The committee met at 10:04 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Good morning. Welcome to this meeting of the Select Standing Committee on Public Accounts.

I’m very happy to welcome my colleagues here today. We do have a couple of members that will not be joining us, but we still have quorum. I know that we have a significant body of work to cover today, so we’re very grateful for members making time in their busy schedules.

[10:05 a.m.]

I want to thank the Clerk of Committees and also Hansard for making the arrangements for us. Any time we’re on the road, we know that it takes extra effort. We’re very grateful for all of the efforts that go into making these meetings possible, especially when we’re outside of Victoria. So we’re appreciative of that.

We have a number of items. We’re going to cover two this morning in the first half of the agenda. We’re going to have a lunch recess, where we’re going to just have some informal discussions. Then we’ll come back this afternoon with a very substantive body of work that the Auditor General’s office has completed.

We’ll begin. Today the format will follow the usual process, where we have the Office of the Auditor General. We’re very pleased this morning to have the Deputy Auditor General with us — Russ Jones. Russ and his team will do an overview of the report that we’re going to look at. Then, obviously, the ministry and the B.C. Utilities Commission will have an opportunity to respond, and then members will ask questions, as we normally do. I thank all of you for being here.

With that, we’re going to begin with the Deputy Auditor General and ask him to begin his presentation.

Consideration of
Auditor General Reports

Observations on
the B.C. Utilities Commission

R. Jones: Good morning, Chair and Members. Thank you for inviting us to present our report on the B.C. Utilities Commission. With me today I have, on my left, Malcolm Gaston, assistant Auditor General, and on my right, Peter Nagati, executive director, who led the review of the B.C. Utilities Commission.

The B.C. Utilities Commission — or, simply, the commission — was created by government 38 years ago to protect the interests of ratepayers while still allowing utility companies to earn a fair return. The commission has a valuable role to play as the regulator for some of the largest companies in the province. These companies include ICBC, FortisBC and B.C. Hydro, which together provide services to almost all the residents of British Columbia. Over the years, government has committed to strengthening and protecting the independence and credibility of the commission.

We set out to assess how well government is doing in this regard. I’ll now turn it over to Peter for a short presentation on what we did and what we learned.

P. Nagati: Thanks, Russ. In this information report, we highlight the role of the commission, draw attention to key aspects of government task force reviews of the commission and encourage government to clarify its intentions regarding outstanding recommendations.

Russ mentioned that the B.C. Utilities Commission is responsible for regulating some of the biggest companies in B.C. It does so by considering and deciding on individual applications from the utilities for rate changes, new facilities and more. The commission provides financial oversight of energy utilities and basic auto insurance, by considering both short- and long-term interests of ratepayers, as well as the financial viability of the companies that it regulates. The commission can also offer government objective advice to help ensure that key decisions on matters of competing or conflicting interest are transparent and well informed.

Utility companies are important service providers and tend to be monopolies because they have expensive infrastructure that can take decades to get into place, creating barriers to new entrants. So an effective regulator is in the interests of all British Columbians, as it protects ratepayers, while still allowing the utility companies to earn a fair return.

Over the years, government has committed to strengthening and protecting the independence and credibility of the commission. A 2013 government task force identified risks to the commission’s effectiveness, and its 2014 task force explored these issues further and made recommendations for improvement. As such, government already knows how it can make the commission more effective.

In late 2016, we started planning an audit of the commission. Our work did identify many of the same risks found by the government task force reviews. We found that the commission and government had implemented a number of the task force’s recommendations. However, it wasn’t clear to us how government intended to proceed with the outstanding recommendations.

Rather than duplicating the task force’s work by completing the audit, we decided to issue this information report, to draw attention to four key aspects of the task force’s work that still were in consideration by government, and we’ll speak briefly to each of those.

[10:10 a.m.]

First, the commission’s independence. Independence means that regulators are able to make objective decisions based on facts. As the 2014 task force noted, government sets energy policy, defines the commission’s mandate and directs the commission on specific matters. But when government gives direction, it should not dictate specific outcomes or intrude on the commission’s consideration of individual applications.

The second aspect that we want to draw your attention to is the commission’s review of large projects, specifically B.C. Hydro projects. Under the Clean Energy Act, government excluded the commission from reviewing some key B.C. Hydro projects, such as the northwest transmission line, the smart meters program and, until recently, the Site C dam. By excluding the commission from key decisions, government loses out on the value of independent, transparent review and expert advice.

The third aspect relates to the clarity of policy guidance. As part of its work, the commission must consider multiple policies and legislation. An issue identified by the 2014 task force is that the objectives outlined in the Clean Energy Act are diverse and sometimes even contradictory. This can make it difficult for the commission to balance different government objectives.

Finally, we want to highlight the commission’s capacity, meaning its ability to recruit and retain qualified staff as well as to appoint full-time commissioners. The 2014 task force identified this as a challenge, in part, because the commission needs to compete with higher-paying utilities for qualified talent. The task force recommended higher compensation to help the commission attract staff and full-time commissioners with the relevant expertise.

Because this wasn’t an audit, we don’t have any stated recommendations. Instead, we encourage government to clarify its intentions regarding the outstanding recommendations already made by its 2014 task force to help the commission better fulfil its role.

That’s our summary for today. Later, of course, we’d be happy to take your questions.

S. Bond (Chair): Thank you very much. I think the next presentation is by the B.C. Utilities Commission.

D. Morton: My name is Dave Morton, and I’m the chair and CEO of the British Columbia Utilities Commission. Thank you very much for inviting us here today. I’m here with Viki Vourlis, who’s our director of corporate services. She’s just going to set up the slideshow here.

I have some slides that I’m going to run through. There are rather a lot of them. It’s at a somewhat more detailed level. I don’t have much to add to Russ and Peter’s general comments on the commission and the role of the commission and the observations of their report. But what I would like to do is I’d like to go through the recommendations of the 2014 task force and the review panel, and I’d like to speak to follow-up actions that we’ve made, that government has made and that we and government together have made. Perhaps that can form the basis of our discussion afterwards.

I’ll try to be brief. There are a lot of words on these slides. I’m not going to read them all out to you, but I will try to be brief.

[10:15 a.m.]

As you’ve already heard, the Auditor General focused their review on the findings of the 2014 review. I’m going to now go through that review and look at some of the detailed findings and recommendations of it.

There were 35 recommendations made in the independent review. Of those, 11 were directed to government, 19 were directed to the BCUC, three were directed jointly to the government and the BCUC, and there was no action taken on two of those. As you’ve seen, the Auditor General summarized the findings of that task force around independence, a review of large capital projects and the clarity of policy guidance. Now, for the most part, the recommendations associated with these areas have been directed towards government, and I know that Kurt is going to speak to some of these when he gives his presentation.

As far as capacity goes, we have added one more full-time commissioner. I’ll talk a little bit more about that as we move along. At the time we added the full-time commissioner, I was the only full-time commissioner. In addition to me, we have ten part-time commissioners. We’ve also hired a COO, and we continue to increase our staff complement within the constraints posed by the compensation challenges that I’m also going to get into in a few minutes.

We’ve also undertaken significant organizational process and technology changes. We’ve made good progress, but we have a lot left to do.

I’m going to now, then, go through each recommendation — certainly the recommendations that apply to the BCUC. I’m going to start with recommendation No. 9, and that is that the recruitment process for the commission needs to be changed dramatically and, also, that higher compensation must be offered. Compensation for commissioners has been increased. It has been increased as part of a general review of compensation for members of administrative tribunals. However, there are still some challenges remaining on the compensation side. Again, I’ll talk to that in a few minutes.

We have changed the recruitment process significantly. Now what we do is we recruit — and we are recruiting actively — for full-time commissioners. We’re looking at ways to increase the diversity of commissioners that we have, and we’ve engaged a consulting firm to assist us with that. We do some internal screening of candidates that come from the recruiting firm, and then we make recommendations to the Attorney General. The Attorney General then strikes an interview panel which includes myself, the Deputy Attorney General and one other senior civil servant. Candidates are then interviewed, and recommendations go forward to cabinet from that.

It has been a successful process so far. We are hopeful that it will result in some more qualified candidates later this year.

Recommendation No. 10 was that two full-time commissioners be added as soon as possible. That was not possible to do immediately after the publication of the report largely because compensation changes that were recommended in the report weren’t forthcoming. In fact, there has been no focus on the Utilities Commission specifically for a compensation change. But we did have a compensation change as a result, as I said, of a review of all administrative tribunals. That was finally put in place roughly by early last year — late 2016, early 2017. As a result, we were immediately able to recruit a very good full-time commissioner that we started late last year.

Recommendation 11 of the report recommended that the number of part-time commissioners should balance the num­ber of full-time commissioners. I couldn’t agree more. Having ten part-time commissioners makes my job much more difficult.

[10:20 a.m.]

The nature of the…. I hate to keep mentioning it, but the restrictions imposed on us by the compensation limits mean that it has been difficult to hire mid-career people, which we would like — certainly, as part of our diversity approach — to be able to do.

Mid-career people are not going to make a move, given the compensation that’s offered and also given the term limits that are often imposed. It’s not unusual for term limits of one year or two years to be placed on cabinet appointments of commissioners. As you can imagine, someone who’s 40 or 45 years old, possibly working at a utility, making a significantly higher salary than I can offer, is basically not going to move and work with me if all I can offer them is a year or two years at a lower salary.

That’s the reality of the challenges that I face. The profile of the candidates I am able to hire are retired people, often very qualified retired people — retired executives, auditors, accountants, engineers, economists — that have been decision-makers throughout their careers and often make very, very good commissioners.

However, for some odd reason, they also like going on cruises, and they like hanging out in Palm Springs and playing golf. That makes it, for me, very challenging to fit these people into an operational framework that requires attendance in the office, attendance on panels, availability for meetings. It’s a huge challenge.

If I could balance the number of full-time and part-time commissioners, that would be ideal — three or four full-time commissioners and three or four part-time commissioners. It’s a goal I’m working towards, but it’s been slow going.

Recommendation No. 13 is to periodically review guidelines and policies to ensure that they remain useful, effective and up to date. This is an ongoing activity for us.

We are currently in the process of reviewing our reconsideration guidelines. We’ve recently reviewed our participant guidelines, our participant award guidelines, and we have other policies and procedures that we’re scheduling for review. That’s a recommendation that is an ongoing project, and it’s something that we are doing.

Recommendation 14 is to work with applicants and stakeholders early in the hearing process to define the issues in the proceeding. Again, on the one hand, that’s completed, but on the other hand, it’s ongoing.

We work with applicants. My staff works with them before they file an application, and they work with them as they’re filing the application, to ensure that it meets our guidelines and that it’s an application we can move forward with.

We typically hold procedural conferences early in an application process, and at the procedural conference, we will also address scoping issues to ensure that the issues are well understood by all of the participants in the proceeding.

Recommendation No. 15. This was a point of contention at the time, in particular from B.C. Hydro and from Fortis — basically, that we asked too many questions. That’s a bit of a can of worms. One of the reasons that we ask so many questions is that the application isn’t fulsome enough to begin with. The more you leave out of the application, the more questions that we need to ask.

That being said, we have tried to work with the utilities to ensure that we get better applications so we have less need to ask questions and that we understand the issues better so that we don’t stray away from issues when we’re asking questions.

All of the questions that we ask utilities are reviewed by a senior staff member. They’re often reviewed by the panel members and reviewed many times by our legal counsel. By all accounts, by the conversations I’ve had with our utilities, they’re happy with the progress that we’ve made on that issue.

[10:25 a.m.]

Recommendation No. 16 is that we should formalize our policies on granting intervener status. As I said, we have reviewed our rules of procedure, and we’ve published revisions to those on intervener status — who can intervene and under what circumstances.

Recommendation No. 18 is on participant assistance and cost awards. To give you a bit of background, our proceedings are open to anyone who would like to participate, and potentially, anyone can apply to intervene. Our guidelines on intervention tend to be inclusive. However, there isn’t a presumption that we will pay for your intervention.

If you have an issue that the panel is interested in that you want to pursue, and if you’re happy to pay for your participation, then generally there’s not a problem there. But we have a number of interveners that would not be able to intervene unless they were paid, and of course, we don’t have any funding. The payment for them comes through the utilities and goes on all of our utility bills. So we do act as a gatekeeper for the distribution of that funding, and we have recently reviewed our guidelines on participant funding as recommended by the task force.

Recommendation 21 is that we develop performance targets for key application cycle times and report on them annually. We have done that and have been doing that for the last two or three years now. The problem with the key performance target is for us to publish our decision within 90 days of a close of the evidentiary record, 90 percent of the time. That means, of course, that for smaller proceedings, we can publish a decision more quickly. Larger proceedings would take a little more time, but 90 days is the average amount of time.

That may sound like a lot of time, but there’s a lot of work that gets done at our end. We have the decision to make, and then we have a decision to write up. I can speak with some experience. I’ve been a commissioner since 2010, and the writing is not an easy task. It takes a long time to fully document a decision, to explain the reasons — and explain them in a way that members of the public can understand, that the applicant can understand and that a judge in the Appeal Court can understand, because that’s the appeal pathway that our applicants and our interveners have if they don’t agree with our decisions.

Recommendation No. 22 is that we should make additional efforts to ensure all compliance reports are necessary and useful. I will combine it with recommendation No. 23, to place more responsibility on regulated entities to report on an exception basis. We’ve done a lot of work in our compliance department to reduce the amount of compliance reports that we ask for. We try to make sure that we only ask for what we can action and what we can do something about or what we feel we need in order to prepare us for upcoming reviews of that applicant.

Again, as I understand it from the utilities, that’s a welcome change. We are always mindful that we need to be aware of the regulatory burden that we place on utilities and the burden that we place on ourselves. We’re a small organization, and we don’t have the staff to read through a lot of reports that we don’t need anyway. So those are two good recommendations, and I would say we’ve made great progress on them.

Recommendation No. 24 is in the same vein — the need for a separate performance monitoring, conduct and compliance group. That’s what we do have. We have a compliance group that monitors and manages all of those reports.

[10:30 a.m.]

Recommendation 25 was for a chief operating officer. That made its way into legislation in 2015. Through our recruitment efforts, we have hired a COO. However, circling back to the compensation, we have similar compensation issues on the staff side that we have on the commissioner side. While I’m very pleased with the individual that we have hired — he has significant executive management experience in the public sector — we were not able to find our ideal candidate, which would have been someone with utility experience. Again, I don’t want to overstate the case, but we are really challenged by our inability to recruit people with utility experience.

Recommendation 26 was to develop a three-year strategic and financial business plan with performance targets. We have done so and have been doing so for the last two years now. I think this is the third year that we’ve done it. Those are all on our website, and they’re also submitted to both the Ministry of Energy and the Ministry of Justice for review before we published them on our website.

Recommendation 27 was a joint recommendation. Any government compensation program that affects the BCUC should be designed to not limit our ability to be competitive in recruiting and retaining staff. I think I’ve probably said quite a bit on that.

Recommendation No. 28 is that our budgeting process should be transparent and ensure that expenditures are reflective of our operating environment. As I said, we’re a small organization, and we’re a fairly lean organization. We recover all of our costs, capital and operating costs, from the utilities that we regulate. We don’t use any taxpayer money whatsoever. Consequently, most of our budget conversations are with the utilities, and in fact, every year we publish our budget. It’s in our business plan, and we share it with the utilities.

We have not had any concern raised about our budget, and further, certainly the larger utilities, B.C. Hydro and Fortis, are both very supportive of whatever budget changes are necessary to support the recommendations of this review, in particular the compensation recommendations. Again, I’m quite satisfied with our budgeting process. I think we meet the transparency requirements in the report.

Recommendation No. 29 is that the province and the BCUC should partner on developing an information technology strategy. When I started in this role as the chair and CEO at the beginning of 2016, I could only describe our information technology as being the Model-T of information technology systems. It was like something out of the 1980s. I couldn’t answer the simplest questions about how many utilities we regulate, what’s the total amount of their assets — simple questions that any manager or employee of a large organization would be able to answer. I couldn’t even put together a Christmas list of contacts.

We have taken steps to change that. We’ve worked with the Ministry of Justice to look at the IT offerings of their tribunal transformation initiative, and we did determine jointly that they would not be suitable for our purposes. But we do have an IT renewal strategy and a project ongoing now which is based on SharePoint and Microsoft Dynamics. It will hopefully bring us at least to 2016-2017 standards, and that’s very exciting for us. That will make a huge difference to our staff and to the work that we do.

Recommendation No. 30 is to establish performance indicators and targets. As I’ve said, we have done that, and our performance targets can be found on the website — and our progress towards them.

Recommendation No. 34 is to publish our guidelines and policies as pamphlets. We have done so and will continue to do so where appropriate.

[10:35 a.m.]

Recommendation 35 is to consider issuing news releases and fact sheets. Again, when I started in this role a few years ago, the mantra around the commission was that our decisions speak for themselves. We had very little interaction with the media, which was what, I think, prompted the review panel to make this recommendation.

Our decisions speak for themselves only to people that read them. It was my observation that often, our decisions weren’t read. They weren’t read by the media because they were too complex and too long. Instead, media would, as media does, go and find people who were unhappy with the decision, and they would base their reports on that. That resulted in, often, bad press for the commission and an inaccurate reflection of the decision that we’d made.

I have embarked on a media strategy. We have a director of communications. We’ve completely revisited our relationship with media. We now reach out to media. We publish summaries of our decisions. I make myself available for interviews, and I’ve done quite a number of interviews in the last two and a half years. I think it’s a strategy that’s worked well. I think that it helps us to tell the story of our processes, the fact that our processes are independent and transparent. I think it helps the public understand what’s in our decisions.

I’m sorry. I’ve probably gone over the time here. I’ve tried to balance the little bit of detail with not too much detail. On that note, I’m happy to answer any questions that anyone has.

S. Bond (Chair): Thank you very much. We appreciate your comments.

I think we’re going to hear from Kurt Sandstrom, who is an assistant deputy minister in the Ministry of Attorney General. We’ll just take a moment and change up the slides. Once that presentation is done, if members have questions, they can start to let me know, and we’ll work our way through those.

K. Sandstrom: Thank you very much, Chair and committee members. The Ministries of Attorney General and Energy, Mines and Petroleum Resources appreciate the opportunity to appear today to provide information on the Auditor General review of the important work of the B.C. Utilities Commission. The report draws attention to 35 recommendations from the independent review. It’s my role today to draw to your attention the status of the recommendations pertaining to the government’s obligations under that report.

I’m just going to go through these specific recommendations. With respect to recommendation 1, that government’s policy objectives and directives should be clear and understandable to ensure policy alignment by the commission, government would advise that this is in progress. The Ministry of Attorney General and EMPR are working with BCUC on this. The history behind that is that in 2015, the Attorney General determined that an MOU between the Ministry of Attorney General, EMPR and BCUC did not align with their mandate letter process. Upon further consideration, this is now being revisited.

In terms of recommendation 2, when issuing directions to the commission, the task force recommends the following guidelines. Directions should not dictate specific outcomes or intrude into the BCUC’s consideration of individual applications. Directions should be timely and issued before proceedings begin, and policy statements are not necessarily legally binding. Where policy is to be mandated, it should be made in a legally effective way, such as a direction under section 3 of the Utilities Commission Act.

In terms of status, the government has completed this recommendation, and it’s ongoing. EMPR, in consultation with the Attorney General, will consider these guidelines in its policy development related to directions.

In terms of recommendation 3, that government should consider updating both the energy plan and Clean Energy Act to ensure that they are consistent with current government policies, government replies that this is in progress.

[10:40 a.m.]

The Premier directed the Minister of EMPR to create a road map for the future of B.C. energy that will drive innovation, expand energy efficiency and conservation programs, generate new energy responsibility and sustainability and create lasting, good jobs across the province.

EMPR advises that the development of an energy road map is underway. Policy commitments in the energy road map will inform the need for amendments to the Clean Energy Act and other legislation.

With respect to recommendation 4, that “the Utilities Commission Act should be amended to clarify the commission’s ability to forebear, or decline to regulate, in specified circumstances,” EMPR advises that the ability to recommend exemption power is already in the Utilities Commission Act. Amendments to the UCA were passed in the fall of 2015 that included partial streamlining of the BCUC’s exemption process, which no longer requires cabinet approval for exemptions and, instead, is done by ministerial order. That relates to recommendation 6 as well.

In terms of recommendation 5, that “amendments to the definition of ‘public utility’ should be considered to exempt services and facilities where commission regulation is not warranted,” government’s response is that that is in progress. BCUC is currently undertaking a number of inquiries and other work regarding the definition of “public utility.” This work will help to inform the BCUC and government of possible legislative changes. There are other areas of review, as well, that will follow — electrical vehicles, charging stations and entities that are 100 percent owned by municipalities.

In terms of recommendation 6, that “the existing exemption processes should be streamlined by requiring a minister’s regulation for all exemption proposals, rather than cabinet approval for some,” government’s overall response is that as per recommendation 4, this is completed. Subsection 88(3) of the Utilities Commission Act was amended in this regard.

With respect to recommendation 7, that “government should review and amend the energy objectives in the Clean Energy Act to reduce conflicts among them, and between them and the Utilities Commission Act,” government’s response is that this is in progress. As related to recommendation 3, policy commitments in the energy road map will inform the need for amendments to the Clean Energy Act.

In relation to recommendation 8, that “the requirement, unique to B.C. Hydro, in the Utilities Commission Act that the commission ‘must consider and be guided by’ the Clean Energy Act energy objectives should be changed to a requirement that the commission ‘must consider’ the energy objectives, just as it does for all other utilities,” government would be pleased to report that that’s completed, and it was implemented as part of the fall 2015 Utilities Commission Act amendments.

Recommendation 12 provides that government should continue to approve BCUC’s compensation framework but increase the upper limit of compensation ranges in line with market levels so the commission is competitive in recruiting and retaining qualified individuals. Mr. Morton provided good detail on that. It is in progress. In September 2016, Treasury Board increased compensation for appointees to administrative tribunals and regulatory boards, including the BCUC commissioners, in conjunction with recommendation 27. Further discussion on this topic is underway.

With respect to recommendation 17, that “government should not establish an independent consumer advocate,” government’s response is that it accepts this recommendation.

In terms of recommendation 20, that “section 116 of the Utilities Commission Act should be amended to remove the need for the Attorney General’s approval when the commission hires counsel to represent unrepresented interests,” government’s response is that that’s completed and was included in the fall 2015 Utilities Commission Act amendments.

Recommendation 27 provided that “any government com­pensation program that affects the BCUC should be designed so that it does not limit its ability to be competitive in recruiting and retaining staff.” Government’s response is the same as recommendation 12. It’s in progress. In September 2016, Treasury Board increased compensation for appointees to administrative tribunals and regulatory boards, including the BCUC commissioners, in conjunction with recommendation 12. Further discussion on this topic is underway.

