The committee met at 10:02 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Good morning. We have a long day ahead of us. We have a very ambitious agenda as we try to keep up with the work being done by the Auditor General and her team. We are going to attempt to do some very significant reports today throughout the day. Depending upon the timing, we’ll take a look at a bit of a break at lunch so that people can actually stand up and take a bit of a breather.

We do want to thank the Hansard team for getting us organized and also the Clerk of Committees. We very much appreciate all of the efforts.

We should probably just recognize her excellent work at the Boston Marathon. I think, Kate, you were a minute-plus better than last year.

K. Ryan-Lloyd (Acting Clerk of the Legislative Assem­bly): Appar­ently so.

S. Bond (Chair): Well, that’s remarkable. Most of us would only dream of being at the Boston Marathon, much less…. So congratulations. Great job there.

As is our usual practice, we are pleased to have the Auditor General here today and her team as they report out on our first report. We also have the comptroller general here. We appreciate his attendance.

The first report today we’re going to consider is rate-regulated accounting at B.C. Hydro. That report was released in February of 2019. We’ll ask the Auditor General to make some opening comments. Her team will then present the PowerPoint. We will have representatives from the Ministry of Energy, Mines and Petroleum Resources with us today and also from B.C. Hydro.

As we work through the process, we would ask that you introduce the staff that are going to be participating, for the Hansard record. We want to make sure that everyone is captured on that record.

With that, we’re going to begin our work today. Welcome to the Auditor General. Carol, we’re going to ask you to begin with your remarks, please.

Consideration of
Auditor General Reports

Rate-regulated Accounting
at B.C. Hydro

C. Bellringer: Thank you so much. Good morning, everybody. I’m pleased to be here for the entire day, and I’ll be available to answer any questions. But we do have a Deputy Auditor General responsible for each of the reports on the agenda today, so they’ll lead you through each of the four reports.

[10:05 a.m.]

I see we’re starting with this simple accounting of rate-regulated accounting at B.C. Hydro, which, for a technical person, I’m going to tell you is one of the most complex technical areas that certainly I have ever had to deal with, have been doing so for many years. But it is a complex area, and for non-practitioner accountants, it is something that is very difficult to understand. So please don’t hesitate to ask us what might feel like a basic question, because there is no such thing in this subject.

I’m going to now hand it over to Russ Jones, who is the Deputy Auditor General who led this particular report.

R. Jones: Thank you and good morning, Madam Chair and committee members, and thank you for inviting us to present our report on rate-regulated accounting at B.C. Hydro. With me today I have Peter Bourne, who leads our audit of the summary financial statements and also worked on the project.

You may recall that on November 26 of last year, we discussed with the committee our report Understanding Our Audit Opinion on B.C.’s 2017-18 Summary Financial Statements. In that report, we discussed our audit opinion and, in part, our qualification of the opinion related to rate-regulated accounting at B.C. Hydro.

Today’s report, Rate-regulated Accounting at B.C. Hydro, explains rate-regulated accounting both in general and how it has been applied at B.C. Hydro. It’s important for the people of British Columbia and members of the Legislature to better understand rate-regulated accounting in order to appreciate the impact it has on the bottom line for B.C. Hydro and government as a whole, including the impact on taxpayers and ratepayers.

Rate-regulated accounting is a widely used accounting practice at utility companies throughout North America. However, past government direction impacted the regulatory framework that was put into place and resulted in B.C. Hydro not using rate-regulated accounting correctly. Our recommendation is that B.C. Hydro prepare its financial statements in accordance with Canadian generally accepted accounting principles without modification.

With that, I’ll hand over to Peter to walk you through the report.

P. Bourne: Thank you, Russ.

Madam Chair and committee members, it’s my pleasure to present an overview of the report.

Rate regulation is a practice of controlling or regulating the price or rate the company charges its customers. Rate-regulated accounting shows the effect of rate regulation on a company’s financial statements.

As Russ mentioned, rate-regulated accounting is widely accepted and a common practice throughout North America, but in order to use it, there are certain accounting standards that must be followed. While rate-regulated accounting is common in some sectors and industries, including utilities like B.C. Hydro, the large amounts in B.C. Hydro’s regulatory account balances are not common.

At the time of our report, B.C. Hydro reported a net regulatory asset balance of $5.5 billion. In addition to having appropriate accounting standards, it is also important to note the critical role in rate regulations at the B.C. Utilities Commission as the regulator holds.

BCUC is responsible for balancing the interests of ratepayers with the interest of the utilities it regulates. Under the Utilities Commission Act, BCUC is the sole judge of whether a rate is unjust, unreasonable or unduly discriminatory. The act does allow government to set direction to the commission, but over the past several years, government has increasingly done so, to the point where government had taken over much of BCUC’s role to regulate B.C. Hydro’s rates, allowable costs and use of regulatory accounts. The end result was to limit the authority of the BCUC.

Examples of government direction include, for example, the Clean Energy Act, which precluded BCUC from looking at a number of projects and their costs, including the northwest transmission line and, at the time, Site C. B.C. Hydro’s return on equity was specified in Direction 7, as was the direction to BCUC to not exercise any power to look at the gas and electricity trading activities of Powerex. Directions also capped some of the allowed rate increases and moved the revenue shortfall into the rate-smoothing regulatory account.

[10:10 a.m.]

Looking at B.C. Hydro’s accounting framework, in 2010, government introduced a regulation that required B.C. Hydro to follow prescribed standards — that is, not the accounting standards established by Canadian standards-setters such as the independent Public Sector Accounting Board. Instead, the regulation allowed B.C. Hydro to follow a modified set of accounting standards.

Government’s regulation exempted the requirement that an independent third-party regulator establish rates. We also found that B.C. Hydro’s rates were not being designed to recover the costs of service, which is another requirement when using rate-regulated accounting.

Although government has the right to set overall direction to the regulator, government’s use of specific directions diminish the ability of the regulator to perform its role and took B.C. Hydro offside with the accounting standards for rate-regulated accounting.

What does all this mean? As of March 31, 2018, B.C. Hydro had 29 regulatory accounts with an accumulated net regulatory asset balance of $5½ billion. In other words, B.C. Hydro hasn’t charged customers enough to cover its operating costs each year.

There are valid reasons why B.C. Hydro might defer costs that BCUC would approve. Say, for instance, a storm destroys the power grid, and the repairs result in higher costs than expected. A regulator may allow a utility to smooth out the recovery of those costs from customers over future years rather than increasing customer rates dramatically in one year to cover the repair costs and then lowering rates in following years.

Without rate-regulated accounting, the additional storm costs would be recorded as an expense, which would reduce annual net income. However, under rate-regulated accounting, the future recovery of storm costs to be collected from customers can be shown as a regulatory asset rather than an expense.

With increasing government direction, the net regulatory asset balance started to increase. B.C. Hydro’s use of regulatory accounts has increased significantly since the early 2000s, as shown on the screen. In fiscal 2005, B.C. Hydro had ten regulatory accounts with a net regulatory asset balance of $182 million. As of March 31, 2018, that had grown to 29 regulatory accounts and $5½ billion.

As a result of how B.C. Hydro has applied rate-regulated accounting, both B.C. Hydro and the government appear to be in better financial shape than they are.

Looking ahead, government has said it’s making changes that affect B.C. Hydro and BCUC. In November 2018, government removed the regulation that prevented B.C. Hydro from implementing appropriate generally accepted accounting principles. Our report was released on February 6 of this year. On February 14, government issued an order-in-council repealing the specific directions impacting BCUC and issued a new direction — No. 8.

We will continue to work with government and B.C. Hydro staff to assess the impact of rate regulation on both B.C. Hydro and government’s bottom line. For the 2019-20 fiscal year, we will become B.C. Hydro’s financial statement auditor.

In our report, we recommended that B.C. Hydro prepare its financial statements in accordance with Canadian generally accepted accounting principles, without modification. Government has agreed with the recommendation and indicated in their response to our report that implementation of this recommendation is underway.

I’ll now turn the mike over to Carol for concluding comments.

C. Bellringer: This was a project that took us almost two years. The project team worked closely with staff at B.C. Hydro and BCUC, as well as staff at the Ministry of Finance and the Ministry of Energy, Mines and Petroleum Resources. We also used a subject matter expert from PricewaterhouseCoopers, PwC.

We would like to thank everyone for their support and cooperation during the course of the work. It was greatly appreciated. I’d also like to take a moment to acknowledge my staff on what has turned out to be a large, complex and, at times, very challenging project. My thanks to Peter and Russ, who are here, and to Jane Bryant, Gabriel Botel and Jess Applebaum, who supported the team from our staff.

That concludes the presentation. I’m, of course, happy to answer your questions.

S. Bond (Chair): Thank you. We appreciate those comments.

We’re going to ask for a response now.

Les, are you going to begin that process?

[10:15 a.m.]

L. MacLaren: Yes, Madam Chair. I’ll be responding on behalf of the ministry and B.C. Hydro. I am joined here by two B.C. Hydro executives: David Wong, who is B.C. Hydro’s executive vice-president, finance, technology, supply chain and chief financial officer — that’s a big title; and Ryan Layton, who is B.C. Hydro’s chief accounting officer. I just have a short presentation. We’d also be happy to participate in the questions and discussion.

Slide 2, please. We’ve already seen the Auditor’s recommendation. We agree with that recommendation, and implementation is well underway.

Just one proviso. I would have thought it would be more fitting for where the ministry is with its policy, and B.C. Hydro with Power Smart — and better messaged for the public — had the graphic designers perhaps chosen a high-efficiency LED light, rather than an incandescent bulb, for the cover of the report.

That being said, in terms of implementation…

Interjection.

S. Bond (Chair): Duly noted, says the Auditor General. Duly noted.

L. MacLaren: …the regulatory provisions under the Budget Transparency and Accountability Act, which created the prescribed standards that the Auditor was concerned about, were repealed last fall. B.C. Hydro is in the process of preparing its 2018-19 financial statements in accordance with international financial reporting standards without modification. Implementation of the Auditor’s recommendation will occur when the B.C. Hydro board is scheduled to approve those financial statements, in early June.

Next slide, please. You’ve seen the Auditor General’s findings in Peter’s presentation. Rate-regulated accounting is common practice. Regulators like the BCUC are important. Past government directions to the BCUC have restricted its role, and B.C. Hydro’s net regulatory balance at the end of the previous financial year, at $5.5 billion, is high, relative to other utilities.

Government’s response to the Auditor’s qualification of the 2016-17 and 2017-18 public accounts — and, ultimately, the recommendation from this report on the use of rate-regulated accounting — was developed as part of a comprehensive review of B.C. Hydro that my minister was directed to undertake. In addition to focusing on affordable rates, a key objective of that review was to enhance regulatory oversight of B.C. Hydro by the B.C. Utilities Commission.

Next slide, please. On affordability, the review looked at reducing costs and increasing revenues. Part of those reduced costs was the impact of writing off the rate-smoothing regulatory account, which, along with other mechanisms already built into current rates to pay down regulatory accounts, results in a projected net balance of approximately $4.2 billion as of March 31 of this year. On BCUC oversight, the changes include oversight of B.C. Hydro’s long-term planning, repeal of past directions and establishing a go-forward oversight of rates, projects and regulatory accounts.

Government was clear, in the B.C. Hydro review phase 1 report that was issued in February, that it would continue to direct the commission on public policy issues such as the ones listed on this slide. Those were detailed in that report — quite detailed.

Next slide, please. In terms of B.C. Hydro’s actions, an application to set rates for the current fiscal year and next fiscal year was filed with the Utilities Commission in February. In that application, B.C. Hydro proposed no new regulatory accounts and to close out two accounts, and it projects that up to six more will be paid off and closed in the next five years.

The regulatory accounts are projected to be paid down further over the coming years, with mechanisms already built into current rates for 25 of the 28 remaining regulatory accounts. The exceptions are the Site C development cost regulatory account — which B.C. Hydro would apply to the commission to recover once that asset comes into service — and the mining customer payment plan regulatory account, which has a zero balance. The third one is the customer emergency fund regulatory account, which the BCUC just established last year, and no recovery mechanism has been set yet. In five years, the net balance of regulatory accounts is projected to be 45 percent lower than the peak that occurred in 2016.

[10:20 a.m.]

Next slide, please. A quick summary. We thank the Auditor for her report, which will help the public understand the common practice of rate-regulated accounting. The Auditor’s recommendation is being implemented. The BCUC’s oversight of B.C. Hydro has been enhanced in a manner that also recognizes public policy, and B.C. Hydro’s regulatory account balances have been significantly reduced and will continue to be paid down in the coming years.

That’s the end of our presentation. We’d be happy to take questions.

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

All right, questions from members.

We’ll start with Bowinn.

B. Ma: Here come the questions from someone who is not an accountant. The prescribed standards, instead of using the GAAP…. It’s a series of questions just to help me understand. I hope that’s all right. When did those prescribed standards get brought in?

C. Fischer: Can I jump in?

L. MacLaren: Yes, absolutely.

C. Fischer: In 2010, government responded to a report or comment of the previous Auditor General about the future expectations for rate-regulated accounting. Canadian accounting standards at that time were transitioning from our traditional national standard to IFRS, international financial reporting standards. At that time, IFRS did not include the specific standard for rate-regulated accounting, so there was a gap in coverage.

