clearly has it on. This
[ Page 1593 ]
wasn’t produced on our letterhead, and we dropped the logo in on top of it. But our letterhead has got Interior Savings Credit Union on it.

Seeing none, in the time we have, I’ll reiterate what I said in Castlegar a few hours ago.

S. Chandra Herbert: I was just going to say that in visiting Kamloops, where we’re heading next, it’s very clear that Interior Savings invests in the community. I know that the Blazers are very supportive of your investment.

I just want to say thank you for your presentation. The credit unions are everywhere, and you’re making sure we hear your voice. As a credit union member since, I think, I was six, I just want to say thank you.

S. Chandra Herbert: Oh god. Well, it will always be the Interior Savings Centre, for me.

G. Creelman: Well, it is okay. We had quite a negotiation there, and we lost out to one of the related family of companies that are ownership of the Blazers.

G. Creelman: So we were destined not to renew, and that was just September 1 of this year.

G. Creelman: We’re still heavily involved in the facility, though. If you go inside, you’ll see our signs everywhere.

I apologize. Usually, I always like to speak last. Nevertheless, I said it in Castlegar. You are very much woven into the fabric of the communities, and I appreciate the work you do. I talked about small business and how many people in this province are employed by small businesses — many of which, like the one you cited as an example, could very well not even have existed had it not been for the risk capital that you were willing to put forward in support of the…. And now they’re going to open a winery — even better.

Anyway, thank you, Mr. Creelman. I appreciate you taking the time to present. Have a good day.

Next we have the Okanagan College Students Union — Chelsea Grisch and Brianne Berchowitz. Welcome. You have ten minutes to present to the committee. I’ll try to give you a two-minute heads-up when your time is getting close. Then we’ll go to the committee for questions for about five minutes after that, if that works for you.

C. Grisch: We’re speaking to you on behalf of the Okanagan College Students Union. Our organization represents over 5,000 students attending Okanagan College across three campuses.

The administration of Okanagan College has made noble efforts to accommodate the needs of learners — you’ve heard about that — including the ongoing construction of a state-of-the-art trades facility, which we ourselves donated $100,000 to, at our KLO campus. Even with their determined efforts, there are many issues facing students across our campuses that we feel government alone can address.

We’re hopeful that you’ll recognize the importance of providing the same or better access to post-secondary education as was provided for Canadians in the last 30, 25 or even 15 years.

As Canada works to secure its footing in a rapidly growing global economy, it becomes increasingly important to introduce a continuous supply of educated and competent persons into the workforce. Though government officials have acknowledged this, the daunting barriers faced by post-secondary students, both current and prospective, have diminished the feasibility of this goal. Unfortunately, many deterrents exist for those considering entering the post-secondary education system.

As a direct result of cuts to post-secondary funding by the B.C. government, institutions continue to increase
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tuition fees, putting a greater burden of cost upon students. The magnitude of these cuts was determined by projected increases in efficiency due to group purchasing networks between post-secondary institutions. While good on paper, the reality is that the moneys displaced by these cuts have negatively impacted the post-secondary sector, both in terms of facilities management and the quality of education itself.

Institutions have decades of institutional memory and committees wholly devoted to efficiencies in operation. It undermines the competency of these individuals to assume a government-drafted savings plan would work better in actuality than tried-and-true in-house practices.

Okanagan College remains firmly opposed to raising student fees as the first course of action against mounting costs, and for that, our students are really grateful. But even with these intentions, our institution has been forced to make cuts to vital operations and increase student fees. Increased student fees means increased barriers to entry and furtherance of education.

One really strong force in overcoming the barriers to post-secondary education has been the free provision of adult basic education at post-secondary institutions, which I’ll refer to from here on out as ABE. Though statistics do not exist on the number of ABE learners who go on to pursue post-secondary education, all anecdotal and observed evidence from our institution suggests that the rate is very high.

We believe it’s imperative that you restore unconditional funding to ABE to ensure accessibility of education. Students from lower socioeconomic backgrounds are more likely to not complete their high school education, thus negatively impacting their career opportunities and earning potential. With the reintroduction of fees onto ABE programs, these students are faced with another barrier to increasing their quality of life and standing in what espouses to be an egalitarian society. Having tuition on ABE exacerbates issues of classism, where education is the privilege of the wealthy.

Okanagan College has taken the class factor into account while contemplating a fee structure for ABE, entertaining the idea of a two-tier system wherein students in possession of a Dogwood would pay fees and those without would not. While this system aspires to spare the students whose needs are more dire, this is a heavily generalized approach that does not completely account for the fact that student demographics and individual needs are not cut and dried.

Compounding this issue is fact that ABE learners are not eligible for student loans. Consider a student who has three ABE courses and two university-level courses. While the student has a full-time course load which requires a very high time commitment for success, they do not meet the course load requirements for student loan funding.

Having a split between ABE and university-level courses is not at all uncommon, particularly for science students — which I, myself, am — for whom course prerequisites are not necessarily graduation requirements for high school. Even if a student in high school identifies an area of interest, say biology, and diligently enrolls in bio 12, they may be unaware that the seemingly unnecessary chem 12 is required for first-level biology courses. A lot of students encounter that problem and upgrade in their first year.

Fees on ABE, therefore, place a higher level of responsibility on high school students in their future study decisions. And let’s be honest, it’s not really a demographic known for their rational decision-making abilities. That adds inefficiencies to the process of transferring into post-secondary.

While a two-tiered system can soften the blow somewhat for marginalized learners, it’s a suboptimal strategy compared to one that could be achieved with adequate government funding to adult basic education.

Though it’s too early for us to have comprehensive data on how post-secondary and ABE enrolment numbers are affected by ABE tuition, it’s safe to say that a fee on a course is a disincentive, particularly for the more casually committed or part-time student. Part-time student enrolment is already at an all-time high, as students are forced to take on more employment concurrently with their studies, more so than previous generations, and due much, in part, to increases in tuition fees.

There also exists the fundamental unfairness of charging people for a service that would have been free at an earlier stage of their lives. Legally defined adulthood cannot be the defining factor, as many high school students graduate after reaching the age of majority. Fees on ABE delineate the post-secondary education system and may significantly delay the entrance of qualified individuals into growing fields.

We’re members of the Canadian Federation of Students–British Columbia, an organization whose flagship campaign is called Squash the Squeeze. We’re sure you’re probably familiar with it. It’s probably been mentioned by our peers, so we’re not going to really belabour these points but just briefly reiterate them.

The four central pillars of Squash the Squeeze form the framework of a post-secondary education system that would resolve both the issues in ABE we have described and the other foremost concerns of post-secondary learners.

First, we implore you to re-evaluate government spending priorities in such a way that more funds are allocated towards post-secondary education. Making economic stimulus plans without first concerning yourself with the workers of the future is putting the cart before the horse, as it were.

Secondly, tuition fees have risen at a far greater rate than that of general inflation. That’s consequently leading to greater student debt, which follows a graduate into
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the workforce and creates delays in starting a family, purchasing a home and other major life events that are seen as benchmarks of personal success.

The elimination of interest on student loans is our third ask. It corresponds directly with the impact of student debt. Any negative impact of removing interest on student debt for the government is far eclipsed by the negative impact of accrued debt on the loan by the debt holder.

Many students become so discouraged by the level of debt they accumulate in a short time that they are forced to discontinue their students. One of my friends, actually, last year kind of got forced to make that decision. It was quite devastating. I’m sure she won’t be the last friend of mine to do so.

Lastly, it remains an embarrassment that British Columbia is the only province without a comprehensive system of needs-based grants. We therefore urge you to keep pace with the rest of the country in providing financial assistance to help students leverage the costs of post-secondary education against the rest of their lives.

We appreciate being given a platform to voice our concerns. We really hope that sincere consideration is given to these issues, as they resulted in the need for a lot of mobilization and organization on the part of student unions and post-secondary institutions who feel that the government needs to play a larger role in creating a future that works for working British Columbians.

S. Hamilton (Chair): Thank you very much. That was a very concise and articulate presentation. I appreciate that.

C. Trevena: It was a very good presentation. I really appreciate it. Very cognizant of the burden that students are carrying with student loans and trying to work and balance education and everything else.

Your main issue about ABE. What sort of percentage of students, your colleagues, are taking ABE courses? Do you have any statistics on that?

B. Berchowitz: The administration would have those. It’d be nice to have that. But it’s significantly higher than we originally presumed. So many students are doing concurrent courses, where they’re upgrading math 12 in order to get into trades, but they’re also taking their first year of pre-app and things like that. It’s a tricky number to calculate, but it’s significant.

C. Trevena: Those at Okanagan College — are they primarily students who have come from high school and are trying to upgrade, as you mentioned? You know, they did biology, and they need the chemistry. Is it that sort of cohort? Are you seeing others coming in who are also…? We hear stories of young mothers trying to get back into education, and immigrants coming in. Do you see that here in the Okanagan?

C. Grisch: Well, it’s a really diverse group. That’s part of why there no real one solution that might work for everybody.

I’ve definitely seen a lot of high school students — or just young students, 18 or 19 — who simply didn’t take a couple prereqs. I’ve also seen a large number of immigrants, single mothers. Definitely, that group is…. It’s more highly represented among aboriginal learners as well. You have the older returning students who often have families.

It would be really difficult for me to…. Those statistics aren’t available, so I really am running just off anecdotal stuff right now. I’m very involved with our aboriginal centre at the school. Probably about half the students there are enrolled in ABE. I would say that likely half of those, as well, have families.

It’s quite high. Then you have kind of a double whammy of the marginalized learner represented in that group — and during a time when there are all these recruitments efforts for aboriginal learners.

It’s really difficult because it is such a diverse cross-section of the population.

B. Berchowitz: Another one of the aspects of Canadian Federation of Students is the campaign called Don’t Close the Doors, which you may have already heard about. That is sort of gathering testimonials of students who are in the ABE program, because it’s not something that’s really been invested in to have research on. It’s not funded in the same way that post-secondary learners are and university- and college-level courses are. So there hasn’t been a lot of evidence as to sorting out who has a Dogwood and who doesn’t have a Dogwood. We’re certainly finding that.

We need to know that because it does matter, especially now that we’re facing a possible two-tier system. So that’s another aspect we’re looking into and working with our own administration on — sorting out those numbers.

S. Chandra Herbert: I would just say thank you for your work in student politics representing the students and for focusing on learners that are often marginalized. If we want a province of opportunity, we’ve got to work for a better education and access. So thank you very much.

The Dogwood, the two-tier system that you’re talking about — is that just Okanagan College, or are you hear-
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ing through the Canadian federation that other schools are doing this two-tiered system?

B. Berchowitz: Yeah, that’s definitely the college. The college put in a fee structure but chose not to enforce any fees for this academic year. But it seems like many schools are researching and sort of getting a feel for how ABE works. I know Camosun implemented fees, and they’re looking at a slight regression in the number of ABE learners enrolling.

We’re still in the third week of class right now, so it’s hard to say. It’s a little soon to get those numbers, given that September started so late. But that’s definitely what our college did. I’m sure we could find out from administration what other schools are doing, or you could look on line for that information as well. It’s a tricky one, introducing new fees on these marginalized students.

C. Grisch: Also, just as an aside, it’s really difficult to…. When we’re talking, you see there’s really not a lot of empirical evidence. There’s not a lot of data collected on the demographics of students who are enrolled in ABE. It was particularly irresponsible to make cuts to ABE, as even at the institutional level…. With our organization, which encompasses many student unions, we don’t have sufficient data. Neither, really, could the persons making this decision, and therefore consequences couldn’t be properly anticipated. So we’re very opposed to reverting back to the fee system.

S. Hamilton (Chair): Thank you very much for taking the time to present to the committee. It was well received. Enjoy the rest of your day.

Next we have the John Howard Society of the Central and South Okanagan — Gaelene Askeland. You have ten minutes for your presentation. I’ll try to give you a two-minute warning, and then we’ll cut into questions for about five minutes after that. If it works for you, the floor is yours.

G. Askeland: I have never done this before, so this is first time. I find it really wonderful that there are 11 of you that are elected sitting around this table and that you’re moving around all over the province. With this federal election going on, I’m feeling particularly jaded about politics these days, so thank you. Thank you for going around and asking us these questions and for being willing to hear us. I really appreciate it. It gives me a little bit of hope.

G. Askeland: As you know, I am Gaelene, and I work with the John Howard Society, Central and South Okanagan. I have three things that I’m going to talk to you about today: domestic violence programming, restorative justice and community courts.

Domestic violence — you hear about it all the time. It continues to be a huge issue in this province. Our Kelowna women’s shelter and the other homeless shelters for women are always full. They’re overflowing. In 2014, in one of our provincial budgets, there was $1 million in funding that was designated in the budget for domestic violence prevention programs. It was not allocated to a ministry, so it sits there unspent and very greatly needed.

There are lots of resources available for women, to help women transition out of domestic violence situations, but actually very little in the way of preventing — working with the men to prevent the violence from happening. It seems kind of counterintuitive to me.

As a provincewide organization, the John Howard Society, we’ve got eight regions covering the entire province. We have a 17-week program that’s been piloted up in Prince George — it’s been running for 12 or 15 years — called Stop Taking It Out on Your Partner, STOP. It’s been proven effective in Prince George. With the funding that was earmarked for domestic violence prevention, we could be offering that same program in all eight regions — ten, 15 communities — within six months.

It would include full program evaluation, provincial oversight, an advisory committee to guide the process. It could be up and running in six months.

My office here in Kelowna — we must get two or three phone calls every week, which doesn’t sound like much. But you aggregate it over the year from other agencies in town — Interior Health; the RCMP, often; parole officers — and just regular people coming in the door asking for this type of programming, domestic violence…. They’re hitting their wives. They don’t want to anymore. “What can I do? How can I get help?”

We don’t anything in those whole region that addresses this — nothing. I think that’s horrifying. The local probation office has this great multi-week program, but you have to be on probation to access it. So for those who don’t want to be on probation or get to that point, we don’t really have anything at all.

It is much more cost-effective to get people before they go to that process and to keep them from getting to charges, conviction, incarceration, probation, parole — whatever they end up being on. Early intervention can reduce the violence by up to 70 percent. This makes for fewer victims, fewer families turning to shelter and more people learning those life skills that enable them to be more successful in all parts of their lives.