[10:45 a.m.]

With respect to recommendation 31, that “government should make use of section 5 inquiries for projects and plans that it may otherwise wish to exempt,” government’s response is that this is completed and continues to be ongoing. Government has made use of section 5. The most recent example was the Site C inquiry.

In terms of recommendation 32, that “government should confirm the commission’s ability to undertake prudency reviews of the execution of exempted projects,” government would reply that it confirms the commission’s ability to undertake prudency reviews of exempted projects and will work with BCUC to determine if further clarity is required.

Recommendation 33, finally, provides that “the regulation of private water utilities should remain with the water comptroller.” Government accepts this recommendation.

In summary, consistent with the Auditor General’s report, government will continue to work collaboratively with BCUC to address the remaining in-progress recommendations from the independent review of the British Columbia Utilities Commission. Government appreciates the time invested by the Auditor General’s staff to engage with BCUC, the Ministry of Energy, Mines and Petroleum Resources, the Minister of Attorney General, stakeholders, subject-matter experts and others to understand the complex nature of effective rate regulation by BCUC.

S. Bond (Chair): Thank you very much, Kurt.

Maybe if the committee will indulge me for one second, I want to set the context for the discussion. These questions are probably directed to the Auditor General’s office.

Initially the intent was to do an audit. Is that correct?

A Voice: Yes.

S. Bond (Chair): Then because there had been a task force that had provided 35 recommendations, which I assume would be covering most of the same ground, the decision was not to audit but to provide some observations about that audit or about those recommendations — just so we understand the process and the work that the Auditor General’s office actually did here.

P. Nagati: We did considerable work in the planning phase. We did set out to do an audit. We talked to people from the commission, stakeholder groups, subject-matter experts. We reviewed a lot of documentation to understand the issues. We also spent a lot of time looking at the work of the 2013 and 2014 task forces.

At the end of the day, we recognized that the issues, the risk areas that we were identifying through our planning work, were the same as what was identified through the 2013 and 2014 task forces. We felt that we couldn’t add value to the work that was already done. It was already said. We probably couldn’t have made any recommendation over and above what was stated.

To complete an audit probably would have taken an additional 1,000 hours of work, and it wouldn’t have added 1,000 hours’ worth of value.

S. Bond (Chair): Okay. I appreciate that.

My last comment. In the beginning of the report provided by the Auditor General, the comment of the Auditor is: “Our report is a summary of information obtained…. This information has not been subject to an audit, and accordingly, we provide no assurance thereon.”

I’m assuming what that means is that after the work the Auditor General’s office did — they reviewed the work of the task force, the recommendations, talked to people — no audit was actually done. So these are observations that summarize the work that was done.

It’s a pretty interesting statement: “We provide no assurance thereon.” Can you explain that?

P. Nagati: To do the work to audit standards would have required coming up with an audit objective, following CSAE 3001 standards to reach a conclusion at the end of the day. We didn’t go that far. Once again, we felt that because the risks we were identifying were the same as the work that was done already, there was no benefit to complete that work and provide audit-level assurance.

S. Bond (Chair): Okay. So in essence, it’s a summary of the work that was done by the task force — a summarization of the work that was already underway and the recommendations that had been provided.

I think it’s important for the committee to recognize that difference between an audit, on which there would have been some recommendations or a commentary about the assurances…. That isn’t the case here. These are observations. It’s a report. It’s a summary based on the work that was done through the planning and information that was gathered.

J. Yap: Thank you for the presentation. The Chair asked the exact questions I was going to start off with.

[10:50 a.m.]

S. Bond (Chair): Sorry, I didn’t mean to. I was hoping to set context, not steal questions. I apologize.

J. Yap: I will add to and follow up to those questions. My first one is this. How common has it been for the Office of the Auditor General to kind of switch gears and go from a full-blown audit to: “Oh, we’re just going to do a question session and pull back from the full audit”?

P. Nagati: Is it common? The answer would be no. But it does happen on occasion. Our legislation does provide discretion to take different approaches for different situations. If we feel that the best approach for adding value is through a non-audit report, we do that on occasion. Typically we do audits, though.

J. Yap: Yeah, in the time that I’ve been privileged to be on the Public Accounts Committee, I don’t recall the Auditor General team deciding to not do a full audit when that’s your plan. So this is sort of an interesting occurrence.

The 1,000 hours you referenced of additional work that was not done — what would that include? Would that include actual review of material and reading the actual work of the commissioners doing audits of files? That type of audit work was not done? Is that the case?

P. Nagati: We did quite a review of background information, existing reports, and so forth. An audit would have involved going deeper and structuring our work to answer specific questions, a specific audit objective and audit criteria, following very rigorous standards. We would have had to structure our work according to recognized formats and to very detailed working papers.

I also want to point out that at the time of our work, BCUC was going through an expedited review of Site C, so timing was not ideal from the commission’s perspective either.

J. Yap: Okay. That’s a good reminder.

On another line of questioning, the presentation from the Auditor General and from BCUC has focused more on the energy side, but of course, BCUC also has responsibility for automobile insurance, ICBC. How do you ensure that you have the expertise? I assume, from your comments to the CEO of BCUC, you predominantly have people on board, commissioners, who are from the utility side. I suppose there’s some crossover in terms of skills, but how do you ensure that you have the people who are going to analyze the insurance side of what you have to regulate?

D. Morton: Thank you. That’s a good question. Let me begin by saying that many of the recommendations that I discussed with you apply equally to ICBC and to B.C. Hydro and Fortis, like decision-cycle times and compliance reports, things like that. They apply in both cases. But to answer specifically your question, I have a number of commissioners that have sat on ICBC rate reviews over the years, and they have developed a body of expertise with ICBC. I’m satisfied that they are up to the challenge, and they can properly adjudicate ICBC issues.

On the staff side, we have economists and accountants that have become familiar with ICBC and that have some…. The actuarial experience is probably the key area in which ICBC differs from utilities. I have economists and accountants that have developed actuarial expertise, and where that is lacking, we have actuarial consultants that we routinely work with, and we engage them to supplement any shortcomings that we have.

In terms of the complement of staff that’s required to look after ICBC, it’s a proportionately relatively small amount of what we do. I think that we’ve got the right balance of staff commissioners and external consulting, and we are able to properly look after ICBC.

[10:55 a.m.]

J. Yap: In terms of the oversight that the commission has over…. Let’s talk about ICBC. Does the commission have the ability to be proactive, or is it more a reactive approach to the oversight?

D. Morton: There are some differences in the way that ICBC is regulated — just inherently different. The regulatory compact, which is sort of a common-law approach to utility regulation, doesn’t really apply to ICBC. We’re not required to approve all of their capital expenditures, for example, the same way that we do with utilities.

We don’t keep track of what’s called the rate base, which is the total of their capital assets. Rates aren’t based on their rate base as they are in the utility model. As I say, it’s actuarial. Actuarial factors drive ICBC rates more than anything else.

I’m sorry. I’m not sure if I’ve answered your question.

J. Yap: I guess I’m interested in whether the commission monitors the utility or ICBC. If you see trends that could raise questions, would the commission, as part of your mandate, be proactive in asking for a report or following up with the entity?

D. Morton: The short answer is yes. Our compliance department monitors compliance from ICBC in the same way it does the other utilities. If a panel, in the course of making its decision, feels it should ask for a compliance report on a certain item, then it will do that. We’re not fettered at all in our ability to do that, and we do it where we feel it’s appropriate.

J. Yap: So in reality, it is known from reports in the last ten months that the financial position at ICBC, which has been a subject of attention, has been changing and challenging. Apart from the formal submissions from ICBC, has the commission a process to monitor the situation?

D. Morton: Yes, we do. I would point out, though, that in the case of ICBC over the last few years, their rates have been set by…. The amount has been set, or it’s been set in a narrow band, by special direction. We’ve had very little control.

We have commented on issues surrounding rates and on expenditures and other factors that we feel could affect rates, but as a practical matter, our oversight of rates is even more limited than you might imagine because of these special directions. That’s not something we can do anything about. We don’t comment on them. I don’t feel it’s appropriate that we do.

J. Yap: If I may, you referred earlier to actuarial analysis, and you bring in expertise if you need to. The insurance business, being it is so much based on risk and actuarial assessment of the risk…. Would the commission…? As part of your normal mandate, your duties, as you monitor the situation at ICBC and you see that there have been changes, perhaps dramatic changes, in the actuarial assumptions or forecast, would that be something that would trigger a compliance report from BCUC?

D. Morton: If our consultant was disagreeing with an actuarial assessment of ICBC…. If that was appropriately brought out in the proceedings — the parties to the proceeding had comments, and we felt that there was an issue there — then yes, we would certainly want to follow up on that.

[11:00 a.m.]

However, if it’s not an actuarial issue — if it’s simply an issue that rates are not being set sufficient to recover the actuarial risk that is there — then that’s not an issue of misidentified actuarial risk.

J. Yap: But there has to be a proceeding for this to be assessed.

D. Morton: Absolutely, yes. We’re not a consulting company. Everything we do has to be open and has to be transparent. So if our actuaries raise an issue, it’s raised in the context of a proceeding, and it would be open for submissions and discussions by all of the parties that are proceeding.

J. Yap: My last question. How does a proceeding happen? Is that through a normal course, or is that something that a commission staff or commissioner might, as part of an ongoing process, decide — that some triggers have kicked in and a review might be in order?

D. Morton: As chair, I can initiate proceedings, and I can initiate a particular kind of proceeding called an inquiry. However, in a general case, a proceeding occurs when an applicant brings forward an application. Let’s say it’s for a rate increase or some change in circumstance — if it was a utility, that they wanted to construct a pipeline or something like that. Then an application would come in. That then triggers a proceeding, and the application is reviewed in an open and transparent quasi-judicial process.

We follow the Administrative Tribunals Act, or at least the sections of it that we’re required to follow. The Utilities Commission Act also lays out a lot of the parameters around those proceedings.

In some cases, if an issue arises out of a proceeding where maybe we need to vary our rules of procedure, let’s say, or maybe there’s a possible need for an exemption or something of that nature, then I would initiate a proceeding to look at that. That would be a commission-initiated proceeding, but it would be conducted in exactly the same fashion, in an open and transparent fashion, with the same rules.

J. Yap: You would, as chair, on your own initiative…. If you felt there was a compelling reason to have a proceeding, you could call a proceeding to review the situation — a utility or ICBC, for example?

D. Morton: In that circumstance, I could initiate an inquiry into it. The result of the inquiry would not be to make a binding ruling or require the utility or the company to do something. But the inquiry would make certain findings, and then those findings…. Depending on what the findings are, then further action could be taken in whatever appropriate way.

J. Yap: If I may, this is all in the public record. It is now known that ICBC revised their forecast loss by a substantial factor, from $300 million to $1.3 billion — so a $1 billion revision, in part with respect to, in my understanding, a change in the actuarial risk that ICBC believed it was facing, with claims exceeding what initially was forecast. Would that be in the realm of a change that might lead the commission to say: “Oh, maybe we should take a look at this”?

D. Morton: It’s difficult to say without knowing what the details of it would be. But it is certainly something that we could ask for a report on from ICBC and take a look at.

R. Glumac: I have a few questions. My first question is: what was the composition of the task force? Who was on the task force?

[11:05 a.m.]

D. Morton: It was a three-member panel. There was Peter Ostergaard, who is a former chair at the Utilities Commission. There was Brian Wallace, who is a lawyer — an energy lawyer, for want of a better word. I know he has appeared before the commission on a number of items. He represents or has represented an industrial customer group. The third member escapes me, actually.

Interjection.

D. Morton: Michael Costello. I think he was a former B.C. Hydro CEO or chair. I’m not sure.

R. Glumac: Okay. Taking a step back on some of this, I’m trying to understand this. I mean, the purpose of the Utilities Commission is to be an independent body, to offer independent guidance and recommendations on things that will affect the rates being charged to people in B.C., from our utilities.

There seem to be a number of exceptions, where guidance is not wanted on various things. I’m just trying to understand this. I wonder if you could give me — maybe this is a question for the ministry — a summary of all the various exceptions that can be utilized by government to not seek any independent guidance from the BCUC.

K. Sandstrom: Yes, that would be something for the government. Mr. Morton would know his act quite well, but section 3 of the Utilities Commission Act provides that:

“(1) Subject to subsection (3), the Lieutenant Governor in Coun­cil, by regulation, may issue a direction to the commission with respect to the exercise of the powers and the performance of the duties of the commission, including, without limitation, a direction requiring the commission to exercise a power or perform a duty, or to refrain from doing either, as specified in the regulation.

“(2) The commission must comply with a direction issued under subsection (1), despite (a) any other pro­vi­sion of (i) this Act, except subsection (3) of this section, or (ii) the regulations, (a.1) any provision of the Clean Energy Act or the regulations under that Act, or (b) any previous decision of the commission.”

That basically sets forth the powers of the Lieutenant-Governor to issue directions to the commission. Generally speaking, the independence is recognized. However, when we’re setting policy in attempts to align with the proper policy of the government, they may issue directions, and have issued directions in the past.

R. Glumac: Just background on section 3 of the utilities act. Is that the legislation that created the Utilities Commission?

K. Sandstrom: That’s correct.

R. Glumac: It references, basically, exceptions. Was that section amended at any point, to put those exceptions in, or was the commission created with those exceptions in place? I’m trying to understand what the possible exceptions are.

D. Morton: I referred to exemptions in my presentation, and Kurt did too. I just want to clarify. Just to go back to where you started, the role of the Utilities Commission, although it doesn’t explicitly state it in the act, is to regulate utilities that operate in a monopolistic environment. So largely what we are is a proxy for competition. Without us and without competition, then a utility can basically charge what they want. They’ve got a captive audience. But it’s difficult to craft a piece of legislation that defines exactly what a monopoly is and under what circumstances. The act does recognize that there may be exemptions. It defines a public utility as, generally speaking, a person that sells energy. But then there are exceptions.

One of the things that we do is we recommend to government…. If we see an area where we feel there is sufficient competition so that it doesn’t need our economic regulation, then we will recommend to government that there be an exemption for that. In my view, that’s a reasonable approach to regulation. It’s a practical and cost-effective approach to regulation.

The section that Kurt is talking about, section 3, is largely used by government. It’s largely used in the context of Crown corporations like ICBC and B.C. Hydro to do something like set rates or set a rate range.

[11:10 a.m.]

If government wants to achieve a policy objective in that regard and not have us set the rate, then government would use that section and order a rate increase of 2 percent or 3 percent, instead of the rate increase that we may grant, which might be 5 percent, because that would be the economic justification. That would have the economic justification, if you follow what I mean.

R. Glumac: Yeah.

D. Morton: I’m not sure what exception area you’re….

R. Glumac: Well, I’m trying to get to…. There are many things that haven’t been reviewed over the last few years. For example, Site C was not reviewed. My understanding is that the purpose of the Utilities Commission is to provide this independent advice.

What mechanisms are there? What is the purpose of the Utilities Commission if that advice is not sought in these cases where the impact to the ratepayers could be substantial?

I’m trying to wrap my head around this. I’m trying to understand. How can the Utilities Commission be effective if there are mechanisms in place that the government can basically say: “We don’t want any input from you”?

D. Morton: We continue to remain as effective as we can be in the areas where that doesn’t apply. In the example you cite of Site C…. I think, as was mentioned earlier, that was explicitly exempt under the Clean Energy Act, along with northwest transmission line, aspects of Burrard Thermal, smart meters and some other projects.

I can’t really speak to the why of that. We regulate. We do the best job we can on regulating where we can and when we can.

K. Sandstrom: I think the other thing to keep in mind is that tribunals and commissions have a wide spectrum between the quasi-judicial and the administrative, in terms of arm of government, in terms of setting policy.

When it comes to regulation of utilities, it is more toward the side of government policy alignment. So you have this creature that essentially is tasked with doing some of the regulation that the taxpayer requires and government making those types of directions, all the while allowing the B.C. Utilities Commission to exercise some judgment in that, as government’s expert in utility regulation.

R. Glumac: Okay. Recommendation No. 6, so I under­stand what that one is. This allows the ministry to ask for an exemption on something directly. Again, I’m trying to get back to…. You talked about the Clean Energy Act. That’s one example where there were exemptions put in. The Clean Energy Act was one example.

I want to get an understanding of what all of the different exemptions are to review at this point. The Clean Energy Act is one. Is this another one that, basically, a ministry can just say: “We don’t want a review”?

D. Morton: This arises from the example that I cited, where we, on our own motion, typically….

R. Glumac: So this is coming from you.

D. Morton: Yeah. Or it’s come out of the hearing.

An example. We have an inquiry that we initiated a few months ago, on our own motion, into electric vehicle charging. Electric vehicle charging is something that, if you read the act, is captured under the definition of a public utility. But there may be sufficient competitive elements in the provision of charging stations that actually…. By us regulating that field, it actually inhibits growth, and it inhibits the development of a charging infrastructure.

We are conducting an inquiry, again, with the open and transparent process, to get everyone’s views, and we will come forward after that. If we feel…. If the finding is that there is sufficient competition that we don’t need to regulate it, we would then ask for a limited exemption for that particular activity.

[11:15 a.m.]

The significance of this recommendation is that that used to require ministry approval. Then it would go to cabinet for an order-in-council. The legislation was changed in 2015, I think, so that it only requires a minister’s order. This means it’s a more streamlined way to achieve…. That’s not the mechanism that’s used to do something like exempt a Site C.

R. Glumac: Right. Okay. I understand that now.

Reading through here, there were questions about ICBC. In the report here, it says that the government changed the terms of the commission’s proceedings and launched a separate review of ICBC’s insurance rates. Under what mechanism did this occur?

D. Morton: That would be government’s prerogative to launch an inquiry of ICBC. Is that what the inquiry…?

R. Glumac: Well, it says it changed the terms of the commission’s proceedings and launched a separate review. It seems to….

D. Morton: I believe it did that by order-in-council. That’s how it was done.

R. Glumac: Order-in-council. It seems to indicate that the scope and the mandate of the commission…. Was it narrowed, and then a separate review was undertaken?

D. Morton: I believe so.

I don’t know if you want to speak to that.

K. Sandstrom: I’m not sure I’ve got that precise information before me, but I can certainly get that for you.

R. Glumac: Okay. I’m just trying to…. So that’s an order-in-council. That’s another mechanism that government could use to narrow the scope.

D. Morton: That’s the usual mechanism that’s used for these kinds of directives. They’re called “special directions” or “directions” or “directives” that typically affect B.C. Hydro. They are a regulation of B.C. Hydro and ICBC, and that’s usually through an order-in-council.

I’m not a lawyer, but as I understand it, that has the same effect as the legislation does, as the act does.

R. Glumac: Yeah. I mean, it comes back to my broader question about: how do you get independent advice, if you have all of these mechanisms in place to narrow scope and to not allow a review of something?

I mean, I don’t know who can answer that question. But what would it take to make the Utilities Commission truly independent? What would it take? Would that just require a change in the utilities act or something?

K. Sandstrom: That would require an amendment of the legislation, yes.

R. Glumac: Okay.

A final question, then. In regards to following on with what the questions were earlier around ICBC, how is it possible that we could have a situation where the effect on rates could be so catastrophic — going from a $300 million to a $1.3 billion deficit?

How is that possible, with an independent commission that is tasked with monitoring these Crown corporations so that there will be independent advice on rates? How did we not get any foresight into that coming at us?

D. Morton: I think the last few years, for ICBC, rates have been set by OIC. I believe we have commented in our decisions, where appropriate, about escalating costs. But we had limited ability to do anything.

R. Glumac: Okay. Rates were set by order-in-council.

D. Morton: They have been for….

R. Glumac: There hasn’t been advice sought from the commission.

D. Morton: Yes.

R. Glumac: All right. Thank you.

S. Bond (Chair): I think the most important comment, if I just might, is that government works within the parameters of legislation. I don’t think there’s any suggestion here, or in this report, that government worked outside of the law that’s been created, which was Kurt’s point.

I think it’s very important to point out. Government has those options. It doesn’t matter which government. They have the option under the law that it’s been created…. If changes are necessary or are wanted, then governments have the ability to make those changes. But I think it would be unfortunate to leave any impression that government hasn’t worked within the confines of the law that was created decades ago.

[11:20 a.m.]

Would that be an accurate reflection?

K. Sandstrom: That’s extremely accurate, yes.

S. Bond (Chair): Thank you.

Ralph, you’re up next.

R. Sultan: Yes, I have a question for Mr. Nagati on the 2014 task force recommendations, which seem to be preoccupied with what I would call process and compensation. The Auditor General’s office referred, on a couple occasions this morning, to their involvement in this rather odd arrangement where they were unauditing, or shall we say not auditing, somebody else’s work, which I thank them for taking on, in that ambiguous role.

You did refer to a couple occasions, as one of the rationales, that you wanted to assess or avoid risk. I was wondering what risk you were referring to.

P. Nagati: I’m sorry. Could you clarify your question with regard to risk?

R. Sultan: Well, in your explanation of why it was, in your view, appropriate, in fact, for the Auditor General’s office to take on this somewhat unusual assignment was, as I heard you — and perhaps I did not hear you correctly — because of the risks involved or, perhaps, rephrasing it, that it would help avoid some risks.

P. Nagati: With regard to the approach we took with this work, we have limited resources, so we need to take that into consideration and make sure that we can do the most that we can with what we have. That went into the decision-making process.

R. Sultan: Ah, it was your risk in having the resources to be able to do the job.

P. Nagati: No, it was in consideration of the overall priorities and the overall body of work that our office would like to undertake.

R. Sultan: Right. Okay. I think I understand the point you made, and I understand it clearly.

I would like to ask Mr. Morton two or three questions and, perhaps, first of all, build on Mr. Glumac’s understandable attempt to “wrap his head around it,” as I heard him say, which we would all sympathize with — the role of the BCUC.

If I could paraphrase, in my years of observing the BCUC and its relationship with government, it seems to have oscillated or swung like a pendulum between an arrangement which was in effect saying, “You’re in charge. Do your job. It’s laid out there in the statute,” on the one hand, and then, from time to time, the directive to say: “Don’t worry about it. It’s not your responsibility. Somebody else will make those decisions for you.” I don’t know if that’s an over-dramatization, but it certainly is my impression.

If that has any validity at all, where do we stand in the swing of that pendulum at the moment, if I may ask?

D. Morton: Looking at B.C. Hydro, our oversight of B.C. Hydro has been particularly limited over the last few years, largely because of two fairly big OICs that I talked about — direction 6 and direction 7. Both of those OICs have virtually expired now. At least, the orders and the directives in them were time limited and have run out.

As a result, we did what we call a revenue requirement review of Hydro’s rates for three years. We completed the first one of those in a number of years, earlier this year. So I suppose, in that regard, the pendulum is shifting towards more oversight on the BCUC’s part.