In 2010, working with the Auditor General at that time, government determined that it was important to maintain continuity. The regulation was issued to continue the practice of using ASC 980, which we’ve talked about in the past, as the standard going forward. In 2012, IFRS did conclude that that was an appropriate way to go, and they included an interim standard that exists to today.

B. Ma: So the prescribed standards for rate-regulated accounting that were used in B.C. were brought in, it sounds like, when there weren’t necessarily accepted standards for that practice. So it was kind of filling a gap. Is that what happened?

C. Fischer: There was a gap during a transitional period from the change to international accounting standards. It was a two-year period where IFRS did not have a standard providing direction on rate-regulated accounting.

C. Bellringer: We would describe it slightly differently. Only that, while there may not be a specific standard in place in Canada at a point in time, there is still a process that one goes through in applying accounting standards, because that happens all the time. We call it the gap hierarchy. It’s another wonderful accounting term that only accountants understand, but it does take you through the hierarchy of what would apply in the event that there’s no specific standard.

In Canada, in the public sector, you would start with Canadian public sector accounting standards. If the particular area is not covered, you can look at international practice. You can look to the private sector in the event that there’s nothing in the public sector. You work it through to determine what the most appropriate standard is.

In terms of prescription, we take the position that government should not prescribe standards outside of the accounting framework because then it permits it to shift in a particular direction that would not be what the accountants would put in place. In the Auditor General Act, we are required to provide an audit opinion on whether or not whatever statements — the public accounts, primarily — are being prepared in accordance with generally accepted accounting principles. We specifically have to go to the accounting standards and not to a prescription that may be put in place at any point in time.

[10:25 a.m.]

We take the same position on the application of capital transfers, which, fortunately, we’re not talking about. It would complicate things even more.

S. Bond (Chair): Do I feel another clarification coming on from Carl?

C. Fischer: No, that’s fine.

S. Bond (Chair): Okay, good.

B. Ma: I guess from that my question, really, is: where did the prescribed standards come from? What benefit or advantage did that offer to either government or the public over generally accepted accounting practices? Why might they have been created instead of using GAAP or instead of using the process that you described?

C. Fischer: The regulation — I think it was 257/2010 — didn’t introduce a new standard. It merely continued the pre-existing standard that had been used in British Columbia and the rest of Canada and the rest of North America. In the interim period, when IFRS was considering whether or not a rate-regulated standard was beneficial, ultimately they decided that it was and, on an interim basis, currently have directed the exact same approach that the regulation introduced.

L. MacLaren: Maybe to respond to your question, it was the adoption of a U.S. standard that allowed for rate-regulated accounting. Many jurisdictions across Canada adopted that same standard because there was this gap in the ability to use rate-regulated accounting that many utilities had been using previously.

C. Bellringer: We acknowledge the fact that during that period of time, there was quite a lot of volatility at the international level as to what standard was going to be recommended internationally, and it still remains something that is in progress. There is a taskforce currently looking at where it will eventually land.

At the time that the original report was written by our office, it was a period when there was a contemplation of completely removing the ability for anybody to use rate-regulated accounting. The kind of deferral accounts that this incorporates would not be permitted at all. That has not occurred. It still remains permissible to have such accounts.

The one…. It’s quite specific, but it does end up being quite a bit of the discussion in this particular report. On page 13, we’ve got the list of the accounting frameworks in place for Canadian rate-regulated utilities. Yes, there are quite a few of them using U.S. GAAP. ASC 980 is American, so it is the U.S. generally accepted accounting principle primarily in use in the States.

It is common to do that, but it is only in British Columbia where that ASC 980 U.S. standard has been modified to not require the role of the regulator. So it isn’t a full application of ASC 980. And it’s an important element. It’s ASC 980 modified to not require the regulator role.

S. Bond (Chair): I think Ralph is up next.

R. Sultan: I think congratulations are due to the ministry and to B.C. Hydro for their very clear statement on page 7 of the report in the response from government and B.C. Hydro: “We agree with the report’s sole recommendation ‘that B.C. Hydro prepare its financial statements in accordance with Canadian GAAP principles, without modification.’ Implementation of this recommendation is underway.”

I know I’m being repetitive, but it would give me further comfort, Mr. MacLaren, if you would repeat those words for the record.

L. MacLaren: Absolutely. B.C. Hydro is preparing its financial statements for the 2018-19 financial year in accordance with international financial reporting standards, which is the Canadian generally accepted accounting principle standard for those accounts.

R. Sultan: Thank you, Mr. MacLaren. If we look to page 13, the comparison of B.C. Hydro’s accounting framework in years gone by, and if we had such a table prepared, let’s say, a year from now, we would not see the prescribed standards atypical entry there on the second line anymore. That would be gone.

[10:30 a.m.]

L. MacLaren: That is correct. It would state, as with some other jurisdictions, IFRS with IFRS 14.

R. Sultan: It would give, I’m sure, the taxpayers and ratepayers of British Columbia further comfort if, for the record, Mr. Wong, chief financial officer, could repeat those very same words so we could hold him to account personally.

D. Wong: B.C. Hydro will be, in our fiscal ’19 financial annual statements, providing recounting under the international financial reporting standards, with utilizing section 14, which relates to rate-regulated accounting.

R. Sultan: Well, all I can say is this is a great achievement and a milestone in the history of this committee, and I thank Hydro. I thank the ministry. These have not been easy decisions and a rather turbulent past, which we have all lived through. I think this is a milestone. We should have big smiles. I certainly do. Thank you. I have no further questions.

M. Dean (Deputy Chair): The money that went into the rate-regulated accounts went up quite rapidly and was not usual. The amount wasn’t usual. Even if we bring it down by 45 percent, it’s still $3-point-something billion. Can you help me understand why there was such a large amount of money that needed to be pushed forwards?

R. Layton: Sure. I guess there’s a few reasons why, and I think the Auditor General touches on some of these. Had we not used regulatory accounting, the reality is that the rates in the province would be higher. I think it’s fair to say that that was one of the tools available to governments to keep rates at a place where they wanted to keep them.

I would also mention, however, that a couple of the biggest accounts with really large balances relate to a change in accounting rules that occurred. Rather than have those changes in accounting rules drive a really large rate increase for ratepayers all at once, simply because the accounting rules have changed, a couple of those accounts tried to, essentially, take the old rules and say: “Okay, we don’t want to burden today’s ratepayers with an accounting rule change. Instead, we’re going to try and smooth those out as if the rules hadn’t changed at all.”

In other words, had this accounting change not come around, the rates would be what they are. Rather than increase them dramatically and quickly because of that change, let’s pretend, essentially, that they didn’t happen and keep ratepayers whole over the long haul as if the rules hadn’t changed.

M. Dean (Deputy Chair): Just looking at the rates going up and not the impact of some rules changing, at what rate would British Columbia’s rates have been going up compared to other provinces, for example? I’m really concerned that it looked like rates were going to have to go up an awful lot in that period of time.

R. Layton: There’s no direct number that, I think, anyone on this side of the room could provide in terms of what rates would have been in a different world. What we can say today is that our rates are the third lowest in North America, as ranked by a Hydro-Québec study. They would be higher today if we hadn’t been using regulatory accounts. There’s no doubt about that. But we’re still in a very attractive place. And because, as Les mentioned, we’re recovering almost all of the accounts and rates today, we don’t expect that position to change going forward.

L. MacLaren: I’d also point out that the report that was released in February on phase 1 of the B.C. Hydro review would see rates over the next five years increasing about 20 percent below the forecast rate of B.C. inflation. Part of that review was to look at controlling the trajectory of rates. We do not expect them to be increasing markedly over the next five years.

M. Dean (Deputy Chair): Is that all contained within the business model of B.C. Hydro? Because obviously, taxpayers is a different group of people compared to ratepayers for B.C. Hydro.

R. Layton: Yes, indeed. As Les mentioned, and the Auditor mentions in one of the exhibits, the forecast decrease in the balance is contained completely within the rate increases that Les has mentioned. Over the next five years, on a cumulative basis, the rates are forecast to rise by 8.1 percent. The decline in the accounts are fully within that framework. In other words, there’s no separate rate increase coming to achieve that decline that’s forecast.

M. Dean (Deputy Chair): Just one final question. You mentioned Site C, and there’s a regulatory account associated with that, but can you just help us understand what the impact will be? Like, there’s expenditure on Site C now, and then at some point, it’s completed. Just explain how that fits into the whole business model.

[10:35 a.m.]

R. Layton: Sure. The account was established to capture some of the early expenditures on the program before the project was approved, and rather than charge those ratepayers for those costs when they weren’t receiving any benefit and when there was uncertainty whether the project would proceed at all, the regulatory account was used to capture those costs. Those will be proposed to be recovered over the life of that asset.

Just like the main project, the multi-billion-dollar project that we’re building, we will go to the regulator and propose to recover that over the life of those assets, which is about 70 years. We will seek to recover the regulatory account on the same basis. That’s to ensure that the ratepayers that are getting the benefit from that asset are the ones that pay for it.

In terms of rates, we provided some evidence in the Site C inquiry that the British Columbia Utilities Commission held. We provided some indications of how that might come into rates. We proposed, for example, you could smooth that into rates over a couple of years, rather than have a spike in one year. Ultimately, it’s going to be up to the BCUC to decide how those costs come into rates, but we don’t expect there to be a significant rate increase related to the project and these costs coming into the framework in about fis­cal ’25.

S. Bond (Chair): Any more, Mitzi?

M. Dean (Deputy Chair): No.

J. Thornthwaite: Thank you very much for your presentation. If I heard you correctly, then, with regards to rates for ratepayers…. With this move, there will be no change in the direction of the rates — going up or down.

L. MacLaren: I would point out that a rates forecast is included in that report from February. The commission is back in the business of setting rates. B.C. Hydro has applied, in February, for rates for this year and next year. The commission will go through its public process and a public hearing to establish those rates.

J. Thornthwaite: What would be the difference between now and what it was like before?

L. MacLaren: Previously, over the last five years, rates were set by direction from government in the first two years and capped by direction from government in the following three years.

J. Thornthwaite: So there’s a chance that rates could go higher, then, if there are no caps?

L. MacLaren: The forecast that was included in the report from February takes into consideration all costs. B.C. Hydro believes that is an appropriate rate increase, and they have applied for and will defend that rate increase before the commission. As I said, ultimately, the commission will decide what rate levels will be implemented.

J. Thornthwaite: When will we decide? When do they determine whether or not the rates are going to be in­creased?

L. MacLaren: They have approved the initial rate increase of April 1 on an interim refundable basis. That means that in the event, after going through their hearing, they determine that a lesser rate increase would apply, then there’s a refund to customers. Typically, going through a revenue requirement proceeding can take 12 to 14 months. They’re right now in the process of….

Actually, B.C. Hydro expects, today, to receive the first round of information requests from the commission, which they respond to on the public record. All the participants in the proceeding also file information requests to create this record of what’s behind all the costs and forecasts in the application. Then they go to a hearing.

It’s a bit of an iterative process. It takes a number of months. But the commission will likely be determining sometime next spring what the rates will be, ultimately, over this period.

S. Bond (Chair): Just for the record, can you articulate what the asks are — what request was made to BCUC in terms of each year in that five-year period? You said, cumulatively, it was eight-point something.

R. Layton: Correct. I’m just referencing, for the committee’s reference, Comprehensive Review of B.C. Hydro: Phase 1 Final Report, page 3. For the fiscal year that has just begun, on April 1 of this year, a 1.8 percent proposed rate increase. For next year, what we call fiscal ’20-21, 0.7 percent. Those are the two years, as Les mentioned, that we’ve officially applied for with the Utilities Commission.

We’ve also, in the report, provided the further three years, which are not currently before the commission. However, I’ll state them as well. For fiscal 2022, 2.2 percent; fiscal 2023, zero percent; fiscal 2024, 3.2 percent. Indeed, Madam Chair, as you mentioned, that’s how we get to the overall cumulative increase of 8.1 percent over the five-year period.

S. Bond (Chair): Interesting that you’ve sandwiched a zero percent increase in between 2.2 and 3.2. That’ll be an interesting discussion at some point.

Garry, you’re up next.

[10:40 a.m.]

G. Begg: I realize that BCUC will, obviously, continue to do their oversight and approval work. But with the increase in rates, does B.C. Hydro make enough money from its customers to cover its operating costs?

R. Layton: Regulatory accounts mean, by definition, that you’re not always going to do that every year. Our rates are set on a cost-of-service basis, which is meant to recover all the costs that we incur. However, part of the purpose of regulatory accounts…. The Auditor General’s team mentioned the storm regulatory account as a good example. I’ll use that as an example by way of trying to explain this.

In our current fiscal year that just began on April 1, we have a budget of $18 million for storm restoration costs. Over the last five years, the actual storm restoration costs have ranged anywhere between $5 million and $25 million. I don’t think it will surprise members that those are on a generally increasing trend, given recent storms and other things that have been going on.

Will we spend more than $18 million on storm costs this year? Perhaps. Recent years would say yes, we will. However, we set our budget based on a five-year average, which is per the B.C. Utilities Commission mandate. They tell us to do that.