The anger that gets people to that place of domestic violence is not just at home. It’s stuff that they carry with them at work, stuff that they carry with them with their friends. That lack of resiliency, that lack of ability to manage their emotions in a way that’s constructive isn’t
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something that a lot of people just learn, or they learn at home. But for people who don’t learn at home and they bring it into their adult lives — how are they supposed to learn otherwise?

We have a lot of people who live here in Kelowna or live in the region who work up north, right? They go to Fort Mac. They go to Fort St. John. They’re away for chunks of time. I’m going to say they’re guys, because predominantly they’re guys. They’re not all guys, but these guys go away for chunks of time.

They work away. They come home. Their spouses carry on. The kids go to school. They have a routine. The guy comes home. The routine is different, and he’s not involved. The wife gets tired of being alone, parenting alone. “I’m single parenting, even though I’m married.” Having somebody pay the bills is one thing, but if they’re not present and they’re not actively participating in the family in a productive way, that creates a lot of tension.

I will generalize grossly again, but a lot of these people have not been ones who have learned how to manage their emotions particularly well. Then they go up north, and they live in this very male environment where there’s not a whole lot of family anything going on. It’s really counterproductive.

We’ve got a lot of that here, and what do we do to help them? Nothing. What could we be doing to help them? We could be working with them, providing this program, helping. I would love to get it into companies that work up north and have that part of the HR process. But that’s another thing for another year, and that has nothing to do with you.

We don’t equip people very well, and we could. We could be doing a whole lot better at it. Funding for these types of programs, especially when it’s already been earmarked and it’s just sitting there not being spent, seems to me to be an easy fix. We would love for you to assign that money to either MCFD or Justice and put it out to RFP. We’ll respond to it. We’ve got it all ready to go. We’ve just got to hit the button.

The John Howard Society here locally manages the adult restorative justice program. We have one paid employee and about 20 volunteers. RJ, in this context, is a diversion program, so it’s used instead of or in conjunction with the criminal justice system.

As you know, the traditional court system is costly and time-consuming. It’s overwhelmed. Victims feel excluded from the process. They’re often not even notified when things are going on, and offenders don’t ever have to sit down and face the victim.

Our focus, with our restorative justice, is on offender accountability and creating that opportunity for an equal voice for the victims. We use the community justice forum model, supported by the RCMP, and we bring together the victims and the offenders and their supporters.

We sit them down in a room. Everybody gets to tell their story about what happened during the event. Then we talk about what harm was done, how everyone has been affected, and then the conversation moves into repairing the harm. “How are we going to repair it? Who’s responsible for making this better, making it right?”

The victim gets a part in that, gets to say what would help them feel better about it. The offender gets to contribute to that conversation. We end up with an agreement of some sort. It ranges from apology to restitution — financial or otherwise — and often community service hours.

The outcomes are greatly lower recidivism rates. Balance is restored for the victims. They get that say. They get to walk away from the process having some closure. It might not have been completely fixed, but they get a say.

In our criminal justice system, as soon as there are charges laid, that offence becomes a crime against the state, not a crime against a person. So offenders…. It’s all about the crime against the state. It takes the whole personal aspect right out of it. It doesn’t really contribute to the offender feeling like he or she has done something wrong, because the victim is right out of it.

This opportunity gives the victim and the offender…. They have to sit down and look at each other, and when you talk about “tough on crime,” that’s the hardest thing to do for a lot of these people — to sit down and look at the person that they offended against, explain what was going on for them that day, and apologize for it — heartfelt, sincere.

We had 99 cases this year. It cost us about $75,000 to run it. For those same cases to go through the criminal court system, it would be $613,000. So we save you money. We save you lots of money. There are 54 RJ programs across the province. Each one of them gets about $2,500 a year from the CAP funding. It doesn’t go very far. We realize that we have to be a cohesive group, interact with the province collectively, make sure that we are holding ourselves accountable and creating positive outcomes that are consistent around the province. We want to do that.

We just need to get there and create a little bit more funding than $2,500 a year to create the opportunity to work collectively better and make sure that we’re having that same positive financial impact and positive impact on the victims and the offenders as we are with this one little program.

Community courts. You’ve probably all heard about community courts, hopefully. It’s a specialized court for mental health or addictions, FASD folks. We suck at it here. We had one. It lasted for about two years — crashed and burned. There are a variety of reasons for that, which I won’t get into, but it had no funding at all, so we were trying to do it on a zero budget. It didn’t work.

We have lots of people. I get judges and defence attorneys and Crowns, RCMP asking me all the time — honestly, all the time: “When’s the community court coming back? We need a mental health court.” I have a judge here
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who’s willing to look at a mental health court, specifically about that. But we need a little bit of funding.

The community courts across Canada and specifically, even more so, across the U.S. are really starting to be effective, especially with the drug courts. But drugs, mental health, FASD — we put these people in jail, and they don’t learn from experience. All they learn about being in jail is that they’re being hurt for something that they don’t remember and didn’t process through at the time, and they’re never going to process through it.

Our jails are not intended to be mental health institutions. They’re not intended to be addiction treatment centres. Yet that’s exactly what we’ve made them into. There’s a better way to treat people, a better way to keep people out of that system and into treatment, a better way to get them into being healthy, productive, taxpaying citizens again, and that’s by diverting them out of the regular court system and getting treatment rather than just tossing them in and hoping that something’s going to get better by the time they get out.

S. Hamilton (Chair): …but you seemed like you had a thought you really wanted to finish, so I wanted to let you get to that.

M. Morris: Gaelene, your passion for this really shows. Great presentation. I’m very familiar with the restorative justice system. I spent 32 years in the RCMP and share a lot of your frustrations. I’d be interested in hearing more about some of the reasons why the community court system has failed in this community. It’s something that we need right across the province.

Our government is very serious about domestic violence and trying to reduce domestic violence. I’m from Prince George, so I’m aware of the program up in Prince George.

I’d like to find out a little bit more about this $1 million that seems to be sitting out there. Where is that $1 million that you were talking about earlier? It’s not assigned to any particular ministry. Was it earmarked for a specific program?

G. Askeland: My understanding of it is that in 2014, it was earmarked for domestic violence prevention. It was put out to ministries to put their hand up and take ownership of it, and nobody’s done that.

M. Morris: I’ll track that down. I’m sure I’ll get a copy of the transcripts, but I…. Do you have a copy of your presentation that you can share with us?

S. Hamilton (Chair): Thank you. And if I could suggest…. I think you went off script a few times, so we could probably look at Hansard to fill in those gaps at the same time.

C. James (Deputy Chair): Thank you for your presentation, and thank you to John Howard for the work they do all over the province. I think many of us have John Howard groups and associations in our communities who do amazing work.

I think one of the things you described so well is the constant pressure to both provide the current supports that are needed for people who are in custody or going through the court system as well as trying to do the prevention and to slow down the work on the other side. I think you’ve really described that well, and I appreciate that.

The other piece…. And I had somebody come into my office looking for programming for men just this past week, so I know it’s a huge pressure. One of the other areas that we hear a lot of pressure about is transition from custody — individuals coming out of jail who’ve been in custody for a long period of time and who are given few supports. I wonder if you could just talk a little bit about whether you’re seeing that pressure as well.

G. Askeland: Oh, huge. We have a probation outreach program. We get seven hours a week, and we get probably ten referrals a week from probation for us to manage within that seven hours. That’s just to help them find housing. Here in Kelowna, we’ve got a 250-person wait-list for UBCO, outside of their residences, to find housing. So our folks — not even a chance. It’s really hard to find housing.

We had a reintegration program here that was federally funded up until a year and a half ago, and then it was cut. I would love to get it back up and running again. My immediate concern about that specifically is the jail down in Oliver, the OCC that’s going to be opened up in January of 2017. I’ve started talking to them already about creating programming to help transition into Penticton and Oliver — wherever these people are going to end up. There’s going to be a small women’s unit at that centre.

It’s going to become a front-and-centre issue for this whole valley as soon as that place opens up. So is it a concern? Absolutely. I’m trying to make sure that Justice is paying attention to what we could do here. Yes, we’ll see where we end up.

C. Trevena: Thank you very much. Great presentation. Very, very engaged.
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The community courts system that failed — how long did it run, and what was the budget for it?

G. Askeland: It was two years. It had no budget. I wasn’t here then. We did get, I think, maybe $25,000 or $30,000 from the Central Okanagan Foundation to pay for somebody to do it off the side of their desk. It was a very part-time gig. It can’t be a part-time gig to coordinate 25 different agencies, to be at court, to be able to put up their hand and make placements and orchestrate all of that. It was a key piece of why it was unsuccessful. The personalities of the people involved were also less than conducive, I think, to working together in the community.

I had a law student this summer who had nothing better to do, and he did a research project for me to find out what exactly happened here, why it was unsuccessful and why the other ones across the country are successful. I haven’t had time, really, to process through that yet, but I will before I go back to the judge and ask him to establish a new mental health court here. It’s on my docket for the next month. But there needs to be a little bit of grease.

S. Hamilton (Chair): Okay, thank you very much for taking the time to present to the committee. Thank you for the work that you do on behalf of the community. It’s very much appreciated.

Paulette, welcome. You have ten minutes for your presentation. I’ll try to give you a heads-up when you’re getting close, at maybe the last two minutes. Then five minutes to the committee. The floor is yours.

P. Rennie: Good evening. It is an absolute privilege to be able to address you tonight. I want to start by thanking the committee for giving us the opportunity to come here and address the budget process.

My name is Paulette Rennie. I am the president of Valley First, a division of First West Credit Union. Valley First has been serving communities from Kamloops and through the South Okanagan and points between since 1947.

We have employees that serve in our regional office in Penticton. We have 17 credit union branches and 11 insurance offices. We have over 70,000 members that serve in our region, and at this time when the economy is uncertain and growth is limited, we saw an increase of almost 3,000 net new members to our credit union in 2014 alone — our key success to our member and community focus.

Because we’re so close to the people in the Okanagan, Thompson and Similkameen valleys, we are well placed to highlight some of the economic challenges and successes here in our region. There is a myth out there that Canada’s seniors are wealthy. While that may be true for some, it certainly isn’t true for all. Easy access to credit, poor financial planning combined with life’s ups and downs have left many seniors very vulnerable — high debt and even bankruptcy.

Seniors in debt often affect relatives who lose out on inheritance and who have to step up and help them. The Office of the Superintendent of Bankruptcy and Statistics Canada reported that 10.9 percent of British Columbians who declared bankruptcy in 2014 were 65 years of age or older. Shocking, isn’t it?

Seniors in financial difficulty is certainly something that we have seen at our local level as well. While we strive to help every member, we know that a little planning goes a long way in avoiding financial personal crisis.

Mr. Chair, this government knows something about finances. It’s one of Canada’s only provinces to have a balanced budget, and that record extends three years in a row. Having a balanced budget is not only good for the province. It’s good for a financial goal for all British Columbians to have for their personal finances.

Financial literacy is key to the economic success and prosperity of our communities, and we would welcome government support to increase financial literacy for British Columbians.

We believe that good financial habits need to begin at a very early age. That’s why we’ve taken a keen interest in teaching young people in our communities about financial planning and entrepreneurship. We are proud to support PowerPlay Young Entrepreneurs. It’s an innovative six-week program providing students in grades 4 to 8 with business planning skills and financial literacy training and encourages them to give back to the community. Introduced in 2014, more than 20 classes in Kelowna and Kamloops will participate in it in 2016.

Teachers, parents and students are already giving top marks to this program. I’d like you to just listen to what they have to say in West Kelowna: “A real-life connection was made for a meaning-filled, authentic learning experience.” That came from one of the teachers. A student community leader in the making noted: “My favourite moment was to be raising money, because I can give away a bit of the money to charity and help other people.”

Parents are happy too. “What a fun, unique way to provide kids with hands-on learning,” said one parent. Another said: “That was one of the best projects either of my kids have done in school — ever.”

We don’t want to miss out on all that fun, so that’s why Valley First also supports this program with in-class volunteers. Employees visit classrooms and guide students through lesson plans on business planning, marketing and community investment.

Education is a cornerstone of Valley First community investment. In 2014, Valley First was proud to invest over $850,000 in our communities through partnerships, sponsorships, supporting non-profit and charitable organizations.
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Part of supporting our community also means supporting our economy. We know that B.C.’s economy depends on small businesses, and that’s why we’re doing our part to support our local businessmen and women. We take a commonsense approach to working with entrepreneurs and small business. They like coming to us because we listen to them, and we do our best to support their needs.

Let me share a story with you about hockey, something us Canadians all appreciate. Okanagan Hockey Group is a Penticton-based business that runs the Okanagan Hockey Academy and numerous summer hockey programs.

Over the years, they’ve expanded and now run camps in Edmonton, Alberta; England; and Austria. Hockey is a big deal in Canada, not just to watch as a fan but as a vibrant business. In 2010, Okanagan Hockey Group was the largest sports tourism contributor in the South Okanagan. According to that group, it was assessed at $13.5 million. Today, Okanagan Hockey Group is estimating their value closer to $20 million.

Their story is also about local jobs that they create — 25 full-time and 140 part-time employees, plus an additional 26 indirect full-time positions. They also contribute to our local economy through using local suppliers. Over the next five years, they anticipate spending $59 million. In January of this year, we were thrilled to win the business of the Okanagan Hockey Group. We have a strong partnership with this Okanagan Hockey Group through our direct banking relationship now, but also as a supporter, as a sponsor of the South Okanagan Events Centre — another of the group’s key partners.

We love hockey, and we love seeing our local business communities grow and succeed.

Mr. Chair, I have shared with you and this committee some of the economic challenges and successes that we’ve seen in the Valley First region and how we’ve done our best to support our community and small businesses. I would like to take a few moments now to highlight an issue that would impact our ability to play these roles in the future.

As this committee well knows, the preferential tax rate for credit unions is set to be phased out in 2016. This will mean a tax increase of 6.1 percent on all B.C. credit unions when fully phased out, bringing our tax burden to 22.6 percent.

The tax increase has a significant impact to our credit union and all other credit unions because it affects the amounts of retained earnings that we will have, ultimately decreasing our financial ability to serve our members and to enhance our communities. In other words, the less retained earnings we have, the less money we have to lend, for example, to small businesses, to new families looking to buy a home or a second car. It also impacts our ability to give to important causes within our community.