R. Sultan: You performed that analysis really autonomously and independently, as I guess the statute requires you to do.

D. Morton: The revenue requirement?

R. Sultan: Yes.

D. Morton: Yes, we did. It was an open and transparent proceeding and a hearing process, yes.

[11:25 a.m.]

R. Sultan: In that regard, do you have confidence in B.C. Hydro’s load forecasts?

D. Morton: We reviewed B.C. Hydro’s load forecast. We reviewed their short-term load forecast in that revenue requirement proceeding. And yes, we had a reasonable amount of confidence in that load forecast.

As part of the Site C review we did last summer, we reviewed their long-term load forecast. However, it was a load forecast that dated back to, I think, 2012, if I’m not mistaken. We found the load forecasts had a range. There was a low range, a mid-range and a high range. The panel there found that the low range…. We had more confidence in the low range than we did in the mid-range or the high range.

However, I think the load forecast does need revision. There’s an IRP process for that. The next IRP is due towards the end of this year, and it would be interesting to see what the load forecast says when it’s….

R. Sultan: Would it be fair to say that, taking a look at actual versus forecasted over the years, this very wonderful utility of ours tends to be drifting into the optimistic range, very often?

D. Morton: I think it is. I don’t disagree that a review of past load forecasts does show that load forecasts has over-forecast. The only thing I would add is that I think there is a predisposition for all utilities to over-forecast, mostly because they’d rather get stuck with a little bit of surplus energy rather than with a blackout or a brownout or have to purchase emergency supplies on the spot market.

I think that there generally is a utility bias to over-forecast. Whether Hydro has exceeded that bias or not is not something that we have looked at in detail. But I think your observation is correct.

R. Sultan: Turning to what is perhaps more core to the BCUC mandate — namely, its finances — are you confident that currently B.C. Hydro has a reasonable plan to retire these massive regulatory accounts that have been accumulated over the years?

D. Morton: I wouldn’t say I’m confident. I think that they’ve got a ten-year rate plan that shows that there can be some reduction in the regulatory account balances within the period of the rate plan. But I do think that it needs continual attention, and I think that it needs further thought. There needs to be a plan to extend beyond the ten years.

R. Sultan: I presume that since the Auditor General, I think, has now taken on the complex job of this audit, they will be considering such issues. I see the Deputy Auditor General nodding.

A final question. Security of supply, I presume, should be part of your considerations. I wonder if the almost-collapse of the Oroville Dam in California a little over a year ago, causing the evacuation, in a big rush, of 188,000 people because of the overtopping of the spillway in an unplanned fashion and the rapid risk of erosion of the entire dam….

[11:30 a.m.]

Do these sorts of events, which are triggered in part by climate change and flooding, which in fact will be the subject of our deliberations this afternoon…? Do these rather dramatically changing climate conditions perhaps cause the B.C. Utilities Commission to say it should take a hard look at the hydrology assumptions underlying our dam designs and the possibilities that, at the extreme, we might face some sort of an Oroville event here in British Columbia in the future?

D. Morton: We do take very seriously the issue of Hydro’s dams and dam safety. We have relied on Hydro’s expertise to identify potential upcoming issues. I think it was last year, or possibly the previous year, there was significant repairs made to the Bennett dam to fix a riprap wall, which had been undercut and eroded by wave action in the Williston reservoir.

We’ve had reports of some of the dams in the Bridge River system that are not able to perform up to their design standard anymore because of potential seismology issues. We are looking at those. We have not conducted or initiated an overall review of the whole system, however. But it is something that we will consider.

R. Sultan: Thank you for that response. I’m encouraged that the BCUC — while as in response to the question of Mr. Glumac, is, in the first instance, concerned with rate structures — considers it, to some degree, part of its mandate and responsibility to also consider the integrity of the entire system from a technical point of view. I thank you for your response.

S. Bond (Chair): Thank you, Ralph.

Malcolm, I think you had something you wanted to add.

M. Gaston: Coming back to the member’s first question to Mr. Nagati, just to clarify, our original intention here was to conduct an audit. The planning process that we go through under standards requires us to identify risks that there may be and whether those might be raised that we would audit.

As Mr. Nagati has already highlighted, our planning work had confirmed that the risk areas that we identified had already been covered by the task force reports. The judgment was that given we have finite resources, there wasn’t a lot of value that we would be able to add in addition to the work that government had already commissioned — in addition to the recommendations that had already been made.

Rather than just stop and say nothing, there was value for legislators and others to report on what we had done, why we had stopped and to highlight the context for that decision.

M. Dean (Deputy Chair): I’ll be brief. I just wanted to bring us all back to all of the work that has happened and the recommendations and subsequent actions. The message from the Auditor General’s office was about moving to strengthening and protecting the independence and the credibility of the BCUC.

All of the action plans and the recommendations, creating the strategic plans, key performance indicators, all of that plan of work…. Is that genuinely moving you towards strengthening and protecting your independence and credibility?

D. Morton: Yes, I think it is. I think there is a lot of good work done in the task force report. There are a number of recommendations, as you can see, that remain to be implemented. I think that refocusing on those recommendations and recommitting to addressing them is very helpful for us. It helps us build our capacity and increase our effectiveness and maintain our independence.

The short answer is yes.

S. Bond (Chair): I have a few questions.

Interjection.

S. Bond (Chair): Oh, is there someone else?

Okay, go ahead, Garry. Why don’t you go ahead, and I’ll just wrap it at the end. I want to make sure you have enough time.

G. Begg: Thank you for your presentation today.

[11:35 a.m.]

I want to predicate all that I say by a general observation. I think it’s important that we recognize that we value performance over process. At least I do. If you had the impression that you were being chastised or otherwise castigated for doing a report, rather than an audit, I think that was unintentional. I think it actually represents some proactivity on your part, and you should be commended for that.

I do have a couple of concerns. They all relate to the same issues that Mitzi just addressed, and that is the independence of the commission. I would ask you to put that same lens on — that forward-looking lens — and identify those areas in which you see the greatest threat for your independence. Where will that come from?

D. Morton: Before I answer that, I’d just like to speak to the word “independence.” I think there is a subtle difference between government, let’s say, stepping in with an order-in-council in the middle of a proceeding and saying: “We don’t need this proceeding anymore because we’re going to set a rate increase of whatever percent.” That’s not an infringement of our independence. It’s government’s right and government’s prerogative to do that, and the statute reflects that.

However, I do think, in many cases, that can reduce our effectiveness. While there may be really good reasons for government to do that — as Kurt pointed out, policy reasons, and so on — that’s not always transparent to the public. Our effectiveness is, in part, because the public sees us as being the regulator and protecting their interests, and utilities see us as also protecting their interests. That’s all done in a transparent process. As soon as rates get set in some other way, then that infringes on the transparency of the process. I think that that’s damaging.

To answer your question, I would say that that is a big threat. It’s not necessarily a threat to independence. I don’t want to put too fine a point on the words, but it’s certainly a threat to our effectiveness, or it can be a threat to our effectiveness.

G. Begg: Just to follow up on what you said. I’m not sure that you answered my question directly. Are you happy with the path in front of you now? Are there sufficient mechanisms in place to mitigate any risk to your independence from any quarter?

D. Morton: When I answered the question earlier about the pendulum and where the pendulum is going, in my view, I think that that’s positive. I would say I’m happy about that. I’m happy about the areas where we do clearly regulate, and there hasn’t been any order for us not to regulate. I think we do a good job there, and I’m happy about that.

G. Begg: For what it’s worth, I think that you should be commended for the work that you do. Any position where you’re required to provide guidance, oversight, independent advice, is a very taxing one. And I think you should zealously guard that. You should be commended for the stance that you’ve taken in regards to your independent oversight and your ability to bring in experts. That is the check in the check-and-balance system. So thank you.

S. Bond (Chair): I just have some questions related to the report. On page 4 of the Auditor General’s report, it points out: “Over the last three years, government and the commission have made changes, but it is not clear how government intends to proceed with outstanding recommendations.” Has that been clarified?

P. Nagati: Through the presentations?

S. Bond (Chair): No. The report says that when it was published, it was unclear “how government intends to proceed with outstanding recommendations.” Has there been a clear process identified of how the government will deal with outstanding recommendations to your satisfaction, because this is your statement, the Auditor General’s comment?

P. Nagati: Yes. I mean, through the presentations today, we learned that work is ongoing. There is still some work to occur. We also learned, through the work that we did, that stakeholders are quite pleased with the progress made so far. But once again, there is still work to happen. We can’t comment on something that hasn’t occurred yet.

[11:40 a.m.]

S. Bond (Chair): Because this is a series of observations and a summary, no recommendations coming out of the Auditor General’s office…. A report is published, and there is a significant body of information. What now does the Auditor General’s office do, in terms of the ongoing monitoring?

No one here denies that you can’t comment on something that hasn’t happened yet, but you’ve laid out a report that clearly says there’s more work to be done. What is the mechanism of the Auditor General’s office to continue this work? What happens next? Even though it wasn’t an audit, it is a report — an unusual one because it is a non-audit. It makes strong statements about what needs to be done, not sure about what’s going to happen. How does the Auditor General now maintain a role in ensuring that these recommendations are taken care of?

M. Gaston: This is something that would be taken into account as part of future planning for our performance audit work. Our planning a few years back had identified the Utilities Commission as an audit that we wanted to conduct. As we’ve talked about today, we started planning for that. We decided that an audit wasn’t going to add value. We’ve obviously heard today an update on what has happened, what is in process and what is still going to be worked on. That’s all information. We’ll obviously keep up to date with that. That will feed into our planning.

If a decision is taken in the future that we want to do an audit, again, of the Utilities Commission, then that is something that would be in our coverage plan. A decision would be taken, along with all of the other possible audits that we can do and the resources that we have available.

S. Bond (Chair): I, for one, am not suggesting that it needs another audit. What I’m suggesting is that you’ve laid out a series…. You’ve relied on the recommendations that were provided by the task force. Will you now have a mechanism that monitors the 35 recommendations, especially since one of the statements in the report says that we don’t know whether government is going to continue with these. The point is that you tabled the report. What happens next? I get that you may not do a full audit, but I’m assuming that somebody is continuing to have a mechanism for monitoring progress.

I think Russ wants to respond.

R. Jones: You’re absolutely correct. In a normal audit, where we have recommendations, we do a follow-up a year afterwards to make sure that there’s an action plan and that the recommendations are being followed. In this case, it is unusual because we don’t have any recommendations.

As Malcolm has pointed out, we do have a three-year plan that we’re currently updating. It is in the mix. It could be one of the things that we decide to do. As Malcolm said, either we could do an audit, or we can just monitor and follow up, much like we might on a regular audit that we do. So it hasn’t escaped our attention, and it is something that we’re on top of. Now that we have seen the response from government and the BCUC today, it gives us some additional information, as well, to look at in the future.

S. Bond (Chair): My point is simply that I think reports from the Auditor General carry a certain degree of weight and an expectation of transparency. They lay out all of the recommendations. In this case, it’s a summary of someone else’s work, yet there are editorial comments added, or there’s opinion added to that. One would assume that making sure the recommendations are carried out is important.

The Auditor General saw it necessary to…. I mean, I suppose you could have not reported at all. I’m not sure that that could have been a choice. You decided to contemplate an audit. “No. Then we’re going to do a non-audit report.” I think it leaves an unfinished piece of the work. If the Auditor is going to comment, then I would assume the Auditor would want to see some sort of continuity or at least an iterative approach.

We want be on record — at least I do — as noting that if you’re going to lay out a report of this magnitude, one would want to assume that if it matters enough for you to write a report, you’d want to make sure there’s an ongoing process of monitoring the work that you’ve reported out on.

A couple of other things that I wanted to ask about. On page 17 of the report, it talks about how there hasn’t been a definition of “public interest” when it comes to this work by the B.C. Utilities Commission and others. I’m sure that in government elsewhere there is a definition of public interest.

[11:45 a.m.]

Can someone explain what they might want to see happen, related to it? This is about the public interest. It’s all about the public interest. That’s, I’m assuming, core to the work of the BCUC. If there’s no definition of public interest, how do you know you’re meeting that test?

D. Morton: You’re absolutely right. Public interest is a very important consideration. In fact, it’s laid out in the act as a test in many of the decisions that we make.

In the approval of infrastructure spending, for example, there’s a public interest test. In the approval of rates, the test is that rates be just, reasonable and not unduly discriminatory.

There’s no definition of public interest; however, it is up to the panel to decide what the public interest is. Our approach to the public interest is broad. Again, our processes are inclusive of other parties, so other parties are free to bring forward issues that they feel are public interest issues. Our staff develops issues that they feel are public interest issues, and they can include anything at all.

In many cases, there’s other regulation and other regulators that, I’ll say, look after those things and, in some cases, may be outside of our jurisdiction. But we do ensure that the public interest gets aired and that there’s been adequate consultation of public interest issues by the applicant.

We have not heard from any of our stakeholders that there needs to be a specific definition of public interest. Frankly, I’m not sure we would get a better result if there was a defi­ni­tion of public interest, because as it is, there’s nothing that’s not a public interest issue. That’s the way it stands right now.

S. Bond (Chair): Well, yes. We’ve had a very interesting discussion here today about the role of policy and legislation. It’s actually that policy and legislation that shapes or defines or, in some better way, provides that sense of what the public interest is, at least from government perspective. Is that accurate?

D. Morton: Certainly, from government perspective, yes, absolutely.

S. Bond (Chair): Okay. Because then what happens is the BCUC interprets that.

D. Morton: Yes, but it’s not just government. For example, a few years ago, we did a fairly lengthy hearing in Kelowna for Fortis electric. They wanted to implement smart meters. Even though Hydro’s smart meters were exempt, Fortis’s smart meters were not exempt. The public interest issues that we dealt with there were broad and inclusive. As you know, there was a lot of concern about smart meters, electromagnetic interference and security issues — the security of the grid, the ability of people to attack the grid, and so on. We had a week-long oral hearing into exactly public interest issues. As I say, I think they got a good airing.

While I recognize that government has policy concerns and policy issues that do come under the public interest, it’s even broader than that.

S. Bond (Chair): I wasn’t suggesting for a moment that it’s good or bad. It’s just that the Auditor General’s comments point out the lack of an explicit definition of public interest, and that can be both positive and negative. It does speak to the issue of legislation and policy and how that helps the direction of that public interest. That’s a pretty critical part of it.

I’ll have this last question, because I know we have one other report to see. We do need to wrap because we have another report that we have to get to before lunch.

I’m interested in…. We’ve talked about the pendulum swinging and your degree of happiness with where things are at. We’re now facing an Auditor General’s role in terms of B.C. Hydro. That work, I assume, is moving forward. Earlier this week, I understand, the government has also announced another review of B.C. Hydro with a goal of “controlling rates.”

[11:50 a.m.]

Is anyone prepared to sort of speak to the way that these processes work together or complement or support, or the role of the BCUC while all of these inquiries and work take place?

D. Morton: I can speak to the BCUC’s role. I’m not sure how the timing of all of these inquiries and how that part of it all meshes. But in the revenue requirement decision that I was talking about earlier, one of the recommendations that we made and asked Hydro to follow up on was a longer-term plan for aligning costs with revenues. We call it a performance-based rate-making approach.

Basically, the rates are capped, which is what direction No. 7 had already done with the ten-year rate plan. But the thing is that the utility has to work within the rate cap to ensure that its costs fall underneath the rate cap. That’s a difference in approach to a more traditional approach, which is that the utility says: “Well, I need to spend this much money, so therefore my rates have to be set at enough to collect that much money.”

We’ve asked B.C. Hydro to come forward with their performance-based approaches, and we would like to see those put in place for the next five- to ten-year period. And that may well work with their ten-year rates plan.

Now, government’s review of B.C. Hydro…. Unless something changes by directive, B.C. Hydro does have to bring forward another rate application, and their latest date that they can bring it forward under the current legislation or in the current regime would be approximately next February, because they would need an interim rate in place by the end of March. So, regardless of changing of auditors and government reviews, we do expect another rate application by then. Before then, we would like to see Hydro’s approach to our suggestions of controlling costs and keeping them within the rate cap.

That’s all I can really comment on.

S. Bond (Chair): Okay. Appreciate that.

R. Jones: I’ll try and update you on everything we’re currently doing, if I’ve got them all in the back of my mind properly. We’re currently wrapping up an audit, right now, of asset management at B.C. Hydro, which will be out in the fall, if I’m not mistaken.

Interjection.

R. Jones: Yeah, so that one’s in progress.

We are taking the financial audit over, not for this year but starting next year, so starting April 1, 2019. Part of what we will be doing in that audit, of course, is looking at how the accounting for rate-regulated accounting is occurring, which will require us to chat with BCUC on a regular basis to see what their process is in determining what amounts can go into those regulatory accounts and how they make sure that Hydro is recovering them in a time frame that makes sense.

We are currently also looking at the regulatory accounts that are in place right at the moment and are going to be issuing a report in, probably, the fall again on trying to describe what they are, how they come about and just whether they meet the standards that are in place right at the current time. I could spend a whole day talking about that, but I’m not going to right now.

We’re also looking at, for our opinion on the public accounts of the province, for this past year, whether or not we can quantify the qualification we had in last year’s public accounts around whether or not, at a summary level, the regulatory accounts should be allowed or not allowed. There’s a lot on the way, right at the moment. That decision we have to make within the next month, so stay tuned for that one. But all the others are more forward-looking.

S. Bond (Chair): Thank you very much. I think Rick had one last question he wanted to fit in, in a quick way, here.

[11:55 a.m.]

R. Glumac: Yes, I will be quick. Just a quick follow-up. It was very interesting, the distinction that you made between independence and effectiveness. The task force was tasked with making sure that there was independence of the commission. Independence can happen even in the context of inability to review things. You can still be independent.

What is the mechanism to determine the effectiveness of the BCUC? Would that be something that the Auditor General could audit, or would that be something that this committee would investigate? I’m curious to know what the mechanism would be to gauge the effectiveness of the BCUC rather than the independence.

P. Nagati: The work of the 2014 task force is focused on the effectiveness of the committee. That is the thrust of the work — the identified issues impacting the effectiveness of the committee. Once again, our planning work identified the same risks, and we spoke to it in our report.

R. Glumac: But I heard a distinction between those two things.

P. Nagati: Well, independence is one of the issues impacting effectiveness. It’s one of the areas identified by the task force and through our work.

R. Glumac: I wonder if they’re….

S. Bond (Chair): Russ, did you want to chime in there?

R. Jones: I was just trying to think of an example, from an accounting perspective. One of the recommendations, I think, that the task force came up with was around…. While government can issue directives, they should not predetermine the outcome that BCUC should come up with.

From an accounting standpoint, in a number of cases, the government directed BCUC to allow a certain regulatory account to occur and to allow certain costs to go into that regulatory account without any scrutiny, I think, of BCUC in some cases. That fetters their job, because the costs that may have ended up in that account may not meet the accounting standards. That is a problem when that happens. Government should allow BCUC to set the account up but then ensure the accounts that go into that meet the accounting standards that are in place.

I’m not sure if that makes sense, but that’s some of the stuff we will be looking at when we take the audit over.

S. Bond (Chair): Thank you very much.

I thank my colleagues for their questions today and for having done their homework.

Thank you to the BCUC, the Attorney General’s office and, of course, the Auditor General for their participation today. It is much appreciated.

We’ll take a minute here and switch up the chairs, if you don’t mind. We’ll have to reorganize that end.

The committee recessed from 11:58 a.m. to 12:01 p.m.

[S. Bond in the chair.]

S. Bond (Chair): We’re going to welcome the participants who are going to speak to the next report.

Once again this morning, welcome. The report we’re going to consider is the Auditor General’s report Product Stewardship: An Overview of Recycling in British Columbia. I believe it was done in November of 2016.

Once again, we will ask the Auditor General’s office to make some opening comments and to walk through some brief slides about the presentation. I think that probably Russ Jones will make the opening comments. Then we’re pleased to welcome representatives of the Ministry of Environment and Climate Change Strategy. I’m sure that David Morel, who’s an ADM there, will be introducing his staff.

I should have also, at the earlier part of our meeting, recognized Carl Fischer, the comptroller general, who is here with us today, as he always is. We very much appreciate the attendance of our comptroller general, so thank you for being here.

With that, Russ, we’ll turn it over to you for some beginning comments.

Product Stewardship:
An Overview of Recycling in B.C.

R. Jones: Thank you, Chair, and good afternoon. We’re into the afternoon now, one or two minutes. And, committee members, good afternoon. We are pleased to present our report on Product Stewardship: An Overview of Recycling in British Columbia. Again, this was not an audit. It is an information piece.

Our office heard from a number of stakeholders who were concerned about the regulation and management of the recycling system in B.C., which is also known as product stewardship. In light of these concerns, we made a commitment in our performance audit coverage plan way back in 2015-16 to determine if we should audit the effectiveness of the Ministry of Environment’s oversight of product stewardship.

We undertook work to better understand recycling in B.C. We saw indicators that the recycling system in British Columbia is performing well in some areas. For example, the ministry’s stewardship agencies have reported high recovery rates for regulated products. We also saw that the ministry was pursuing planned improvements to its oversight of recycling.

As a result, we decided that an audit wouldn’t add value at the time we were thinking about doing an audit. Instead, we issued this report to provide more information about recycling in British Columbia and to encourage the ministry’s effective management of the program as it moves forward.

With me today I have Morris Sydor, assistant Auditor General, and Peter Nagati, executive director, who will lead you through a summary of the report.

P. Nagati: We have limited time, and you have lunch waiting, so I’ll keep this as brief as I absolutely can.

S. Bond (Chair): Nice try, Peter. We’ll still be asking you lots of hard questions. [Laughter.]

P. Nagati: Certainly. All right.

In B.C., those who make, distribute or sell certain types of products are responsible for recycling them. The intent is to ensure that producers, rather than taxpayers and local governments, cover the costs of recycling. Government regulates recycling in the province, but collection and recycling are carried out by producers and stewardship agencies, like Recycle B.C., formerly known as Multi-Material B.C.

[12:05 p.m.]

The program is known as product stewardship, and it covers a number of everyday products, such as paper, bottles and cans, batteries, tires and electronics. Some of these items are picked up at curbside, at our homes, while others must be taken to recycling centres.

This next slide is our report at a glance. You can find it in our report. In the interests of time, I’m going to move on to some of the opportunities that we identified through our work.

During our work, the project team identified opportunities for improving the recycling program. These opportunities included improving reporting for recycling outcomes; resolving challenges related to stewardship agency competition; consistently applying regulatory oversight of producers to eliminate so-called free riders; expanding access to recycling services to more locations throughout the province, including small communities; and encouraging accountability through transparent financial reporting.

At the time, we observed that the ministry was aware of these opportunities for improvement and was working to address them. This is another example of where we exercised our discretion to not conduct a full audit and to take a different approach to make efficient use of our limited resources.