What actually happens, though, if we spend more than that is that we don’t recover those from ratepayers today. Our budgets are based on the idea that we’ll spend $18 million, and we will recover every cent of that from ratepayers this year. However, if we actually spend $25 million instead of the $18 million budget…. If we didn’t have a regulatory account, ratepayers would never pay that cost. One of the purposes of the account is to make sure that ratepayers do pay that cost, because that’s a legitimate ratepayer expense.

In that example that I gave, by definition, we wouldn’t be recovering all of our operating costs in that given year. But the way the rates are set is that they’re designed, based on a forecast basis, to do exactly that.

D. Wong: To summarize, the total revenue requirement takes into account what we believe is required to run our systems reliably and safely. Then we are also asking for certain deferral accounts to be had in the revenue requirement as well. With the approval of all that, we believe that that’s sufficient to run the business.

B. Ma: There are 29 regulatory accounts right now. We’ve heard that at least one of them is in relation to Site C. What are the other 28, generally?

L. MacLaren: Member, if you look, there’s an appendix to the Auditor’s report that provides a list of all the…. I believe it’s appendix D. There’s a brief description of each account. It’s balanced at the end of March of last year and also talks about the recovery period.

B. Ma: Now, hypothetically speaking, if rate-regulating accounts, in the example that David gave…. Let’s say there’s an overage in terms of how much they’ve spent on whatever the example was. You take that amount, and you put it into a rate-regulating account. My impression is, basically, you kind of leak out the costs over a longer period of time.

Unless the rates are forecasted to decline over a certain…. Like, the real rates for electricity are expected to decline over a number of years; then the rates will have to go up at some point. Let me try that again.

Unless the energy costs are expected to decline, then the addition of rate-regulating accounts will drive rates up over time at some point, in order to pay them off. I guess my question is: were electricity rates expected to decline, or were you expecting that the rates would gradually increase with all of these rate-regulating accounts layered on top of it? What was the forecast?

L. MacLaren: Maybe just a couple of points. It’s going to be the commission that will determine the period over which these accounts are recovered. Part of that setting up of an account is: what’s the reason behind it? If it’s something like the storm restoration costs that Ryan was talking about, that maybe is appropriate to recover over a two- to three-year period. If it’s something like the other account, like Site C costs, the expectation is that it would be recovered over the life of the asset, which could be 70 years. But the commission will decide that.

[10:45 a.m.]

I think your other point is that we expect, with increasing costs for compensation, cost of energy — there are inflationary pressures — that rates will rise modestly. But I think the point we like to make is that there are mechanisms built into rates today to recover 25 of the remaining 28 accounts. So the rates don’t have to necessarily increase in the future to pay down the balances that are there.

B. Ma: I guess the reason why I asked my question is before the decision was made to allow the BCUC to start regulating rates again and when there was still a cap on rates…. It kind of feels as though you’re pushing sand into the future. What was the idea behind it before the recent moves of the ministry? From B.C. Hydro’s perspective, what was the forecast? What did it look like?

R. Layton: I’ll take us back to the beginning of what we call the ten-year rates plan, which was implemented previously. It was announced in 2013, and its first year was fiscal year 2015. What ratepayers were looking at in those years were rate increases somewhere in the low teens in terms of annual rate increases. And the key component of that rates climb was the rate-smoothing regulatory account, which said: “We don’t want the rates to be that high.” What we’re going to do instead is set the rates for the first couple of years — 9 percent, for example, in the first year instead of somewhere up in the teens — and, indeed, take some of that money, as you suggested, and put it over here and collect it over the remaining years of that ten-year period.

So it wasn’t open-ended — you know, punt the ball forever and not be clear when you’re collecting from ratepayers. It was a very clear ten-year period. We can debate whether that’s an appropriate number of years or not, but it was always very clear that it would be fully recovered over the ten years. In other words, everything that got added to that account would be recovered from ratepayers by the end of that ten-year-cycle.

B. Ma: How do rate-regulating accounts get created? Do they come as a recommendation from, for instance, yourself and David and B.C. Hydro to government, or is it the other way around? How do those decisions get made?

L. MacLaren: Normally, the BCUC would approve a regulatory account. The utility would apply. They’d have a rationale for spreading the cost over a period of time, and the commission would approve the creation of the account and its recovery period.

A number of the regulatory accounts have been established also by direction from government to the commission. It was part of those acts of cabinet providing directions to the commission that the Auditor was concerned about.

B. Ma: How many of these accounts were created by direction?

L. MacLaren: I believe it’s about half and half, but some of the larger ones were created by direction, like the rate-smoothing account, which was written off in the prior fiscal year.

C. Bellringer: We didn’t add it up, so I don’t have the specific answer to that question, but we did identify in appendix C…. There’s a synopsis. If it says, “Source direction,” then in the description, it may indicate which of the accounts were set up through that direction.

S. Bond (Chair): Any other members before I have some questions?

Okay. Well, thank you very much for the presentation. And you’re correct. It’s a very complicated issue.

Is it safe to say that…? You mentioned earlier that one of the primary reasons for looking at capping or looking at deferral was making sure ratepayers weren’t paying rates that were in the teens. Is that accurate?

R. Layton: In various years, yes.

S. Bond (Chair): Okay. I wanted to pursue Bowinn’s question just a bit further. It wasn’t as if nothing was being done in terms of looking at the repayment of the plan. In fact, there was a ten-year plan, so work was being done, especially to deal with rate-smoothing and those issues prior to…. There was a 2010 audit, obviously, and now there’s this one. But there was a plan — was there not? — by B.C. Hydro to look at the paydown of those accounts?

L. MacLaren: That is correct, Madam Chair. The 2013 ten-year rates plan, as I stated earlier, had rates set for the first two years at 9 percent and 6 percent, and then rate caps of 4 percent, 3½ and 3 percent for the years 3 to 5. The forecast was that rate increases averaging 2.6 percent per year for the remaining five years of the plan would draw the rate-smoothing regulatory account to zero at the end of the plan. That’s the way it was established.

[10:50 a.m.]

With this most recent review of B.C. Hydro, the rate increases over those last five years are now projected to be approximately 40 percent below what we thought we would be able to achieve in the 2013 rates plan.

S. Bond (Chair): Explain for us…. It’s curious that there is a zero percent increase in between two increases that are 3-something and 2-something. How is that possible?

R. Layton: There are a lot of vagaries in that, perhaps, on the face of it. What I’ll say, without having the materials in front of me that could give you a really detailed answer, is that it’s not just regulatory accounts that drive the rate increases. It’s various projects coming into service that we may be starting to recover amortization from. The regulatory accounts are part of that. It’s our whole financial framework. So the rates going up and down like that don’t reflect solely on regulatory accounts. They reflect many things going on in our business — such as, like I said, projects coming on board and so on.

L. MacLaren: And B.C. Hydro would be free to actually apply to the commission to smooth that and not have 2.2, zero, 3.2 — to maybe look at smoothing that over a number of years. The commission would consider that if they think that’s in the best interest of ratepayers.

S. Bond (Chair): This is exactly the exact fundamental issue we’re talking about with this entire issue. It was about rate smoothing, for the most part. So in essence, we may well see a request for rate smoothing to BCUC, because you have a zero request at this point in time, which seems highly unlikely to me, in the middle of two, bookended by much more significant increases.

I do have a couple of specific questions about the report in particular. On page 14, it talks about the repeal of directions related to the B.C. Hydro rate-setting process. Now, this was released in February. It says: “The timing is not clear.” Is there any more clarity related to that reference in the report?

L. MacLaren: The directions 6 and 7 that prescribe the rates and the rate caps were repealed in mid-February.

S. Bond (Chair): So that’s already been completed? It’s because this report came out prior to that?

L. MacLaren: That’s correct.

S. Bond (Chair): Okay. So could you just specifically articulate direction 8 for us?

L. MacLaren: Direction 8 replaces a series of prior directions. As discussed in some detail in the report from mid-February, it looks at areas of public policy where the government was trying to create a balance between restoring independence of the commission and also looking at the fiscal plan and public policy matters.

Direction 8. It repeals a number of prior directions. It prohibits the commission from disallowing costs that are currently in the regulatory accounts. The review creates a go-forward role for the commission in terms of establishing accounts and how they’ll be paid back. But after having discussions with the commission, to try and go back over the last number of years and try and tease out whether this should be allowed or that should be allowed was thought to be a rather onerous process. We thought it would be better to look at this on a go-forward basis, and the commission agreed.

There are still interest costs associated with the amounts borrowed for the rate-smoothing regulatory account. Those continue to be for ratepayers. Direction 8 also establishes Hydro’s net income for the current and next fiscal year at the existing level of $712 million per year. Over this two-year period, the commission anticipates not only having a revenue requirements application to set rates but also having a separate proceeding on what the appropriate cost of capital is for B.C. Hydro. That cost of capital will drive net income going forward. So over this interim two-year period, that direction sets net income at $712 million.

There are existing provisions that have been continued related to what’s called retail access to rate rebalancing and expenditures for export. Some of those are being dealt with in a bill currently before the Legislature, but they were included in this direction so B.C. Hydro would have a legal basis on which to make its rate application in February. That direction also continues the prohibition of the B.C. Utilities Commission regulating B.C. Hydro’s marketing subsidiary Powerex. Those are the provisions of direction 8.

[10:55 a.m.]

S. Bond (Chair): I want to reflect on a comment that the Auditor General made and then ask what the impact of moving to GAAP and using IFRS…. As the Auditor General pointed out: “It makes the government and B.C. Hydro look like they’re in better financial shape than they are.” What is the impact of the now committed to — thank you, Ralph, for having it on the record twice — change and the reaction to the Auditor General’s recommendation? What happens to the government books and to B.C. Hydro’s books as a result of the change in accounting practice?

R. Layton: I’ll speak to B.C. Hydro’s books, and I’ll let others speak to government’s books. For B.C. Hydro, we don’t anticipate material change in terms of the figures on our financial statements. What you will see is a new presentation that’s required under IFRS rules. What that will show is, essentially, our results before regulatory accounts and then one line that shows the total impact of regulatory accounts and then our final totals.

That’s a presentation change. But in terms of the nuts and bolts and the material figures in our statements, we don’t expect any change from the adoption of IFRS.

S. Bond (Chair): And government?

D. Wong: We are finalizing our audit this year, so that’s our preliminary assessment. We’ll be filing the final report in June.

C. Fischer: From government’s perspective, there will also be no impact. B.C. Hydro is a government business enterprise, and they’re consolidated on the modified equity basis. Their final results expressed in their financial statements, subject to audit, are a direct pickup in the summary financial statements.

C. Bellringer: From our perspective, we’re still reviewing and working through the various adjustments and the transition to IFRS at the Hydro level. We do not do the financial statement audit of Hydro this year. That’s done by an external private sector accounting firm. We’re talking to them to understand the work that they’re doing from an audit side, and we’re understanding from the accounting side what Hydro is doing. There is no opinion on that yet.

It does roll in on a modified equity basis, as Carl described, into the public accounts. But as you know from previous years, we’ve also assessed whether or not there’s an independent process that would allow government to pick up those results and not be…. We did point out in our qualification previously that the government’s direction was extensive, and therefore it was guiding that bottom line.

We will have to look carefully at the direction 8 to see whether or not we believe that enough independence has been introduced into the process. We’re sensitive to the fact that transitions take time. But unfortunately, we will have to make our assessment on a point-in-time basis and not take that into account, which might mean a different position today than we would have two years from now.

I’m just not wanting to set the expectation that just because the change has been made it will cover off all of the concerns that we’ve already raised. They are quite detailed, so we’re having to go through all of this information in a detailed fashion as well.

L. MacLaren: Maybe one further comment. Under the former rates plan, depending on how Hydro performed in a given year, if the revenues were not sufficient, transfers were made into the rate-smoothing account. With that gone, Hydro’s performance will be reflected in some additional volatility in their bottom line, which will then flow into the public accounts and the summary financial statements. The Ministry of Finance is aware of that and is planning accordingly in terms of considering forecast allowances and contingencies.

S. Bond (Chair): Are you aware of the magnitude of that volatility?

R. Layton: I think it’s impossible to say at this point in time, because we need to see what the B.C. Utilities Commission makes in their ruling about a year from now, as we talked earlier. As Les mentioned in talking about direction 8, it prohibits them from looking backwards and saying the money that’s already in there…. It has to let us collect that money.

On a go-forward basis, they may say: “Well, we don’t want you to continue using this account or that account.” Depending on which accounts those are, it could be tens of millions of dollars. It could easily be hundreds of millions of dollars as well in terms of annual volatility, depending on which accounts are in use or not.

[11:00 a.m.]

S. Bond (Chair): Les, can you just articulate that again? That volatility, ultimately, will transfer, potentially, to corporate accounts. Is that correct?

L. MacLaren: Yes, because of the consolidation of B.C. Hydro. If they have volatility in their results, it’s reflected in the summary financial statements.

S. Bond (Chair): Causing government to then adjust its financial forecast or protective measures — for example, with a higher forecast allowance or some other mechanism.