Unlike some financial institutions, when credit unions profit, we give back a portion of our profits to our members and to our local charities and non-profits. Roughly 42 percent of British Columbians are members of a credit union, and phasing out the preferential tax will be harmful to the credit union and could impact their ability to give the financial services that our members have come to depend on.

Mr. Chair, I know this committee has recommended, two years in a row, that the preferential tax be made permanent, and I implore you to once again make this recommendation.

I would like to thank you for your time and your attention this evening and for the opportunity to share some of our successes and concerns, and I would be happy to take any questions from the members of the committee.

S. Hamilton (Chair): Thank you very much, Ms. Rennie, for taking the time to present.

Great. I was going to say don’t look at the lack of questions as being indicative of disinterest, because we’ve heard this message a lot, with a lot of questions. A lot of them have been great answers and great questions.

C. Trevena: Just to make sure that we keep…. When we are working on our recommendations, we have a very balanced approach. Some of the other credit unions have been presenting and giving very strong arguments on why the preferential rate should be kept. I think everyone around this table is a supporter, if not a member, of a credit union.

Other credit unions have been giving examples, figures. How much investment are you making in local small businesses and in the community initiatives — the 2 percent or 3 percent that you put back into the community?

P. Rennie: We budget, each year, 3.5 percent of our net earnings to go back into…. That includes our foundation, bursaries, scholarships — all of it.

C. Trevena: Do you happen to have a dollar figure, just off the top of your head?

P. Rennie: I’m sorry. I don’t. I can provide it, but I don’t want to guess for you.

C. Trevena: Likewise, do you have a sort of estimate or ballpark of what the hit would be for you if you lost the preferential tax?

P. Rennie: Yes, as a matter of fact. We’ve done a lot of work in that area. We have come up with…. Through 2016 to 2019, the impact would be $6.8 million. Then it would be $3.5 million per year thereafter. That would be for First West Credit Union as a whole.
[ Page 1601 ]

D. Ashton: Paulette, I want to thank you for coming. Credit unions have done a great job, not only the uptake that’s been taking place for the review, through the Minister of Finance, but also in the tour so far to date — very unified, very straightforward and very much appreciated.

I know that you have…. It was counted earlier as 11. We’ve nominated one of our great staff members to be elected now. It’s been heard by the ten sets of ears around this table. Thank you again for a very good job. Well done.

S. Hamilton (Chair): If I may, the theme has been very common, but the story is unique. I appreciate, again, the uniqueness of each credit union, each institution that’s coming forward. You told me a story about hockey. Just before you, we heard a story about a fellow that opened a gas station and then a winery, all because of the support they’d received from credit unions.

Next we have the British Columbia Association for Child Development and Intervention — Jason Gordon and company.

S. Hamilton (Chair): We’re going to get you to introduce her so we can get her name on the Hansard record and make it official. Mr. Gordon, welcome.

MLA Foster is going to declare a conflict of interest and leave the room. For the record, his wife sits on the board of one of the associations.

You have ten minutes for the presentation. When you get close, about two minutes, I’ll try to give you a signal, and then we’ll go to the committee for five minutes of questions. The floor is yours, if you’d introduce your guest.

J. Gordon: I’m Jason Gordon, the provincial advocate for the B.C. Association for Child Development and Intervention, BCACDI. This is my daughter Lily Gordon — my more important job as a dad. I couldn’t get a babysitter today, so she’s joined me. Thanks for the opportunity to come here today and speak with you. I recognize many of the faces on this committee from years past.

BCACDI has 30 member agencies across British Columbia. In 2014, we provided service to more than 15,000 children and youth with special needs and their families. For the past four decades, our agencies have been providing services within their communities.

I’d like to start off the presentation just by thanking this committee for the recommendations you’ve made in the past. Your Budget 2015 recommendations document…. Recommendation No. 39 was to increase base contract funding for non-profit agencies that provide early child development programs and services to children and youth with special needs. I couldn’t have written that recommendation any better myself. Thanks for being so clear and concise.

Unfortunately, Budget 2015 didn’t reflect that recommendation, so I’m here today just to talk a bit more about the importance and why that’s creating a bit of a crisis in our sector.

The only new funding for early intervention services was a $3 million budget lift, which was a 1 percent figure on only 80 percent of our contracts. That was strictly for wages and benefits only. We didn’t receive any new funding to address the wait times for service or to expand existing programs.

What we’re seeing now is…. Efficiency has been the word du jour in our sector for several years now, since about 2009, when base contract funding levelled off. Over the past several years in our quest for efficiencies, we’re now beyond that, and we’re now heading towards organizational instability. Many of the strategies our agencies are using to try to maintain existing service delivery levels are having real impact on both families and the communities that they serve.

As an example, professional development budgets have been cut significantly. We’re expected to provide evidence-based interventions, but many of these funds are being rerouted to try to maintain existing service delivery levels. We have some of our non-union agencies, which have some flexibility, diverting funds away from things like the cost-sharing for benefits packages and putting more burden on the employee instead of the employer, and that’s impacting recruitment and retention in our sector, and cuts to office staff and administration.

Some of our professionals that have high-level skills and have a high level of pay are being forced to do things like scheduling and photocopying, where they should be directing their skill set on providing front-line services. In some cases, our agencies have had to negotiate a reduction in service delivery hours in their contracts, and this has resulted, in our sector, in job layoffs. The big critical point there is that when we have job layoffs in our sector we have increasing wait times for service for our children to access the vital supports and services that help with their potential.

Some other strategies. We’ve had preschool closures. Many of our agencies have some of the only integrated preschools in their communities, where children with challenges can actually be in the same environment as their peers and have the supports required, but there’s a lot of increased costs to those environments. We’ve had
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one large centre in the north just close their integrated preschool, taking that opportunity away from those kids. We’re noticing a lot of decreased travel, decreased outreach services. The more effective place to provide our services is in the home environment for the family, and we’re having to cut our outreach, just because of the travel costs.

Agencies also have used up any deferred revenue over the past several years, so they’re in a vulnerable financial situation should a crisis arrive, and are relying solely on fundraising to purchase equipment such as computers, mobile devices, etc. The costs behind technology, although it does do us many favours in many ways, are significant.

The recruitment and retention piece is something that continues to be noticed. In this sector, there’s already a real difference in pay scales. A speech-language pathologist working in our sector will make anywhere from $7 to $9 an hour less than their same-trained-qualifications colleagues working in, say, a hospital. When you combine that with the cuts to professional development and the environment they’re working in, it’s a real struggle. Right now in Quesnel there’s no early intervention physiotherapist, and it’s been that way for the last six months, which again is just causing some real hardship for families in that area.

I want to talk a little bit about the impact on families. Our association over the past few years has developed a data set where we look at things like the number of children served, the number of referrals a year and the wait time for service.

Our wait-time data element is the date of referral to the date of first clinical contact in the agency. For 2014, our average was seven months and two weeks. That’s the average wait time right now in B.C. for a child referred to our service. So imagine being the parent of a six-month-old, told you have a developmental delay, and you know there are services in your community that could support that child and help them realize their full developmental potential, yet you’re forced to wait for seven months. We feel that’s unacceptable. The levels of stress and anxiety on the family in that situation are obviously immeasurable.

On society we know, depending on what study you look at…. They all reflect a positive return on investment for early intervention services — anywhere from $3 to $17, depending on what you read. But we know it’s a good investment to make for government.

The other issue we see. There are other crises to deal with and other places money should be directed by government, for sure. We saw some of that in Budget 2015, for example, with the recent teachers labour dispute.

There was a lot of discussion about support for special needs kids in the classroom setting, and government responded by creating a learning improvement fund, $69 million. Adults with developmental disabilities also have difficulty accessing services. Government responded by a $71 million lift for Community Living British Columbia. Yet the very sector which is going to actually help save money on those investments down the road, early intervention services, again only received a lift of $3 million, which was strictly for a wage and benefit increase, nothing for wait times or program expansion.

We just feel incredibly…. We’re continuing to ignore where we’re going to get a really positive return on investment and where we’re going to save money down the line in the school system and beyond by investing in inappropriate interventions.

Our recommendations remain the same. We’d just like to see an increase in our base contract funding for the agencies that provide services to children with special needs; to make sure that the wait time is much more manageable; and the access to service is there for families in their own environment, where the most positive impact can be made.

S. Chandra Herbert: In the presentation and in your document you talk about how long-term planning and budgeting is simply not possible in the environment you’re having to deal with right now. I can completely understand that, given what’s been going on.

I’m curious. Multi-year funding…. Certainly, the committee in the past has argued for an increased base lift, but I wondered if, as well, multi-year, long-term funding is something that you think the government needs to spend more time looking at. We’ve heard this from other agencies in different sectors — that multi-year contracts or multi-year investments would certainly help, because then you wouldn’t have to focus on fundraising all the time.

J. Gordon: Yeah, for sure. That was actually a recommendation made by this standing committee, based on our presentation of I think it was three years ago or maybe two years ago — the multi-year contracts. There is some work being done at a ministry level, an innovation and sustainability committee that’s looking at those things.

While we’re waiting and delaying the potential investment in those areas and in implementing the multi-year contracts, there are children and families out there that are losing support. I know it’s something that was common in the sector prior to the economic crisis in 2008-2009, and it’s taking far too long to get back to that kind of sound investment — long-term contracts where agencies have the ability to better plan for the future.

S. Chandra Herbert: Thank you for pointing it out, because it just wastes your time and money, and it wastes the government’s time and money as well.
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You mentioned the wait time — seven months and two weeks in B.C. How does that compare to other jurisdictions? Do you know what the situation is elsewhere in Canada?

J. Gordon: That’s a great question. I don’t have an answer. Our association is a little unique in Canada. There is one in Ontario that’s similar, but as you know, the infrastructure, the system and the funding models are quite different from province to province. We’ve taken the opportunity, as an association, to develop what we call our dashboard, and we can start to look at some of these data elements. But we haven’t had an opportunity at this point to explore some of the other provinces and see how our wait times measure up.

There is some work we’re involved in right now. There’s a national pediatric rehabilitation reporting system project that our association is involved in. It is going to look at wait times, and that will be a national benchmark for community-based therapy services. But that’s just getting started this fall.

J. Gordon: For sure. I think we’ll have answers to that question once that’s implemented in a couple of years.

C. James (Deputy Chair): Thank you, Jason, for your work and for all your agencies’ work around the province. I wanted to follow up on the data piece as well, because I think that there is a little bit of irony in us asking you to gather more data when you’re coming to talk about the pressures you’re facing and not having the supports. But I think the more data, the more impact.

I think the other piece that is going to be important is for families to speak out about what that wait-list wait means to them and means to their family. You know it so well, and your agencies know it so well. But I think it’s helpful for the politicians of all stripes to hear the personal impacts of families and the cost that a family incurs.

I certainly know families that are able to will try and provide those supports and fund them in a different kind of way or try to find some private support for it. Many families are not able to, and they’re the ones who are falling through the cracks. I think the other piece…. The personal impact stories I think would be very helpful, as well, for everybody to hear, around what those wait-lists really mean.

I think the other piece that’s important is going into the school system. When kids transition into the school system, there’s often an expectation that they may have had some supports in the community. If they haven’t been able to access those supports, it sets them back again then, in the school system, in waiting for support, because they have to be accessing support in the community.

I think that’s another piece that government often hasn’t taken a look at that’s important to talk about.

As part of our dashboard, one of the data elements we’re considering are those children who are transitioning into kindergarten and have not yet achieved all the goals in their individualized service plan so that we can even prepare the education system for what might be coming down the line.

G. Heyman: I’ll just ask a quick question. You’ve listed a number of issues that negatively impact service delivery. My assumption is that cuts to professional development budgets and staff layoffs would be the most significant ones. You list some of the options that are available to some agencies that actually create negative impacts on employees. I would assume — but I want to check with you — that this creates a recruitment and retention problem for those agencies.

J. Gordon: Yeah, it’s been an ongoing issue in the sector. As I alluded to, the base wages are quite low in this sector compared to their peers in health and education. The recruitment and retention is ongoing. The Ministry of Children and Family Development used to actually have an office for recruitment and retention specific to this sector, but that was cut in 2011. That obviously hasn’t helped the issue at all. Like I said, in Quesnel right now there is no early intervention physiotherapist, which is a real loss for that community.

It’s an ongoing issue in the sector. But you know, one of the things our agencies have is working with kids, and people don’t go into this sector unless they have a real passion to work with kids. As long as we can provide some type of support, whether it be professional development or that positive working environment, I think that’s enough to make sure that we have the bodies and the place to provide the services that should be provided.

S. Hamilton (Chair): My question is…. You mentioned a little earlier about wage disparity with speech. Were you referring to speech pathologists or speech therapists? Personally, I’ve paid for the services of a private speech pathologist. Wow, that’s a lot of money. But you’re talking about wages for employee…. Now, it speaks, as well, to what George was saying about recruitment and retention. What sort of wage range are we talking about for the speech pathologists?

J. Gordon: Speech and language pathologists…. It just goes with the different collective bargaining agreements
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that exist. I mean, not all of our agencies are unionized. Some are non-union, but obviously they have to provide a wage and benefit package that’s competitive with their peers.

The collective bargaining units in the community social services sector…. The wage grids are, again, anywhere from $7 to $9 an hour less for the professionals like speech and language pathologists, which is the same thing. Speech therapists and occupational therapists, physiotherapists — those are all highly skilled professionals that are critical for the intervention services that we provide.

But more to your daughter: Lily, you’ve sat there while your dad has made a very important presentation to us, and you’ve sat there absolutely perfectly. I’ll tell you what. If you walk around to that nice lady right over there, there’s a treat box that we have for us when we’re good.

S. Hamilton (Chair): Mr. Gordon, thank you for taking the time to present to the committee. We do appreciate it, and good luck.

Okay, next we have a joint presentation. We have school district 23, represented by Lee Mossman, and the Central Okanagan Parent Advisory Council, represented by Shelley Courtney.

Welcome. You have ten minutes for the presentation. I’ll try to give you a two-minute heads-up warning when it’s coming time to wrap up. Then we’ll go to the committee for five minutes for questions if that works. The floor is yours.