In the year and a half since we published our report, we’ve continued to monitor government’s progress on addressing the identified opportunities. We’ve met with the ministry three times, three separate occasions, since we released the report. We’ve observed that the ministry has continued to work to address all five areas of opportunity. For example, we noted that the ministry has continued to pursue regulatory compliance and enforcement to reduce the risk of free riders in the system. And as of October 2017, newspaper publishers became part of a stewardship plan, meaning that the cost of recycling newspapers is now recovered.

Based on our understanding of the ministry’s activities, as mentioned, we have not pursued any further work in this area. We do encourage the ministry to continue its efforts to improve and refine its approach to product stewardship, including ensuring communities across B.C. have access to appropriate recycling services.

That concludes our presentation.

S. Bond (Chair): Thank you.

David, if you would mind responding on behalf of government, that would be fantastic. Perhaps introduce your staff as well.

D. Morel: First, let me introduce Bob McDonald. He’s the director of extended producer responsibility, which is the program that was under…. I guess it’s an audit examination, for lack of a better term. Bob will take you through the presentation a bit. I just wanted to say a few opening comments.

First of all, thanks to the Auditor General and the staff for doing this. We do actually appreciate the comments and work that you have done on this.

We believe that there are always opportunities for improvement. We’re going to talk about some ways that are not just mentioned by the Auditor General for improving but some other things we’re doing to make sure our products or our program continuously improves.

B.C.’s product stewardship program is recognized nationally and internationally as leaders. This is referenced in the report. The Extended Producer Responsibility Canada, which looks at all of the programs across Canada, has given B.C. an A, which is the highest in Canada. That means that we still have room for improvement, and we’ll talk about how we’re going to continue to improve.

One of the things we’re doing to improve that Bob will not address…. There are about a half-dozen stewardship plans that are currently in development — in public consultation or under consideration. Those stewardship plans provide us the opportunity to, in a sense, require stewards to take certain activities and put in various performance requirements, put in better compliance points so we can do better compliance jobs — and other performance measures. So we’re actively evolving as these plans come up to improve them from what we’ve learned.

We also want to look — and we’ve discussed this with the minister — over the next year or two, at: are there products that should be added? While we’ve got a wide array of products, there’s continuing demand for new products to be added into our product stewardship, whether it’s Metro Vancouver wanting to add mattresses or other products that come up from time to time.

[12:10 p.m.]

Right now where we are is we want to get through this kind of bulk of stewardship plans, get those done properly, do some other performance improvements and then consider new products, probably in about a year or so, to be added — and then the new stewardship programs added.

I’ll leave it at that and let Bob kind of provide a bit of an overview of the presentation. I’m sure you’ve all had an opportunity to go through it, so we won’t go through it in any real detail. Then we can answer questions about what is in Bob’s comments or the programs in general.

B. McDonald: Thank you for that, David.

So we’re all on the same page, what we have is the recycling regulation that stands, and what we do to it every now and then is add a schedule which covers off a product category, be it mattresses or electronics or something like that.

Then what happens is the industry that produces those projects…. They generally get together and form a stewardship agency that writes a stewardship plan that is approved by the ministry. That’s kind of their go-forward orders as to what’s expected as they roll out that plan, in terms of access or collection rates or this, that or the other thing. But that’s the plan. That’s the real piece of this, as Dave mentioned, and that is continually evolving.

I think somebody like Peter and company realized as they got into this area that it’s very public-facing. If you’ve got eco-fees that…. Most products, when you buy, have an eco-fee if they’re under the program, just to recover the costs of providing that full on for end-of-day recycling service.

You’ve got those transactions happening every minute. You’ve got people accessing return facilities or systems, be it your curbside service or a depot. Again, every minute, every day around the province — very public-facing. We get a lot of feedback — the good, the bad, the ugly. We get a lot of feedback, so that really helps us evolve these programs over time.

As Dave mentioned, B.C. is a leader, but it has taken a number of years to get all these programs in place. They’re coming up to their five-year renewal date of those stewardship plans. As Dave mentioned, we’ve got these half-dozen plans that are…. Five years later, now that it’s been fully implemented, how can we improve that? I think that’s one of the themes of this presentation — just continually evolving programs.

I mentioned the recycling regulation. It’s very results-based. It gives a fair bit of latitude in terms of…. It talks about adequate consultation, adequate access to return facilities, sufficient this — that type of thing. It gives program staff a lot of ability to prescribe what we expect as a benchmark, as a performance measure. Those differ between different programs, but it really allows us to hone in on the specific program and evolve that over time.

They’re very efficient and effective compared to other jurisdictions. They’ve got their environmental performance highlights noted and overall support across the board from industry, from local governments. Whenever we get a complaint of some sort, they start by saying: “We like this program. We want to see it expand, but….” They’ve got an issue with it.

One of the areas that came up was just better reporting. Often, these plans…. Again, I mentioned that they’re the backbone of the programs. They were very loose. So we’ve given them very strict instructions, a self-declaring checklist of what those performance measures are throughout the plan — not a rambling story about how they’re going to manage their products but very clear, defined performance measures. What page? What’s the measure? Are you meeting that regulatory requirement associated, yes or no? That type of thing.

We’ve also given them very strict instructions as to annual reporting. So when you wrap that up — and those annual reports come out July 1 every year, following the previous year — spell it out clearly so that everybody can see, very transparently, what you’ve been up to and how successful you are.

Those are two big areas that we’ve added to, in terms of guidance for producers. We’ve done some third-party assurance. Every year we update that, make sure that we’re measuring the right thing in the right way.

Then we contracted Deloitte to do a study on looking around the world at a lot of these programs. How are they improving? What better performance metrics are there? Like electronics. If you’re collecting so many tonnes this year, well, you expect to improve on that next year. But, golly gee, electronics are getting lighter and smaller. So you might be getting more of them, but your tonnage is going down. Are you not meeting that performance measure? Should you switch performance measures?

We’re always trying to keep up to speed and evolve our programs to make sure that we stay at the front of the class.

[12:15 p.m.]

Competition. We’ve done a two-phase study. It started in 2016. The second phase took place last year. We’re just about to release it. We thought last month, but hopefully this month.

The main recommendations with that are…. The interest from the OAG was to see how competition between stewardship agencies might fall out or play out in B.C. We took that and also expanded on it, just to make sure that for competition at that level, we had the right policy and pieces in place.

But also competition beyond that, making sure that healthy competition with a stewardship plan or a stewardship agency meant that for all those services that they contract out each year — collection services, processing services, whatever — they have healthy tenders and they get the best price for their consumers and for the public in general.

There are a number of recommendations. I won’t go through them all. Probably the most relevant is at the agency level. This is coming out of the report. There is a clause in our regulation that allows the statutory decision-maker to consider the implications on another agency, an existing agency. So if somebody else comes into the game, how does that play out? The report finds that a very sort of frightening thing as to how that might be abused, so some guidance on that was provided.

If there is a program coming in, does it necessarily mean it has to be a provincewide program servicing all corners of the province, like an existing program? It recommends: not necessarily. You might be able to franchise up the province or that sort of thing so that each agency is playing with the same costs and services, but they don’t have to mirror each other or overlap each other.

Some healthy recommendations like that we’ll definitely be taking into account. We’re already moving on a number of these other areas that we’ve checked off.

Our compliance and enforcement has mentioned that the free-rider issue is a major issue that really undermines the program. Let’s say, with packaging and printed paper, if there are a number of producers that aren’t paying into the system, their material gets collected in the basket of goods at curbside or wherever anyway, so the producers that are in it are paying for it. They’re also getting a lot more material, then, that isn’t theirs, so they’ve got a very good recovery rate, and it starts to distort things pretty quickly.

It’s unfair. There are subsidies going on from one producer to another that’s not participating. We went after some 500 different producers, and most of them just acknowledged that they weren’t aware of it, and now they’re in the game or coming into the game. There are a lot of complications with parent companies and the way our regulation has a cascading definition of who’s responsible, but most folks are coming into compliance. It’s taken some time to make sure that this program is fulfilled.

For the other ones that are more established, that have been around for 20-plus years, free-riding producers are not an issue, but packaging and printed paper really highlighted an issue.

Access to recycling services. I mentioned provincewide service. What’s that perfect level of accessibility around the province? Is it having a depot for different materials in every community of 200 people plus? Is it 4,000 people plus? What is that perfect match? That’s always a challenge. Some programs are depot-based; some are curbside. Some are mail-back, if you have thermostats or things like that. Getting that provincewide coverage will be an evolving, continuing discussion.

With the packaging and printed paper program, there was a gap. There were a lot of communities, 30-plus significant communities, that weren’t in the program, that there just wasn’t funding for. So when we got those free-riders in, the funding came along. They were all offered services as of the end of last year, which was the goal. So we finally got that sorted out, ensuring that access to recycling is there for everybody.

The last one was just financial — better transparency with financial reporting. The way the regulation sits, if you charge a visible fee at the point of sale, you have to have fully audited financial statements provided with your annual report. Well, something like Recycle B.C. doesn’t have a visible fee at point of sale on your toothpaste or whatever, so they don’t have to. Fortunately, they committed to. I think we strong-armed them into doing this initially, with their plan that they would do that. Other agencies have done that as well.

There’s one group of producers that doesn’t do that, and we’ve highlighted this issue with them. Thank you to the OAG for helping us with that. They’ve committed to also going with that fully audited financial statement.

[12:20 p.m.]

They just haven’t bothered. But because it’s better transparency and they like the regulation, they want to be transparent. We expect that to be coming this year for all the agencies that report.

I think I’ve covered it as quickly as I could. I thank the OAG for their work. We’re good for questions.

S. Bond (Chair): Thank you very much, Bob. We appreciate that. And also to David — we appreciate it.

J. Yap: Thanks for the presentation. I’m curious about the reference to so-called free riders. In the report, on page 14, it refers to, as an example, the newsprint newspapers. What level are we talking about? Is it the newspaper, like the local paper or the regional newspaper? Or is it the producer of the newsprint, the actual paper? Or is it the community that is not paying in?

D. Morel: I can talk a little about the newspaper issue. At the time of the report being written, the newspapers were not in the Recycle B.C. program. Over the last year and a half, we’ve had discussions, and that has changed. The newspapers now are included in the Recycle B.C. program. That has been what we think is a major accomplishment, because it helped to fund Recycle B.C. to have coverage for communities that were wait-listed.

Since getting them into the program…. I think it’s 30 communities that were on wait-lists and have all been made offers by Recycle B.C. to join in to the program. When the report was written, newspapers were outside of the program. But that has since changed. Now they’re actively involved, and that’s allowed us to expand our products.

J. Yap: For example, in my community there are two papers — the Richmond News and Richmond Sentinel. Would they now be paying into this, or would their parent company be paying into it? How does that work?

D. Morel: It’s through the parent.

B. McDonald: Yeah. So there are four or five major chains operating in B.C., and they cover all the community newspapers. That’s sort of the major group, shall we say. There’s also a number of independent or small, sometimes multicultural, papers or something outside of that, but the main chains cover off all those papers, as you mentioned. And they’re all part of that payment to the system now.

Those chains operate across Canada. It’s the same situation in other provinces. All the other provinces have found equally creative solutions to support the newspapers in some way, to make sure their products are recycled.

J. Yap: So as technology changes and as society shifts with it…. This is actually a good example, right? I’m thinking the trend is probably a sunset trend. Over time, as more and more baby boomers and Gen X’ers shift to their iPads and not newsprint to get their news, the volume in five, ten years will probably be significantly lower. So will the system adjust to that?

D. Morel: You’re pointing to something that we see occurring in the newspaper industry. The collection weight of newspapers in these systems is declining and will continue to decline, we believe.

We all see not only the thinning of the newspapers but…. Thinner newspapers and fewer people buying them — we see that transformed into the newsprint industry in the province and the problems that that’s bringing.

So yes, there’ll be declining revenues from the newspapers, or we expect that over time. From a pure recycling perspective, maybe that’s not a bad thing, because the first thing we want to do is…. I understand the negative effects to some of the other sectors, but we do want to reduce, as one of our important items in the recycling programs.

R. Glumac: I have a question. I was on city council when our community, Port Moody, signed on to MMBC. One of the challenges that many communities face is, if they have in-house collection, they’re not being fully compensated for that collection.

I don’t know whether it’s true or not, but there has been discussion around….

[12:25 p.m.]

In some communities where the collection is contracted out, the money going towards that contracted-out collection is actually more than what the communities receive who do it in-house. Has there been any audit of that or any analysis of that?

D. Morel: I’ll start and maybe let Bob answer a bit more specifically.

The payments to the depots or to the other places are, I think, one of the most controversial issues that we hear about from Recycle B.C. If you’re running a depot of any kind, say a bottle or some of these other depots, we get consistent complaints about not enough funds going there.

R. Glumac: To be clear, I’m not talking about depots. I’m talking about curbside collection.

D. Morel: Curbside collection. Oh, I’m sorry. I’m not quite understanding the question. Maybe you could ask it again.

R. Glumac: The amount of money that the municipalities get compensated for doing in-house curbside collection of recyclables is not enough to cover the costs. With extended producer responsibility, the intention is that the costs would be fully covered. They’re not.

The complaint that I’ve heard is that those municipalities that chose to contract out those services for curbside collection…. The costs going towards that are actually more than what municipalities receive that choose to do it in-house. I’m wondering if there has been any analysis of that, in terms of whether that’s true or not, or it’s just hearsay.

B. McDonald: It’s, again, a function of…. We get a lot of feedback on that front, as you can imagine.

Actually, I was with the Cowichan Valley regional district when this program was introduced. We had contracted our services out. We ended up going in-house, buying all new, fully automated trucks. We crunched the numbers every which way to Sunday. We were getting 95 to 90 percent of costs covered on that. That’s a personal experience where I know it was sufficient.

We’ve got a couple…. I’ll just say a couple, because there are only a handful that are saying: “Actually, it more than offsets our costs.” I think the city of Kelowna is one of those that’s said: “No, no. We’re….” But you’re right. Most folks, with their curbside service, say it’s not quite enough.

When Recycle B.C., or MMBC at the time, started introducing the programs, they went around and did an audit of costs. Again, we were one of the jurisdictions that they audited. I thought it was a fairly comprehensive audit. They ended up…. The costs were on the graph in different areas. They tried to set a bar that covered most folks. Obviously, some were below that, had expensive programs or inefficient programs. Some were above. But they tried to cover that off. That, I’d say, was a first cut at the cost.

Now that their plan, as Dave mentioned, is due for renewal, reviewing those costs is central to that. I just had a workshop at a conference two weeks ago. That was an hour plus of discussion of doing the survey. Where are those costs landing today? They’ve already made some adjustments or are proposing adjustments on that.

I know you’re not asking about depots, but as well, some of the depot costs per tonne that they provide — those went up 300 or 500 percent. They’re starting to sort that out, sort of not year 2 but round 2 of their program. That’s something that we, as a regulator, are saying: “It’s part of the regulation. You need to really demonstrate….”

We just provided some guidance on this to all the stewards, saying: “As per the regulation, you need to demonstrate what your basis of methodology is to come up with those costs, and if you’ve got input from somebody else, local government, on curbside or whatever which counters that…” Well, now you’ve got a much healthier discussion. But before, it was a lot of: “That’s what we’re going to pay you. End of discussion.”

That doesn’t really work for people. Now we’ve got a much better system for getting those costs more closely defined and set out properly.

D. Morel: Bob, will the costs be changed as part of the stewardship plan that we’re looking at?

B. McDonald: Yeah.

D. Morel: Under the stewardship plans that we’re currently developing, this is one of the topic areas that we’ll be hoping to address as we approve their stewardship plans.

R. Glumac: So the costs will change. What is the timing of that? Is it a renegotiation? I mean, is it going to be another sort of “Here’s what you’re now going to get” kind of thing?

B. McDonald: They just introduced what they found is the basis of their costs that they’ve studied — RBC’s come out with. Now they’re going to sit down with all those service providers and say: “Does that make sense? Let’s get your input on that.” Then they’ll finalize those costs in some sort of contract that they have with each service provider.

[12:30 p.m.]

We, as the regulator, sit there at the end of the day and go: “Is that reasonable? Are they covering off all the right pieces of that cost equation?” Hopefully, they have. But having that discussion and getting all those pieces identified and on the table — that’s the new guidance we’ve provided to them.

We know those costs will change. I think they’re all in­creas­ing to some degree. Some of the other costs with their program — like, say, the depots — are significantly increasing.

D. Morel: So this year, 2018?

B. McDonald: The contracts expire in November 2018. The new contracts start December 1, 2018, but they go for five years. So that discussion is still ongoing for the next two months.

R. Glumac: Okay. Basically, municipalities that are doing in-house collection will be renegotiating that contract at the end of year based on all this new information.

D. Morel: Based on guidance we’ve given them on how they should calculate those costs.

R. Glumac: Okay. One more question. I remember one of the things in that contract was — and you alluded to it in some of the materials — tonnage, the amount of recyclables collected. You get a bonus if it’s over a certain amount or something. I mean, ideally, we’re trying to reduce overall. I’m wondering. Is there going to be any consideration of a plan for reducing waste and also packaging, overall, instead of incentivizing the creation of more of it, in a way?

B. McDonald: That is good to question, because it rubs both ways. If you have a jurisdiction that has a collection service and people aren’t using it and that material is going to landfill, that’s not good. That’s why there’s an incentive to get as much that’s out there into the recovery system as possible. But overall, that’s part of the extended producer responsibility mantra. If there’s now a cost on producers at end-of-life for managing their products, it comes back to haunt them.

I’ll just use an example. If a fast-food chain does a bulk mail drop every month — 30,000 people in Kelowna or something — now they might just switch to radio. That’s an 100 percent cost reduction. They don’t pay that fee. They’ve got an incentive not to do that anymore. They may start lightweighting things. They may start redesigning things.

They’ve got incentive from us, as B.C., a very small part of the global equation. But this is happening across Canada and in Europe and everywhere. All the global manufactures are going: “We know where this is going. We’re going to start redesigning our product so there’s less of it, less wastage, less cost.” That’s the nice end goal of the EPR, extended producer responsibility.

R. Sultan: When MMBC was introduced, some of us skeptics in caucus said: “There’s no such thing as a free lunch. Somebody’s paying for this.” But we were assured: “No, no, no. The producers are going to pay and support this thing.” At the end of the day, if you add it all up, who’s paying for all of this? Is it perhaps, as I secretly wondered, paid for through added costs built into the price of the merchandise we purchased in the first place?

D. Morel: Some of the programs do have fees. The most common one we think of is every time you buy a can of Coke or something, there’s a deposit fee or some other…. I mean, that’s one separate program where there’s a fee that is put on.

What we have done is taken some of the cost responsibility away from municipalities for doing that by having the producer responsibility fee. It’s a good economics question of how much of the fee gets passed on to the consumer and how much of the fee actually gets taken by the producer. I used to be an economist, and I’ve seen how those studies kind of go and the difficulty in doing them. But there have been fees put on products.

R. Sultan: Well put. Second question. Where I live, I put out my plastic bag full of paper. Then I have a blue box. Then I’ve got the trash barrels. Then I’ve got the organics in a green box and then put garden clippings out in a paper bag specially designed. Five different categories sitting out there on the curb.

[12:35 p.m.]

You better figure out carefully what day of the week it is, because you’ll probably get it wrong. Four or five enormous diesel-driven trucks. It must have 500-horsepower engines and a team of people who empty and handle all the equipment arrive at random times during the day. I’m looking at this and saying, “Wow, does this make sense — we’re having a talk about global warming in a moment and all these big diesel trucks on the highway — or is it a little bit overkill?”

D. Morel: I don’t know if we’ve ever looked at the overall climate change implications of having the trucks collecting, you know, in kind of a life producer life cycle. We believe that when you look at the amount of waste going to landfills, the source separation that goes on at residentials is very helpful for that. And that’s an important issue to deal with.

On the climate change side, there’s the whole food and organics issue, which is a major climate change issue that the government will be bringing in some initiatives around in the coming months.

But I can’t say we’ve ever — Bob, unless you’re aware — done a life-cycle analysis of the trucks and what that contributes to climate change versus improving organics, which is another…. If there are less organics in landfills and the gases that they emit, is that a positive or negative? I haven’t seen a study like that.

R. Sultan: Thank you. Then what do we do with the glass? That seems to be a really big issue in my town. I put the glass in a cardboard box — the coffee jars and the jam jars. They accumulate, and I don’t know what to do with them. What are you supposed to do with the glass in this world? What’s wrong with glass?

B. McDonald: Glad you asked. Glass used to be accepted at curbside with your mix of other materials. The problem with that is it gets broken in the compaction part of the truck. As the truck goes around for the day, it squishes everything as much as it can.

Once you’ve got those broken shards of glass, it impregnates the paper and the plastics and things like that, and now that bulk volume of material is devalued significantly because it’s contaminated. So you have to get it out of that waste stream. As convenient as it was, you have to get it out of that waste stream.

Unfortunately, the only option there is depots. That goes for your film plastics, your bags and some of that, because, again, that gets mixed with paper — the plastic bags — and it’s very difficult to separate. It devalues everything else.

That’s already an issue with the China market, right? So keeping that out has allowed B.C. to really ensure that the bulk of those materials, all the rest of the materials, are properly marketed and marketable, but it’s more effort on the part of you.

I’m going to give a little plug here for all the programs that are out there. When you go to the depot, don’t just bring your glass. Bring your old compact fluorescent light and your oil or oil filter and all your electronics, and make that one trip. Once you’re there, you’ll realize all those options that are out there. That’s just my little plug. I had to get that in.

That’s the idea. You do have to save them up. It is a bit of inconvenience, but there are reasons behind it.

R. Sultan: Okay, final question. I read in the paper that China isn’t going to take our trash anymore. Is this true, and is there a world trash crisis now?

B. McDonald: I would say it is a crisis for a lot of jurisdictions around North America. A nice thing about EPR, beyond just encouraging design for the environment, is once you regulate an industry to manage their products’ end of life, whatever the cost is, they have to do it.

Recycle B.C. saw their situation, saw the responsibility they were taking on, and started the program with very little contamination. So at the end of the day, they’re one of the few jurisdictions across North America that is able to keep marketing to China, because they have such a low contamination rate.

Unfortunately, next door in Alberta, Toronto…. A lot of jurisdictions in Canada have stockpiles of material that has the glass or the plastic in it, has contamination, and they just cannot move it. That seems to be the way markets are going. B.C., with the EPR program and the way it’s rolled out, is in a very fortunate situation.

R. Sultan: Thank you. Pat on the back for B.C.

B. McDonald: Yeah. A lot of jurisdictions are looking at us as a model.

S. Bond (Chair): I just have a couple of things before we wrap up.

David, it’s good when you get a “well put” from Ralph. You should write that down, because Lord knows he’s a Harvard guy.