L. MacLaren: It is one of the factors now that the Minister of Finance and Treasury Board are going to have to be cognizant of in establishing the fiscal plan.

S. Bond (Chair): Okay. I had one other question. It was an interesting discussion, and there was a fair bit of it in the report, about the reallocation of costs between customer classes. On page 8, it reflects an alternative view between the ministry and, I think, the Auditor General in terms of how those costs are allocated between classes of users.

Can someone just explain to me what that means? It sort of sets up another…. We have two separate views happening here, so can someone explain the difference there?

C. Bellringer: I’ll start with what we put into the report and where our comments were coming from, and then I’m sure you’ll hear the other view. When we were looking at all of the detail behind ASC 980 and the American standard, it’s not an application, a list, where you go, “Yes, we did everything on this list; tick,” and you’re in or, otherwise, then, you’re out. It’s an assessment of many, many factors and then a weighting of all of that to determine whether or not…. In particular, it’s an assessment of whether or not it’s done with an independent regulator and a regulatory framework.

One of the factors is the extent to which…. There’s a description within the American standard of the class allocation aspect. It is, generally, an indicator that when public policy is introduced, it’s taking away from the independence of the regulator, in effect. I mean, that’s kind of the bottom line to all of this. There is no….

We’ve been pressuring, as a community of auditors, the Public Sector Accounting Board in Canada to put a specific standard in place for Canada on rate-regulated accounting, because it is a different setup in Canada. You do end up with…. The regulator itself is not 100 percent independent, but it is an independently run process that’s done in a public way. We’re okay with the way that it’s set up in Canada, but that’s not really well described in the Canadian standards.

The use of the utility for public policy is also another very commonly used mechanism across Canada, but it’s not anticipated in the U.S. standards, so it would be very much not used in the U.S. to…. There are a number of public policies that are things that Hydro does, and the government direction is certainly clarifying that in a number of cases. We’re okay with that currently, because there’s no guidance to suggest otherwise.

This is a public policy area, but again, it is an indicator that we drew out. We were not prescribing how it should be done, but we were pointing out that the facts show that that’s what’s in place.

L. MacLaren: What’s behind rate rebalancing, as it’s called, is…. The utility typically files, as B.C. Hydro did with its revenue requirements application, what’s called a cost-of-service study. That looks at how costs are allocated between different customer classes — whether that’s residential, industrial, irrigation, street lighting or general service, which is commercial customers — and what the revenues those customers are paying into the utility are. Generally, commissions — and BCUC, in particular — are comfortable when the ratio of revenue to cost is between 95 percent and 105 percent.

[11:05 a.m.]

In many jurisdictions, residential customers pay less than their cost of service, industrial customers pay approximately their cost of service, and the commercial customers pay more than their cost of service.

The rate rebalancing is just a reallocation of costs between the different customer classes and might see some having rates going up more than others. It does not change the total revenue requirement of the utility. It’s normally called a rate-design proceeding. Direction 8 and the legislation before the commission continues an existing prohibition on rate rebalancing unless applied for by a public utility.

In our view, as stated in the response to the Auditor’s report, this is a public policy issue. We have regulated and are proposing to legislate in this area.

R. Layton: I wanted to also mention, for members and for the Auditor General’s team, that we have, since the report was released, released our latest study, which Les mentioned. The ratio has improved, in that study, for residential ratepayers. Residential ratepayers are now at 93 percent, up a couple percent from last time. As Les said, that’s very close to where the commission likes to see things — between 95 and 105.

S. Bond (Chair): I guess the last question, although Carol has referenced it…. The reason I asked you to outline direction 8 is it’s very complicated. There are a lot of changes, but we’re not sure of the impact of that yet.

Are you in a position, as the Auditor General, then, to look at what government has done to date — the current government — and tell us whether or not you think that these will help eliminate the qualification that you, as Auditor, have placed on previous statements?

C. Bellringer: There are a lot of eyes on me on that one. The quick answer is no. We haven’t completed our analysis yet.

The one thing that hasn’t been brought up…. We already had, at one of the previous PAC meetings, talked about what the qualification was based on. But the simple math — it’s not so simple — of when we’re looking at the independence issue and looking at the extent to which the direction…. Is the direction now…? Again, it’s very common for there to be direction. Now it’s a matter of assessing whether or not it’s too much.

We concluded last year it was. That was based on a control over, through direction, the rates, the return on equity — or the bottom line that government was expecting, which comes into its results — and the application of the various deferral accounts. It left no room for enough reflection of: were the results really reflecting the performance of the organization? Instead, it was controlling all three pieces.

We’ll be looking at the direction 8 to see — and the removal of the other directions as well, because it’s a combination of both — as well as the work…. Now, the work of the regulator will not time well with the assessment, because it’ll come in after we’re having to reach a conclusion. We’ll have to work with what we’ve got to see whether or not there’s been enough backing off from what we consider to be too much direction. But no, we’re not there yet.

S. Bond (Chair): Okay. Well, we will look forward to your analysis and whether or not that makes what we would describe as a material change, when it comes to a qualification.

Any other comments?

With that, we want to thank the Auditor General and her team. I know that was an extensive amount of work. It has garnered a lot of interest and commentary in the province.

We appreciate both the ministry…. Les, thank you for being here. We appreciate all the work that you do in the ministry. And we appreciate B.C. Hydro being at the table and looking at the importance of moving forward here.

We’ll certainly be watching with interest the discussions with the BCUC and also the Auditor General, as she considers whether or not there will be a qualification in the next round.

Thank you for your time, for your answers this morning.

We’ll probably just take a five-minute break here while we switch up to the next report. Thank you all for being here this morning. We appreciate it.

The committee recessed from 11:09 a.m. to 11:16 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Thank you for taking that brief recess so that we could set up for the next report.

The second report on our agenda today is also an important one and will, I expect, generate a fair degree of discussion. Again, the report was released in February of 2019. The report is entitled Access to Emergency Health Services. We’re going to ask the Auditor General to begin with some opening remarks. I know she has members of her team here that will walk through the presentation. We’ll then, I assume, hear from the Ministry of Health or B.C. emergency health services.

You can let us know, as we work through the presentation, who is going to do that. As I reminded others, if you could just make sure that your team is introduced for the record so that their names are captured in Hansard, that would be most helpful.

With that, we’ll begin with the Auditor General’s comments on the report and then ask her team to walk through the PowerPoint, please.

Access to Emergency Health Services

C. Bellringer: Thank you, Chair.

I’m joined, for this report, as well as the last report, by Deputy Auditor General Sheila Dodds. Sheila will walk through the highlights of this particular report and introduce the staff.

S. Dodds: Thank you, Carol.

Good morning, Madam Chair and committee members.

In British Columbia, B.C. emergency health services — or BCEHS, as we’ve referred to it throughout the report — is responsible for both delivering emergency health services throughout the province and consenting to the provision of emergency health services by first responders. Emergency health services are first aid or health care that is provided outside of a health facility without delay.

Providing the right interventions at the right time, at the scene and on the way to the hospital, can save lives and prevent serious harm. BCEHS’s goal is to ensure that in every community across the province, patients receive timely and appropriate access to emergency health services when required. And that is what we audited — whether B.C. emergency health services has effectively managed access to emergency health services across the province.

With me today are Peter Nagati and Kevin Keates, the two senior members of the audit team. I’m going to turn it over to Kevin to provide an overview of what we looked at and what we found.

K. Keates: Thank you, Sheila.

Good morning, Chair and committee members.

In this audit, we looked at whether BCEHS had effectively managed access to ambulance and emergency health services across the province. Overall, we concluded that BCEHS has effectively managed access to ambulance and emergency health services in some areas. However, we found that its performance against key targets for patient care needs improvement and the coordination of access to emergency health services with fire departments needs to be strength­ened.

Emergency health services are first aid or other health care that is provided outside of a health facility without delay to save lives or prevent or alleviate serious harm or pain. These services are often someone’s first point of contact with the health care system in an emergency situation.

BCEHS responds to medical emergencies across the province. Paramedics provide patient care, from basic emergency care to advance care, for a variety of life-threatening conditions, both at the scene of the emergency and while transporting patients to hospitals.

[11:20 a.m.]

BCEHS’s goal is to ensure that in every community across the province, patients receive timely and appropriate access to emergency care when required. In 2017-18, BCEHS spent $478 million and employed over 4,000 staff — including paramedics, call-takers and dispatchers — to support the delivery of emergency health services.

We found that BCEHS sometimes takes longer than it would like to, to reach patients where time matters. This increases the risk that some patients don’t receive the care they need when they need it. Exhibit 4 from page 22 of the report shows that BCEHS is achieving its arrival targets in rural and remote areas but not in urban areas.

We also found that access to emergency health services varies depending on where you live. For example, advanced-care paramedics primarily work in urban centres where call volumes are high. There are no advanced-care paramedics stationed in rural and remote communities. Evaluating its advance-care coverage across the province would help BCEHS to determine whether it is sufficiently meeting the needs of patients.

Overall, BCEHS understands where it’s succeeding and where it needs to improve. It’s in the midst of a transformational change of its service to better match its resources to patient needs. This includes an increase to the number of paramedics and ambulances as well as the introduction of a new dispatch approach with the goal of shortening response times for patients who need the care most.

BCEHS is also pursuing alternatives to traditional emergency response for patients who don’t require transport to a hospital. This includes options such as providing medical advice over the phone, transporting patients to a health clinic rather than a hospital or having a paramedic provide treatment in the home or community rather than transporting to a hospital.

Fire department first responders play an essential role in supporting BCEHS to provide the quickest possible response to patients requiring time-critical care. We found that BCEHS’s collaboration with fire departments had not resulted in a coordinated approach to emergency health services across the province. Improved coordination with fire departments would support consistent application of medical standards, information-sharing, improvements to patient care and clarity on roles and responsibilities.

That said, there are several challenges to improving coordination. First, fire department first responders are employed by local governments, while BCEHS is part of the provincial government. Further, BCEHS and some municipalities have different views on how fire department first responders can best support BCEHS in providing effective access to emergency health services. Support from the provincial government may be needed to improve coordination.

In conclusion, we made four recommendations in this report — three to BCEHS and one to the Ministry of Health. We recommend that the BCEHS (1) review its performance management framework to identify additional indicators for timeliness and clinical quality, (2) determine an appropriate level of pre-hospital advanced care coverage that considers patient need and implement strategies to achieve that level and (3) improve transparency and accountability by publicly reporting on its targets and performance.

We recommend that the Ministry of Health work with local governments and BCEHS to ensure that BCEHS can implement a coordinated approach to pre-hospital care that results in medical oversight to the extent appropriate across agencies, to ensure that patient care meets acceptable medical standards; data sharing between agencies to better understand whether patients are getting the right medical interventions at the right time; signed agreements outlining the roles and responsibilities of fire departments, including the level of care provided; and confirmation that first responders are being notified of events where they can best contribute to patient care.

We’d like to thank everyone at the B.C. emergency health services and the Ministry of Health for their support and assistance during our work on this audit.

We’d also like to acknowledge the paramedics and first responders we met with for their professionalism and contributions to this audit and for the services they provide to the people of British Columbia. Thank you.

S. Bond (Chair): Thank you, Kevin. We appreciate that.

Good morning. I’m not sure who’s going to lead the presentation on the other side here.

S. Feulgen: I will start out, Madam Chair.

Thank you to the committee members for inviting us here today. We appreciate the opportunity to speak to you. I’d also like to thank the Auditor General, Carol, and her staff. I think we’ve had a very collaborative approach to this audit. The BCEHS teams and the Ministry of Health have really appreciated working with the Auditor General’s team. I think there have been some significant learnings shared and learned. Thank you for the time that you spent with our teams and your patience.

[11:25 a.m.]

With that, I’d like to introduce those that are with me today from the BCEHS: Dr. John Tallon, who is the chief medical officer responsible in the BCEHS, and Barb Fitzsimmons, the chief operating officer. I also have with me Ian Rongve from the Ministry of Health, the assistant deputy minister for provincial hospital and lab services. And I guess I should introduce myself. I’m Sabine Feulgen. I’m the associate deputy minister, one of the associates responsible in the Ministry of Health.

Going right to the audit findings. We, as a ministry in the BCEHS, agree and accept the report’s four recommendations. We are looking forward to working with the B.C. emergency management health system and the municipalities, in particular for the ministry efforts, and also to provide some assistance where required for BCEHS as they work through their other three recommendations.

Some of these actions have already been implemented, partially, to date. You have before you an action plan. What I’ve asked the team from BCEHS to do is to actually walk through the recommendation and then the action plan that we have prepared to address the recommendation, if that works for the committee members.

I don’t know, Madam Chair. Do you want to do questions as we go through that or wait until the end?

S. Bond (Chair): No, I think if you want to walk through the recommendations, the action plan, and then we’ll do the questions at the end of all of your presentations.

S. Feulgen: Okay, great.

I’ll turn it over to you, Barb, if you want to start with recommendation 1, please.

B. Fitzsimmons: Good morning, and thank you very much. I, too, would like to thank the Office of the Auditor General and Sheila’s team for working very collaboratively with us throughout this process and for the support from the Ministry of Health, as well, in moving forward and working on the recommendations.