L. Mossman: I’d like to thank the committee for fitting us in. We weren’t originally scheduled to get a slot, but we managed to put together a presentation for you, and hopefully we can get it done under the allotted time if I shut up here.

I’m going to make a broad statement. I’m not going to go into any great detail. I was prepared to make an oral statement, so I’ll just read from the presentation that I got, and I’ll add some bits along the way.

Boards of education have been lobbying for stable, predictable and adequate funding for public education, particularly to cover mandated increases for salaries, benefits, pensions, contributions and MSP premiums. Rising costs associated with carbon emission calculations and carbon offset purchases were also a concern, along with capital costs of increased maintenance, seismic upgrades and school replacements.

With the implementation of the new curriculum, teachers, parents and advocacy groups are calling for enhanced resources that will be needed to help realize these goals of this initiative. The new curriculum is an endeavour that requires a fundamental shift in the way our children learn. This is a big move. This will not simply happen at the flick of a switch. New methodologies require new resources.

The additional initiative to expand and focus on trades- and skills-based education for the anticipated need of skilled workers again ups the ante for another major shift in resources and infrastructure. That currently does not exist. The challenge is now twofold.

To address the fund, two major shifts. All stakeholders are in agreement that sustaining a high-performing education system and striving to be among the best in the world will require a significant and continual investment. To see this happen, operating grants and funding formulas need to be increased, perhaps by $1,000 per student or more, and that only brings us up to the national average. Of course, we would propose that the amount should be even more than that. B.C. should be leading the way in our country when it comes to investing in the future of our children and our province.

Some districts are struggling to find ways to find the cuts that their government has mandated for 2015 through 2017. Some districts that are already running very lean are tasked with trying to make additional cuts that will surely have an effect on the classroom regardless of the intentions to not have that happen.

Further exacerbating the issue was that while public schools were mandated to cut $54 million in administration costs, an additional $30 million in funding went to private schools.

The latest challenge before school boards is the issue of the exempt pay freeze and how the lifting of the freeze will impact districts — that the government will now expect boards to find money to pay increases that are long overdue and necessary to maintain and retain quality exempt staff that have been waiting, sometimes as much as eight years, for a pay increase, while other stakeholders have seen two rounds of bargaining and increases to them.

Maintaining and retaining these quality staff is going to be important to how our schools run effectively and keep running at what I would call a Cadillac level of service at a Chevy price.

S. Courtney: Thanks very much, again, to the committee for seeing us on short notice. I come to you today to speak to you on behalf of parents of students in British Columbia’s public schools across the province.

At this spring’s annual general meeting of the British Columbia Confederation of Parent Advisory Councils, two resolutions were passed directly related to the funding of public education in our province.

The first calls upon the government of British Columbia to follow the recommendations of this very committee from last year, which are as follows: to provide stable, predictable and adequate funding to enable school dis-
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tricts to fulfil their responsibility to provide continued equitable access to quality public education and to meet required repair and maintenance needs; to provide adequate capital funding to school districts for facility improvements, seismic upgrades and additional schools in rapidly growing communities; to provide support for proposed new K-to-12 initiatives, such as personalized learning and enhanced trades and technology training; to provide resources to identify and address the growing number of students with special needs and those with minimal English language skills; to restore the separate library line item in the Ministry of Education budget for public libraries; and to commit to stable, ongoing funding.

Unfortunately, in the last year, rather than abide by these recommendations, we saw cuts to the public education system, cuts that will have deep and lasting impacts, including cuts to adult education in this province.

The current funding increases do not even cover rising inflation, and as costs for utilities, health premiums, etc., rise, the amount of funding remaining for the education of our students declines.

The second resolution that was passed insists that the B.C. government redesign the funding formula to remove unfair advantages in the current policy for independent schools. We ask for the following.

Only include the funding amounts for English language learners, aboriginal students, adult learners and vulnerable students if the independent school actually has equivalent proportions of properly identified students in those categories enrolled. Currently, those funding amounts are given to independent schools regardless of if they actually have those numbers of students enrolled. They take the average of the students that are enrolled in public education, and they provide that funding as well to independent schools.

Remove the public schools’ declining enrolment supplement from the base amount used to calculate the per-student grant for independent schools. Currently, the ministry includes the public schools’ declining enrolment supplement in the base amount used to calculate the per-student grant for independent schools, which can give the independent school a double boost. When the students move from a public school to an independent school, the student brings the ministry grant with them — effectively a voucher system.

Independent school parents also receive tax benefits to offset tuition costs based on some independents’ charitable status and other religious instruction time allowances.

The lack of transparency in these complex and often confusing formulas makes it possible to disguise increases in independent school funding, while public schools face a continuing lack of adequate funding.

A strong public education system in our province is needed in order to bring us prosperity and success in the future. More funding to public education is needed now more than ever, as British Columbia embarks on a period of change — potentially the greatest change that our children currently enrolled in the system will ever see. With the introduction of the new curriculum and no increase in funding to allow for the innovation needed to truly bring justice to the work that has been done, I fear for our students approaching graduation, who have no idea even what their assessments will look like as they’re applying for university in one to two years’ time.

S. Chandra Herbert: I was going to say thank you to both of you for your passion for education and for actually getting on with it. I appreciate it. The kids certainly are getting on with it as we wait.

In terms of the independent schools submission, some of this is new to me. I certainly appreciate your bringing this to our attention. I wasn’t aware exactly…. As you’ve said, complex and hard to calculate, hard to really understand what’s going on there. So thank you for that.

In terms of the parent advisory councils of B.C., where are we at now, do you think, in your experience, in terms of parents’ faith in the public education system as it stands now? It sounds like at least — I don’t know — breaking point. I don’t want to put words in your mouth, but as somebody said earlier today, you can only take so much away.

S. Courtney: Absolutely. I don’t know if I could adequately speak to you on the parents across the province and their faith in the education system. But I know, speaking from my own experience, I’ve watched families leave public education because their children are not receiving the supports that they need to succeed. I know that’s happening across the province.

C. James (Deputy Chair): Thank you, both of you, for your presentation, and thank you for your clear focus about the needs for support for education.

I wondered. You didn’t speak about the additional cuts that boards are having to make now on the administrative end. You mentioned the piece around the administrative wages and the issue around contracts and that there hasn’t been support for that — or whether, if there’s lifting now, there will be funding. I wondered if you just could speak for a moment about the additional cuts now that boards are going to have to face.

L. Mossman: Sure, yes. I did make reference to it in regards to comparing that with the $30 million in private schools. The intent is to find administrative savings. That, I guess in layman’s terms, is a way of — I don’t want to say pressuring — let’s just say mandating boards to run efficiently. The problem with that is that the vast major-
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ity were already running extremely thin, extremely efficiently. Cuts have been going on forever.

The incentives to try and find savings, to try and find a better way of delivering good, quality education while keeping the cost down…. Sure, fiscal responsibility is key, and our families expect the province to run effectively, but you only get out what you put in. You’ve been getting a huge return on your investment because the…. I want to say the standards, but let’s just say the results.

I can only speak for my district; I can’t speak for other districts. I know the figures and the reporting that come back to say B.C. is among the world’s best, and we can make that argument for sure. I think that speaks more to the quality of the people that are delivering that service than it does to how much money is being put into it. If you think what you’re getting now is among the world’s best, imagine what it would be like if it was properly funded.

S. Gibson: I just want to respond very briefly. I think, in terms of independent schools, government really values choice, so I didn’t want to leave that alone. As you know, more students go to independent schools in B.C. than the largest school district, which is Surrey. The reason it’s growing…. The funding formula — you make some comment, I believe, that it’s not transparent. It’s totally transparent, the funding formula for independent schools. I wanted to just comment on that.

Parents do have choices. We have 350 independent schools in B.C. Students have a choice. They can home-school. Most parents send their kids to the public schools, as you know. For example, one of the things in my own area of Abbotsford that I represent is that over 20 percent of the students are in schools of choice in the public system. So they’re going to traditional schools, or they’re going to art schools — where my wife taught — or sports-oriented schools or tech schools.

The choice is something we really value as government. I didn’t want to leave that alone. Independent schools — just one of the choices that parents make.

S. Courtney: Respectfully, though, I must insist that while there are choices that exist in the province, for those from low income or middle income who can’t afford a lot of the choices that are afforded to families with greater income, the choices necessarily don’t exist for them.

It may exist for that small percentage of the population who can afford to send their children to independent schools or who can afford the time and the investment to drive their kids across the city to get them to a program of choice. We need to make sure that every school in British Columbia affords every child this same opportunity to succeed. That is what British Columbia should stand for.

S. Gibson: Yeah, and government values that. I know, Mr. Chairman, we don’t want to argue about that. But you’ll be interested in knowing, if you look at the research on the kids that are going to independent schools, that in my area, for example — Abbotsford-Mission — these are not affluent families necessarily. A lot of folks come alongside to make it possible for those kids to go to school.

It’s all a matter of choice whether you want home school or independent school or public school. That allows parents the options in a democratic society, and government values that.

Seeing none, thank you very much Mr. Mossman, Ms. Courtney, for taking the time to present to the committee. We appreciate it.

S. Hamilton (Chair): Okay. Keeping on schedule here — pretty close — we have the Association of Administrative and Professional Staff at UBC — Lia Cosco and Joey Hansen.

Welcome. You have ten minutes to present to the committee. I’ll try to give you two minutes of a heads-up when we’re getting close to the end, and then we’ll go to the committee for questions, if that works for you. The floor is yours.

L. Cosco: We’d like to start by thanking the committee for your time today. My name is Lia Cosco, and this is Joey Hansen. I’m the vice-president, Joey’s our executive director, of the Association of Administrative and Professional Staff at UBC.

We are the professional association for the management and professional staff group at the University of British Columbia. Our members play a critical role the daily function of every function of the operations and delivery of service of the university.

Just to give you some examples, we are all qualified professionals working in and leading work in IT, conducting/facilitating research, directing academic community programs, managing facilities and infrastructure, guiding/supporting students and academic advising/counselling/coaching. I could go on.

AAPS — that’s our acronym — members also work on behalf of the university to lead industry initiatives and partnerships with the broader community for the economic development of the university.

We’re here today because AAPS wants to recommend to this committee that the government restore the $25 million cut from the University of British Columbia’s operating grant over the last several years. We are very well aware that this is clearly only a start.

The restoration of the $25 million stops the government’s current trend, we feel, in divesting from post-secondary education. We’re now talking about education
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from a different lens than our colleagues previous. Also, we feel it ensures the ongoing investment of the quality of teaching and research at our leading university — No. 2 in the country.

In the long term, we also feel the province must develop a plan to increase its investment strategy in post-secondary education, particularly if there is to be a continued expectation for UBC to expand its enrolment.

J. Hansen: Adequately funding post-secondary education makes a statement that the province is serious about developing a workforce with world-class skills and that the province is serious about engaging in world-class research. About 70 percent of academic research in B.C. is conducted at University of British Columbia. This strongly positions the province to be competitive in the global knowledge economy. There’s an ongoing cost to maintaining UBC as a world-class institution, though we would point out that investing in that cost now pays dividends for generations to come.

World-class universities like UBC attract top students, faculty and staff from around the globe. They become valuable members of the community, they help diversify the economy, and they create local jobs. Graduates of University of British Columbia…. Whether they’re British Columbia residents, they come from elsewhere in Canada or they come from around the globe, many of them choose to remain in British Columbia for what I think we all know are obvious reasons. They build families, they build businesses, and they bolster the ranks of skilled employees in existing industries in British Columbia.

A world-class university also attracts research funding from both the federal and provincial governments, and this research further boosts the economy. The return on investment generated from maintaining UBC as a world-class institution isn’t strictly limited to jobs and the economy either. Research at UBC makes vital contributions in other areas, such as the province’s health care, environmental sustainability and support for community services.

The university is facing a double crunch. At the same time it’s facing cuts to its funding, there’s a significant increase in enrolment. In the last decade, UBC has added 11,000 FTEs. To put that in perspective, that’s the equivalent of adding Thompson Rivers University to University of British Columbia, in terms of FTEs. The increased enrolment calls for increased investment in UBC.

The B.C. government is really the only immediate source of those funds. Tuition fees are already too high, and many qualified students are already priced out of studies at UBC. High tuition fees also lead to student debt, which may mean that qualified graduates flee the province, even if they want to stay here, because there’s opportunity for lower costs of living in other parts of the country.

As I noted before, a strong post-secondary system featuring a world-class university is a vital driver for economic growth, but we’ll only be able to drive that growth if the university remains sufficiently affordable that the best and brightest from across B.C. and around the globe can attend.

L. Cosco: What we’re here to highlight is the fact that our group is responsible and has eyes on and is…. For the delivery of our services as a university, while the enrolment rises and our resources go down, our human resources are also strained.

When we’re talking about the quality of education delivered by the university and the need for our students to strive academically and socially…. We are worried and want to speak to you today about the fact that the students’ quality of experience at our university is going to be strained as we’re challenged to find and ongoingly support the services and the delivery of higher education. We’re talking anything from counselling services and our professional support personnel.

The combination of the funding declines that we’ve been seeing on campus, as a management professional group, with the enrolment increases, really, again, strains the availability of resources and our ability to deliver for our students at UBC. Again, like Joey said, if students are unsuccessful, we are potentially losing long-term skilled workers who can positively impact this province’s economy.

Again, this reality really…. I want to just get into a little bit of how it strains our management professional group. The increased enrolment coupled with the province’s divestment hits us first and foremost on campus. Our members do not enjoy any form of job security; nor is there a set formula for compensation for excessive hours of overwork.

Funding challenges on campus have already compelled the university to make some tough choices. In the last 12 months alone, nearly 100 of our members have lost their jobs for financial reasons. It is often our members who are positioned first to be cut when departments are asked to find moneys for the shortfalls that we are seeing in our operating budgets.

When this increasing enrolment and the operating funding is cut…. It’s putting a strain on our staff support and our ability to deliver our services. This means it’s straining our infrastructure, most notably in IT.

Technologically, if we use that as an example, the university’s various networks and services provide service to a population that’s nearly 2.5 times the size of Penticton. Such infrastructure does not require just the hardware or software but, really, the skilled staff to maintain and assist in others maximizing the benefit of such technology.