[12:40 p.m.]

Yes, I would agree with Ralph. When we first began this journey, it was pretty chaotic across British Columbia. There was a lot of anxiety about this, so it’s nice to know we got an A. There is room for improvement. I want to speak to that question of improvement.

I think you said, Bob, that the schedules are basically done by regulation in terms of what is collected. Are recovery targets also by regulation?

B. McDonald: No. That’s one of the parts of the regulation that’s flexible. It says a 75 percent recovery rate — basically, what you produce versus what you collect; that’s a threshold — or another recovery rate as defined by the director, the approver of the plan. So depending on what the product is, we can choose another recovery rate or recovery target.

S. Bond (Chair): Okay. That, from my perspective, is a positive thing. I think 75 percent is kind of a nice rate, but if you want to be really pushing people, it’s 80 or 85. You want to be able to do that without a legislative…. So you’re saying yes, it can be done by a director or whomever. That’s important. I saw that there were quite high recovery rates in some cases, so we need to keep pushing the envelope there.

You also spoke to designated products. I have to admit that it’s the first time I’ve heard about mattresses being recycled. So that list that currently is defined…. I was just looking up the regional district of Fraser–Fort George, for example. It lists exactly what is collected there. Again, as things evolve, can you change that list or add to it with relative ease?

B. McDonald: Yes, we can. It’s a regulatory change, currently, to add a schedule to the regulation. We’ve got anything with a cord or a battery, in terms of the electronics schedule. We’ve got pharmaceuticals, tires, packed and printed paper. But if we have the desire to add mattresses at a future point in time, or whatever the product might be, we can do so.

D. Morel: I just mentioned mattresses because in Metro Vancouver, that’s one of the items that they’ve requested to us be added as a designated product. There are other products that come up from time to time that people would like to see added to the list.

S. Bond (Chair): Undoubtedly. You look at things that people no longer want to use.

This is about changing behaviours. That’s what this is about. It’s about driving change through incentives or, in some cases, negative impacts. The whole issue of straws at the moment…. Good gracious. I find myself being very conscious now. I look around me, and there are eight people using a straw. Guess where that’s going. The whole issue with plastics in the ocean — those are important issues. I think all of that matters, which is why I wondered about what you can add and how we change those things. It’s good that there’s flexibility there.

You will not be at all surprised to hear me ask about rural B.C. and where we’re at with that, because there was a lot of concern. I think David may have even been in some of those UBCM meetings where every regional district was up in arms about…. My constituents, whether they live in Dunster or Prince George, want to recycle, especially in places, like the Robson Valley, that are beautiful. They want to participate. Can you just quickly update us? When I look at the report….

Again, you won’t be surprised to hear me say this: unbelievable detail about many other elements. When it comes to regionality, it’s mentioned in about five sentences. It is a huge issue. Before we start adding a pile of other products in urban B.C. — which is important, because that’s where the population is significant — is there some sort of base expectation that people in this province can have where they live, in terms of a general set of products? How are we doing in rural B.C.? There were a lot of very upset people and regional districts, in particular.

D. Morel: The service in rural B.C. continues to be an issue. I’m sure I’ll hear some more about it at UBCM this year. Like with a lot of government programs, there’s kind of a cost-versus-effectiveness issue that the product stewards look at. We’d all like to see better services, but the amount that gets collected also has to be somewhat balanced with that.

With the product stewardship plans that are out there, one of the issues that Recycle B.C. and others will have to deal with is this rural service area. When we get their stewardship plans back from them, we will look at the consultation that took place — what they heard and how they’ve addressed that, including the rural issue.

[12:45 p.m.]

Within costs, we will encourage and build into their stewardship plans targets and ways of dealing with it. But it will never be a perfect system of service where I think we can make, unfortunately, everyone say that there’s service next door, whether it’s rural B.C. or even in some of the larger areas. It takes time to get to those depots to do it.

We’ll look for improvements, but I can’t say that we’ll ever get a system where everyone is going to be perfectly pleased with it.

S. Bond (Chair): I don’t think anyone is asking for a blue box system in McBride. But there is an inequity, because British Columbians across this province pay eco-fees, wherever they live. I want to encourage you, and through you the government, to remember that there are issues in rural British Columbia about this, and that should be part of the consideration of stewardship plans, because people are paying for this. They don’t expect blue box, but they do expect to have a place where they can contribute to recycling in the province.

I was just disappointed, because I think the report reflects that feeling — that it is actually minimally recorded in the report. Yet it is probably, I think it might be fair to say, one of the biggest issues that this program faces.

When you get an audit or a summary of recommendations that says we need to take care of regionality, and it gets five sentences in a report, that tells me that we need to take that seriously. From the beginning of launching this program to now, that has been the biggest issue that we’ve heard about as MLAs: “What about us?”

Then the argument that because there are free riders…. You’re not getting service because there are free riders in the system. That doesn’t go that well in communities who are still paying eco-fees and who want to be contributors to an improved system.

I guess I’ll just make it the last question. I have some other things, but I can deal with them off line. I’m concerned about…. I heard you explain that newspapers were out, and now they’re in. That was the other major issue. While the world is moving to a whole bunch of devices, I don’t want to see recycling be the demise of newspapers in British Columbia, because there was a very onerous schedule.

Newspapers across the province, especially in small, rural communities or wherever, don’t have the larger entity that they are a part of. Was there consultation with newspapers? I mean, it’s great that they’re part of this program as you’ve described it, but is it going to be the demise of newspapers? There was certainly a hue and cry when the regime that was suggested by the previous government was being considered by newspapers. How did we get them on board, and what impacts will it have on the newspaper industry?

D. Morel: There was significant consultation with the newspaper sector, and I must say that they came in through an agreement that we have with them. It wasn’t forced on them through regulation. It was a significant amount of discussion that took place over two to three years, and now the newspapers have actually signed an agreement with us on how they come in — and the terms and conditions of them coming in.

It was done through a negotiation and consultation process that now has them inside it.

S. Bond (Chair): Heaven knows I have enough devices as well, but enough pressure is on newspapers. I certainly don’t want this to be the icing on the cake which drives, especially small local newspapers who may not have the benefit of high-speed Internet…. There are still places like that in British Columbia. Anyway, I just want to be cognizant of that.

Thank you very much. First of all, congratulations on the good work that is recognized in this report. I think everyone here realizes there’s more work to be done, and we encourage you to continue to focus on reporting all of those things that have been outlined. But we know that you’ve embraced the report of the Auditor General, and we appreciate your presentation here today. Ralph now knows that he can take his glass to an MM depot, wherever the closest one is, and I’m sure he’ll be taking that on with his glass. Thank you very much for your hard work and for your comments here today. It’s much appreciated.

With that, we’ll recess the committee, and we will adjourn the meeting until probably about quarter to two. I think our next delegation is available at two, so if we could reconvene at two o’clock, that would be fantastic.

The committee recessed from 12:50 p.m. to 2:02 p.m.

[S. Bond in the chair.]

Correspondence

MINISTRY OF MUNICIPAL AFFAIRS
AND HOUSING

S. Bond (Chair): Good afternoon. We’re going to reconvene the Public Accounts Committee. We appreciate the work that was done this morning, two important reports.

Before we move on to the third report of the afternoon, which is a very significant report…. We can certainly recognize that by the number of representatives we have here today to participate in the discussion here at Public Accounts. Before we do that, I want to draw members’ attention to a piece of correspondence that we received. It’s part of a process that we’re going to continue to try to improve as we look at how we ask questions and then get the answers back from government.

We did receive correspondence from the Ministry of Municipal Affairs and Housing. It was regarding a response to an outstanding question, which was posted at the Public Accounts Committee on the non-profit asset transfer program January 31, 2018.

I know that MLA Glumac did ask some of those questions, so I wanted to bring that item to the committee’s attention. We will be, in the future, hopefully identifying other correspondence that we receive in response to those important questions. I wondered if any members had any questions or comments about the feedback we received. Obviously, we can’t answer it. Despite the many public servants we have here today, I don’t think any one of them could answer this question for us. Well, they might have, depending on their history in the public service.

Did anyone have any comments or requests about the correspondence?

R. Glumac: Just what we talked about earlier.

S. Bond (Chair): Okay. It’s my suggestion, then…. I think, Rick, that you would like to have some further clarity. What we’ll do is we will ask the Clerk of Committees to contact the ministry and ask them to come back. Or we’ll put it on as an agenda item for our next meeting. Did you want to provide some clarity about exactly what you’d like to have them come back with, please?

R. Glumac: My question is around the public interest im­munity — probably the appropriate ministry for this would be the Attorney General — and questions around transparency, because it’s come up in the committee that some questions couldn’t be answered. Some clarity around that would be helpful.

[2:05 p.m.]

S. Bond (Chair): Yours is less about, then, the public asset transfer program. You’re more concerned about the question around public interest immunity, and you’d like a representative to come and speak to that piece.

R. Glumac: Yeah.

S. Bond (Chair): I think the Clerk can arrange for that, and that would indeed be the Attorney General as the ministry that would provide someone.

Any other questions or comments about that correspondence? We’ll try to be more regularized in that approach. The Deputy Chair suggested that from now on, we circulate those in advance. Then, if you have questions, that will be part of our regular agenda. I appreciate that, Mitzi.

Consideration of
Auditor General Reports

S. Bond (Chair): To everyone else who’s here this afternoon, welcome. We are here to consider the report of the Auditor General. That report is titled Managing Climate Change Risks: An Independent Audit. It was done in February 2018.

I feel good. We’re almost in the year of the report now, which is a good thing. We’ve been working very hard to catch up here.

It’s in conjunction, obviously, with the federal government report Perspectives on Climate Change Action in Canada — A Collaborative Report from Auditors General. That was in March of 2018.

We welcome you all. Just for those of you who haven’t been here recently, the process that we will follow is that the Office of the Auditor General will provide some opening comments. Today those will be provided by the Deputy Auditor General, Russ Jones, who’s with us. He’s brought a number of his staff. Someone will make a presentation on their behalf. Then we will hear, obviously, from government. I would imagine…. Bobbi, are you leading the presentation?

B. Plecas: I am, thank you.

S. Bond (Chair): Bobbi Plecas will lead as the Deputy Minister of the Ministry of Environment and Climate Change Strategy. We will go through the presentations, and then members will have either already thought of some questions or you will generate them by the presentations that you make, as we found out this morning.

Welcome all of you. Russ, can I ask you to begin, and perhaps introduce your staff as well.

Managing Climate Change Risks:
An Independent Audit

R. Jones: Good afternoon, Chair, committee members and everybody else who is here today. Thank you for inviting us to present a summary of our report, Managing Climate Change Risks. With me today I have Morris Sydor, who was the assistant Auditor General on the job, and Katie Olthuis, manager on the job.

Climate change, and the impact it has globally, continues to present major challenges and risks. We see this every day in headlines in the paper and scenes on television newscasts. The events highlight the environmental, economic and social threats that climate change poses to our province as well.

Climate change requires two responses: mitigation, reducing greenhouse gas emissions; and adaptation, reducing the potential harms and negative impacts climate change may cause. We need both of these responses to create a climate-resilient province.

Without mitigation, the need for adaptation increases, and there are limits to the degree of change we can adapt to. However, even if all of B.C.’s GHG emissions ended tomorrow, significant change would likely still occur, so the province needs to be prepared. Actions to mitigate and adapt should be complementary.

Overall, we found the B.C. government is not adequately managing the risks posed by climate change. It is very likely that B.C. will not meet its 2020 emissions reduction target, and models suggest the 2050 target is in jeopardy.

Given that B.C.’s actions are part of national and international efforts, it is fitting that we completed this work as part of a Canada-wide collaborative audit on climate change.

I will now turn it over to Katie to provide a more detailed overview of our audit findings and recommendations.

K. Olthuis: Climate change is one of the greatest challenges the world is facing. Here in B.C., we’re feeling the impacts of climate change. From 1900 to 2013, B.C.’s average temperature increased faster than the global average, with greater warming taking place in the north of the province. The province is expected to face increases in extreme weather, rising sea levels and the risks of wildfire and flooding. Plus, we’ll see a change in the location of ecosystems and the species that live there.

In the wildfires last summer, more hectares of the pro­vince burned than in the previous seven years combined. As well, heavy rains last spring in the Okanagan, along with the snow melt, caused extensive flooding.

On the other hand, B.C. contributes 9 percent of Canada’s greenhouse gas emissions, mainly from transportation and the combustion of fuel to produce energy and heat.

[2:10 p.m.]

As Russ mentioned, the B.C. government has work underway to adapt to climate change, but it’s not adequately managing the risks to the province, nor does it have a plan to move forward on adaptation. Government also faces significant challenges in addressing the climate-related risks of flood, wildfire and drought. In addition, as Russ mentioned, B.C. will likely not meet its 2020 emission reductions target.

Our audit largely focused on adaptation to climate change. We found that government hasn’t comprehensively assessed the risks posed by climate change or prioritized among the risks. Ministries and partner organizations conducted a number of sector-specific risk assessments, though all these used different methodologies and approaches, leading to a lack of comparability or understanding of how the assessments work together.

We also found that government doesn’t have a plan to move forward on adaptation. The adaptation strategy was released in 2010 and is now outdated. As well, the strategy did not include clear deliverables, roles and responsibilities, or timelines. In addition, ministries haven’t implemented all the deliverables in the adaptation strategy.

That said, ministries certainly have work underway, and they’ve made significant progress building a foundation of knowledge on climate change. Examples of good practices we found include the work done at the Ministry of Transportation and Infrastructure to require infrastructure engineering work to include climate change adaptation, and the climate-based seed transfer project underway at the Ministry of Forests, Lands, Natural Resource Operations and Rural Development to help forests become genetically adapted to a changing climate.

However, a lack of mandates and limited resources and capacity appear to be obstacles to implementing adaptation actions in the province. We also found gaps in climate data throughout the province. There are fewer climate monitoring stations in the north of the province and at high elevations. As well, there is a need for more monitoring on small rivers and streams. These gaps limit government’s ability to make informed decisions.

Government faces significant challenges in three key areas related to climate change: flood, wildfire and drought. Government may not be able to effectively manage increasing flood risks in the province. Challenges with the current approach include distributed roles and responsibilities, a lack of staffing and technical capacity within the provincial and local governments, outdated floodplain maps and limited incentives for local governments to take action. In addition, much of the province’s diking infrastructure will likely not be sufficient in the face of increasing flood risks.

Similarly, government’s wildfire prevention activities, such as eliminating fuel like debris, twigs and branches from forests, are not sufficient, and they need to be both coordinated and to target areas of highest risk. There is also a need for more research on the impacts of climate change on wildfire in the province.

Mitigating and adapting to climate change isn’t just a provincial government issue. Local governments are often on the front lines of climate change, yet they face significant challenges in adapting to climate change, including inconsistent and limited support from the provincial government.

In terms of mitigation, we found that government has not taken adequate action to meet provincial emission reduction targets, and 2016’s climate leadership plan does not build a clear and measurable pathway to meeting B.C.’s emission reduction targets. B.C. will likely not meet the 2020 emissions reduction target.

Government has met their legislative requirements to report on their progress to reduce emissions. However, the 2016 reporting provided less detail than reporting in 2012 and 2014. As a note, we did not look at the effectiveness of the carbon tax in decreasing emissions in the province as part of the audit.

For a climate resilient province, we need both adaptation and mitigation. As such, we made 17 recommendations for government to improve its response to climate change, and we’ve summarized them in the themes that you see here.

Finally, this audit is unique in that it was part of a Canada-wide collaborative audit project on climate change. The work was done to determine the extent to which federal, provincial and territorial governments in Canada are meeting commitments to reduce greenhouse gas emissions and adapt to climate change. Auditors across the country created a framework so that each jurisdiction would complete an audit independently but that these audits would have similarities, to allow for comparison of actions across the country.

As a group, we developed common questions that each jurisdiction would answer in their work on both mitigation and adaptation. Not all audit offices focused their work on the same aspects. For example, while we focused on adaptation, in Ontario, their audit focused on the province’s proposed cap-and-trade system.

[2:15 p.m.]

The audit work showed that a majority of provinces and territories had developed high-level strategies to reduce emissions but they lacked detailed timelines, implementation plans and cost estimates. In addition, many governments did not know if their planned actions would be enough to meet their emission reduction targets, or they already knew that their planned actions would fall short.

In terms of meeting targets, you can see in this diagram up here that seven governments, the ones shown in dark grey, had not set an overall emissions reduction target for 2020. Of the six jurisdictions that did have 2020 targets, only two were on track to meet them. That was New Brunswick and Nova Scotia.

The audit work also looked at what governments had done to help Canadians prepare for the impacts of a change in climate. The collaborative report shows that at the provincial level, only Nova Scotia had undertaken a detailed governmentwide assessment of risks but that other governments had undertaken risk assessments for individual communities, sectors or government departments. At the federal level, auditors found that only five of the 19 departments they examined had assessed their climate change risks.

As a result of the weaknesses in risk assessments, adaptation strategies often lacked detail, and the federal government, Alberta, Saskatchewan, Manitoba and the Northwest Territories had no adaptation plan or strategy at all.

The summary report included a number of questions that legislators and Canadians could ask of their governments, in place of recommendations.

That concludes our presentation, but I would like to thank the ministries that we included in this audit for their support and cooperation during the audit. Staff at the ministries were actively engaged throughout the process, responsive to the audit team and demonstrated commitment to preparing the province for climate change impacts. That was greatly appreciated by the audit team.

S. Bond (Chair): Thank you, Katie, for a job well done. I appreciate your presentation, and I am sure my colleagues did as well.

We’ll now ask if Bobbi Plecas would like to lead the presentation. I’m not sure if you intend to have other participants speak, but if you could introduce them, or if they could introduce themselves. We do need names on the record, just for Hansard’s sake.

B. Plecas: While Kate sets up our presentation, perhaps I could just take a moment and introduce the group of public servants who are here to walk the committee through our response. I think if we do it by ministry, it might be easier for the members to figure out who’s who as the questions get answered.

I’m Bobbi Plecas. I’m the Deputy Minister of Climate Change at the Ministry of Environment and Climate Change. On my left is Jennifer McGuire, who’s the assistant deputy minister of the environmental sustainability and strategic policy division at the Ministry of Environment. On my right is Tim Lesiuk, the acting assistant deputy minister of the climate action secretariat. Thomas White is the director of climate risk management of the climate action secretariat, and David Tesch, behind me, is the executive director of the knowledge management branch in the environmental sustainability and strategic policy division. That’s one ministry.

Now we can move to the Ministry of Forests, Lands, Natural Resource Operations and Rural Development. Meggin Messenger is on my left. She’s the executive director of strategic initiatives in the office of the chief forester. Madeline Maley is the executive director of the B.C. Wildfire Service in the integrated resource operations division, and Valerie Cameron is the water stewardship manager in the resource stewardship division. Thank you for being here.

From the Ministry of Agriculture, we have Arif Lalani, the assistant deputy minister of the business development division; Joan Easton, the executive director of the business development division; and Willow Minaker, the director, strengthening farming, innovation and adaptation services branch.

From the Ministry of Transportation and Infrastructure, we have Kevin Richter, the assistant deputy minister of the highways department, and Dirk Nyland, the chief engineer at the B.C. Ministry of Transportation and Infrastructure. Thank you both for being here.

At the Ministry of Municipal Affairs and Housing, we have Tara Faganello. She’s the assistant deputy minister of the local government division. Lee Nicol is the director of planning and land use in the local government division.

Then we have, from the Ministry of Public Safety and Solicitor General, Becky Denlinger, who is the deputy minister of Emergency Management B.C., and Jesal Shah, who is the director of the disaster mitigation branch.

That’s it. That’s all we brought from government.

[2:20 p.m.]

It was really the nature of this audit that suggested that we both had to work in collaboration to answer the audit questions. We are now working in collaboration to implement the audit recommendations, so we’re going to, in the spirit of collaboration, take turns leading bits of the presentation. We’ll try and move through the presentation quite quickly, because we know you have it there. We’re also going to take turns answering questions, depending on where your questions go, so that you have the clearest answer from the agency responsible, if that’s acceptable to the committee.

S. Bond (Chair): That’ll be fine.

B. Plecas: The government thanks the OAG for their audit. We agree that the audit process was done in a collegial and appropriate manner, and we appreciate the thoughtfulness that the auditors brought to their review and to the recommendations. Government has stated publicly that it accepts all of the OAG recommendations and intends to work to implement all of them.

We wanted to provide, before we dig into the actual detail of the audit, a bit of additional context that has happened since the audit was released and, certainly, since it was begun. Since the audit was released, the Abbott and Chapman review of the 2017 floods and wildfires report has been made. We feel, as a group of public servants, that that report complements the work of the audit and that together they will provide a solid foundation for making progress on the range of issues that the Auditor identified.

We also wanted to raise the issue of the pan-Canadian framework. The pan-Canadian framework on clean growth and climate change continues to be implemented across Canada. The work that is happening across Canada — at different levels of sophistication, as the auditors pointed out in their audit — continues to be implemented. That work will also go into supporting the recommendations of the auditor.

Included in the pan-Canadian framework were a number of pots of money, including the integrated bilateral agreement that will provide significant resources both for implementing climate policies to reduce GHGs and to respond to the impacts of climate change — in terms of disaster mitigation as well as adaptation, more broadly.

The low-carbon-economy fund that Canada announced also provides resources that will support the implementation of the Auditor General’s report. The low-carbon-economy fund includes $162 million from Canada to support a transition to a low-carbon future. British Columbia will match and slightly exceed the contribution from Canada in terms of implementing those strategies.

I mentioned earlier — and I’ll just circle back to it — that just in the last number of weeks Canada has launched its disaster mitigation and adaptation fund. The fund is looking for its first intake early in July for programs that are in excess of $20 million, happening across British Columbia. I think my colleague Becky Denlinger will have an opportunity to speak a bit more about that when we come to her section of the presentation.

If you now move to slide 9, you’ll see that we’ve broken the recommendations down according to the ministry with responsibility for implementing. I’m going to talk about the first few recommendations, and then we’re going to pass the microphone along as other ministries step up and deliver their section of the response to the recommendations.

The Ministry of Environment and Climate Change Strategy, inside the climate action secretariat, has responsibility for five of the recommendations. The first one was that we undertake a provincewide risk assessment that integrates existing risk assessment work and provides the public with an overview of key risks and priorities. This assessment is well underway. We anticipate a final draft by December 2018. The process of developing the risk assessment is being done in collaboration with the ministries that you see around the table. We are also following the risk management guidelines for the B.C. public sector and the ISO 31000 risk management principles and guidelines in the creation of this framework.

[2:25 p.m.]