The three recommendations, we fully accept. Recommendation No. 1, which is that we will review our performance management framework and determine additional indicators — we’ll do that by March 31. Currently our timeliness is assessed. We do it by community, but we also roll it up to urban, rural and remote as well. We’ll determine those. Those are in alignment with our clinical response model that we’ve adopted, based on other jurisdictions.

Recommendation No. 2. As I said, we fully accept. We will work in collaboration with our key partners to understand the role of the advanced-care paramedics outside of the metro-urban communities and determine the appropriate levels of coverage by 2020. We currently have, in an evaluation component, six advanced-care paramedic positions which have been created in rural communities.

Recommendation No. 3. We will regularly post on key initiatives and performance measures by March 31. Currently we do post our action plans, so that information is available publicly. What we will do is enhance that and post our clinical and our other key performance indicators so that they’ll be available for the public.

S. Feulgen: I’ll turn recommendation No. 4 over to Ian.

I. Rongve: Thank you, and apologies for coughing as my first action.

Recommendation No. 4, around improving the coordination with first responders and municipalities. Government accepts this recommendation. The ministry will be developing a municipal engagement plan. It’s obviously a complicated thing, with a couple of levels of government. As the Auditor General’s report noted, not all municipalities are exactly on the same page on this, so I think it’s really important to have a really fulsome discussion with the municipalities as we develop our way forward here.

We will work with BCEHS to develop the appropriate medical oversight. Obviously, there is very strong medical oversight within EHS itself. Extending that to first responders, taking account of the different roles of first responders and EHS, means that we have to make sure that the medical oversight responds to those differing roles.

To update the collaborations agreements — the Auditor General talks about data, talks about the fact that the collaboration agreements are not consistent across the province. Where there exist collaboration agreements, we’ll work with EHS and with the municipality to update it to make sure that it includes, to the best of our ability, data sharing.

[11:30 a.m.]

It’s a very strong case that data sharing is important, both for identifying what’s actually happening on the ground as it’s happening but also as we start to look at the effectiveness and the timeliness of the system. There’s no doubt that we’re missing a point of data on some of the more extreme calls when we don’t know when the first responders get there. As the representatives from EHS were saying prior to entering the room, that actually can make a real difference.

As we also noted, there are municipalities across the province who do not have consent agreements, so working with them to get a consent agreement. Obviously, with different levels of governments and all of that, we can’t guarantee how we’re going to get there, but we will be working very hard to get universal coverage across the province on consent agreements.

S. Feulgen: I think that pretty much covers the recommendations that were provided by the OAG. I think you may have some questions. We’re definitely open to some suggestions.

As Ian noted, the challenging part with engaging the municipalities is, again, that we don’t really have oversight over municipalities. We’re really working with best practices to reach collaboration and respond to the OAG’s recommendations as we go — community by community. There is no overall thing that fits everything, so it’s very sensitive, and it’s being approached…. I think BCEHS would be able to point out some more communities where they are very successful and the model is working. It’s a bit of a progressive, iterative process.

Please, any questions would be welcome, or suggestions.

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

Any other comments from the Auditor’s office, Health?

All right. With that, we’ll ask committee members for their questions. We’re starting the speaking list, and it looks like everyone’s on it.

We’ll start with Mitzi, please.

M. Dean (Deputy Chair): Thank you for this important work.

I’m a bit concerned that we just keep talking about municipalities. I’m very interested in the partnerships that will be developed with Indigenous communities and also with federal communities as well. Has there been some thought given to those partnerships?

J. Tallon: There is definite attention being given to both those initiatives, including federal and First Nations. In fact, we have an ongoing relationship with First Nations through our provincial manager of First Nations, who is also our manager of first responder relations, Blaine Wiggins. As an example, there’s an upcoming meeting — I think it’s the first week of May, actually — with First Nations in conjunction with Island Health on the role of BCEHS in supporting nursing stations in that environment.

M. Dean (Deputy Chair): Were Indigenous communities impacted by the policy change as much as other communities were?

B. Fitzsimmons: The clinical response model? Yes.

M. Dean (Deputy Chair): Okay.

The clinical response model…. Your performance measures are going to be measuring that. They’re going to be measuring the clinical response. But in your partnerships with municipalities and Indigenous groups and firefighting groups, the outcomes there are much more holistic. They’re much more about making sure that someone is responded to — that they have someone there just as another presence or can take care of some other things going on. The clinical outcomes are a subset, in a sense, of the whole holistic experience. Will those other outcomes be taken into account when these partnerships are developed?

B. Fitzsimmons: Yes, as part of the whole clinical response model. It’s getting to calls in a timely fashion where time matters, and then improving the experience of all the other patients. So where time isn’t necessarily of the essence, making sure that we’re getting a holistic and appropriate approach to caring for those patients. So, yes.

G. Begg: I wonder if you could be specific and give us an example of a community where you have an agreement that works really well and describe it in the sense of why it works so well. You indicated earlier that there were a couple of examples.

S. Bond (Chair): I think we’re referencing a collaboration agreement. That’s a great question; I had just written it down on the top of my sheet. Could you describe a collaboration agreement for the member?

[11:35 a.m.]

B. Fitzsimmons: Currently, some of the larger municipalities like Vancouver and Surrey…. We have some very effective actual signed agreements with them which include our relationship and how we’re going to work together. Even those aren’t as fulsome as Ian was referring to, in terms of the medical oversight, the clinical pieces. Those are the things, throughout the whole province, that we’re going to work on and improve with all of them.

I would say that, right now, those larger municipalities that we actually have signed agreements with — we’ve got a good relationship with them. It’s helpful in terms of understanding who’s going to do what, and the availability.

G. Begg: I think I understand the process, but it’s unclear to me what makes the relationship so good — the relationship that you’ve agreed upon with Surrey and Vancouver — and, obviously, why that can’t be replicated with other municipalities.

B. Fitzsimmons: It can be. That’s the work that we’re going to be doing over the next couple of years with the support of the Ministry of Health. We believe that we can reach that goal. As you can imagine, every municipality is different, and there are nuances with regular, full-time departments, volunteers, etc. But that’s the commitment: that we’ll work through those.

G. Begg: Are there legislative things that would be helpful to you in that process?

I. Rongve: As we look through the ministry’s response to try and improve the collaboration and the cooperation with municipalities, we’re going to look at a full range of options. Legislation is an option. Whether it’s the appropriate option, certainly, is not for me to say. It will be something that we look at, but it’s certainly far too early to say that there will be a legislative response.

G. Begg: One related question: is there a common radio communications system that paramedics and other first responders share?

B. Fitzsimmons: Not currently. We’re on separate radios.

G. Begg: So the police can’t access your radio system, and the fire departments can’t?

B. Fitzsimmons: No, not currently. I think technology would…. I don’t know enough about that particular technology, but we’re not on the same….

G. Begg: Would that not be helpful?

You seem to be very fuzzy, very reluctant to…. It’s a simple question.

B. Fitzsimmons: I just don’t know enough about the radio system. It’s not my…. We’ll take that back and come back.

G. Begg: No, no. You don’t have to know anything about the radio system. Would it be helpful if you could communicate directly with Surrey fire, who are first at a scene before you — yes or no?

B. Fitzsimmons: Well, we do get information through both dispatch centres, so we can communicate through whoever is dispatching them. We are in contact. We’ll know what the scene is, and they’ll update us with information through the dispatch centres.

G. Begg: Earlier, though, it was indicated that data management, data gathering, is sometimes difficult because you don’t know when another first responder has arrived.

B. Fitzsimmons: We don’t have the actual data from their patient care records and the actual time that they arrive. We don’t see that on our AVL; we get it through a dispatch centre. It would be very helpful to be able to see that — seeing which responders are arriving on scene.

I. Rongve: One of the issues with having a joint radio system, as I understand it, is that if you have three different potential groups using the same radio system, keeping track of who’s talking at any one time becomes more difficult, and the chances of missing a call or missing a response increase. Again, I’m not a paramedic and not a first responder, but that’s what I’ve heard.

G. Begg: I think that…. Well, I know…. I’ve worked under a system where there is a common channel that can be accessed by all emergency responders. We’re not reinventing the wheel here, I hope.

J. Tallon: Maybe I’ll add a couple of comments, just taking a step back, from the patient’s experience. The patient, as you say, does access the system for police, fire and ambulance through the common 911 system. At that point, if it is an ambulance-oriented medical issue, it’s diverted to BCEHS.

[11:40 a.m.]

BCEHS is firmly embedded within the health care system, within PHSA, of course. I think, first of all, the suggestion is a great one, to have congruence of communication and perhaps redundancy there as well. But some of the communication within BCEHS, of course, is very specific to that patient’s information, that patient’s destination, that patient’s diagnosis. That comes under the health authority as well, but overall, I think it’s a very, very good suggestion.

G. Begg: One last….

S. Bond (Chair): Oh, please. I’m going to build on yours in a minute.

G. Begg: I hate to harp on this, but particularly with responses to the opioid crisis, there’s a very pressing and urgent need to have good communication. One of the ways to do that is through a common channel on a radio system that already exists. I respect that there may be some confidentiality matters with regard to patient records, but it’s also timely information for EHS with regards to criminal history, potential violent nature, whatever.

I guess I’m being…. I’m not giving you direction, but you should, I think, explore. As you speak with municipalities about conventions or agreements, that should be an area that should be explored with them as well.

S. Bond (Chair): Maybe just with the indulgence of the committee…. I normally wait till the end, but I have a number of questions about firefighters I’ll ask our first responders. But I just want to go back to Garry’s point, because I totally agree with him. Can someone describe for us a collaboration agreement? Does it lay out the protocol that…? If fire rescue arrives on the scene before an ambulance does, which is often the case, are there communities that have a laid-out protocol that says: “First responders can do this” or “They don’t do this”? What is a collaboration agreement?

It’s the first time we’ve actually heard that they exist. So if they exist, what do they look like? Do they lay out protocol for first responders so there are clearly understood expectations about what happens? I do know this — and I’m sure everyone around this table can tell you: no one in those circumstances notices the colour of the uniform. They want help. I’m glad to see this issue has actually been brought forward by the Auditor General, because there has been an overall, from my perspective at least, reluctance to have this discussion for far too long.

It’s not about the colour of the uniform or the jurisdiction. It’s about how we get help on scene quickly. Can someone describe a collaboration agreement that currently exists?

J. Tallon: Sure, and for the purposes of the committee, we can certainly submit one, as well, for people to have a look at, if permissible. The collaboration agreement reflects the current standards of the EMALB, or the licensing authority, for first responders and paramedics as well. It delineates the expectations of patient care in the context of that licensing level, and it implies that there will be good communication, patient care records exchanged, as well as a review of that collaboration agreement within…. I can’t remember if it’s two years or three years.

S. Bond (Chair): Okay, maybe we’ll try this angle. There are fire response teams in British Columbia that are trained up to paramedic status, are there not? There are two that I’m aware of.

J. Tallon: Delta and…

S. Bond (Chair): Prince George.

J. Tallon: …Prince George.

S. Bond (Chair): Which is where I live. That’s how I know.

In the case of those particular fire rescue units, they have a high degree of training. Are there collaboration agreements in place so that if they arrive on scene, they are allowed to use the scope of their training?

J. Tallon: Currently Delta certainly does. I don’t know Prince George at this point.

S. Bond (Chair): Okay. I’m sure others will have questions, and I appreciate your latitude in letting me interject there, because it is an issue that I am, as Garry is, very concerned about.

R. Sultan: Just continuing the same line of questioning. On the North Shore of Vancouver, where I live, we daily see the drag-race contests between the ambulances and the fire equipment roaring down Marine Drive or wherever, to see who can get there first. You sometimes wonder: is this really any way to run a railroad?

[11:45 a.m.]

What this discussion suggests to me is that perhaps this committee should consider an obligatory, mandatory co­operation agreement between all fire departments and B.C. Ambulance or whatever ambulance service in the local jurisdiction.

I can well imagine…. We all deal with the firefighters. We don’t see the B.C. Ambulance people quite so often, but they are high morale, motivated, muscular. They know their mission. They’re in charge. You wonder where this macho world ends in terms of accommodating the caring life-saving.

It is a complicated world, and, I think, by the nature of the institutional framework, it doesn’t lend itself to collaboration and cooperation. Perhaps we should crack some skulls here with legislation. Just a thought.

I have a couple of questions on the report itself. On page 26, I found it a bit surprising overall that the rural response times are usually quite comparable to the urban response times.

Then we look at performance indicators, on page 26, for cardiac arrest — a subject of some personal interest — and paramedic response times in the first panel on that page: provincewide, 70 percent meeting the standard; Vancouver Coastal, 75 percent; and Fraser, 57 percent. It’s an outstanding number in the wrong direction.

Why does Fraser…? And it’s not the first time we’ve noticed Fraser is an outlier on performance indicators. Why are they at 57 percent and everybody else is in the high seventies criteria?

B. Fitzsimmons: There are a couple of reasons. The demographics — the growth of 1,000 people moving in there a month has been very challenging for, I think, most of the health components to keep up with, with that volume.