We can use the same example if we look at the infra-
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structure and building operations group at our university. The university has deferred nearly $600 million in capital maintenance costs, and that figure is increasing by about $30 million per year. This is a serious situation. Again, that worries us and also affects our staff group on campus — quite literally, in one staff group, daily. Continually deferring capital maintenance costs impacts the university’s ability to promise parents that when they send their children to UBC, it is a safe environment to do so.

There are long-term costs to deferring capital maintenance. As we all know, well-maintained buildings last longer. Really, the university is being put in a position to force it to save pennies today to spend unnecessary dollars tomorrow.

Basically, we understand, and we’re here today to say, that the block grant funding provided by the government is one part of the funding at the university. Fees paid by students, as well as funds raised in various ways from the federal government, private donors and commercial activity are also a robust part of our operation at the university and help pay for the reality and the cost of delivering higher education.

Many of our members work, in doing so, in development, fundraising the money for research and infrastructure support to support faculty in their research and the construction of new buildings at UBC. This takes time. The business development and funding models do take time and require initial investments from the university.

The investment in fundraising does pay dividends in the long term. In the short term, it does strain our already limited resources at the university. Thus, again, we’re asking that the government restore the $25 million that has been cut from one of our leading universities. That does not mean that a lot of the issues we see and face every day, as the university community, will be resolved. But it will also help us support the fact that these problems will not get worse, and we will continue to be able to deliver the quality of education that we can provide at the university.

Restoring funding, we do feel, is a necessary first step while the B.C. government develops a long-term plan to adequately fund higher education.

S. Hamilton (Chair): Thank you very much. Impeccably timed as well. Well done. Thank you for the presentation.

J. Yap: Thank you for your presentation. I may have missed your reference to it. I didn’t see it in here. How many members do you have? You tried to give us an idea of your membership — the technologists, the professional staff. What types of positions are part of your membership?

L. Cosco: I’ll answer that. Joey, if I miss anything, please jump in. We are close to 4,000 members on campus, represented mostly at the UBC Point Grey campus with about 300 or so here in Kelowna. Our staff group is unique in that we are the bargaining unit for 4,000 members on campus. But we are not a trade union. We represent members in that pocket — anywhere from support staff or academic advisors for students, undergraduate or graduate, to professional coaches in athletics who lead the athletic teams. The diversity is quite unique and interesting, actually, on campus. So if that gives you a sense…. I don’t know. Joey?

J. Hansen: I would just add to that that in addition to representing members at Point Grey and Kelowna, we represent a couple of hundred members, scattered at hospitals across the province, who are engaged in research where they’ve partnered with the university.

D. Ashton: What is…? It’s a fund, a legacy fund that UBC has. If I were a previous student, I would contribute. The name is stuck in my mind right now. If I make a contribution, what’s it called?

D. Ashton: It was a fund? Legacy fund. I’m trying to remember the name of a donor that has previously attended a university and then continues to support on an ongoing basis.

L. Cosco: Sure. It could be. The reality, again, and I’ll ask Joey to jump in here, is that what we’re seeing as a management and professional group that represents 4,000 highly qualified, skilled workers scattered across the province in some ways delivering our quality of higher ed is that the messaging we continually hear is that because the operating budget has been cut, there is no money on campus to support the delivery of the services. Our group is the first to feel the brunt of that.

Legacy fund does exist, yes. Does it come into the day-to-day work of our management professional group? Not so much.

L. Cosco: That’s a conversation we can have with the university administration.

D. Ashton: Sorry. It’s my understanding it’s well in excess of $1 billion.
[ Page 1609 ]

J. Hansen: I would note that it is, though, as you know, the way these funds work is that the university operates off the investment income of the fund. It doesn’t spend down the principal, in order to maintain revenue long term out of the fund. That’s standard for all universities. That’s not unusual for University of British Columbia or even for Canada.

But I would add on top of that that in addition to enrolment, the expectations of the services the university is expected to deliver have changed significantly and draw demands on resources. There was a time, for instance, when a student enrolled in university and they were told: “Look to the left. Look to the right. One of you won’t be here….” Or two of you won’t.

J. Hansen: Maybe a different generation. It was one when I was there. It may have been two at one point. Now there’s an infrastructure that’s put in place that ensures that if a student is not immediately academically successful, they have resources on their own.

I graduated from university about 20 years ago — 18 years ago. I’m not going to rob myself of a couple of years there. You know, when I went to university, I had a break in classes on Thursdays. Between that break in classes, I checked my e-mail. If you didn’t get that e-mail to me on the break in class, I wouldn’t check my e-mail again until next Thursday. That was a pretty common experience when I was there. Now there’s a massive tech infrastructure that’s in place at the university.

Sure, the endowment funds have increased significantly at the university. The revenue that the university derives from sources other than students or the provincial government has increased significantly but so have the costs associated with running a university and the expectations about what the public expects a university would deliver.

D. Ashton: I concur wholeheartedly. I think that was very well brought up. But it takes all of us to work towards a solution that includes your membership, including your membership to work towards that solution.

I really appreciate the input, and we’ll take it from there. At least, I will.

S. Hamilton (Chair): We’re right at the edge of the time, Claire, for closing questions.

You mentioned there’ve been 100 job losses already. It must be a very precarious feeling. I’m wondering what sort of notice you’re getting. We’re going forward. You’re looking for more money and looking to increase the budget for UBC to provide the good-quality post-secondary education that everybody wants. What’s the feeling among your members?

L. Cosco: To speak quite frankly, there’s a lot of fear on campus. A lot of members…. There’s some fear even engaging with us, as an association, not knowing where and how we can support one another. “Am I allowed to talk and question the way the funding is coming, the fact that there is no job security?” When there’s zero job security for a bargaining unit on campus, it is very precarious. But we are the biggest bargaining unit on campus.

What I see day to day, working as a manager in the faculty of education, is a lot of fear and a lot of my colleagues losing their jobs monthly, and a lot that’s sort of talked about in the sense of reorg and restructure. But it really is due to a lack of funding that does not come from endowments, coupled with, at the same time, as Joey mentioned, that actually the expectation and requirements for how we deliver education now have completely changed. We’re just seeing those two things not coming to terms at all.

S. Hamilton (Chair): Thank you very much for coming forward and providing us your presentation. Thank you again. Enjoy the rest of your day.

Now we have Dylan Wall, who’s going to tell us all about the Living Positive Resource Centre. Mr. Wall, welcome.

S. Hamilton (Chair): Ten minutes for your presentation. I’ll try to give you a heads-up about two minutes to go, and then we’ll go to the committee for questions. The floor is yours.

I’m Dylan Wall. I’m here on behalf of Living Positive Resource Centre. I’d like to talk to you today about HPV vaccines.

Having begun as an HIV/AIDS service organization in 1992, Living Positive Resource Centre has since expanded our mandate to serve anybody in the Central Okanagan experiencing concerns relating to housing, income, nutrition, and access to health care, including addiction and mental health services, connections with support networks and other determinants of health.

Living Positive Resource Centre recognizes the value and dignity of each individual. We encourage and support our clients to make healthy choices, and we respect the choices that they make. We work with, and on behalf of, our clients to improve their quality of life. We believe that all individuals deserve equity in accessibility. We collaborate with community partners and actively participate in community efforts to ensure that basic human rights are protected.
[ Page 1610 ]

Living Positive believes that harm reduction promotes and supports the health and well-being of both individuals and communities, and we believe that all humans have the right to comprehensive, non-judgmental services based on individual need. Through education and prevention efforts, we work to reduce the risk of harms to the individuals and the communities.

As an organization, we play a vital role in preventing infectious diseases, improving individual well-being and quality of life. Vaccines also offer significant value to society as a whole. Immunization not only protects individuals, it protects entire populations and communities by preventing the spread of infectious disease.

Vaccines are a proven, cost-effective investment for the health of all Canadians, an important factor in ensuring improved economic performance and labour market participation. Vaccines offer further economic benefit through decreasing the need for avoidable and more expensive forms of treatment, such as hospitalization, emergency room visits and physician visits.

Living Positive believes that vaccines represent one of the greatest opportunities to improve the population health, reduce the burden of disease and save money in health care. While the British Columbia government has been active in expanding access to publicly funded immunization, there remains an opportunity to provide additional benefit to the public. In particular, Living Positive Resource Centre recommends that the British Columbia government move swiftly to expand its school-based HPV vaccination program to extend equal protection to all British Columbia boys.

Living Positive Resource Centre believes that the clinical and financial evidence clearly substantiates the health and economic benefit of implementing this recommendation. Such action would improve the province’s health and save the health system money. In a time of fiscal restraint, such targeted investments make good sense.

The British Columbia Ministry of Health’s recent decision to offer the HPV vaccine free for young males who are vulnerable and at risk aims to protect more children. The province will now extend the cancer-preventing vaccine to gay and street-involved boys, but the well-intentioned policy risks stigmatizing young people. B.C. should follow the lead of other provinces and offer the vaccine to all girls and boys. When Health Canada approved the HPV vaccine in 2006, it aimed to prevent cervical cancer, so the vaccine was recommended only for girls. Today, however, HPV-related head, neck and other cancers are on the rise.

Research has demonstrated the HPV vaccine is safe and effective and will save future health care costs in both girls and boys. Consequently, in 2010, Canada’s national immunization committee recommended both girls and boys aged nine to 26 receive the HPV vaccine. All provinces and territories provide the vaccine to girls for free. Prince Edward Island, Alberta and Nova Scotia have included boys in their school-based HPV vaccination programs and, wisely, do not discriminate on the basis of sexual orientation.

Singling out gay children is problematic for many reasons. The B.C. policy asks too much of children to come out to their classmates and parents as gay to receive a vaccination. Parents of boys may believe it necessary to proclaim their son is gay to gain access to preventative health care. Given the fluidity and incontestability of sexual identity, policing such vaccines and access to it can prove difficult.

Many males won’t identify as gay or bisexual until their 20s or 30s, and we will have missed the opportunity to receive the vaccine's full benefits because the biggest immune response occurs in younger children. The at-risk label might cause young B.C. boys to internalize stigma about being gay, when most people who engage in sexual touching or sexual intercourse are at risk for the sexually transmitted HPV infection.

B.C.’s new vaccine policy could clash with school-based attempts to reduce bullying. Imagine the classroom snickering that might occur when the school nurse calls for only girls and gay boys to leave their desks for a vaccination.

We know subsets of girls — aboriginal, black and Hispanic — are more at risk for HPV-associated cancers than other girls. Government vaccine programs have not discriminated on grounds of ethnicity and should not discriminate on grounds of sexual orientation. Heterosexual males are unfairly excluded from this cancer prevention program.

B.C.’s policy commendably extends HPV vaccination to more of its children, but the cost-saving policy is shortsighted. Recent research on a cohort of 192,000 Canadian boys suggests that HPV vaccination could save from $8 million to $28 million over their lifetimes.

Canada’s reputation as an international leader in developing free HPV vaccination programs might cause other provinces and countries to adopt this new and unwise policy. Canadian provinces and territories should offer all children, irrespective of gender and sexual identity, the opportunity to receive the HPV vaccine.

Living Positive believes that the introduction of a comprehensive public HPV vaccination strategy to cover both males and females would be a major step in helping to eradicate preventable cancer in this province. British Columbians would benefit if this province follows the lead of provinces like Alberta, PEI and Nova Scotia in expanding access to this essential vaccine.

We are confident that enhancing the public’s protection against HPV is strongly supported by health, social and financial policy rationale.

S. Hamilton (Chair): Thank you very much, Mr. Wall, for the presentation. I will go to the committee for questions.
[ Page 1611 ]

S. Chandra Herbert: I just really want to thank you for your focus on this issue. I’ve raised it with the Health Minister already, and he said he’s certainly open to hearing the debate.

All the points you make are clear, credible. I wasn’t out in high school. Now things have changed. It’s been a few years since I was in high school, more than it might look. I would just say that…. No, it’s clear: people are not often out in high school, even now, even though we have made some steps in addressing homophobia and bullying in schools. But we’ve still a long ways to go.

It’s clear that this makes sense. It’s doesn’t make sense at all to think that a boy would have to out himself in high school in order to get this vaccine, when he might not even know himself, might not have even considered sex or sexuality at all.

Thank you very much, and thank you for distributing this from something down in my neighbourhood — the Health Initiative for Men, which has been very active on this file as well.

Just one from me. In studying this and going forward, has a price been put on expanding this program to facilitate all young people, as opposed to just a subset?

D. Wall: They definitely exist. I’m not 100 percent sure of what they are right now.

S. Hamilton (Chair): We can go to the Health Ministry as part of our research, to bring that back, maybe to form part of the report.

All right. Thank you very much, Mr. Wall, for your presentation. I appreciate it.

Next we have our friends from the Kelowna Chamber of Commerce — Jeffrey Robinson and Caroline Grover. Welcome. You have ten minutes for the presentation. I’ll try to give you a two-minute warning, and then we will go to questions for about five minutes after that, if that works. The floor is yours.

Thank you very much Mr. Chair, Madam Deputy Chair. We appreciate the opportunity to speak with the select standing committee tonight.

As you know, the Kelowna Chamber of Commerce strives to be the voice of business for our area. Part of that voice is giving advocacy and presence of mind to issues that affect our constituents. Tonight we focus our submission on two of our policies that are of particular relevance to a finance aspect. They’re both better taxes, in fact. One tax we want to change, the other one we want to keep the same.

The tax we want to change is the property transfer tax. I’ll get into the reasons for that and how we want to change it. I’m sure you’ve all heard this before from other chambers of commerce, but we want to have our piece on it too, housing being a very key issue in the Kelowna area.

The other tax we want to talk about is how income to credit unions is taxed. Many Kelowna businesses serve other small communities in our Okanagan region and outside that region. Many of those communities, in turn, are served only by credit unions. The big banks are loath to expand in the smaller markers unless they’re very sure they can make a go of it, and we don’t want to see credit unions suffer.

I plan to address the property transfer tax issue first. We all know housing is a major issue. It’s on the news every night. I kind of get a chuckle out of it, because I’m now in the Okanagan. I’m from Vancouver. The news I watch every night is produced in Vancouver, and almost every night there’s a story about housing.