The second recommendation is to create an adaptation plan for British Columbia. In the fall of 2017, the government announced the creation of a Climate Solutions and Clean Growth Advisory Council and has committed to the release of a climate strategy in the fall of 2018. An integral part of that climate strategy and of the mandate government has received from the Climate Solutions and Clean Growth Advisory Council is the creation of that adaptation plan. It’s our intention to have that adaptation plan be publicly available in 2020. We will begin public consultations on that plan about a year from now, in the late spring or early summer of 2019.

In addition to that, a number of the ministries that you’ll see there — Transportation and Infrastructure; Forests, Lands and Natural Resource Operations; Agriculture; and Environment — have also identified strategies around adaptation in their service plans.

Recommendation 3 from the audit report speaks to the need to continue education of climate change impacts and adaptation of staff across government. We have engaged, in the climate action secretariat, with the Pacific Institute for Climate Solutions, or PICS, as well as with Simon Fraser University’s adaptation to climate change team, to look for opportunities of providing broad-based continuing educationals for professionals in the public service.

We’re also looking to submit a proposal to Natural Resources Canada’s BRACE program, building regional and adaptation capacity and expertise — there are a lot of long titles in this world — to look for funding for a multi-year training program. We know that other ministries, particularly for staff focused in this area, are looking to augment existing training programs to ensure that there becomes a baseline understanding across the dirt ministries, the natural resource ministries, on the importance of adaptation and climate change.

Recommendation 6 speaks to creating a performance mon­i­toring framework based on the goals, activities and outcomes outlined in the adaptation plan. This refers back to our commitment to create an adaptation plan. As we are beginning to develop that plan, it will include draft monitoring and evaluation to ensure that the adaptation plan that is released is robust. We intend to begin to implement with our partner ministries and some of our public sector organizations beginning this fall and report out on our findings as early as 2020.

Recommendation 6 and recommendation 7 work together. Recommendation 7 speaks to improving public reporting, including detailed public reporting on adaptation and legislative reporting on mitigation.

This spring the Auditor has talked about the challenges of government meeting its 2020 legislated reduction targets. This past legislative session, we introduced an amendment to the legislation that had been called the Greenhouse Gas Reduction Targets Act, GGRTA. We renamed it the Climate Change Accountability Act.

Included in the amendments to the legislation, government added legislative targets for greenhouse gas reductions in 2030 and 2040, removed reference to the 2020 greenhouse gas reduction targets, because it was understood that it was an impossibility to achieve them and, as well, added to the publicly required reporting in the legislation the need to report out on adaptation for public sector organizations.

As public sector organizations are required to report out on their GHGs, they will, going forward, also have to report out on the work that they are doing towards increasing their resilience and response to climate change. The first reports, specifically focusing on adaptation, will be required beginning in 2020.

I’m now going to pass the microphone to my colleague Jennifer McGuire, who is going to address the two recommendations that are on the Ministry of Environment side.

[2:30 p.m.]

J. McGuire: Thank you, Bobbi. I’ll speak to recommendation 8 and recommendation 14.

This recommendation, recommendation 8, is with regards to climate data needs and gaps. Environment will continue to work with our colleagues and partners regarding the various climate data needs. We have recently renewed a monitoring agreement, in place, for the monitoring of meteorological networks in British Columbia. There are four ministries and five external partners who are signatories to this agreement. This agreement overarches the climate related monitoring program.

We have ongoing collaboration with the federal government — ECCC, Environment and Climate Change Canada — where we’re focused on standardization. Specifically, we’re also looking at quality assurance and quality control aspects of meteorological data, which will assist public access to data, which will also help to support climate modelling and other analytical uses of the met data. This collaboration reduces operational costs and duplication for each agency and promotes efficiencies.

We’re also working towards development of a map, which will be produced by the fall of 2018. This map will address two aspects. First of all, it will look at gaps in locations of monitoring stations, as well as gaps in sensor equipment. This is a subset of the climate-related monitoring program sites, which will be looking at whether or not there is a need to support long-term climate monitoring and whether or not there’s a process to assess if there are new sites that need to be added to that particular monitoring network.

Recommendation 14 is with regards to the development of a provincial drought management strategy. This is some­thing that we are working on very closely with our colleagues in Forests, Lands, Natural Resource Operations. This is a provincial strategy, and it is informed through engagement with external partners and colleagues across ministries.

A literature review is being done, a jurisdictional scan is being conducted, and an assessment of water issues across the province is being done in order to inform the drought management strategy. An assessment of hydrological drought risks and vulnerabilities is also being done to inform the drought management strategy, as well as the identification of policy and program options that will enhance provincial drought response and preparedness.

I’ll now hand over the mike to my colleague in FLNRO.

M. Messenger: I’m here to speak to you today about six of the recommendations that were in the report that fall under the Ministry of Forests, Lands, Natural Resource Operations and Rural Development.

I’m going to go to recommendation 5. This particular recommendation focuses on considering climate change adaptation in all of the ministry’s legislation regulation approvals and permitting processes. It’s a very comprehensive, sort of integrated, recommendation.

FLNRO has been responsive to this recommendation. We’ve held workshops across the province with our staff, and we’ve asked them: “What are some of the opportunities and challenges that exist in terms of integrating climate change into our business?” We have a draft report from those workshops, and we’ll be using the analysis from that report to go to our executive, having identified some of the key places that we can begin to shift our business.

We aren’t waiting entirely just for the results of that. We are also taking advantage of some of the obvious opportunities that are presenting themselves. For example, and I heard someone else refer to it, we have introduced a change to the Chief Forester’s Standards for Seed Use that is allowing us to immediately begin to be responsive and have forests that are better prepared for climate change.

For recommendation 9, the auditors focused a few recommendations on flood risk. The first one was on a flood risk strategy. I’m happy to report that phase 1 of that provincial flood risk strategy is completed and that the overall strategy is expected to be completed in fiscal year 2021-22.

The flood risk strategy is designed to respond specifically to the recommendation in the audit and will include a review of roles and responsibilities for flood management, set clear objectives that target areas of high priority and that are high risk, develop information to help target funding to these areas, and assess our capacity to meet objectives.

Recommendation 10, also related to floods — here, the recommendation related to floodplain and hazard mapping.

[2:35 p.m.]

One of the things that’s very critical as we talk about how we’re responding is that local governments are actually responsible for developing their own maps in this area, but the recommendation focused on providing better support. So I’m happy to report we are getting going on that. In particular, technology is helping us here too. So, as the ability to use laser imaging to map areas is coming on stream, it’s easier to get that information to people and do a better job on the mapping.

GeoBC is conducting and assisting with lidar mapping and has finished this work for the Lower Mainland and the Okanagan. This work is planned for Vancouver Island and the Kootenays. EMBC is funding that work — so again seeing that crossing different organizations to get the work done. FLNRO, GeoBC and EMBC are providing technical expertise to support local governments — that they can draw upon when they’re developing their flood hazard maps. This is also directly linked to the flood strategy that I referred to in the previous slide, because this mapping is needed in order to develop that strategy fully.

The one other thing I’ll mention is we have it in mind that we need to keep working on this mapping and keep it up to date, because as climate changes, we will need to have accurate maps that allow us to develop our business properly.

Recommendation 11. We’re changing over to wildfire now. It’s a big ministry. On the wildfire front, one of the recom­mendations was to conduct and support research into climate change and wildfire behaviour. Research, as you’ll appreciate, happens in a very big and integrated community. The federal government plays a role, academia plays a role, and provincial ministries play a role as well. FLNRO’s B.C. Wildfire Service is collaborating with these other organizations on wildfire research, especially as it relates to climate change.

They have also hired a research coordinator to help better understand the other research endeavours that are going on across Canada and make sure that our future research is plugged into that work. The research coordinator is also using some work that has been done, in terms of looking at what research is out there so that we can better understand what research is yet to be done.

Recommendation 12. Create an overall strategy to address hazardous fuel risks. One of the elements that has already been mentioned earlier in this presentation is that we have the B.C. Flood and Wildfire Review, and government will be providing a response to that in October of 2018.

A lot of the material that we would do inside the ministry to respond to recommendation 12 will be absolutely aligned to that reporting that will happen in October. However, the B.C. Wildfire Service is taking immediate steps to develop a comprehensive wildfire risk reduction strategy, and they’re focused very specifically on preparation and preparedness and fuel reduction.

The strategy includes working with partners, stakeholders and communities to more accurately identify wildfire threat and risk and to provide funding opportunities to Indigenous and non-Indigenous communities that are undertaking prevention activities.

I’d like to say a little bit here about funding. The province has provided $50 million over three years for local authorities and Indigenous communities. This is 2018 funding, but it builds on $78 million of funding, which has been spent through the strategic wildfire prevention initiative already.

The province also has put money in the Forest Enhancement Society of B.C., to a tune of $235 million, and some of that funding is also possible to deploy against wildfire risk reduction.

The B.C. Wildfire Service has hired a senior manager to coordinate stakeholder engagement and work specifically with First Nations. One of the key pieces there is beginning to build on traditional knowledge in how we manage wildfire risk.

Recommendation 13, which is, I think, our final recommendation: to create additional educational materials and incentives for the public that focus on behavioural change to reduce wildfire hazard.

The B.C. Wildfire Service has hired a communication and engagement specialist and also has the B.C. FireSmart committee, which includes partners from UBCM, the fire commissioner, fire chiefs, First Nations, social services and academia. The purpose is to engage these partners in reducing risks to homes and communities.

The B.C. Wildfire Service is working with provincial and territorial colleagues, as well, to implement the Canadian Wildland Fire Strategy. Through these partnership efforts and other measures in FLNRO, we are working to address all of the recommendations in the Auditor General’s report on climate change.

[2:40 p.m.]

B. Plecas: I’ll turn it over to the Ministry of Agriculture — Arif.

A. Lalani: I will be speaking to recommendation No. 4. The Minister of Agriculture, leveraging the federal-provincial cost-sharing arrangement, which from 2013 to 2018 was called Growing Forward 2, has done a considerable amount of work with the ag sector to support climate risk adaptation. A lot of the work has been done on-farm through three programs. We have the beneficial management practice program, the agriculture water management program and the emergency management program, which are on-farm to support farmers in adapting to climate change.

However, in 2012, we undertook a risk and opportunity assessment both with industry and producers. One of the things that was made clear out of that was that we needed to work not only with the farm level but also on a wider, regional level to support the regions and the work they have to do on climate change.

The climate adaptation program engaged partnerships with local governments, agricultural organizations and other stakeholders in six key regions — Cowichan Valley, Delta, Peace, Cariboo, Okanagan and Fraser Valley. These partners have helped to determine regional adaptation priorities and to design the tools and resources developed through the program, including updating and modifying tools to suit the local context. As part of the program, partners, including local governments, participate in a revisit workshop, at which the project’s tools and resources are assessed. The revisits are largely underway or complete. All updated reports will be completed by July 2018.

The ministry is launching a new five-year, $6 million climate change adaptation program under the new federal cost-sharing arrangement called Canadian agriculture partnership. The learnings from the previous process will be applied to future programming, both within the six regions and in three additional regions. The Ministry of Agriculture’s implementation of this recommendation is substantially complete.

B. Plecas: I’ll turn it over to my colleagues at the Ministry of Municipal Affairs and Housing to respond to their two recommendations.

T. Faganello: Thank you, Bobbi. Good afternoon. The Ministry of Municipal Affairs and Housing will be collaborating on recommendations 4 and 15.

We’ll be collaborating with the Green Communities Committee on plans and actions to respond to the recommendations. As members know, the Green Communities Committee is a joint committee between the Ministry of Municipal Affairs and Housing. We also have support from the climate action secretariat, but with the Union of British Columbia Municipalities.

Also, as you know, there are 187 local governments signed on to the climate action charter since 2007. This is a great accomplishment. Part of that work the Green Communities Committee has been doing as recently as 2016-2017, engaging in three different working groups, and one of them was on climate adaptation. So there is some progress happening in those respects.

With respect to recommendation No. 4, we will review the plan with the GCC to obtain its endorsement, and we’ll work with stakeholders to update existing or create new tools to fill the gaps. As I mentioned, some early actions through the GCC include refreshing the Climate Action Toolkit to include a portal on climate change adaptation. The toolkit is a first-stop website for local governments on climate action information. We find that one of the best things that can be done is to share best practices between local governments and share best practices around adaptations so that those numerous rural and urban communities can have access to that information.

Also, we are currently updating the asset management plan for sustainable service delivery, a B.C. framework. Why that’s important is that this is a framework and a tool for local governments to look at their infrastructure from a life-cycle costing perspective, and when you do that, looking at how those pieces of infrastructure and tools can be built with an adaptation focus is what we’re updating as part of the framework.

[2:45 p.m.]

You’ve heard some comments earlier about senior government infrastructure programs — money, grant programs that local governments can apply to. Those local governments — when they apply to those programs, we look to see that those projects have GHG reduction capabilities. They score better on the programs.

With respect to recommendation 15 on assessing the challenges facing local governments around climate change adaptation, identifying priority areas and taking action, specifically, we will develop a plan that identifies the full spectrum of local government climate adaptation challenges and will review and validate this plan with the GCC. The plan will build off of work already undertaken by the GCC adaptation working group and any new and ongoing cross-ministry work that we’re hearing about, including today.

Specifically, some examples with respect to recommendation No. 15 include sponsoring, with EMBC, a one-year research assistant on using land use planning to improve community resilience to flood and wildfires. As well, we’re supporting the Fraser Basin Council with the Northeast Climate Risk Network project, which will raise awareness about adaptation initiatives in the northeast. That’s joint support between us and CAS and FCM.

I’ll stop there.

B. Plecas: Thank you. I’ll ask my colleague Kevin Richter, from the Ministry of Transportation and Infrastructure, to respond to recommendation 5.

K. Richter: I’ll be speaking to recommendation 5, specifically about considering climate change adaptation and its legislation, regulation, approvals and permitting processes.

Our ministry is and will continue strengthening our operational implementation of climate adaptation practices in three areas. One is in education for awareness, for risk management, and also in adaptation principles, both internally and externally. We’ll continue to evolve our tools. We have an existing T-circular, used in the design of our infrastructure, which talks about the identification of risk and also the measures that can be implemented to improve the infrastructure or create the infrastructure to survive. This is also a requirement in our consulting services contracts. So it’s a requirement, whether it’s internal staff or consultants. They must adhere to the technical circular. It also has a climate adaptation worksheet that must be completed.

We’ve also been working with EGBC in standards of practice to address climate adaptation and will continue to work with them and other partners from across Canada and with the federal government on new tools in the toolkit.

Finally, we’re in the constant stage of making sure that the right tools fit the needs, most by looking at what’s the evolution in the science but also based on the performance. I’m happy to say that what we implemented post the 2011 events survived in 2016, when we had some more. It’s that validation of the engineering practice that’s helping us update our tools accordingly.

B. Plecas: Thank you very much. There are three recommendations that pertain to emergency management B.C., and Becky Denlinger will respond to those.

B. Denlinger: In fact, I’ll elaborate on EMBC’s role in addressing recommendations 5, 9 and 10.

You can imagine, at EMBC, we’re getting to see firsthand how climate change is exacerbating the flooding, the fires and even the geohazards that we’re experiencing — landslides, land movements, things like that. In the last several years, the province has begun to experience record fires and flooding. Some parts of B.C., such as in the Okanagan Valley, have experienced one-in-100-year events repeatedly in the last several years.

With respect to recommendation 5, EMBC is addressing climate change–related recommendations by looking at its own core activities and operations. The Abbott-Chapman B.C. flood and wildfire review report has also delivered recommendations, as Bobbi pointed out, on how to better plan for and respond to future flood and wildfire events.

Internally, EMBC has began to examine many of the 108 recommendations for which we’ll have lead responsibility in evaluating and implementing. In partnership with other ministries, our planning section at EMBC develops, maintains and implements emergency plans that address priority hazards for all of government, and EMBC intends to apply a climate adaptation lens to the ongoing review and development of applicable hazard-specific plans that are nested within the all-hazard plan, starting with the update to the B.C. drought plan and the update to the B.C. flood response plan. These are expected for late this year and early next year, respectively.

[2:50 p.m.]

The disaster mitigation branch of EMBC is involved in managing several hazard mitigation funding programs, such as the national disaster mitigation program, the community emergency preparedness fund and the forthcoming green infrastructure fund’s integrated bilateral agreement.

EMBC will soon require hazard mitigation funding applications to discuss how proposed projects will address climate change as a part of its funding approval process. That is to say that applications that address climate change will be preferred over applications of parity that do not.

With respect to recommendation 9, we have efforts under­way. EMBC is leading the update of the B.C. flood response plan, as noted earlier. This will clarify roles and responsibilities across government for flood response in a changing climate.

EMBC’s disaster mitigation branch evaluates project applications for flood mitigation funding programs across all of the programs that we have responsibility for. In addition to adding a substantial climate change lens to the project funding evaluation criteria, EMBC has developed criteria to tie flood mitigation funding for local governments to commitments to address risk at the local level. As I said, these criteria then will serve to favourably identify applications that address this risk and to assess the level of risk addressed by the applications.

EMBC has provided approximately $1 million in funding to the Fraser Basin Council to develop the regional flood management strategy for the Lower Mainland. Phase 1 has been completed, and phase 2 is expected for delivery in 2019.

EMBC sits on the advisory committee for the development of Forests, Lands and Natural Resource Operations’ provincial flood risk strategy project. When completed and implemented, as mentioned, this project will assess current capacity to meet objectives and identify potential gaps in the province’s approach to managing flood risk. We’ll then turn our attention to addressing those gaps.

With respect to recommendation 10, legislative changes in 2003 and 2004 transferred responsibility for developing flood and hazard maps from the province to local governments. Since then, the role of the province has been to pro­vide guidelines for local governments to consider, to provide technical support and to provide funding when it becomes available.

Between the Ministry of Forests, Lands, Natural Resource Operations and Rural Development, its unit at GeoBC and EMBC, we have technical expertise that local governments can and do draw upon when developing flood hazard maps. Over the last year and a half, EMBC has added two flood engineering professionals to its ranks to help provide communities with flood mitigation technical expertise.

As mentioned previously, through funding by EMBC, the Engineers and Geoscientists of B.C. recently developed flood mapping guidelines for professionals to follow when creating flood maps. Current mapping guidelines will be reviewed every ten years, or when substantial new science dictates, to ensure that the effects of climate change are properly considered in all of the guidelines.

EMBC has also provided resources through the national disaster mitigation program and the community emergency preparedness fund for important orthoimagery and lidar products for many areas, including Vancouver Island, the Sunshine Coast, the Lower Mainland, Okanagan Valley and the Kootenays.

As you know, lidar generates precise three-dimensional data about the geographic area of interest, as well as its surface characteristics. The orthoimagery is important because it combines high resolution aerial images with the spatial accuracy and reliability of maps. This helps verify land use changes for local governments to use when mapping their risks.

Lidar and orthoimagery are essential precursors to developing accurate flood maps, and these flood maps consider the effects of climate change. All that information is pro­vided at no cost to local jurisdictions, and EMBC will continue to look for opportunities to fund these types of projects.

Through the senior officials responsible for emergency management across Canada, the federal, provincial and territory meetings and other meetings with federal agencies focused on climate change and hazard mitigation, EMBC will be advocating for a federally funded floodplain and hazard-mapping program similar to the floodplain-mapping program that was funded by the federal government in the mid ’70s through the late 1990s.

I also wanted to add, with respect to recommendation 13, that the office of the fire commissioner from EMBC is assisting in public education initiatives intended to motivate behaviour change to reduce wildfire risk.

[2:55 p.m.]

B. Plecas: The last two recommendations that we haven’t addressed, recommendations 16 and 17, come back to the climate action secretariat for their implementation.

Recommendation 16 is about creating a new climate strategy, including clear accountabilities, estimates and baselines, resources and interim targets, some of which I’ve already referenced with respect to the implementation of the new Climate Solutions and Clean Growth Advisory Council. Our commitment of a climate strategy to be released in fall of 2018…. That will include, as the recommendation suggests, clear accountabilities, emissions estimates, baselines, timelines, etc.

The recent change to the Climate Change Accountability Act has implemented both 2030 and 2040 targets as well as allowed for the minister to set interim targets. It’s our intention that the adaptation strategy, as we’ve already mentioned, will follow with consultation in the late spring of 2019.

Recommendation 17 speaks to the reporting challenges the Auditor General identified in the report. Our commitment is that the report that we do in 2018, our progress-to-targets report, will include more information with respect to the use of offsets, which was the challenge identified by the Auditor General’s office.

In summary, we again thank the Auditor General for the thoughtful work that they did in shining a light on both our strength practices and areas where additional work needs to be done. We are committed, as a group of ministries, to continue to work collaboratively on implementing this ambitious range of strategies beginning this fall for climate strategies and continuing with all of the many and varied work that you’ve seen and heard about across our different ministries.

We look forward to being able to report back to you on the successful completion in the coming months.

S. Bond (Chair): Thank you very much. Thank you to everyone who has responded. I’m sure the Auditor General’s office is pleased. They seem to have generated a great deal of follow-up and response, and that’s always important. Obviously, this is an ongoing effort. It didn’t start yesterday afternoon. It’s an important process.

J. Yap: Thanks, everyone, for a great presentation. This is a very impressive example of cross-government, cross-agency collaboration and coordination — and very fittingly. This is the great challenge of our times, and it takes everyone to be a part of it. Probably some of the ministries that could be part of it couldn’t join us today, but it does seem like we have lots of people from Victoria. Thank you for being here.

Actually, my first question relates to one of the last recommendations that were covered in regards to offsets. What is the extent of offsets that can be included in the calculation of targets?

B. Plecas: There’s no numerical limit to how many offsets can be included. Traditionally, when we demonstrate our progress to reaching targets, we identify the offsets below the line. So the line that you see in government charts that shows GHG reduction paths going forward…. At the bottom of the chart, we show a little blip below, which are the offsets government has purchased to be consistent — the broader public sector included — with our carbon-neutral government approach.

They’re very modest, and they are not reflected in the line. We, for reporting purposes, reflect them separately.

J. Yap: Okay, good. Thank you.

Now, in regards to recommendation 16, Climate Solutions and Clean Growth Advisory Council to advise on pathways to the targets, will the plan with regard to these pathways be costed as part of this effort?

[3:00 p.m.]

B. Plecas: Yes. I’m happy to expand, but yes, they will be costed, and the emissions profile of the potential measures will also be identified so that it’s very clear in terms of the pathway to targets or the implications of implementing various measures to reduce GHGs. They’re modelled numbers. It is projecting into the future, but it is based on the most sophisticated modelling that is available and that has been consistently used over a number of years.

J. Yap: Would that allow for a comparison of the different pathways in terms of if we choose to emphasize this set of choices and where we place our emphasis — different pathways to get to the reductions — that there might be different cost implications? Would there be an opportunity to do a comparison?