R. Sultan: The community is growing too fast.

B. Fitzsimmons: Yeah, it’s growing very quickly.

R. Sultan: That’s your answer.

B. Fitzsimmons: It’s a very large geographic area as well. So those are the two….

R. Sultan: It’s not as large as British Columbia.

B. Fitzsimmons: No, not as large. You’re absolutely correct. But for our response rates, that becomes a bit of a challenge. Those are two pieces.

We also did find that it has, interestingly, decreased with, again, changes in demographics and the growth.

R. Sultan: I don’t find your answers very convincing. Let’s go to page 23. Here we have the charts of response times for urban versus rural in general, not picking on poor old Fraser. Again, first of all, overall, I’m proudly astonished at the response times. I think it’s incredible that in this vast province of our ours, the size — what? — approaching some European countries and beyond, we get there within minutes. It’s astonishing.

But what I find puzzling is the fact that the response times in urban areas are really the mirror image of response times in what is defined as rural areas. That somehow is counterintuitive. Why is that?

J. Tallon: It’s a great question. It’s a question that is reassuring to the rural remote component of our system, as you say. It’s worrisome in the urban context, where the higher concentration of advanced-care paramedics are. So it’s something that we need to study further. I don’t have a clear answer, at this time, for you why the rural remote — great distances, as you say — versus the urban have such disparate responses.

R. Sultan: Maybe you should move some of the rural managers into urban areas and say: “Do your stuff.” Anyways, that’s the sum of it.

I come back to the point that the Chair and Garry referred to, which is troubling to me, that we have these highly trained, very expensive organizations who de facto, on the ground, appear to be competing with one another, not always necessarily to the benefit of the client.

[11:50 a.m.]

This is dysfunctional. It is, I suspect, at times wasteful. And surely, as a government, we have some responsibilities to try and cut through these feuds, shall we say.

That’s all I have to say.

J. Thornthwaite: I’m not going to repeat what has already been said, but obviously, there’s going to be a certain level of frustration about the lack of collaboration, or these so-called consent agreements, between firefighters and ambulance.

I am really interested in what’s going on in Port Coquitlam.

Barb, you were quoted, actually, in a newspaper article about the agreement — that you have to call 911 twice. I still don’t get it. I mean, have we come to such a horrible situation in our collaboration that the ambulances don’t trust the firefighters, and vice versa, such that the general public has to call 911 twice?

My first question. I think we need a response about what’s going on in Port Coquitlam, and hopefully, it’s not going to happen anywhere else.

B. Fitzsimmons: The situation in Port Coquitlam is that the fire chief had directed the staff at their facilities to call fire, to request fire, when they call 911. When you call 911, it says police, fire or ambulance. They were told to request fire. That got misconstrued in the media. It was almost like the public was being directed to do that. It’s not at all. It was just for in their facilities in the municipality of Port Coquitlam.

Subsequent to that, we worked together to determine that in their municipal facilities, they would call and request ambulance first. Again, for any of the critical, life-threatening calls and a number of other calls, we also notify fire at the same time. We would do our call take and determine. Then, as we’re dispatching, we also notify fire dispatch.

As a result of that, we clarified for the municipality. They’ve chosen, and justifiably so, that if their staff feel that they need extra help on a medical call, they will then call back and request fire.

J. Thornthwaite: The fire to assist the ambulance?

B. Fitzsimmons: The fire to assist the patient and the staff at the facility, if they require it.

J. Thornthwaite: It’s the fire that’s coming first.

B. Fitzsimmons: It may be. It’s not always.

J. Thornthwaite: I know what my colleague Ralph had said. On the North Shore…. Thankfully, I haven’t had to call 911 that much, but when I do, it is actually the fire that comes. I know there’s an issue, that they can’t transport. Then they have to wait for the ambulance. So it’s like a double call.

I reflect, again, on what I said before, this frustration. It seems like a waste that we’re using all these highly trained, professional individuals and because of an issue of turf, unless somebody can explain the real reason why…. Is it a fight between turf, or is it incompetent managers? Whatever the case may be, I think I’m reflecting a general frustration that we’ve got all these very highly trained people, but they’re not being utilized in an effective and efficient way.

We’ve really got to get to the bottom of it. It might have something to do with the response times in urban British Columbia. There are too many turf wars.

I don’t know. That’s just the way I feel. I don’t know who else wants to answer that.

B. Fitzsimmons: I can help clarify. It may seem like it’s a drag race, but in those critical calls — for instance, a cardiac arrest, an unconscious patient, a major trauma — we’re actually going to work together there. The benefit of having a first responder there initially for cardiac arrest is they can start CPR. That’s critical in that situation.

Oftentimes when we arrive on the scene, firefighters…. You need at least two, because it’s very tiring. When it’s those types of calls, all hands on deck are appreciated and, in particular, as fast as possible. So those are the critical pieces.

I know it seems like we’re racing each other, but we’re actually not. It’s that we’re trying to get there together to help the patient — or as soon as possible. Those are the critical pieces. Then often first responders will help us, again, to continue CPR on the way to the hospital. You really require a lot of hands on deck in those types of calls.

[11:55 a.m.]

S. Bond (Chair): Anyone else with comments? Mitzi. Then I have a series of questions related to the report.

Go ahead, Mitzi.

M. Dean (Deputy Chair): On the collaboration agreements, the consent agreements and in your action plan, what you’re saying is that there will be models and templates developed by the end of this year, but there’s not going to be any creation and activity of actually working. I’m wondering whether that’s something that could be speeded up.

I’m picking up on frustration from all of my colleagues, and I know that this is a critical issue in my community. I have Indigenous communities. I have federal authorities. Many people in my community…. I’ve heard stories of people lying with a minor injury and nobody going to them for well over an hour. I have a lot of seniors living in my community as well. So it would be really beneficial, not just to British Columbians in my constituency but across the province, to see more of these agreements actually being completed sooner.

I. Rongve: I’ll respond to that. The action plan, particularly around the collaboration and cooperation for recommendation No. 4 — that’s not a sequential thing, so we’re not going to wait until we have everything done before we start working with the municipalities. Having said that, it’s going to be a difficult conversation at times with municipalities.

S. Bond (Chair): Okay. I think we’ve all sort of keyed in on one issue, and I really hope that’s going to send a strong message to EHS and to the Health Ministry that all of us, as representatives of our community, hear about this issue all of the time.

We begin this conversation by being very grateful for first responders and for emergency health personnel who serve us every day. We are grateful. We are thankful beyond belief that they are called to this line of work.

It is important when we have…. We hear in so many reports: “Limited resources; we can’t make this work.” More than ever now we need to be able to utilize health care professionals to their full scope of capacity. And that means that there are fire responders who are able to help at those scenes. I have had constituents contact me, as I’m sure my colleagues have, to say: “It doesn’t matter the colour of the uniform. We just want help.”

I hope that message is starting to permeate, because for far too long it’s been: “Well, no. We have to deal with this. We have to deal with the municipalities.” It’s time to get on with this and figure out and have that conversation about how we utilize all of the resources that we have in the province.

I think you’ve heard more than enough. We certainly, I think, would agree that we are going to want to see a report back on this action plan. We’re going to make sure that you come back to us and give us a sense of what the progress is on collaboration reports, what the engagement plan looks like, because every person around this table has expressed their concern about that issue.

My colleagues will not be surprised to know that I keyed in on the statement that I think we should be worried about as a group. When you look at a chart that basically says, in the report of the Auditor General, that access to emergency health services varies depending upon where you live, that’s a concern for me. And there are two concerns, because one we see is that response times are not meeting…. In fact, it’s urban B.C. where response times are more challenging, yet outcomes, if you read…. Rural and remote communities are not receiving…. According to the Auditor General’s report, there are concerns about rural and remote communities in British Columbia because of the kind of personnel that are missing. So you’re not going to be surprised that I’m going to raise that issue because of where I live.

I know that a number of new programs have been started. It’s referenced on page 7 of the report, and that’s community paramedicine. There have been, from my perspective, at least, some positive outcomes of that. Can you tell me what the future of the community paramedicine program is? Are we intending to see that program continue, to accelerate, to be enhanced? And how does that link with the potential addition of advanced-care paramedics in areas where there currently are none?

[12:00 p.m.]

J. Tallon: That’s a great series of questions. Currently we have 99 community paramedics around the province who are doing wonderful work with chronic disease management, community engagement and participating in cardiac arrest CPR education. As you noted as well, we currently have a pilot project, if you will, using an old term, of advanced care paramedics in the rural community paramedicine format. That project is underway right now and represents, as you say, a significant change for BCEHS in the context of moving advanced care outside of the urban areas to where, in fact, it’s probably needed more critically in many, many cases because of distance, time and resources.

S. Bond (Chair): Is the community paramedicine program…? I don’t know. Maybe it’s the Health Ministry or somebody. We have 99 at the moment, making an enormous difference. I was in McBride just a few days ago, actually, and I heard nothing but compliments about that program. Will it continue, and will it be expanded?

B. Fitzsimmons: It definitely will continue, and one of the areas where we’re looking to expand it is through the acute care paramedics for right now and then determine where the next stages are going to go.

S. Bond (Chair): Well, I’m relieved to hear that, because it is making a difference.

On page 11, it talks about patient-centred. I’m assuming that all of the treatment, even up until today, has been patient-centred. But this talks about recommendations of alternative care.

Can you — someone — explain how that differs from the current approach? When someone arrives on scene…. If we look at page 11, it talks about how a quick visit to the hospital may not be in the best interests of the patient and treating them on scene or recommending alternative care. Is that different somehow than what happens or has happened in the past? Maybe just walk us through how that helps improve the outcomes that we’re concerned about in this report.

J. Tallon: I’ll answer it a couple of ways. First of all, just to go back a step to cardiac arrest as opposed to alternative care. Just a reminder to people around the room that the first, first responders in cardiac arrest are, of course, citizens, family members, etc., who are at the scene. But the first, first responders from an assistance perspective are the call-takers and dispatchers who answer the phone for ambulance and medical calls, who are actually highly skilled and trained in giving advice around everything from CPR to airway management to delivery, actually. So that predicates the care and initiation of care for patients in cardiac arrest itself.

Around Canada, North America and the world, the usual paradigm of “you call for an ambulance, and you get transport to a hospital” is changing quite dramatically, where the patient experience is better informed, perhaps, by that patient being referred to primary care, being treated at the scene or being referred to alternative care as opposed to an ambulance ride to the hospital for care that could be better offered in a separate setting. It’s one that we’re moving to, as you point out, in the action plan itself and which is being done around EMS jurisdictions around the country.

S. Bond (Chair): So we’re not reinventing the wheel. We’re actually looking at best practice and looking at how we (a) improve outcomes but (b) also better utilize resources so that we’re not just a transport system picking someone up and taking them to the hospitals. Is that…?

J. Tallon: Yeah.

S. Bond (Chair): Okay.

I was surprised…. On page 21, there was a reference when we talk about…. I think Ralph brought forward the issue of timely response and how that works. I’m surprised that…. I would assume that one of the things that contributes to the length of time it takes for the ambulance to get to the person is how long it takes to dispatch that ambulance.

The report that the Auditor General’s team points out is that BCEHS monitors key performance measures, but it does not track how quickly BCEHS dispatches an ambulance and how that contributes to the overall timeliness for care.

Wouldn’t that be the first thing you’d want to know — how quickly you get the ambulance out of the bay? So have we changed that or added…? Is there going to be a measure that’s added? I mean, if the delay is two minutes while they’re on the phone trying to figure out who’s doing what, of course that contributes to the length of time. Has that been rectified?

B. Fitzsimmons: Absolutely. That’s one of the components of the new framework that we’re working on.

S. Bond (Chair): Okay. So working on…. I mean, it seems fairly straightforward to me that from the time the call has arrived to the time the ambulance arrives beside the person’s house should be the complete dispatch time.

[12:05 p.m.]

I just don’t know how it’s not possible that you measure from the time the phone rings to the time….

B. Fitzsimmons: We do measure from call pickup to arrival. That’s the time. Other jurisdictions start measuring it and reporting on from when they actually dispatch to arrival. So there’s the call-taking component as well. That can take up to 90-plus seconds.

S. Bond (Chair): Right. That’s my point, that you’d want to know that that is extremely efficient. That when the call arrives, the assessment and the dispatch…. That could take up to — I don’t know — two minutes of the time, when you’re looking at a nine-minute critical time frame.

You’re telling me that that’s being looked at. I hope that that’s something that can be dealt with fairly quickly.

The other piece that was surprising is that when you look at performance targets and how the outcomes are measured, first responders’ contributions to looking at the performance targets are not actually tracked.

You, yourself, gave the example of cardiac arrest. If a first responder is on scene and they’re actually doing CPR, according to this and the report of the Auditor General — I think I have it correct — that’s not counted in terms of the outcomes. You don’t track the success of a first responder being on scene actually beginning CPR. Is that correct?

J. Tallon: That is correct. With our transition, though, to a provincial electronic medical record, which was implemented in the 20 months during the report itself, that has been corrected. It is in process of being corrected.

In a secondary context, we do have that information, through our external partners — in conjunction with first responder cardiac arrest research associated. Those are our research partners at UBC, one of whose paper is actually referenced — I can’t remember what page it’s on — as well. But it will become a routine part of our associated metrics.