I feel validated in my decision to move to Kelowna, because it was, in fact, housing prices that drove my wife and me out of Vancouver. We couldn’t manage a downtown job with a suburban house and a child. So for me, it really kind of hits home and makes me feel good, but, also, I can imagine it’s very hard on people who don’t have the option to move like I did.

What we’re seeing in housing is pressure on all sorts of people across our economy. It’s eroding affordability for homeowners. That means a greater portion of their income is going into housing. As a result of that, they have less money to spend in other places in our economy.

We can also see it putting wage pressure on employers. Employers have to compete with other jurisdictions to attract talent, pushing up wages. That, in turn, makes our services less competitive from a price point of view against other players from different jurisdictions.

It also has the effect on business of hampering our ability to bring in workers from other jurisdictions. For example, my law firm wants to hire. We often have to look to Saskatchewan for people who want to come to our firm. Those who look at our firm and think: “Gee, Kelowna housing prices — this is tough.” Not that the property transfer tax is the cause of this, but it’s a part of it.

We’re looking at ways that we can make that tax make more sense in terms of how it’s going to affect business. We’re aware that taxes are important to the government — that this is a nice revenue cash cow. It came in under Vander Zalm, but since then it’s become a pretty nice piece of meat for the government to sink its teeth into.

We’re not advocating an abolition of or getting rid of this change. We want gradual change. Relative to the current model — 1 percent on the first $200,000, 2 percent
[ Page 1612 ]
on the balance — you have an exemption of $475,000 for first-time buyers.

Our first change — the most small, modest change — is to simply increase that first-time-buyer threshold up to something that’s closer to the average home price. That’s something in the neighbourhood of $600,000 instead of $475,000, so not really a major change.

The second change we’re looking to do is to add a primary-residence grant. This change is important, because that is the grant that will really have its biggest impact on labour mobility. People want to move into the province or move from Kelowna to Vancouver or vice versa. The primary residence has to change for that employee to move.

What we’re seeking to have on the primary-residence grant is something very similar to the first-time-homebuyers grant. Have an indexed threshold that is going to allow your average workers, the workers who are really driving the economy, who businesses want to attract…. Make it easier for them to relocate.

I give myself as an example. When I moved, the property transfer tax was on the order of $10,000. That’s the typical payment you’ll see on a $600,000 home. My moving cost alone, just hiring the movers, was $12,000. It would have been nice if I didn’t have to pay property transfer tax and could have just had that money to pay the movers.

Now, I’ve mentioned earlier that you guys like taxes. You won’t admit you like taxes, but government likes the money. How do we get the money back if we’re going to be basically getting rid of this tax or reducing this tax for the average British Columbian? Well, here we see a real opportunity to affect housing affordability from a different direction.

There is now data from Landcor which shows the presence of foreign buyers in our market. This is no secret to anyone from Vancouver. A large portion of the high-market housing in Vancouver is purchased by foreign investors. Those investors don’t pay any more property transfer tax than the rest of us do.

Throughout the world there’s a similar trend going on with major cities. Investors, particularly investors from the People’s Republic of China, are purchasing residential property in the major cities of the world. In that sense, British Columbia is not alone, but we are different in that we’re not doing anything about it.

If you look around the world and see what people are doing, you have the U.K., which applies a 15 percent stamp duty on properties over, I think, $2 million. The U.K. is also introducing a new capital gains tax on foreign-owned properties that have a lift in value at the time of sale. Paris and New York do similar things. Sydney has done similar things. Hong Kong itself has a 15 percent stamp duty.

You should be asking yourself: why isn’t B.C. taking hold of this problem? It seems to the chamber that a good way of addressing that problem would be to shift the burden of the property transfer tax from resident British Columbians, who are deeply impacted by the tax, to foreign investors, who are using our jurisdiction to basically insulate themselves from the own uncertainty of their home jurisdiction.

We might say that imposing a tax on foreigners like that is un-Canadian, but that really isn’t the case. In Alberta, they already restrict foreign ownership of land to 20 acres, or two lots. P.E.I also has similar restrictions on ownership. You have to apply for a permit to go above a threshold for owning property.

From our point of view, we don’t see this as being a radical change in philosophy. It’s simply introducing what other jurisdictions have done and what already provinces in Canada are doing to limit foreign ownership. That will, I guess, conclude this submission I have on property transfer tax.

The other issue we’re here today about is the tax on credit unions. Credit unions, since the 1970s, have benefited from what is essentially an extension of the small business tax rate. As most of you know, the small business tax rate is currently 11 percent but only applies to your first $500,000 of income.

For many years, credit unions have had that similar low tax rate, but it goes beyond $500,000, and there’s a formula that tells you how big that threshold is. I’m not a tax lawyer. I don’t know the formula. But it has been a major benefit for credit unions.

In 2013, the federal government decided they were going to phase out that tax advantage for credit unions. They didn’t really give any rationale that I could find, except that it created neutrality in the tax system. Frankly, neutrality is a red herring when it comes to credit unions, because credit unions compete against banks.

Credit unions and banks are fundamentally different in a couple of ways. First, credit unions are more likely to serve small communities. Banks — less so. The second major way is that credit unions have to rely on retained earnings and deposits for their capital base.

Also, if they want to expand, build a new branch, grow, have the nice carpets, they’re going to bring in the big business to basically churn through their loan portfolio. Banks, by contrast, have access to capital markets. So we see a fundamental difference between credit unions and banks.

Now, our government in B.C., thankfully, has decided to defer the elimination of the preferential tax treatment for credit unions until 2016. In the three years since 2013, the credit unions have had this breathing room. But now we’re up against the change.

What we would like to see is the provincial government extend that tax treatment indefinitely. It isn’t as through credit unions are actually necessarily thriving or beating banks. They are just like every other player in the market. They’re a market player. We don’t’ see them having an unfair advantage.
[ Page 1613 ]

It’s really key for us, because there are many communities in B.C. who only have credit unions. Research from Credit Union One tells us there are 40 communities, in fact, that only have credit unions serving them. There are no banks in the communities.

We would not want to see those communities disadvantaged by having their credit unions now paying more tax, which means less money available to support the local soccer team, less money in the capital portfolio to lend out to new businesses that want to get off the ground in those communities.

We have had a written submission handed out to all of you, which says more than I’ve said tonight and probably in a lot more eloquent way. Please feel free to refer to that or have your assistant refer to it for you. With that, that’s the end of my submission, and I’ll take questions.

D. Ashton: Jeff, thanks for your submission. We’re here for intake and we do pass it along. We discuss it amongst ourselves and come up with some resolutions to put forward. Respectfully, I totally disagree with your first one and concur with your second one.

I live in Trout Creek, south of you here, and I cannot count on both of my hands how many people from Alberta have taken up waterfront property and have driven the waterfront property prices in Summerland and Trout Creek, where I’m at, like this.

Are they next on our list? Not in my books. This is a free country — always has been a free country. Canada was built on the back of immigrants that have come. It’s become a wonderful country, well respected around the world. With all due respect, I ain’t going anywhere near your first suggestion, personally. I can’t speak for my peers around the table. But again, I appreciate you bringing it forward. I’m not here to be argumentative, but I think that’s a very slippery slope for many people to go down.

J. Robinson: I’ll just make one point, and maybe I wasn’t clear on this point. Those stamp duties and those taxes on foreign investment — they’re not applying to your immigrant who’s coming here to find a better life.

They’re applying to the immigrant — not even the immigrant; the foreign investor — who has made their money in a country which isn’t fair, isn’t safe, doesn’t have rule of law. They’re coming here, and they’re taking advantage of all these great things in our country that actually cost tax money.

That’s the point we make. There’s a critical difference between shutting the door of those who want a better life and those who are just coming here to take advantage of the things our taxes pay for.

D. Ashton: Sir, again, respectfully…. We flew in here today, and I looked at some incredible homes that I don’t remember being in Kelowna for many years that I’ve flown through this valley. I know a lot of them are property of people from Alberta that are actually driving the real estate market in Kelowna also. I think we just have to be a bit careful. But again, I really appreciate your submission.

S. Chandra Herbert: Maybe to take a slightly different tack than my colleague, my constituents wonder — and I hear it across the province — how they’re going to be able to buy a home. They look at the fact that prices continue to climb higher. Their wages aren’t quite keeping pace. They really question who we’re prioritizing in terms of getting housing in this province.

I appreciate that you focused on primary homes, that the idea is to help somebody get a primary home and to find a way to make the tax break better for them so that they’re not starting out with their home being unable to afford it to begin with. If you can’t afford a home here, you’re not going to be able to continue to support the economy in the same way.

I’ve got one neighbourhood in my community where approximately a quarter to a third of the homes are vacant. Meanwhile, people can’t afford to get housing. It is a real tough thing to deal with. I think it is a tough issue. Xenophobia and many other things can enter into the debate and certainly have, so we have to approach it with real care.

I just appreciate that the chamber has put forward a proposal to discuss how we can actually reform the property transfer tax to prioritize those that live in British Columbia who want a primary home to actually be able to raise their family in. Thank you for your submission.

E. Foster: Two things. One, to your second submission, it’s nice to see someone other than just the credit unions supporting the credit unions. You were the third person today to talk to that — or the fourth, I guess. Yeah, we’ve had three credit union presentations. Anyway, that’s great.

On the other one, the property transfer tax, that is difficult. As you said, it was brought in some years ago, and it was reasonable because the house prices were a lot lower. I don’t like the tax. I don’t think it’s productive at all — the property transfer tax — but it is $1 billion worth of revenue. You can’t throw $1 billion worth of revenue out the door, but I do think that we need to get creative with how we collect it.

I’m the MLA from Vernon — the valley. We’re seeing, over the last number of years, that the price of houses here in the valley is impeding development and investment. There’s no question about it. We can’t get professionals to come here because they can’t afford to buy a house.

Keep coming with it. Keep thinking of ideas, because we definitely have to address it.
[ Page 1614 ]

G. Heyman: Thank you for the presentation on both issues. Again, I’ll echo Eric’s comments that it’s important, I think, for everyone to see — not just credit unions speaking about the impact on local investment and local business of the tax being introduced on credit unions.

I can’t remember the details — I’d have to consult my notes from last year — but it’s my understanding that removing the preferential tax treatment on credit unions to supposedly treat them the same as other financial institutions actually results in a higher tax rate on credit unions.

C. James (Deputy Chair): Just a quick comment. I want to say thank you for bringing forward your ideas around the property transfer tax. I think it’s something that everybody is struggling with. I think you were realistic in recognizing that it’s not likely to go away, when you look at that kind of revenue coming in to government. But I think the purpose of looking at making it more fair…. I think your proposal, whether it’s right or wrong, is a creative idea and is trying to problem-solve.

I appreciate that, and I appreciate the approach. It’s not looking at forbidding people who are coming here from buying property. It’s saying there’ll be an additional penalty for people who are not living here who are buying property. I think it’s an interesting approach, and I think we need those interesting approaches to be able to address what has become a cash cow for governments of all stripes and is not likely to go away but is a hindrance for people who are living in very high property areas. So thank you.

S. Hamilton (Chair): I’ll just conclude anecdotally. A couple of years ago, when I first started on this committee, I recall a line of real estate agents or people, at least, involved in the real estate business saying: “Axe the tax. Get rid of the property transfer tax. Do something with it. Reform it. It’s killing….” And property wasn’t selling that much a couple of years ago. Now it’s hot, and I don’t hear them complaining anymore.

I just sold a house yesterday, as a matter of fact. Thank God he brought in his own buyer, because I’m going to cut a cheque for only about $20,000 instead of…. And this fellow is just selling one house after another, so he’s not complaining so much anymore about that tax.

You know, taxation occurs…. You’re right. It was brought in, in the Vander Zalm era. Government does feed on it. We have to. If it’s not taxed at that level, it’s taxed somewhere else. It’s money that we need to run the operation, but at the same time….

You know, I do concur. I think there are opportunities for reform. I think it’s something that we should look at going forward, but for now that level of revenue still has to essentially come into the coffers from somewhere.

Anyway, I do appreciate your taking the time out and providing a presentation to the committee. Thank you for the work that you do, and have a good evening.

Moving right along, we have the Childhood Obesity Foundation — Dr. Tom Warshawski.

Doctor — ten minutes for presentation. I’ll try to give you a two-minute warning close to the end to wrap up, and then we’ll come to the committee for five minutes for questions. If that’s good with you, the floor is yours.

T. Warshawski: Good to go. I think everyone has a copy of my presentation. On the first page I try to summarize all the major points I want to make in case I run out of time and you guys want to come back and look at the take-home messages.

I’m with the Childhood Obesity Foundation, and I’m a consulting pediatrician here from Kelowna. I’m the head of the pediatrics department and the former president of the B.C. Pediatric Society and former president of the Society of Specialist Physicians and Surgeons of B.C.

We at the Childhood Obesity Foundation work on a pan-Canadian basis. We have initiatives that we work on here. The province tasked us with the childhood healthy weights intervention initiative over the last three years. That’s bringing in Shapedown clinics across the province. It’s creating MEND programs across the province and also the healthy eating activity program for kids. It’s a $10 million project, and now we’ve just turned it over to the PHSA.

The reason I’m saying all of this is that we’ve been in the game for a long. We’re in the game locally, and we’re also in the game of obesity prevention on a pan-Canadian basis. What I want to talk about today is sugary drinks and the fact that sugary drinks are getting a free ride, and those that consume it as well.

There’s a very strong scientific consensus that sugary drink consumption is a major risk factor for the development of chronic diseases. They are therefore a significant driver of health care expenditures, and as you all know, health care eats up about 40 percent of the province’s revenue. Yet sugary drinks are not even subject to the provincial sales tax. We know that the PST is probably the primary revenue source for health care. The MSP payments only cover a small percentage of that. The PST is the major payer.

Despite the fact that consumption of this product triggers significant cost to the province, sales of the product are simply not contributing their fair share in terms of revenue. Sugary drinks are under-taxed by any measure that we would apply. The Canadian Cancer Society, the Childhood Obesity Foundation, the Canadian Diabetes Association, the Heart and Stroke Foundation, Doctors of B.C. as well as the CMA are all recommending that there be an extra tax applied on sugary drinks.