B. Plecas: Certainly, when government makes some decisions about the kinds of strategies they want to use to reduce greenhouse gas emissions, the cost of that and the pathway — the result of that — will be identified.

I’m not sure if you’re asking if government will release a range of strategies. There is, of course, no silver, single strategy that’s going to get us to our targets. It’s going to involve a wide range of incremental actions across the entire economy to get down towards our target numbers. When government makes those decisions and releases that plan, certainly the funding and the pathways will be identified.

J. Yap: I’m glad you mentioned the economy. Maybe that’s for another study. But maybe someone can comment if there is a study on both the costs and the impact, positively and negatively, on the economy as we move towards implementing the climate change strategies.

B. Plecas: We’ve just actually emerged from a day-and-a-half meeting of our Climate Solutions and Clean Growth Advisory Council. One of the presentations that the council saw was from an organization, a think tank, called Smart Prosperity, made up of a range of civil society and business leaders from across the country. There was a chart that was displayed that talks about the effect of climate policy on GDP growth. Of course, the economy is a complicated thing, so it’s hard to make that a perfect 1-to-1 ratio.

What the chart showed is that those countries that have implemented climate change strategies tend to be equivalent to the countries that have had significant GDP growth. So whether that’s some of the European countries or Canada — British Columbia, in fact — there are ways of implementing climate policy that lead to economic growth.

Of course, competitiveness is an important consideration, and wanting to ensure that strategies that are implemented don’t negatively impact the business community — for sure.

J. Yap: Right. I’m glad you mentioned Europe, because there are examples of economies that are doing quite well with a high degree of emphasis on sustainability and climate action. The Scandinavian countries come to mind. Also, south of us, California, the state — their economy, I understand, is booming, and they have a high degree of incorporation of climate change strategies. Is someone looking at those opportunities as part of that strategy?

B. Plecas: Very much. If we can avoid inventing a wheel, we’ll just go and see a picture of one and use it.

You talked about Europe. In Norway, more than 50 percent of the cars are now electric that are being purchased. Of course, they’ve got 1,200 charging stations in downtown Oslo. If you look at some of the strategies out of California, new builds beginning within the next ten years are required to put solar on their roof. So you’re right.

One of the things that we’re absolutely looking for are strategies that have been implemented in other places so that we can learn both from their successes as well as from any downfalls that they’ve encountered so that, as we’re moving forward, we try and build a perfect mousetrap.

[3:05 p.m.]

J. Yap: I’m sure other colleagues have questions. I have just one more for now, and that’s the $3.9 billion in funding over ten years for infrastructure projects. That, I presume, includes the potential funding for transit projects and transportation projects.

B. Plecas: There are so many federal infrastructure dollars. Are you able to just throw us…?

J. Yap: This is on page 3, slide 5.

B. Plecas: Ah, the overall infrastructure dollars.

J. Yap: Yes, it’s called the integrated bilateral agreement.

B. Plecas: The $900 million is directed explicitly to the green infrastructure stream, which is focused on mitigation, adaptation, resilience, disaster mitigation and environmental quality. Of that $900 million, 45 percent of it has to have a direct reduction in greenhouse gases. So an investment must result in a direct reduction in greenhouse gases.

I’ll ask my colleague from Transportation and Infrastructure to speak more broadly about the $3.9 billion. We in climate action secretariat are keenly interested in the green infrastructure fund, but the overall project rests with Transportation.

K. Richter: The 3.9 would include the transit projects and initiatives going forward, yes.

J. Yap: The 3.9 over ten years — that’s all B.C.’s share.

K. Richter: That’s B.C.’s share that we could get, yes.

M. Dean (Deputy Chair): Thank you so much. There’s a lot of work gone into all of this, from the start through to all of the action plans. I’m really pleased to see we’re going to get the plan coming out in the fall — we need that — and to see the collaboration as well. I have just a couple of questions about collaboration.

It is really ambitious — I mean, people in the room are saying that — and it’s collaborative That takes extra effort to make sure things don’t fall through the cracks and for all that communication and the relationships to be functional as well.

How are you going to be managing all of these pieces of work that everyone is doing and monitoring that they’re actually having an impact? I know it’s a long-term plan, but actually making sure that they’re all going on the right track and we don’t need to correct them and doing that in a collaborative way…?

B. Plecas: There are, inside government…. I’ll ask my colleagues to jump in when I’m finished, as a collaborative answer. We have a number of cross-ministry committees at the officials level working towards implementing a wide range — all of the climate as well as the adaptation initiatives. That includes staff at the working level, at the assistant deputy minister committee, deputy minister committees and cabinet committees. There are clear structures in place to make sure that we have opportunities to share information and to remain aligned.

In terms of advancing an agenda, we also have our colleagues in the Office of the Auditor General that periodically look for updates from us, so even if we weren’t intending to continue to do this work, we have a bit of assistance and an opportunity to report back to the Auditor General. Inside government, however, we have built those structures in place to make sure that there are structural opportunities to work collaboratively.

M. Dean (Deputy Chair): Does that start measuring from as soon as the plan is published?

B. Plecas: We also have lots of paper. We have this 11-by-14, 26-page implementation strategy, where we’ve taken each one of the OAG recommendations. We have an action plan, target dates, assessment of progress and then the action already taken. The climate action secretariat, as the lead ministry in this audit, has responsibility for maintaining and tracking and helping our colleagues to stay focused on the important work at hand.

B. Denlinger: If I could add…?

S. Bond (Chair): Oh, go ahead, Becky.

B. Denlinger: When the Abbott-Chapman report was released, we immediately approached Bobbi and her team and have taken a second step. Now we’re monitoring analysis of those 108 recommendations dovetailed into this action plan that Bobbi just showed you. So we’re doing our best to make sure that there’s no wasted effort against either set of recommendations and that we can leverage every effort to best effect.

M. Dean (Deputy Chair): Another dimension to that. What’s missing here today is EMPR and MOE as well. And I’ve heard reference to Indigenous people just once or twice during the presentation today.

[3:10 p.m.]

I’m just wondering if you could provide a bit more detail about how Indigenous people are engaged and involved and how we could also use this to promote reconciliation as well.

B. Plecas: The Climate Solutions and Clean Growth Advisory Council has Indigenous representation on it in terms of ensuring, as part of the voices we hear to provide advice to government, there is Indigenous representation at the table.

There are a variety of different processes underway across government, particularly on the natural resource side, that require deep consultation with Indigenous communities and the climate strategy and then the adaptation strategy. At the climate action secretariat, we are looking at ways to do a deep and meaningful engagement with Indigenous communities across the province on how best to respond to their particular needs with respect to adaptation.

From a clean growth future perspective associated with a climate strategy, I think that there are significant opportunities to ensure that Indigenous communities see themselves reflected in that clean growth future, whether that’s energy independence and coming off diesel in remote communities or looking at ways that a clean growth economy also represents the broad geographic range of the province, including Indigenous communities.

My colleagues might also want to have comments about how they’re working with Indigenous communities as well.

B. Denlinger: Yes, I can add. In EMBC’s organization, we now have a unit of standing, the First Nations coordination unit. By virtue of the agreement that we have with the federal government to provide emergency management services to reserve First Nations in B.C., we now undertake all of our work and open consultation from the moment we start anything in consultation with the reserve communities and our other First Nations partners. It’s embedded in the way that we do work now.

B. Plecas: If it’s okay, we have one more perspective we would like to share.

S. Bond (Chair): Sure. Go ahead.

M. Maley: Madeline Maley, B.C. Wildfire Service.

A couple things we’re doing at a national level, working with other wildfire agencies. We are looking at our Canadian Wildland Fire Strategy and trying to then build in the Indigenous voice. It’s very important to us, so we’re working on that. Across the country, I think, on some of those wildfire priorities, that will make a big difference for us.

At the same time and in collaboration with EMBC, we’ve entered into a tripartite agreement, also with the federal government, with the TNG, the Tsilhqot’in Nation. That’s about emergency management, as well as all aspects of wildfire management.

We’ve had the same kind of conversation with the Oka­na­gan Nation Alliance, and we’ve had some interest from other nations, such as the Nicola Valley. So a real interest in working in a partnership and a systems approach not just to wildfire response but emergency management prevention and mitigation.

R. Sultan: I just wanted to say how impressed I am that this collection of experience and talent would all gather in one place to discuss a problem of vital urgency. It makes me proud to be a supporter of this government. Good on you.

Having said that, let me say the presentations are long on goals, planning and future possibilities and rather short on action on the ground. Furthermore, I think rallying the requisite political support for your ambitious objectives, of course, is fundamental — without which, the plans will collapse.

I would suggest a good beginning at plugging into the feelings of ordinary British Columbians, perhaps, would be to produce a more realistic set of goals. I’m looking at the chart on page 94 of the Auditor General’s report, which presents some goals going out to 2049 or 2050 versus actual. I don’t think we’re going to get close to it.

[3:15 p.m.]

I think clinging to these unrealistic goals just adds an air of unreality to the whole exercise. I think we need realistic goals, achievable goals. We need to show some success in meeting short-term goals. That would be important, it seems to me.

In terms of action plans, could I suggest three obvious ones to me. It’s already been mentioned about Norway and electrification. As I read the charts, 40 percent of our greenhouse gas emissions come from the transportation sector. Why don’t you say, by such and such a year, we’re going to cut it in half by electrifying the cars, the trucks, the railways, maybe even a few ships? It’s achievable. It’s certainly within our technical grasp, and it’s politically sexy. You can sell that idea.

As far as flood mitigation is concerned, I think the engineering firms who are scratching around for work would love to get to work on flood control, dam reinforcement. We heard this morning that maybe some of dams on the Columbia system need a close look, and so on. There’s a huge amount of work to be done there that will put people to work.

Finally, on fire suppression. Where are all these younger people going to go to work? I suggest we give them a pair of cork boots and send them out in the woods to start making those forests of British Columbia, our forest industry future, more fireproof than they are today. Huge employment potential.

Those are three simple ideas. Thank you.

S. Bond (Chair): Thank you. One thing I know: I would not bet against Ralph being here to tell us, in 2049, that we didn’t meet the targets. He’s an energetic fellow.

Do you want to comment, Bobbi?

B. Plecas: I appreciate the suggestions. Certainly, electrifying transportation is going to have to be key to reducing GHGs in the province, just as looking at home heating fuels and energy efficiency in homes and buildings is also another big source of emissions that we need to tackle. I also take your point that we’re long on strategies and short on specifics. Maybe, as your time allows, you’ll invite us back, and we can come back and talk long on specifics and be shorter on strategies in the future.

S. Bond (Chair): Thanks, Bobbi. We’ll just make note of the fact that we probably will love to have you come back. It’s part of how we’re going to enhance our committee work. We’ve been thinking about that a lot, actually.

Kevin, do you want to go ahead?

K. Richter: With regards to transportation, we are increasing the number of charging stations along the corridor system, so we’re moving forward with putting more charging stations in our rest areas. We’re looking at the next suite of vessels for the inland ferries to see how we can electrify them. We’re having meetings with B.C. Ferries to encourage them. There’s been a movement afoot in Washington state with the electrification of ferries, so we’re hopeful that can transmigrate over.

Also, in the trucking sector, working with them, inviting them to consider the electrification of trucks, but in the interim step, looking at different axle configurations, looking at different wheel configurations like the very wide single-tire configurations in attempts to reduce greenhouse gases, plus existing things that have been happening with them on aerodynamics. Working with the Trucking Association on trying to provide the necessary infrastructure to support them in getting them on board with electrification too.

R. Sultan: Very encouraging. Thank you.

S. Bond (Chair): I know that ADM Richter will not be surprised if I will be asking him how many of those stations will be along the Highway 16 corridor — how many yellow dots are along that highway.

B. Ma: Thank you so much for your presentation. This is really quite an incredible report. There’s been so much information in both the report and the response.

I’m going to ask a few questions, and I hope you’ll bear with me if you’ve mentioned it before or if it’s somewhere that I haven’t found yet.

I was curious about some of the data that’s in here. For instance, on page 92 on the Auditor General’s report, exhibit 30 shows that the per-capita emissions for B.C. are significantly lower than the per-capita emissions of Alberta, Ontario and even Quebec, but also, at the same time, significantly higher than Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick and Manitoba. I’m wondering whether or not anyone here might be able to explain why that is. Is it primarily hydroelectricity? What else is going on that puts us where we are?

[3:20 p.m.]

B. Plecas: B.C. is blessed with hydroelectric power. That puts us below Alberta, which is blessed with petroleum products, which causes their emissions to be the highest of any jurisdiction in the country. We are always fair…. Comparatively speaking, we’re considerably less than Alberta because of our hydroelectric power and because of the nature of our industry here. We fare well against other jurisdictions that don’t have clean hydroelectricity.

When you compare our per capita to places like Europe, you’ll see that even countries in Europe like Norway that have hydroelectricity — our per-capita energy usage is much higher. Some of that has to do with the nature of Canada. It’s just as cold in the Scandinavian countries, but they’re much smaller, and the population is more dense. Our housing is scattered and not compressed, and our communities are larger and further apart.

British Columbia fares relatively well in Canada because of our hydroelectric power and because of the work that’s already been done on climate strategies in British Columbia. We don’t fare as well as other countries in Europe because of the nature of our landmass.

B. Ma: For sure. Would you be able to provide some insight in comparison to Newfoundland, for instance? It’s quite cold there, and they’re not particularly dense either.

B. Plecas: It’s a good question. May I ask my colleague, Tim Lesiuk, to step in on Newfoundland? I don’t have enough context about why Newfoundland would be….

B. Ma: So low.

T. Lesiuk: From a very high level of industrial activity…. A lower level of heavy industry. Because this is an all-province emissions, not just personal emissions. Industrial activity in Alberta, Ontario and Quebec is also significantly higher.

B. Ma: In regards to the kinds of, I guess, GHGs…. My next question is around what actually ends up in our numbers. For instance, GHG emissions resulting from massive wildfires and forest fires — do those end up in these numbers?

B. Plecas: No. GHG is associated with the land base. Let me start by saying the way that we assess our GHGs is consistent with the way Canada assesses GHGs and is consistent with the way the United Nations assesses GHGs.

That said, what we measure are ins and outs of climate change. A forest that grows doesn’t get counted as a carbon sink. When a forest fire happens, it doesn’t get counted as an enormous increase to the GHGs. Trees grow, and they don’t grow, and that is not part of our GHGs. Our GHGs are human engagement with the land base.

B. Ma: What about products that are passed through the province? As an example, I imagine we are counting GHG emissions from the mining and production of coal but not necessarily the burning of that coal if it’s shipped out of the province.

B. Plecas: That’s correct. If the energy that it takes to mine the coal in British Columbia counts as our GHGs — coal that arrives in a train and gets put on a barge and sent elsewhere — the energy that’s used to transmit it through British Columbia is counted. But the burning of that coal will only be counted in the jurisdiction where it’s burnt.

B. Ma: Where do the transportation GHGs of the barge get counted? Is that shared between Canada and the others, or how does it…?

B. Plecas: Global GHG emissions…. There are two giant holes in the way the globe counts GHGs. One is international airplanes. They don’t get counted anywhere, the GHGs in the sky. The second one is giant tankers. They don’t get counted. We believe that there could be an opportunity globally to assist with global GHG emissions by looking at using CNG for big tankers, rather than diesel, by way of example.

B. Ma: It certainly does appear to be a big gap, not necessarily one that the British Columbia government can resolve. But it does seem like a major gap if, globally, we’re not counting those international flights and the tanker emissions, because the GHG cost or the CO₂ emissions cost of transporting energy by those massive tankers is huge.

[3:25 p.m.]

If nobody is taking responsibility for it, then we’re basically suggesting that the transportation of energy across the Pacific Ocean is zero, which, obviously, we know it isn’t. That’s really interesting.

I’m going to switch gears a little bit. I think I have one more chart-based question, and that’s on page 61, exhibit 13. The Auditor General’s office referred to gaps in, I guess, data-collecting stations. One of the items that is on this exhibit 13 list is surface water quality. It identifies 40 rivers. Under the section that says number of stations, it says 40 rivers and streams, 63 lakes. Is that one station per stream, per lake? Are they at the beginning of the stream, at the end of the stream? How do those locations get determined, and what kind of coverage are we looking at, compared to the actual number of streams and lakes in British Columbia?

D. Tesch: Hello, I’m David Tesch.

The two numbers that you’re talking about there are slightly different networks. The 40 stream sampling networks are combined federal-provincial stations. We collaborate with our federal colleagues with Environment and Climate Change Canada and operate those stations. Those are water quality stations.

The 63 lakes that you’re talking about are part of a provincial lake ambient water quality monitoring program. The stream stations are part of a federal program. Their locations are selected based on trying to articulate water quality across Canada. The lake stations are part of a provincial program where there has actually been work done to do a sampling stratification of all the different lakes in B.C. They’ve actually picked about 150 lakes that they want to monitor, and they are looking at those 63 at this point in time.

B. Ma: There is, potentially, a move towards actually monitoring all 153, did you say?

D. Tesch: Approximately 150 lakes, yes.

B. Ma: So 150 lakes. We are moving towards monitoring water quality on all 150 lakes.

How many rivers and streams…? It must be an impossible number to count, almost, but what would you guess? In B.C., how many rivers and streams are there?

D. Tesch: There have been some numbers, but it’s in the hundreds of thousands.

B. Ma: Sorry, did you say 100,000?

D. Tesch: Hundreds of thousands, probably. If you’re starting to talk…. A lot of it is a question of scale, right? We have the seven major stream systems in B.C., but if you’re talking about really, really tiny streams, then yes. You’re getting into large, large numbers of streams.

B. Ma: It sounds like we’ve still got a lot of work to do in regards to river and stream monitoring.

D. Tesch: There is, from a water quality perspective, yes. If you are looking at surface water quantity, we are actually monitoring far more stations in B.C. We are monitoring approximately 450 stations for surface water quantity, which is the volumes of water.

B. Ma: I’m going to switch gears here now to emergency response and prevention. Obviously, there’s a lot of work to be done in preventing and preparing and adapting towns and communities, as you’ve said, to deal with the impacts of climate change — so wildfires and flood response and so forth.

We’ve spent a lot of effort responding to floods, responding to wildfires, because they are urgent and necessary. I know you had talked a little bit about adaptations and kind of prevention of wildfires, which costs money. I’m curious. Do we have a sense of how much money it would cost to prepare B.C. so that we are impacted less viciously by wildfires and floods and how much we have been spending on response in comparison?

Did that question make sense? How much money would it cost to prepare B.C. to be better for flood and wildfire, and how much do we spend, on a regular basis, responding to that?

B. Denlinger: Maybe I’ll go first, Madeline. Speaking from EMBC’s point of view…. Of course, our mandate is to coordinate government’s response. There are two contingency votes that can access the general fund when an emergency arises.

[3:30 p.m.]

One is the Emergency Program Act vote that EMBC accesses, and the other is the direct fire vote that Wildfire Service accesses. So between Madeline and me, we know something about how much is spent.

I’ll start with that one. Treasury Board and Finance, as the Chair well knows, fund the EPA from year to year, looking at the ten-year average of what’s spent on response and then taking a number slightly less than that and notionally funding us at the start of the year. Then we have access to contingency if we need it. That number is right around $15 million.

Now, in the last two years, the ten-year average will have increased — quite something — but in the three-year financial plan that we’re in right now, it shows it right at, I think, $14.97 million, which is 10 percent less than a ten-year average, accessed through the Emergency Program Act. Last year we spent nearly $300 million through the EPA and another $700 million through the wildfire, so nearly $1 billion just in response to last year’s events. As you know, those were record-setting events.

When it comes to what it would cost to keep us from all that, that’s a much harder question to answer. But I will tell you…. Jesal is an expert in this area. I know that Valerie works in this area a lot too, and Madeline will understand some. We have a tendency to identify a risk by project, typically, and then do a business case so that we understand what it would cost to mitigate that risk, and we can project. Some of it’s looking backward in the rearview mirror, but because of the way that trends and events are changing for us, it’s not as simple as it used to be.

We can almost always make a business case to say that we believe there’s a three to…. Far more than that — a minimum of a $3 return on every mitigation investment that’s wisely placed. Am I saying this right, Jesal? It has to be well conceived and usually very well informed through engineering studies and geotechnical studies and things like that. But almost always, you’ll see a three per $1 return on investment or higher than that, depending on the project. In each of them, we like to do a business case.

Jesal, before we flip to Madeline, would you want to add anything to that?

J. Shah: Yeah. The question about a study to determine what it will cost to make the province more flood resilient…. Across the province, that hasn’t been done. But several years ago, for the Lower Mainland, to upgrade all the diking infrastructure to prevent against sea level rise and freshet flooding, the cost was about $9 billion. That was commissioned by FLNRO. That was released in, I think, 2012. So that’s there as well.

Since 2015-2016 fiscal, approximately $140 million has been spent specifically on flood mitigation. That provides the response to the question you had on what’s being spent. That was specifically for flood mitigation. Now, for fire, I can defer. If Valerie wants to add….

B. Denlinger: If I could just say…. That $9 billion cost — we can compare it to what the Insurance Bureau of Canada’s report indicated would be $30 billion in damage should a flood of record occur there.

J. Shah: Yeah. The one to three comes out of that.

V. Cameron: I’ll just add a p.s. to that. What Jesal was just referring to was the study done on the Lower Mainland, and that is just the Lower Mainland. So when we embark on the remainder of the flood risk strategy…. During phase 1, it was identified that flood risk assessments be undertaken. I think if they are undertaken, that will go a long way into starting to quantify what the potential costs and the risks will be.

B. Plecas: If I can just circle back, one of the recommendations was around a risk assessment that CAS is leading on behalf of all of government, because when you hear numbers that large, it’s hard sometimes to know where to start. So one of the things that we are looking at creating is an all-hazard risk assessment across the province so that it will be more clear where government needs to place its priorities in terms of spending the kinds of moneys, over a long period of time, that need to be invested.

S. Bond (Chair): Thank you both.

Next up is Rick.

[3:35 p.m.]

R. Glumac: Obviously, the problem of climate change is a massive problem. It’s encouraging that we have so many people here, because there’s obviously no way we can tackle that problem unless we all work together across not just our government, but all jurisdictions across the country and throughout the world. It’s good to hear that we’re working together on that.

I’d like to understand a little bit more about how…. Maybe there hasn’t been a traditional practice of looking at this kind of an issue within government so far. I’m wondering, structurally, what kind of changes have been made or are being made within ministries, in terms of the things that are being done on a day-to-day basis, where the lens of climate change is being applied to the work that’s being done.

Is this something that is coming through all of the ministries? Is this a very clear goal, to look at things through the lens of how they affect greenhouse gas emissions, how there may be opportunities for reducing or offsetting carbon? I’d like to get a better sense of that — the culture within government. How is it changing, structurally? Maybe you could talk about that.