S. Bond (Chair): Okay. Well, we’re relieved to hear that.

One sort of last venture back to the discussion around working with fire rescue and first responders. The report mentions several times that government may need to help sort this out.

I guess, to the Ministry of Health, is government prepared to get involved and actually be a partner in having a discussion with municipalities? There is an organization that is responsible for all municipalities. It’s called the Union of B.C. Municipalities. I would assume that a place where you could actually have a meaningful discussion on a broader basis is by taking this issue to UBCM, or working in partnership with…. I mean, it’s not like we’re islands. We have organizations that are there for this very purpose.

Is the Ministry of Health committed to being a partner? The report recommends that government may need to help here. The exact words are that government may need to be engaged and help. Is the Ministry of Health taking on a role in this process as well at this point?

I. Rongve: Yeah. I mean, that’s the essence of the acceptance of recommendation No. 4, that the government will get involved. We will be developing options. What the exact mechanism of that is, is still to be decided. But government absolutely will be getting involved.

I think the suggestion to have a discussion at UBCM is a very good one.

S. Bond (Chair): I guess my concern to the overall response from government…. “The ministry, with BCEHS, will engage with municipalities through 2020 to 2021.” It’s 2019 right now, isn’t it? Are we talking about two years to have a conversation about something of this magnitude, which is not new to government? I know we’ve all heard it, as MLAs.

Why is it taking until 2021 to have a conversation and try to come up with…? We’ve already said there are models. We’re looking at communities that already have them in place. Why till 2021 to actually have a conversation and get some of these things in place?

I. Rongve: That’s to have that discussion with, hopefully, all of the municipalities.

[12:10 p.m.]

We’re not talking about waiting and not doing anything until 2021. It’s definitely start the conversation basically immediately and, as we go along, to work to coordinate more collaboration agreements, more discussion, with municipalities. In essence, that’s the entire lifetime of the plan, rather than sort of the initiation.

S. Bond (Chair): I don’t know if other colleagues have other questions.

My last question is about if there is a recognition that outcomes in some parts of British Columbia…. The report is pretty clear about that. I mean, we’re all here — and I know you are, too — to make sure that all British Columbians have a certain level of service. None of us who live in rural B.C. expect the same services that are necessarily provided at St. Paul’s to be provided at, you know, Prince George University Hospital of Northern B.C., but we do expect a basic level of care and outcomes for all British Columbians.

How does BCEHS feel about the utilization of other services — like STARS, for example — where services provided through BCEHS are supplemented? They’re used in other jurisdictions far more widely than they are. I know there have been groups of people lobbying for a long time to have…. STARS is a helicopter response team that provides…. Especially in industrial settings, it can be a huge advantage in large geographies.

What is the mindset of BCEHS to those kinds of proposals in order to make sure that all British Columbians receive the kind of service that they deserve?

J. Tallon: That’s a great question. I’ll tell you. As recently as last week we had STARS here visiting for three days and collaboratively working with us to delineate best care for patients in certain parts of B.C., like the East Kootenays and the northeast as well.

We have an ongoing relationship with STARS and Alberta Health Services. We meet fairly regularly. There’s a complete clear recognition that their skill level is appropriate to patients in those areas.

S. Bond (Chair): So is it fair to say, then, that there is a willingness to look at continuing to expand the use of STARS in regions that currently don’t have that opportunity? I don’t know if they’re still serving Kamloops and that region, but I think there was some service there.

Further north, there is less service, so is there a willingness, in terms of looking at outcomes, to make sure that there’s an exploration of all of those options?

J. Tallon: The answer is yes. Air medicine was not a part of this report itself, but it’s a clear part of delivering good care to rural and remote B.C. Those conversations continue, and we engage regularly with STARS.

S. Bond (Chair): Okay. Does anyone else have any follow-up, or any…?

I think you can tell that we’re probably all pretty passionate about looking at how we find some resolution or, at least, some progress on an issue that’s been, I think, very accurately portrayed by the Auditor General’s recommendations. Frankly, I’m sure my colleagues agree. It’s good to see it in writing — a sense that somebody needs to be doing something about this. It has been a longtime discussion, especially around collaboration and cooperation.

We really appreciate the work that was done by the Auditor General and her team on this report. We appreciate the action plan. We would urge you to look at the dates and try to move some of these things forward as quickly as possible.

While there may have been some difficult questions here, we do not want you to leave without recognizing how appreciative we are of the service that’s provided. We can’t imagine how difficult it is on many days for first responders and emergency health professionals. We are deeply grateful.

In fact, our questions are merely to try to find an improved service in British Columbia. We know we have a great one, and we’re pleased about that. The report does point that out as well. We thank you for your time today, for answering our questions.

Kate, if you could put that on the list for follow-up when it comes to updates on the action plan.

Interjection.

S. Bond (Chair): Yes, that would be great. As Kate reminds me, perhaps giving us a sense of a collaboration agreement. If you could do a follow-up with us about what that might look like and probably outlining, as well, what the community engagement process might look like so that all of us can be sure that our communities and our colleagues are encouraging participation and a positive discussion about that. Thank you. We appreciate that.

With that, what I think we’ll do is take a break for half an hour or 45 minutes for lunch so people can stretch their legs, and then we’ll return to deal with two other reports after the lunch break.

Thank you again. We appreciate your time today.

The committee recessed from 12:15 p.m. to 12:59 p.m.

[S. Bond in the chair.]

S. Bond (Chair): I want to thank everyone for their work this morning on two important reports. We have two more to cover this afternoon, plus one other item of business. We will continue with the practice….

[1:00 p.m.]

I know that there are some guests with us today for whom it’s their first appearance before Public Accounts. It’s not that complex; it will flow right along quite nicely. We know that you’ll do just fine.

We’re going to begin, as we usually do, with the Auditor General providing her remarks. Then her audit team will provide comments through the use of a PowerPoint. And then we will obviously look to the B.C. Oil and Gas Commission for their response. We will hear all of the presentations. Then committee members will have a chance to ask questions at that point.

With that, over to the Auditor General for her opening remarks, please.

The B.C. Oil and Gas Commission’s
Management of Non-Operating
Oil and Gas Sites

C. Bellringer: I’ll be passing this along to Deputy Auditor General Morris Sydor to introduce the report and the staff that worked on it. I’m just going to add that for this particular audit, we struggled quite a bit at the end of the audit to pull together our overall conclusion. There are some areas of great strength, and we don’t want to draw any attention away from that. But there were some areas, as well, where we point out need for…. And the recommendations are addressing some areas for improvement.

I just lay that out as a bit of an initial comment in order to make sure that…. Especially, we note that when new people come before the committee, it’s just by virtue of the way that our reports are written that a lot of the focus does become on the areas where there are recommendations. I don’t want to take away the areas of strength that we also pointed to in the report.

S. Bond (Chair): Well, I appreciate those comments. I think we also need to remember the scope of this discussion. This is about the management of non-operating oil and gas sites. It’s not a chance for us to have a big policy discussion about the existence of oil and gas in British Columbia. This is really to the Auditor’s point as well. We need to really focus, because the report in and of itself is quite complex and quite in depth. We will try to remember to do that as we make our comments.

Morris, were you going to begin?

M. Sydor: Yes. Thank you, Chair. Good afternoon, committee members.

Industrial activities on a public land base are an important component of British Columbia’s economy. But these activities also introduce environmental and financial risks to British Columbians. Environmental risks occur when activities impact land, water and air. Financial risks occur when industrial operators don’t have the resources to fulfil their obligations to remediate and restore the public lands upon which they operate.

In British Columbia, the Oil and Gas Commission regulates the oil and gas industry and manages the environmental and financial risks that come with it. The commission’s oversight is what this audit considered. With me today are Peter Nagati and Melissa Miller, the two senior members of the audit team. I’ll turn it over to them to provide you with an overview of what we looked at and what we found.

M. Miller: Thank you, Morris, and thank you for having us here today. In this audit, we focused on how the B.C. Oil and Gas Commission is managing the environmental and financial risks of oil and gas well sites that are no longer operational. Specifically, we looked at inactive, decommissioned and restored sites.

Overall, we found three main things: first, that oil and gas site operators weren’t required to decommission wells and restore inactive sites because of gaps in legislation; second, that the commission did not collect enough funding from operators to cover its costs of restoring orphan sites. Finally, we found that regulatory changes were underway to address environmental risks and the resulting financial liability of unrestored and orphan wells.

We made 11 recommendations to the Oil and Gas Commission, and we are satisfied with its responses to the recommendations.

We did this audit because, while the oil and gas industry is an important component of B.C.’s economy, it also introduces environmental risks and potential financial liability for a government. For example, contamination from oil and gas activities may affect surface and groundwater quality, air quality, human health, wildlife, livestock and ecosystems. The timely restoration of inactive well sites reduces that environmental risk and the resulting financial liability.

[1:05 p.m.]

In B.C., the Oil and Gas Commission is responsible for regulating oil and gas activities in a way that protects public safety and the environment. In the audit, we found that operators were not required to decommission wells and restore inactive sites unless the commission ordered them to do so to address specific safety or environmental issues.

Decommissioning the well involves permanently sealing the well with cement. Restoring the site involves cleaning up any contamination on the site and returning the land to its pre-activity condition. The commission had clear standards in place for how to do this but lacked the tools to compel operators to decommission and restore well sites in a timely way because of the gaps in legislation.

The commission recognized the limitations in its regulatory framework and was backstopping the environmental risks of non-operating sites through site assessments and inspections and enforcement actions. We found that the number of inactive wells that had not been decommissioned almost doubled, from 3,800 to 7,474, between 2007 and 2018.

The commission follows the polluter-pays approach, where industry is expected to cover the cost of environmental cleanup, at no cost to the taxpayer. The commission estimated that decommissioning inactive wells and restoring sites could cost operators $3 billion.

However, when an oil and gas operator is bankrupt or cannot be located, the commission designates the operator sites as orphans. At that point, the commission is responsible for decommissioning the well and restoring the orphan site. The number of orphan sites in B.C. increased from 45 in 2015 to 326 in 2018.

To cover the costs of decommissioning and restoring orphan sites, the commission collects security deposits and uses the tax on operators’ production. The money goes into what’s called the Orphan Fund. But the commission did not collect enough funding from operators to cover its costs of restoring orphan sites. In 2016, the Orphan Fund was short $16.6 million. In 2017, it was short $13.1 million. To make up this difference, the commission used extra operating funds that it also collected from industry. The commission anticipates that the number of orphan sites and associated restoration costs will continue to increase.

Regulatory changes are underway to address environmental risks and the resulting financial liability of unre­stored and orphan wells. In April 2018, the Legislative Assembly passed amendments to the Oil and Gas Activities Act to close the gaps in the legislation and provide the commission with the authority to require operators to restore sites. The legislative changes also give the commission greater flexibility to collect and use the revenue from operators to restore orphan wells.

The commission is currently developing accompanying regulations that will detail the new requirements, including timelines for decommissioning and restoring sites.

That’s the summary of our report. We’d like to thank the Oil and Gas Commission for all that they did to help us throughout the audit. It’s worth mentioning that although the commission was already aware of many of the issues that we identified in the audit and they were already working to address them, they were also supportive of us drawing attention to those issues throughout our audit.

Thank you for letting us share the findings of our audit with you today.

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

I’m not sure who’s going to lead the presentation for the Oil and Gas Commission. As you do, we would ask that you introduce yourself and the rest of your team just so that Hansard has all of your names on the record.

Paul, maybe you can just introduce yourself and your team, and we’ll get started.

P. Jeakins: Thanks very much, Chair. My name is Paul Jeakins. I’m the commissioner of the B.C. Oil and Gas Commission.

With me is our chief operating officer, Ken Paulson, and our vice-president, operational policy and environment, Sean Curry. Sean was the lead contact for the audit from our end.

Good afternoon, everyone. Thank you very much for the opportunity to sit with you today and provide further information on our plans to address the findings of the Auditor General in the recent report.

Before we review the overall plan and our response, I thought I’d give you a bit of background on the OGC, just so everyone’s at the same level. As we just heard, I think the auditors found that the OGC has dedicated professional and expert people working in the public service. I’m sure, as the people of B.C. would expect, staff take their jobs very seriously and look to continuous improvement throughout our day-to-day work.

[1:10 p.m.]

Under the Oil and Gas Activities Act, which we refer to as OGAA, section 4 clearly lays out the mandate of the commission. As the Chair said, the big policy piece that we work with comes from that. I’ll read just a bit of it. The right:

“(a) to regulate oil and gas activities in British Columbia in a manner that (i) provides for the sound development of the oil and gas sector, by fostering a healthy environment, a sound economy and social well-being…(b) to provide for effective and efficient processes for the review of applications for permits and to ensure that applications that are approved are in the public interest having regard to environmental, economic and social effects; (c) to encourage the participation of First Nations and aboriginal peoples in processes affecting them; (d) to participate in planning processes….”

To do all of that, the commission works with local communities, all levels of government, Indigenous people, landowners and industry to ensure safe and responsible energy resource development for British Columbians.