Taxing sugary drinks has wide support if the proceeds go towards health promotion. Support amongst the pub-
[ Page 1615 ]
lic, both in B.C. and across the country, diminishes if it goes into general revenue. A 30-cent-per-litre tax, an excise tax, on sugary drinks would raise over $150 million per year to recoup the societal cost of this product which is costing us all a lot of money in health care dollars and is getting a free ride.

A tax on sugary drinks would also promote individual responsibility, as those who drink the most would pay the most. A tax would serve as a point-of-purchase disincentive to purchase, so it would, in fact, reduce consumption and therefore be health-promoting. Lastly, these taxes could provide targeted funds for health promotion — subsidies for physical activity programs and weight-loss initiatives, and subsidize the price of fruits and vegetables.

I suppose the take-home message is, first off, what are sugary drinks? Well, these are beverages that have been sweetened with added sugars. It doesn’t include 100 percent fruit juice, but it does include all those drinks that have added glucose, fructose, sucrose, brown sugar, high-fructose corn syrup, corn syrup, maple syrup and molasses.

These are beverages which are primarily sugar. They’re distilled, watery sugar, and they have little or no nutritional benefit. Some examples are the usual soda pops; sports drinks such as Gatorade, Powerade; the so-called real-fruit drinks, which are carbonated water with a small amount of fruit juice added and are primarily sugar water as well.

Why are sugary drinks of particular concern? Well, they are the largest contributor of added sugar in the Canadian diet. They’re inexpensive, they’re abundant, they’re high in calories, and they deliver no nutrition whatsoever. They’re heavily and effectively marketed. More than any other food, rigorous scientific studies have demonstrated that they are linked with heart disease, diabetes, hypertension and strokes, even in individuals of healthy weights.

You can’t just say: “Well, I’m slender, so I can drink this stuff. It’s not going to hurt me.” The data is very, very strong now with regard to the risks even to people of healthy weights. We all know intuitively that sugary drinks are strongly linked with unhealthy weights.

The mechanism is that we don’t actually compensate for liquid calories, so when you sit down to eat a plate of sandwiches, you’ll eat as many sandwiches if you drank water as if you drank Coca Cola or a pop or a juice. All those extra calories don’t get compensated for, they don’t displace other food items, and they’re just simply saved as fat.

Sugar, in liquid form and high-dose sugar, has other properties where it actually damages the pancreas. It causes hypertension and also leads to heart disease on an independent basis. Sugar in the kind of dose that is delivered in the average sugary drink is a toxic beverage.

What do we know about sugary-drink intake in Canada? Well, Canadians drink a lot of pop. It’s about 110 litres per person per year. I use the word “pop,” although “sugary drinks” encompasses more than that. That data comes from Stats Canada and encompasses carbonated drinks. When you take that number and then add on the fountain drinks that you get, say, when you go to the Keg or you go to McDonald’s and get that, it’s 110 litres per person per year.

If you also recognize that a certain percentage of Canadians, probably about a third, seldom drink the products, those that drink are drinking a lot, and it really does raise their risk of disease. They are unique amongst processed foods in that they’re almost entirely sugar, with no nutritional benefit.

What are health-promoting organizations saying about reducing sugary-drink consumption? Well, there is unanimity across the world. The WHO, the American Heart Association, Institute of Medicine, centre for disease control, Canadian Paediatric Society, Heart and Stroke, Canadian Diabetes, Doctors of B.C., CMA, the British Medical Association are all requesting the population to decrease their consumption of this product. And most, if not all, are also recommending a tax as a very useful way to serve as a disincentive.

What are governments doing? Well, France, the city of Berkeley and Mexico have instituted taxes on sugary drinks. Mexico imposed this tax a little over one year ago, and it’s been extraordinarily successful. It’s a 10 percent tax. It’s brought in a great deal of revenue, and it’s shifted consumption patterns over towards drinking water. It’s doing exactly what people had forecast or predicted it would do.

What does the industry say? Well, the beverage industry maintains that sugary drinks, on average, only add a small percent of calories to the diet. But that’s actually very misleading, because it only takes a small percent of extra calories to gain weight. So 150 extra calories per day on a monthly basis will cause about a pound of fat gain per month. So 150 calories is about the amount in a 355-millilitre can.

The beverage industry also says that the real problem is a lack of physical activity. What they fail to acknowledge, though, is how hard it is to exercise off the calories in a soft drink. The average Canadian male teen drinks a soft drink five times per week. The average serving size is 500 millilitres. That’s about 280 calories. That teen will have to jog for over 40 minutes to burn off those calories. It’s almost impossible to burn off the calories consumed on a regular daily basis that you get in through sugary drinks.

Big beverage also claims that a tax on sugary drinks would be unpopular. But in 2011, and we’ve done some more polling since that time as well, there was very strong support — 60 to 70 percent, sometimes upward of 80 percent — amongst the population for a tax on sugary drinks if the proceeds go to targeted funds for health promotion. The public, in general, is skeptical of tax revenue which goes into the general revenue pool.

In terms of other points, the beverage industry claims that a tax on sugary drinks is regressive and unfairly penalizes the poor. Again, they fail to note the fact that obesity is also regressive, and it seems to preferentially affect the poor, especially poor, low-income women. They also claim that it won’t change consumption, but it will.

What would it achieve? It would ensure that the product is paying its fair share of taxes.

B.C.’s tax policy is based on the premise that all non-essential items should be subject to a PST in order to fund services. Products that trigger additional expenses — such as tobacco, tires or batteries, that sort of thing — have to pay some additional costs to offset their externality. A tax would recoup that externality. It would also garner about $150 million per year to use for other services.

Under the current system, B.C. citizens who choose not to drink sugary drinks, and as a result stay away from chronic disease, pay the same amount of tax as those that are choosing to drink this product. These people that drink the product are getting a free ride. So as B.C. strives for a balanced budget, there is little extra funding for health promotion.

Another major benefit of taxing sugary drinks would be to generate revenue for health-enhancing initiatives. This could include weight treatment programs for British Columbians of all ages, subsidizing the price of fruits and vegetables, and providing enhanced opportunities for physical activity for the entire population.

S. Hamilton (Chair): Thank you, Dr. Warshawski. At 110 litres per person per year, maybe we’ve found a way to replace the property transfer tax.

S. Gibson: Thank you, Doctor. It was a very cogent presentation, very well organized. I find it quite persuasive in some ways, just personally speaking.

A couple of points. Where do the parents fit into this? As I go by convenience stores and as a teacher of students, I see them drinking a lot of this product, and I think the parents have some responsibility. Most of these people that you’re talking about are minors. That’s my first one. I’ll keep them…. I know we’re running out of time here, Mr. Chair.

The other one is: there are many people who choose not to drink alcohol, and that is even more pernicious, taken in quantities, in many ways. People like that who are going to bars and that — they choose to drink a soft drink as an alternative to alcohol. Have you considered that equation in your discussion? In other words, say people say, “I’m going to have a ginger ale instead of a whisky,” and that may be a good thing in smaller quantities.

T. Warshawski: Sure, so it’s unanticipated consequences. We would say that diet drinks — those low-cal drinks — should be excluded from this tax because they’re not a sugary beverage and there’s no association with chronic disease. That would help that type of issue.

The other one about parents…. It’s true that parents are the gatekeepers for the pantry for those under the age of, say, 12 or 13. But once you have a teenager — like I have two — where they have some discretionary income, when they go to the store to buy their products, they don’t have a lot of money, so they’re extremely price sensitive.

A tax which would be on these products has a fairly good elasticity, so it would really decrease consumption.

The parents themselves, and most British Columbians, are simply unaware of how bad sugary drinks are. We are, in our foundation and all the health-promoting organizations I mentioned, trying to make people aware. We are like a small barking puppy in the wind compared to the noise of the beverage industry, which spends tens of millions of dollars on their marketing — very savvy, very sophisticated marketing.

It’s true. We should do more to make people aware. In my practice and in the MEND program, one of the things we say is to stay away from sugary drinks. I love to see kids come into my practice who are overweight and who are drinking pop, because I know if I can make that one single change in their diet, the next time I see them, their weight will be down. But people aren’t aware.

S. Chandra Herbert: Thank you for this. I certainly have cut back on my sugary beverage intake as I’ve been working in this job, because I want to keep my suits fitting. It seems to be helping.

I’m curious. One of the criticisms of this, and you mentioned this, is that in other jurisdictions — I think New York is the jurisdiction that gained a lot of notoriety on this recently — you can put on a tax, but it’s not going to make any difference. People aren’t going to shift their behaviour. It would have to be a massive tax in order to shift that behaviour. Yet in this document, I see you suggest that it has shifted behaviour elsewhere. Could you talk a little bit further about that? Do you have any more detail?

T. Warshawski: It has. The beverage industry is blowing smoke. The reason why they fight this tooth and nail is because they know it’s going to decrease sales. They wouldn’t spend tens and hundreds of millions of dollars fighting beverage taxes in every single community that it even arises in. So just watch what they do, not what they say.

Where it has actually been implemented, in Mexico the price elasticity was exactly one. So for every 10 percent increase, sales would drop by 10 percent, and that has them sort of quivering in their boots.

The New York example was a little different one. It was Mayor Bloomberg. He wanted to limit the sizes of the portions — again, through the lobbying of big beverage. They have pseudo-public groups that they fund. One
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of them is called the Global Energy Balance Network, which just got exposed in the New York Times because it’s pseudo-science. They fund some people to say the problem is a lack of exercise, not calories in.

Big beverage spends tens of millions of dollars to fight this. They’re fighting because they know it will decrease consumption.

C. Trevena: Very briefly, thank you very much for the presentation. They are very compelling arguments.

My quick questions are…. You say that the argument is for those drinks that have sugar, but you also hear, then, of the dangers and other health risks of the fake sugars in low calorie drinks. I can already hear that there would be that sort of argument: “Well, you’re doing one or the other.”

The other is, again, fruit juices. You hear lots of people say: “Well, those are really high in sugar.” It’s hard to get those arguments — which are the healthy ones and which are not the healthy ones.

My third one. I find it very interesting that those jurisdictions that have introduced this — it’s a limited number. Are there other jurisdictions that are moving towards this, do you know?

T. Warshawski: There are more in Europe. Hungary has as well. Denmark has a tax which was rescinded. It was too broad a tax and quite messy in that regard. There are, I think, two South American countries, as well, that are implementing the tax.

The U.S. has been extraordinarily active in this. A number of states have tried, but it never seems to get past their state legislatures. They just can’t get through there because of the heavy lobbying by the beverage industry.

Getting back to your other points, in terms of the diet drinks, the scientific evidence is that they are safe and do not promote weight gain — to date. It’s not that I’m an advocate for diet drinks, to be honest, because putting chemicals into your body is probably never a good idea. But for those that really want a sparkly, sweet drink, the safety seems to be fairly clear.

In terms of 100 percent fruit juices, they actually are high in sugar. From the medical side of things, nutritionists and us, we’ve done a disservice to the population by telling people that a serving of fruit juice is the same as a serving of fruit. It’s not. It’s very high in sugar. It also promotes weight gain. But it’s not devoid of nutrition the way sugary drinks are, which are just sugar water.

You have to kind of draw the line some place, but we also have to advocate moderation in consumption of juices — which is a hard thing to say in Kelowna, with Sun-Rype here.

J. Yap: You’re advocating a tax on sugary drinks, but there’s sugar in lots of products — candies, other food products that are very popular. Will you be advocating, as well, to tax other products?

T. Warshawski: No. You have to do something that’s evidence-based, and the scientific evidence from sugary drinks is unequivocal not just for the overweight but for the normal weight. It’s a slam dunk in terms of how bad it is.

There are lots of products that have added sugar in them, but the data is just not there to say how bad they are. They’re not consumed to the same degree. So I don’t think you want to take it that broad.

Again, a take-home message is that the stuff isn’t even subject to the PST. It’s absurd that this product is not taxed when we tax running shoes and health-promoting products.

C. James (Deputy Chair): Two quick things that I think are very interesting. I mean, the presentation was interesting, but I think the piece around the PST…. I think that’s another interesting way to frame it, to look at it — not to consider those drinks as food because, basically, things that are food are not subject to PST. I think that’s an interesting frame.

The other piece that’s really important that you’ve raised is going into health promotion. I couldn’t agree more. I think if people figure it will go into the black hole of government revenue, they’re not interested. But if they know it’s going into something healthy….

Certainly, I’ve seen, from some of my work in the north, that there is a very clear marketing of sugary drinks that are much cheaper than fruit juice, for example, for families. When you’re a family living in poverty and you hope you’re doing the right thing, I think there’s a real issue there. So I think using it to be able to promote and provide support for healthier foods would be critical.

T. Warshawski: Two litres of Coke cost less than two litres of bottled water. So how could that be?

S. Hamilton (Chair): Thank you. I’ll conclude. Just on the heels of what Carole was saying regarding health promotion, education. I’ll use an example.

I have two people, acquaintances of mine, good friends. They’re both people of size. They have two young children that are prepubescent. They exercise. They’re out on the soccer pitch and that sort of thing, but they eat garbage. The parents allow them, practically with impunity, to eat whatever they want whenever they want, drink whatever they want. The kids, of course, are not gaining any weight. They’re still quite young.
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Mom and Dad have got to learn that the day is going to come — puberty, probably, post-pubescent — that these kids are going to start looking like Mom and Dad. But they’re just sort of going through life denying that these kids are ever going to have a problem. They’re doing them an incredible disservice. How do we get to them? How do we educate them?

T. Warshawski: I think there are lots of ways, actually, but it all takes resources. When you work for the Ministry of Health in the population and health branch, resources are very limited. That’s one of the benefits of a targeted tax. That’s my suggestion.

S. Hamilton (Chair): This was a very unique and topical subject. I allowed a lot of latitude here for our timing, because I don’t think we’re going to hear anything like it for the rest of the tour. I do appreciate you coming forward and enlightening us the way you have. Thank you very much.

T. Warshawski: I think that the BCHLA will also say the same thing in a few weeks’ time, and maybe Canadian Cancer as well.

Welcome. You have ten minutes for your presentation. I’ll try to give you a high sign at about two minutes left, and then we’ll go to questions. The floor is yours.

P. Macklem: Thank you. I certainly understand the challenge of being a regulator. It’s a very difficult thing.

The city of Kelowna just had the opportunity to get together with our council on Monday to discuss topics for this evening. I think we had sketched it out, but council had some very good input into it.