B. Plecas: There has been a climate action secretariat in government for a decade, so there has been a central group of people in government, my very esteemed colleague Tim Lesiuk being one of those people, who are very deeply knowledgable. As I look around the table at my colleagues, there are so many of them who are so deeply skilled in climate. Some of them have worked in the climate action secretariat previously. All of them, I would say, have contributed to initiatives to reduce greenhouse gases over time.

Part of the culture of government is that knowledge and understanding and knowledge awareness of the importance of climate change — about how, in the policy area senior officials find themselves in, there is a role to play to support climate change or to support reducing greenhouse gas emissions.

There are structurally, as I mentioned previously, a number of committees of officials — at the assistant deputy minister level, at the deputy minister level and at the cabinet level — where there is broad-ranging conversation about climate and where I, for example, sit on the economic deputy ministers committee as well as the natural resource deputy ministers committee, as do the officials whom I work with. Those conversations happen organically — by participating in those discussions and by having a central place that is the strategic hub for climate change — but also happen structurally, by having issues related to climate come through those kinds of governance paths.

I’d say the other thing is that the public service is a nimble, professional, resilient and responsive organization. As the interest in a climate strategy grows in the provincial govern­ment, so, too, do the good ideas from all across government to respond to the interest in having a climate strategy. I would say we tend to be extremely collaborative, and those good ideas are emerging from all sectors of government.

R. Glumac: We’ve had a plan to reduce greenhouse gas emissions in this province, as a legislated plan. Why do you think we’ve not been able to meet that?

B. Plecas: The Paris commitments are very ambitious. Our 2050 target is based on a Paris commitment, and those are ambitious climate change…. Some of it is just the societal change that will be required to electrify our transportation systems. MLA Sultan mentioned earlier around electrifying vehicles, and there are a growing number of options available for people to buy, particularly in cars, and a growing number emerging in minivans and light-duty vehicles.

[3:40 p.m.]

There’s a very, very early start for big, heavy-duty ma­chines. Tesla released one. There’s a company out of China that’s now doing sort of what you’d think of as 18-wheelers that are electrical.

There’s a combination of cultural shift, where people begin to see electric vehicles as the wave of the future…. They know someone who has one, and goodness gracious, isn’t it lovely to not have to buy gasoline? The cost of those starts to come down, the infrastructure starts to become more prevalent, and you start to see a tipping point where there will be sufficient vehicles that are electric that it will become increasingly common, as Norway is finding.

You see technology beginning to expand into new areas in terms of heavy-duty vehicles. It hasn’t made it yet to things like airplanes. The technological advancements just haven’t gotten there yet.

You start to see that happening as well with respect to buildings. It’s a hard case in British Columbia. We have inexpensive hydroelectric power, comparatively speaking, and it’s expensive to do building retrofits, so how do we begin to have a culture where people start to see that as important?

That’s a long-winded way of suggesting that I think it’s a combination of levers that government can pull, of technology coming to bear that will allow that transition to happen in an efficient and effective way for people. You see the rising understanding and the capacity of people to start to make those kinds of decisions.

R. Glumac: I guess what I’m trying to ask is…. There are other jurisdictions that have set targets, and they’ve been able to meet targets. Those were based on the Paris accord. Why is it that in B.C. we’ve not been able to meet those targets — specifically in B.C.?

B. Plecas: In those jurisdictions that have been able to change out their energy systems, particularly if you’re thinking about phasing out coal, significant investment — but by a single actor, usually the government — will result in enormous reductions. We don’t have that opportunity because we’re gifted with clean hydroelectric power, which means that what’s left for us to change to meet our GHG targets are individual choices by individual citizens primarily and the need to develop some technologies for our industries so that they can efficiently reduce their emissions.

The “low-hanging fruit,” the phasing out of coal power, isn’t an option here. So it’s down to people buying electric vehicles and retrofitting their homes.

R. Glumac: Right. Thank you for that answer. That’s actually an interesting point. We don’t have those low-hanging fruits here. Do you feel that because the targets that we’re setting are still ambitious…? From what I gather from your answer, you are optimistic that there will be advancements in technology to help us meet those targets as we move forward, whereas in previous years, it may have been still early stage in some of those things. But you do feel optimistic that we will be able to come up with a climate plan that’ll meet the Paris targets and achieve that? I see you nodding, so that’s good.

B. Plecas: Yes.

R. Glumac: One other question. You talk about individuals doing things but also municipalities and other jurisdictions. Municipalities across North America and the world have been doing amazing work. Do you think there are things that we can do that maybe are low-hanging fruits, that could enable municipalities to do the good work that they want to do? Perhaps they’re being faced with maybe bureaucratic challenges or legislative challenges that they’re not able to do certain things. Are you guys looking into that as well?

B. Plecas: I’ll answer a bit. Maybe I’ll ask my colleague Tara to step in as the local government. Then if I’ve got any follow-up, I’ll do it after. Is that okay?

T. Faganello: Great question. I think if we had low-hanging-fruit requests from the local governments, we would have them. They do great work. They have a lot of ability to effect GHG reductions in their communities, and they do that.

[3:45 p.m.]

As I said before, 187 local governments have signed on to the climate action charter. There are things from land use planning through to landfill management actions and also, when they do their water treatment centres, looking at being able to capture more water — so the water storage. Those are all very expensive things, though, and for some smaller rural local governments that don’t have a big tax base to draw from, that’s a challenge for them. They do come to the province and to the federal government to ask for help — the carrots approach.

As I mentioned — I always like to get a little plug out — we have our environment quality infrastructure program open right now to local governments. It’s also open to First Nations and not-for-profits, so kind of record setting from that perspective. Within that, the point that I raise is that from an environmental quality perspective, we look to be able to fund good projects with local governments that have GHG or adaptation benefits to their projects from a wastewater and water perspective.

R. Glumac: One comment on that. There are even things that I think we can do that would be almost no cost to provincial government — for example, in the Community Charter, allowing the local improvement charges of municipalities to be able to loan money for energy retrofits for homeowners and to be able to recoup the loan on the property taxes. It’s something that provincial legislation…. There’s no cost, necessarily, to the province, and some municipalities have expressed keen interest in being able to do something like that and working with the province on something like that.

My last question. I think one of the challenges that we have, also, is helping the public understand these costs. Bowinn touched on it. There are huge costs involved. You cited $9 billion just for flood mitigation in the Lower Mainland. I think having good information about what these costs are, because I think a lot of times people don’t think about….

When we’re using something that emits carbon, you don’t necessarily think right away how that comes back to you as a cost. I think it’s important that we have that information to share with the public — that sometimes, where we are today because of all of the carbon that we’ve used, there is actually a cost associated with it, and the public may have to pay some of that cost. If we’re not proactive about dealing with it, the cost is going to be even higher, as you mentioned, at 3-to-1 multiple.

I just think that for us, out there talking with the public, having that kind of information, not just floods but the costs involved in making sure we’re prepared for wildfires and all of this…. The costs of the wildfires — that information has been shared. But across the board, there are costs involved.

I think it’s really important that we understand what those costs are. Is there a way that we can communicate this better to the public and make them understand, all of us understand, the high cost of climate change, going forward, on the economy and on the pocketbook of individuals?

B. Plecas: I think communicating about costs and opportunities will be an important part of a climate strategy in our fall. We’re spending time trying to think through how best to both engage citizens as well as share that message in a way that will be effective. I agree with the point you’re making.

S. Bond (Chair): I have a few questions. Hopefully, they’re more along the short snapper line, because I’m cognizant of time. I think all of us have invested a fair bit of time in reading this.

I want to ask a question. I’m not an apologist for the status quo; I will say that right here. In the Auditor General’s report, the conclusion reads: “We concluded that the government is not adequately managing the risks posed by climate change.”

[3:50 p.m.]

It goes on to talk about adaptation, saying more needs to be done by government, and mitigation, that not enough action has been taken. Is there a jurisdiction about which we wouldn’t be saying those things? I think it would be very hard to actually say that around…. Especially across Canada, when we look at the map.

The context of this report is important because climate change is a massive, challenging — you can tell by the number of people here — pretty complex issue. So I just think it’s important for context. As I read the conclusions, I’m thinking to myself: “Well, I’m sure that for most jurisdictions, we would say the same thing.” I’m not suggesting we don’t have a lot of room for improvement.

Is there a model jurisdiction that we would be able to look at and say: “Well, perhaps they might…”? I think you understand my point. In terms of context, the conclusions would not be dissimilar from probably every jurisdiction that’s grappling with the magnitude of these issues. Is that a fair summary?

K. Olthuis: Yeah, I think that was shown in the collaborative audit project where we looked across Canada. Many of the jurisdictions had very similar findings in terms of their audits, so B.C. was not an outlier by any means.

S. Bond (Chair): I think it is important for British Columbians to recognize that B.C. doesn’t stand alone in some sort of abrogation of their duty. In fact, this is complex, and most jurisdictions in the world could probably have the heading of this report being in the name of their jurisdiction. I think that’s an important piece of context.

One of the things that I was a bit concerned about when I heard it and also when I was reading it…. The point that was made earlier by the Auditor General’s office was that there has been work done at the ministry level but different methodologies have been used for that work, making comparability a challenge.

Have we sorted that out, work that’s done that would benefit cross-government approaches? Have we sorted out how to have sort of a baseline approach to this so there’s a way to compare — and that the methodologies are not so unique that we can’t actually look across ministries?

B. Plecas: Across government, I think we’ve done a better job inside our own government. It is a priority of the pan-Canadian framework to figure out how to drive consistency across the country.

S. Bond (Chair): It’s very difficult. I mean, when you look at even an issue of whether you have a carbon tax or not, you’re trying to look at GHG reductions, the way it drives change, how it incents change. We are comparing apples and oranges across the country. I think that inside the government, we’re hopefully getting it right across ministries. But when it looks at pan-Canadian…. That is part of the issue we were looking at here today.

The way that Bobbi captured it in one of her answers was helpful for me, because this entire report continues to talk about there being no comprehensive risk assessment. The magnitude of even contemplating how one would look at a comprehensive risk assessment is beyond imaginable. The way I think you captured it was an all-hazards risk assessment. But again, we need to reassure British Columbians. Many of those assessments have been done by sector. I’m not sure how else you do it.

It is, again, to Ralph’s point earlier…. I can understand the visionary approach of this, but when it comes down to a pragmatic, provincial, fully-comprehensive risk assessment related to climate change, I would love to know who knows how to do that and do it incredibly well. It’s really not a question. I think the whole concept of how you assess risk…. I mean, I read the report. We talked about flood, fire and drought — each of them having incredibly complex, expensive and very difficult challenges. I kept waiting for the pests, and lo and behold, they’re in here too. I was really pleased to see that invasive species are actually part of this report. Pests are part of the….

We all want to be aspirational, and we all want to meet targets, but we should also be clear about the challenge we are facing here. Looking at a provincial risk assessment is not like: “Let’s just get it done next week.” It is complex and difficult. So I worry about the very black-and-white presentation of what is definitely not a black-and-white issue. There are all kinds of challenges, and I think we just need to have some caution. Not that I don’t think there’s more work to be done.

[3:55 p.m.]

I would like some reassurance around the…. I think Becky referred to the Abbott et al. report — that it complements the work of the audit. Do the 108 recommendations there take care of some of the recommendations or concerns that were expressed in this report about wildfire? Is there a comparability and a way to take what was learned after a dramatic fire experience? Another report, 108 recommendations. Is that somehow going to alleviate some of the concerns that were expressed in this report?

B. Denlinger: I would answer that by saying that there’s overlap. Some of the work that we’ll undertake to implement those recommendations aligns with…. I know that Thomas White had joined us in beginning to analyze that. We’re at early stages. Invite us back. We’ll have more to say about that.

S. Bond (Chair): Well, my point is just that, again, another body of work was done. There is a whole lot of concern about wildfire mitigation — what we do, how we learn from it. We have 108 more recommendations on one of the issues. There has to be a melding or some sort of joint approach to look at that. I’m encouraged by that, Becky. I appreciate that.

I wanted to ask, related to, believe it or not, the pest part of this…. This is a FLNRO issue. We’ve seen the impacts of mountain pine beetle. We now have spruce bark beetle. We have a variety of other pests. This says we need to be proactive and we need to be prepared. Do we know what’s next? How do we, when it comes to risk assessment…? Who knows what the next invasive species is going to be, in terms of forests?

Who is managing…? We have deep concerns about spruce bark beetle and a variety of other things. How is there a strategy in place to deal with the imminent next wave of invasive species when it comes to forest management?

M. Messenger: Good thing you have a professional forester here. This one is super tricky. We have a lot of research underway currently. It’s collaborative research across a number of jurisdictions — federal, local, provincial. We also are using a number of different approaches to looking at future risk, particularly with an eye to things like forest carbon or towards timber supply. We are actively working on that.

The underpinnings for all of it are understanding the po­ten­tial climate change we may face and understanding what differences in temperature may result in. It’s all about putting those pieces together and trying to align them to get to those places. But that is all part of that risk assessment work that needs to be done.

There is work underway to look at…. An earlier question was: “Are we already doing things?” The answer is yes, we are looking at which species of trees, where. How do we create more resilient forests? How do we make our ecosystems complex and resilient? We are actively working on that.

It answers the pest question, but it also addresses some of the other questions that we have here as well.

S. Bond (Chair): Again, just adding to the complexity. You almost need a crystal ball. It’s very difficult. Now we look back at mountain pine beetle and say: “Oh, if we’d only done this or only done that or only done this.” Well, now we have all kinds of new challenges in the forest, on the land base, and we’re grappling to figure out what to do with those particular situations.

There was an interesting statement on page 37 of the report. I guess it’s just not what I perceive, and that’s after many, many years in public office. “Local governments are considered to be the front line of climate change.” Again, that’s a comment of the Auditor General’s office.

I would be surprised if local governments sort of saw themselves on the…. I think they are certainly required to respond. I’m just wondering if someone could better explain to me how they are the front line. I understand that they provide the services, and maybe it’s from that perspective. I think they would be surprised today if they thought we were talking about them as being the…. Look how complex these issues are with the number of people in the room. Capacity, expertise — all of those things.

Could someone just give us a bit of context for that statement?

K. Olthuis: I think when we put that in the report, it was more about the impacts of climate change. Local governments and local communities are the ones who are actually feeling the impacts of climate change, more than, necessarily, maybe the provincial government would be.

It wasn’t necessarily about efforts but impacts.

[4:00 p.m.]

S. Bond (Chair): Certainly, capacity and expertise at local government levels are a challenge as it is — just to manage their line of responsibility. But if they’re suddenly seen as the front line of managing climate change, I can’t imagine.

I think of some of my little small municipalities and villages. They would find that very difficult to comprehend.

M. Sydor: I think what we were referring to here is that they are the ones who are receiving the impacts of climate change. They’re the ones that are going to have to provide the resources to deal with the local impacts. Certainly, the provincial government can provide funding support. But in terms of actually carrying out activities, it’s going to be done at the local level.

If you look at jurisdictions across the U.S., when they talk about climate adaptation plans, the plans are being done at the local level. It’s the same thing that we’re talking about here. We expect local communities to identify what issues they’re going to have to deal with by way of adaptation. That’s where the front line is.

What we have here…. As you say, we have the collective strategy. We have the collective knowledge at this level. It has to filter down. So part of what we looked at here was the coordination — I think it was discussed earlier — with local communities.

We have people from the ministry going to B.C. municipality meetings to disseminate the knowledge so that local governments can take that and make the changes at the local levels. They are at the front line. They are receiving it.

S. Bond (Chair): Well, my point is just this. If we are expecting adaptation plans and front-line activities from local governments, there would need to be a very significant shift in how that resourcing capacity and expertise is provided. That’s simply my point. They would probably not see that. I mean, they would certainly be on the receiving end of it, but in terms of….

You look at the expertise around this table, and we’re grappling with how to manage it. I think that further directing that downward is a challenge.

M. Sydor: What our report points out is that municipalities that have the resources have developed specific adaptation plans, whereas those that don’t have the capacity tend to bring those in within other planning approaches that they take within a local community. So even if small communities don’t have the specific expertise, they try to incorporate what they can within their own municipal plans. It’s certainly people around the table here that can provide guidance for them, as well as other organizations.

The institute of planners, for example, can provide guide­lines as to how local communities can develop adaptation plans. So it’s not just the ministry; it’s specialists, as well, that have knowledge in these particular areas.

S. Bond (Chair): On page 43, the report pointed out that there was an imbalance in staff allocation between adaptation and mitigation — three on adaptation and 36 on miti­gation.

Has there been a look at that in terms of the balance and how that’s being addressed?

B. Plecas: Generally, the province has been focusing on mitigation measures. That has been the focus of preceding climate plans. As the audit pointed out, there hasn’t been an adaptation plan in almost a decade. Part of what this has enabled us to do is to turn our minds to looking to manage both — both limiting the effect of GHGs here in British Columbia as well as planning for the future.

S. Bond (Chair): Okay. The whole point, or one of the major points, of the Auditor General’s report is that you need both and that there has been…. Mitigation is an important part, but it’s adaptation that’s actually going to reduce the issues in terms of mitigation at some point down the road. Just raising the point that there was a concern expressed about the balance of staffing.

I was interested to note…. Someone made the comment that they were going to produce a map, in terms of monitoring and how it’s done and the gaps between. And there is a gap.

If you actually look at the map that’s already in the report that was provided by the Auditor General, when you look at monitoring, where there’s the gap is in northern regions of British Columbia. In fact, when you read the primer, it says that warming rates have been more than double the global average in the northern part of British Columbia.

Is there a look at how we’re going to actually look at the places where there is a more rapidly warming climate? I’m expecting we’ll be able to grow grapes any day now in northern B.C. How do you close that gap? If you’re looking at risks, we’re talking about significant impacts in the northern part of the province, which has the least amount data available about it.

D. Tesch: Yes, the map that we’re talking about doing is related to the climate related monitoring program. That program is essentially a collection of weather stations that are operated by several of the agencies that are represented here, along with Environment Canada, Rio Tinto and a few other industry and local groups.

[4:05 p.m.]

What we’re trying to do with that gap mapping is look at which of those weather stations can be used to support national climate modelling. It’s the gaps in the locations of those stations and perhaps the standardization of the equipment that’s being installed at those stations that our mapping is going to look at. So it is part of the provincial contribution to the national climate modelling that we’re looking at.

S. Bond (Chair): My point is just that one of the exhibits speaks to climate monitoring stations in British Columbia. The giant gap is in the northern part of British Columbia, where warming is at twice the rate as it is in other parts of the province. The report points that out as a key finding, so I’m assuming there will be some effort to try to close that gap.

I’ll just leave it with one final question. Transportation apparently has done some good work. One of the observations in the report is that there’s been some important work done there but it hasn’t been shared across ministries, necessarily. What is being done to look at the whole best-practice scenario?

If a ministry is doing something that has applicability in other ministries, how do we ensure that there’s not a stovepipe approach here? Transportation has done some good work here and in other areas. Why isn’t that naturally being shared as best practice across ministries? We heard about some other good work in FLNRO, I believe it was. How are we ensuring that that is flowing to other ministries?

B. Plecas: I’d like to say that there’s a perfect answer, but it relies on some of the things that we’ve already talked about, some of the structures that we have in place in terms of tracking documents, in terms of the conversation and making sure that there is a regular opportunity to have conversations, to make sure that there are strong interministry linkages, to make sure that there are governance paths so that good ideas don’t get missed when other things are being approved — and the will and the commitment of everybody that you have here before you to try and work collaboratively to make sure that good ideas are shared.

S. Bond (Chair): I’m sorry. There was one other thing. I was really concerned about an item on the action plan. We talk about the urgency of all of this, and it’s just one example. It talks about the climate action secretariat. It will develop and publish a provincial adaptation strategy by 2020. We’re now sitting in 2018. It says public consultation is scheduled to begin in June of 2019.

Why would we be waiting so long to consult about adaptation when it’s such a critical issue, with a fairly urgent timeline? There are a couple of places where dates are pushed way out. I’m just wondering if you could address that one specifically. You know, if we’re going to have a sense of urgency here, I’m assuming that probably consulting by June of 2019 is a bit far down the path.

B. Plecas: The timeline is partly because the risk assessment is not going to be completed until the end of the calen­dar year. An adaptation strategy has to identify priorities, so we needed to give ourselves, across government, a few months to get it organized before we sent it out for consultation.

Our intention is that it will be out for consultation over the summer and into the fall, so we’re not trying to jam people over the summertime in terms of responding, and that it would come back in through a budgeting process early in 2020.

S. Bond (Chair): Is there a firm timeline on the risk assessment? Do we have every confidence it’ll be done by the end of this year?

B. Plecas: Yes, I was briefed by the folks we’ve hired, one of the globe’s leading risk-assessment companies, about three weeks ago, and we’re on track for December.

S. Bond (Chair): Okay. Thank you very much. I’m sure that everyone around this table has lots of questions, including all of you, in terms of the work that you are doing.

Please know how much we appreciate it. It is complex. There are probably few files that touch as many ministries as this, with a subject as complex as this.

Your presence here today I think speaks to how serious you take the matter. We appreciate your leadership, and we look forward to an update a few months hence, down the road, as we follow along and get the updates and make sure that we’re seeing that kind of progress. Thank you very much. We do appreciate your time.

I think, for the committee, we have one last item we’re just going to ask Kate to speak to ever so briefly.

[4:10 p.m.]

Canadian Council of Public Accounts
Committees Conference

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): Thank you very much, Members. The final agenda item was just a brief update on the Canadian Council of Public Accounts Committees. I know the Chair and the Deputy Chair are working to finalize a delegation. Registration is now open, so we hope to confirm participation by the B.C. delegation in the coming week or so.

We will handle all the registration through our office. We’re also happy to help with any travel arrangements for members who are participating. The conference organizers have identified three or more opportunities for the B.C. delegation to participate in the program, so we’ll also assist members with any presentations that they may be asked to participate in.

Also, on behalf of the Canadian Audit and Accountability Foundation, I did distribute a survey to PAC members. I thank those members who have already completed the survey. The deadline for that process is June 29.

The intent is to connect with each Public Accounts Committee member across the country and get a sense from each of you of the effectiveness of committee work. The results of that survey will be compiled and reported out at the conference in September.

Thank you, Members, for very good work today and for your interest in those two activities.

S. Bond (Chair): Thank you very much, Kate. We will work to finalize the delegation. It’s important. We will inherit the next conference here in British Columbia. British Col­um­bia actually takes a lead role now in that organization, at the completion of this particular conference.

With that, I want to thank everyone for their good work and their questions today.

We will be canvassing members to hold another meeting to deal with the two reports that the Auditor General has recently completed. That would then catch us up. That would be a fantastic accomplishment.

I want to thank you all for your hard work. With that, we will adjourn the meeting.

The committee adjourned at 4:12 p.m.