I am the deputy city manager with the city of Kelowna. I’ve been with the city for 27 years.

The city really does appreciate the opportunity to provide some input into this provincial budget process and will focus the discussion on six areas: first, a long-term strategy for integration of Kelowna water systems to consistently meet Canadian drinking water quality standards or guidelines; secondly, development cost charges, particularly the exemption of microsuites; thirdly, transit funding freeze; fourth, Agricultural Land Commission enforcement; fifth; inspection stations to address the zebra and quagga mussels problem; and sixth, continue to financially support trail development through existing programs. We’ll focus, really, on the top few.

On this past Monday, Mayor Colin Basran and city council made public council’s highest priorities for this term of office. The number one priority is clean drinking water.

Approximately 21 public and private water utilities deliver drinking water of varying quality and rates to Kelowna residents. The city is committed to working with the province and area irrigation districts to develop a long-term plan that leads to an integrated and resilient water system that delivers clean drinking water to all of our citizens at equitable rates and offers a sustainable water supply for agriculture.

We also want a system that can respond to impacts resulting from climate change and changing regulations. The biggest asset we have in Kelowna is that there are multiple sources of water. Our biggest liability is that we are not interconnected. This is very problematic. We have regular boil-water orders, and that is certainly not acceptable in a community like ours, when we have such great water sources close by.

The city has made it a priority to work towards integration of the five water purveyors within the boundaries of the city to ensure all citizens have access to clean water.

Our request is for the province to assist in this initiative through funding support as we work towards solutions. The investment in infrastructure absolutely requires provincial participation. Past Minister Oakes was well informed, and Minister Fassbender will be met with at UBCM. Mayor Basran and our city manager, Ron Mattiussi, will be meeting with him to further discuss this.

We have been in constant communication with our water purveyors through the Kelowna Joint Water Committee, and that will continue. But this council has made it a priority and has said that it’s time to make the move.

Second is development cost charges and the exemption of microsuites. Section 933 of the Local Government Act provides for, through regulation, DCC exemptions on new, self-contained residential dwelling units where each unit is no larger in area than 29 square metres. Initially, there wasn’t much uptake on that, but it is certainly taking hold, especially in communities where price of land and costs are high.

This provision was part of the Local Government (Green Communities) Statutes Amendment Act, Bill 27, and really, the purpose was to create greater incentives to develop more compact, liveable communities. This legislation gives local governments another way to support such development.

The issue for our city is the download of servicing costs to the existing taxpayers without representation. The regulation should provide the option for municipalities to waive or reduce DCCs on small units, similar to that already provided for in legislation related to eligible classes such as not-for-profit rental housing and supportive living housing. This would allow municipalities to determine their taxpayer contribution of affordable and obtainable housing by tying waivers or reductions to the
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anticipated level of this form of development contained in their official community plan.

The bottom line for us is that these costs may be too burdensome for the community. We do have a healthy number of people who call for no growth in our community because they don’t want the burden of additional costs on them.

We would see that the potential is there for communities like ours to say that we will not allow any units to be less than 30 square metres, which would then attract development cost charges, but then we would have to charge full whack for them. It’s problematic, too, when you have very small units. That means you’ll be able to fit a lot of units in a small space, which says that density is very high.

The provision of infrastructure in highly urbanized areas generally is cheaper, because your pipes are right there. But in the case of something like parks, where in a 29-square-metre unit, you’re going to need much more…. In terms of parks, you’re developing those parks in highly urbanized areas, which means it’s brownfield development not greenfield, so very costly.

When legislation was introduced for DCCs around 1986, it was welcomed by local governments as a new tool to help ease the burden on existing residents of developing infrastructure to support new growth. Certainly when I arrived in Kelowna, when the Glenmore Valley opened up, it was a free-for-all of development, and we had very few tools to be able to manage that infrastructure.

Over time, there have been a number of positive changes to DCC legislation — we recognize that — many of which were initiated through the Development Finance Review Committee. That group established a best practices guide for DCCs in the province and was made up of development interests, local governments and provincial government representatives and was chaired by the inspector of municipalities. At the time, Dale Wall was the inspector, and I had the privilege of serving on that committee.

That committee did a lot of good work but has been dormant for the last couple of years. I’ve had discussions with the ministry, and they are planning to resurrect it. However, this legislation…. There was no consultation with that committee. This just happened. That committee was a great source of information and really could have been consulted.

To move this from a regulation, as it is today, to something that would give communities the option and maybe even a sliding scale of how they apply DCCs on these developments, particularly where…. In Kelowna, we’re now saying that those kinds of developments will only take place in town centres, so we’re restricting the areas. It’s okay if it’s downtown in some cases, but when we put them out near the university, where the cost of servicing out that way is very high, it’s problematic for us.

Transit funding freeze. In May of 2015, Transportation Minister Stone announced that funding for B.C. Transit would be reduced to a very modest lift over the next three years.

The expectation is that B.C. Transit and local government partners would find ways to reduce costs. All good and fine. We’re always in favour of checking and determining whether our routes are providing the best service. It’s our dollars too. We’re part of the solution, and we want to protect our taxpayer dollars as well.

However, we’re a growing community, and to put a freeze on transit funding when we have made strides in this community to have RapidBus service coming down the spine from West Kelowna all the way out to the university — very important to supply — then we believe it’s prudent to keep putting a fair amount of interest and financial wherewithal into our transit system. It’s important, and we do not think a freeze is really appropriate at this time, when at least we could move with growth, to some degree.

Next, Agricultural Land Commission. I will not go on far on this one, but we continually have a problem in Kelowna, where we have 40 percent of our land base in the ALR. We’re providing enforcement where there are so many cases of people trying to figure out new and unique ways to not comply with legislation.

As noted in the report, non–farm use allowances like landscaping and contracting companies. You only have to go down Benvoulin, and you’ll see some of that. Illegal businesses. Storage of RVs and boats happen all over the place — and this is a high-RV area — and weddings and special events. We’ve gone through some interesting gyrations on that as well. So we would certainly support better enforcement through the ALC.

Also, where we cannot accommodate some of our interests, like airport expansion, because there are ALR lands there, we certainly would be looking for flexibility, considering our airport is one of the greatest economic generators in this region. We certainly need to keep that in mind.

The inspection stations to address the zebra and quagga mussels problem. I think you’ve probably heard about it. You probably know much about trying to keep mussels out of our lakes. We would certainly support that through the Okanagan Basin Water Board, who are our major folks who provide the initiative. They are active in trying to ensure that the government is well aware of what’s going on in terms of these mussels coming in from Alberta.

Continuing to financially support trail development through existing programs. As much as anything, this is a thank-you to the province. The recent purchase by the city of the CN rail line through the city and beyond will be just a huge legacy for this region and will do well to help tourism in this area when people start doing road trips and winery trips and all that sort of thing. I’ve been
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through that in Europe. It’s fantastic, and we have great potential here.

As noted at the end, a cross-regional team of CAOs continue to explore joint opportunities to advance the initiative, and recent participation by provincial staff has been excellent. We’re really appreciative of that, and we look forward to continuing access to funding programs that align with the trail network opportunities within our region.

E. Foster: Thanks for the presentation. It was great. On the DCCs, the DCCs are applied on the development on a per-lot basis, correct?

E. Foster: Okay, but if you’re doing…. You’re talking here about residential developments. You’re talking about these microsuites. These are basically what we used to call in-law suites or illegal suites or all the different things we called them. You’re talking about a 325-square-foot room that you rent, or a small bachelor-type suite.

E. Foster: So if you’re doing this in a residential development, DCCs are so much a lot….

P. Macklem: Not necessarily by lot. When we have multiple-family, it would go by unit.

E. Foster: Okay, so you’ll back it up. You build a house, and you put this in the basement. You’ve got one set of services, so you’ve got one DCC, correct?

E. Foster: You base your DCCs on service. If you have a duplex, you have two services.

E. Foster: Your DCCs are developed on that basis. The idea of this, of course, is to encourage some affordable housing.

E. Foster: I’m the MLA for Vernon. I’m the MLA for Vernon. We’re not quite as expensive as Kelowna, but we’re in the same boat. We’re trying to develop some affordable space.

I guess my question is…. I was in local government for a long time before I was here, so I understand the revenue and putting money aside for future water and sewer and parks, and I support it.

I just don’t understand where the concern is. I don’t see where the extra cost to the municipality is by not charging an additional DCC for this small space.

P. Macklem: Well, it starts with how we put together our whole 20-year servicing plan. The city uses a 20-year servicing plan. We look at growth, what the growth will be over that period of time. All growth is counted. So if a lot of your growth is going into these very tiny units, then we provide a servicing plan to ensure that we have the services available.

If we don’t collect from those units, the development community doesn’t say: “Oh, you can put that on our backs.” They say: “No, that’s your problem. That goes on the taxpayers’ backs.” So we, of course, provide an assist. In water and sewer, it’s very small, but in parks and roads, it is more substantial.

We also sometimes, in fact, share between existing and new growth. So the taxpayer takes on more there. But in those cases, for every one of those units that we cannot charge a DCC, there is an implied…. It does happen eventually. There is a burden that shifts over to the taxpayer that has to make that work.

E. Foster: If I could…. You have a single-family dwelling. You put this unit in the basement. So you’ve charged the DCCs for the underground services and so on. Your water is metered, so the use of the extra water and the extra sewer goes onto the bill, so that bills into your reserves for future water or sewer use.

P. Macklem: But this is about the infrastructure to get the water to the house — not to the house but in the area.

So you’ve charged that for that house. You’ve got to put one pipe into the house and one pipe out of the house, correct?

E. Foster: Okay. What I don’t understand is…. What are you going to do? Charge an extra DCC if somebody is going to put a suite in their basement? Are you going to put a higher DCC on that?

P. Macklem: Well, we actually do have a charge for suites. It doesn’t equal what a DCC would be for a unit.

S. Hamilton (Chair): Could I interrupt? Are we talking apples and oranges here? The microsuites are, in fact, the apartments that you’re talking about. It’s the density — for example, down on Pandosy — not a basement suite, not a secondary suite in a home.

P. Macklem: Correct. These would be a full development, like an apartment building.

E. Foster: Oh, I’m sorry. I thought you were talking about putting in-law suites in single-family…. That’s the way I read that.

S. Hamilton (Chair): I know that because I read the front page today of the local newspaper.

E. Foster: Okay. I apologize. You’re talking about a whole development of 300- to 400-square-foot suites.

The transit section. I know that you put a lot of effort into transit. You got your new interchange and the bus connections and the rapid bus. Have you been following how the ridership has gone up with these investments and what the predicted impact of not being able to continue to expand will be?

Ridership has been relatively flat. That’s why we need to ramp up our service, not necessarily routing. A lot of it has to do…. It’s noted in the report. We’re looking at AVL — the importance of ensuring that when someone’s in their house and it’s raining out, they can look on their phone and they can see where the bus is. It’s five minutes away, or it’s ten minutes away. Traffic is bad. They know exactly what’s going on out there. That’s critically important to us.

Also, local marketing. We’re not counting on B.C. Transit on that. We’re counting on doing some local marketing as well. We need to ensure we understand and can appeal to our ridership.

We know that keeping cars off the road is critically important, and we want to make whatever moves we can. We are a multimodal community. We are working very hard to get bike lanes everywhere. If you look around and you see the number of buses with bikes on the front of them, it’s tremendous.

We are pushing really hard for better multimodal service. We have doubled it over the last five or ten years. It’s still small, but we are making progress.

S. Hamilton (Chair): Okay, I’ll conclude with one comment. You talked about the ALR and regulations and enforcement. Speaking for my own community in Delta, we have an even more significant amount of agricultural land per area, and enforcement is a difficult issue. But Delta has…. We heavily subsidize the farming community — water and electricity. There’s nothing quite like a single water line down three miles of road just to get to the house at the end. That gets a little expensive, but nevertheless, we do it, and we’re glad to do it.

One of the other things that we subsidize, so to speak, is enforcement. We have a great enforcement model, a collaborative enforcement model with the ALC. Where our bylaw enforcement officers and the eyes…. We have Soil Watch for soil deposit issues, if you see something. You can be reported. Our bylaw officers work on weekends, and if they see anything, they work, again, collaboratively with the ALC.

I just wanted to mention that. It’s a very good model that works quite well for Delta, and it’s something you might want to take a look at. I’ll leave you with that.

Any further questions? Seeing none, thank you for coming forward, Mr. Macklem. I appreciate it.

Hansard Services publishes transcripts both in print and on the Internet.
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Chair:	Wm. Scott Hamilton (Delta North BC Liberal)
Deputy Chair:	Carole James (Victoria–Beacon Hill NDP)
Members:	Dan Ashton (Penticton BC Liberal)
	Spencer Chandra Herbert (Vancouver–West End NDP)
	Eric Foster (Vernon-Monashee BC Liberal)
	Simon Gibson (Abbotsford-Mission BC Liberal)
	George Heyman (Vancouver-Fairview NDP)
	Mike Morris (Prince George–Mackenzie BC Liberal)
	Claire Trevena (North Island NDP)
	John Yap (Richmond-Steveston BC Liberal)
Clerk:	Susan Sourial

1) British Columbia School Trustees Association	Teresa Rezansoff
2) Advocis (Financial Advisors Association of Canada)	Rob Bauml
3) Okanagan College	Allan Coyle
	Tom Styffe
4) Interior Savings Credit Union	Gene Creelman
5) Okanagan College Students’ Union	Chelsea Grisch
	Brianne Berchowitz
6) John Howard Society of the Central and South Okanagan	Gaelene Askeland
7) Valley First, First West Credit Union	Paulette Rennie
8) British Columbia Association for Child Development and Intervention	Jason Gordon
	Lily Gordon
9) Board of Education, School District No. 23 (Central Okanagan)	Lee Mossman
Central Okanagan Parent Advisory Council	Shelley Courtney
10) Association of Administrative and Professional Staff at UBC	Joey Hansen
	Lia Cosco
11) Living Positive Resource Centre	Dylan Wall
12) Kelowna Chamber of Commerce	Jeffrey Robinson
13) Childhood Obesity Foundation	Dr. Tom Warshawski
14) City of Kelowna	Paul Macklem

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