The commission’s board of directors has the power to make regulations under OGAA, and it’s through engagement processes with those affected by oil and gas activities in B.C. and our own technical experts that we’re able to continuously review and improve the regulation. So the commission does appreciate the role of third-party audits by the Office of the Auditor General, as they test our assumptions and operating processes and result in improvements. Our response to this audit is that we fully accept and/or are acting on all 11 recommendations made in this report.

The audit report focused on our management of the risks of inactive sites from January 2015 through to October 2018. It contained 25 findings — again, leading to those 11 recommendations — and they were grouped into the four areas of examination that you see on the slide. As part of our commitment to continual improvement, we were developing a number of related new initiatives during that period, and we have continued to do so.

Our responses and action plan are geared to each area of the examination. For each, we have a summary of the findings and recommendations as a reminder on our slides. I won’t be reading those. I’m sure everyone has got the slides before them. A higher-level commission response addressing the general theme of each area of examination. A response and action plan identified for each recommendation. And, for context, I just put up the number of well authorizations in B.C. just on that slide there.

For the decommissioning inactive wells and restoring sites area of examination, the OAG identified five findings and two recommendations. During the audit period, the commission was working with the Ministry of Energy, Mines and Petroleum Resources to help enact the Energy, Mines and Petroleum Resource Statutes Amendment Act that we were calling Bill 15 back when it was being worked on, enabling a number of improvements to the regulatory framework in B.C. for management of non-operating oil and gas sites.

The amendments have had a dramatic effect and given the commission new tools to accelerate the rate of inactive site restoration, to strengthen our authority, to make regulations in the area of site treatment, closure and risk assessment and mitigation and improve the orphan funding model. So that was a very big step for the commission. These new tools will provide for the restoration of oil and gas sites in a timely manner while ensuring no cost to taxpayers.

The commission is updating its restoration framework that integrates restoration initiatives currently underway and those being planned by the commission and government ministries. Many of the recommendations from this audit focus on restoration, and commissioned actions to these will be incorporated. Key among them will be learnings from First Nation pilot projects that we have underway. I’ll discuss those in a little bit. Combined, these activities and the actions associated with implementing will assist in establishing a prioritized and effective coordination to restoration.

Rollout of activities will be incremental and continue, culminating in full delivery by December 2020.

As I said, you’ll hear us refer to Bill 15, and again, just as a reminder, that is the Energy, Mines and Petroleum Resources Statutes Amendment Act, enabled for management of non-operating oil and gas sites. We’ve been working with First Nations and industry for the past year to gather input to help in the development of the regulation, and we’re planning to review the draft with our board of directors within the next month or so and hope to have a new regulation very soon, right after that.

The regulatory development underway is going to provide timelines for restoration of inactive sites, along with requirements for work planning and reporting. That’s going to allow the commission to identify priority in environmental and cultural sites that will need to be restored within five years, providing notice to Indigenous people, landowners and local governments and making B.C. the first province in western Canada to impose those timelines for cleanup of wells. As I said, that’s a very powerful tool for good going forward.

The next few slides are focused on a second area of examination — mitigating the risks of unrestored sites. For this area of examination, the OAG identified four findings and had no recommendations. Despite lacking some of the legislative clout that the commission now has, the OAG found that the commission was mitigating the risks of unrestored sites.

[1:15 p.m.]

The commission does accept the findings. Programs are designed to ensure safety and environmental protection within the legislative authority, and the amendments to OGAA provide for enhanced transparency, including the regulatory oversight of inactive sites.

The next few slides are focused on the third area of examination, verifying and monitoring restored sites. Here the OAG identified nine findings and six recommendations, and these are summarized in two slides — this one and the next one.

Again, the commission’s response is that we accept the findings and the recommendations. Work is underway to more clearly define the surface reclamation requirements based on both western science and traditional knowledge. As I said, we’ve got a few pilots going on right now with some Treaty 8 First Nations up in the northeast. The commission is reviewing the existing memorandum of understanding for high-risk sites as part of the planning for the dormancy regulations. That’s the MOE, with the Ministry of Environment.

Public reporting is being enhanced, and research on the long-term performance of decommissioned wells and restored sites will continue to drive regulatory improvements. We’ve got some examples of research coming up on a couple of slides.

On the recommendation amending the certificate of reclamation process, compliance verification of surface reclamation has been included in our 2019-2020 certificate of restoration reclamation verification process. We’re going to do a target sample. Ten percent of the sites that have received a COR will be audited, and we’ll include a verification of surface reclamation. We’ll be doing those audits. We do those internally. We’ve got a crew that does that on a regular basis.

The next recommendation. Coordination with the Ministry of Environment and climate change strategy. The MOU we had with them started in 2005 with the conservation officer service of the ministry. It has been updated and renewed. In addition to the schedule regarding mutual assistance with the CO service, the MOU includes schedules for remediation of upstream oil and gas sites, which focuses on contamination and the steps to remediate. This includes a sub agreement detailing the principles, roles and responsibilities and administrative functions; acquisition of capital equipment to support ambient air quality monitoring in northeast B.C.

The oil and gas site classification tool contains the processes and lists the criteria that define different levels of site, including when a site is referred to the Ministry of Environment for their review.

On recommendation 5, on Indigenous partnerships. Well restoration work provides an opportunity for the commission to work hand in hand with Indigenous communities most affected by orphan wells. The commission has several partnerships and projects underway directly related to orphan site restoration and will continue with these projects; and to expand those projects is our plan for the next couple of years.

These projects provide opportunities for collaboration on work objectives and examine the role of traditional knowledge in restoration work. We’ve had a lot of very good input from each of the communities that we’re working with right now.

Key components include undertaking joint assessments on candidate orphan sites; establishing ecologically suitable reclamation plans for the sites; First Nations companies are partners undertaking the required surface reclamation work; and First Nations–led monitoring of the reclamation outcomes.

Projects are being supported by Indigenous education programs. The commission is providing training opportunities for Indigenous people in environmental monitoring certification and land reclamation certification through five post-secondary institutions. Again, that’s a well-received program in the First Nations communities.

On public reporting, we began updating our public-facing reporting in 2017 through our transparency strategy, and we’re moving to full implementation by the end of this fiscal. So public reporting on annual site restoration outcomes will be implemented by the end of this fiscal as part of that.

The commission on recommendation 7 — legacy sites. The commission will improve the management of legacy sites. The improved approach will define environmental risk, establish timelines, provide for transparent reporting and incorporate monitoring. We’ve initiated a review of the legacy sites and related material, and a draft plan will be completed by March 31, 2020.

On recommendation 8, the long-term risks. The commission, in conjunction with Indigenous people, Geoscience B.C., universities, industry and others will lead the development of a plan to explore the long-term environmental risks of decommissioned wells and restored sites. The plan will include additional monitoring and/or research, based on the risks identified. A draft plan will be ready by December 31 of this year.

[1:20 p.m.]

We certainly understand the benefit of continuing to look at the potential long-term impact, both for people living near any industry sites, or all of B.C., for that matter.

Research is a cornerstone of what we do at the commission, and we support and collaborate on various research initiatives and partnerships on water, air and seismicity, to name a few. We’ll continue to look for opportunities to further the research in the area of decommissioning and restoring sites.

As an example, the commission initiated a well fly-over program to look for methane leaks. Follow-up actions based on that research include developing a risk-rating system for leaks to rank all decommissioned wells, conducting annual fly-over inspections focused on the highest-risk wells and developing a long-term aerial inspection schedule that focuses on wells in remote or winter-access-only locations, which we have a few of.

Under the leadership of the Ministry of Energy, Mines and Petroleum Resources, the commission is participating with the Ministry of Forests, Lands and Natural Resource Operations and the Ministry of Environment to help develop a coordinated response to the hydraulic fracturing scientific review panel report. Part of that review is to consider the role that strategic research opportunities and partnerships can play to fill information gaps. This recommendation will be brought forward as part of this initiative as well.

The next few slides are focused on the final area of examination — managing orphan sites. Orphans are wells where a company has gone bankrupt or we can no longer find owners. The OAG identified five findings and three recommendations here.

While we accept the findings, we shouldn’t leave the impression that we collected inadequate funds from operators because we weren’t paying attention. We just didn’t have the legislative vehicle to increase funding as orphans increased. We do have that now, as was pointed out by the OAG, with Bill 15 in place.

As part of the development of its new comprehensive liability management plan, all aspects of liability management and security are being reviewed and modernized. The commission’s regulatory framework has consistently ensured that all oil and gas liabilities are managed under an industry pay regime, and the new and modernized regulatory framework will be closely monitored for effectiveness and amended as needed. The goal is to restore orphans, which make up just over 1 percent of all oil and gas wells in B.C., within ten years of designation.

On recommendation 9, liability management rating. The commission has begun to enhance its approach to liability management. That’s through our comprehensive liability management plan. That’s going to include an improved method of estimating liability based on site and activity. It will incorporate additional factors that help identify risk — the number of inactive sites, compliance history of the company and remaining asset life — and includes a risk assessment model for additional oil and gas infrastructure such as pipelines and incorporates a set of operational and corporate risk indicators to identify high-risk companies.

It will integrate the above into a program that consistently and transparently applies financial assurance requirements for permit holders to mitigate risk to the public safety, the environment and the orphan site reclamation fund. The commission does work collaboratively with landowners as we carry out restoration of orphan sites on their land, and landowners can apply for compensation through outstanding rental payments or land disturbances in relation to the surface lease from the orphan site fund.

Liability management rating. The key deliverables that we plan there…. The new orphan liability levy has been implemented. That’s already underway. The dormant sites regulation, as I mentioned, will be implemented and going by the spring of this year. A new liability management model will be the summer of 2019, our corporate health test will be the fall of 2019, and integration of the liability model and the corporate health test in decision-making will be by the spring of 2020.

On recommendation 10, monitoring the new orphan funding model. It was initiated, as I said, by April 1 of this year. Under this new model, the commission sets the orphan funding required in a given year and charges permit holders a levy. A permit holder’s share of the levy is based on their estimated restoration liability divided by the total restoration liability estimated for oil and gas sites in the province. Starting at a 50 percent liability to a 50 percent production levy on April 1, it then shifts to 25 percent annually until a full liability levy is in place by April 1, 2021. We are going to monitor that report, and we will report out publicly on those results.

On recommendation 11, the timely restoration of orphans. We’ve implemented a policy to restore orphans within ten years of designation. The commitment requires funding of approximately $15 million a year. Spending, as you can see, has increased threefold since 2017-18 with the increasing number of orphan sites. Progress, again, will be monitored and reported.

[1:25 p.m.]

In closing, the commission thanks the Auditor General and her staff for a well-done and professional audit. We accept all the recommendations contained within the report, and we’re working on corrective actions as outlined in this presentation. We’re working diligently on regulatory improvements that will ensure B.C. has a comprehensive and effective regulatory framework for the oversight of inactive and orphan sites. We are committed to ensuring that all program costs have been and will continue to be paid by industry.

Thank you very much.

S. Bond (Chair): Thank you very much for that very thorough response to the Auditor General’s report. We appreciate that. And thank you, again, to the AG’s team.

Questions from members.

R. Glumac: Thank you for coming in today and talking to us about this very important topic. I have some questions about where we are today — you’ve answered some of that already, and in the report, that’s been addressed — but also how things worked in the past and why things didn’t work the way they should have. I want to better understand that so that we don’t make those same kinds of mistakes going forward.

The first question is just around…. We’re talking about decommissioning sites. Right now a company that does development here in the natural gas sector has to decommission a site. What kind of timeline has…? I know there wasn’t a requirement for a timeline, but how long has it taken, on average, to decommission a site? Secondly, is it just decommissioning, or is it full restoration that we’re talking about? I don’t have a clear picture of how long that’s been taking and what the new requirement is going to be.

P. Jeakins: Good question. What I’ll do is maybe give a high-level strategic overview of where we came from, as you asked, and then I’ll let Ken or Sean take a crack at the technical thing.

In terms of why we didn’t have the ability, it wasn’t in legislation. It was something the Oil and Gas Commission had been asking for, I think, forever — that we would have the ability to require companies to start to decommission and reclaim within a certain time frame. Bill 15 allowed us to do that, finally. So the status quo was that we didn’t have that ability, other than if there was an emergency. Then we could step in and require something right away.

In terms of how long it was taking to reclaim, again, it really depends. I mean, we can give you an average number. I don’t think it would be meaningful just because companies would suspend for a while. They would abandon and leave them for a while. Some would go to a certificate of restoration, which is full reclamation. I don’t know if there is a standard number that we really can say that they did it within, because every company was different.

They started to pick up, I guess, in the last couple years, when a few of the companies really started to take this seriously and started to decommission a little more intensively. Before that, the conventional sites that we had…. They would pick away at them, from our perspective anyway. We switched from mostly conventional sites around 2007. Now we have mostly unconventional sites — so more the newer sites with hydraulic fracturing. A lot of the older sites from the ’60s, ’70s and ’80s are the ones that we want to see decommissioned and fully restored.

In terms of timing, we could get you them by company. We don’t have the stats right here, right now. But again, they’re just kind of all over the map.

R. Glumac: Okay.

Getting on to orphan sites, the orphan fund was funded through these security deposits.

P. Jeakins: Well, it was a bit of both. Within, again, the Oil and Gas Activities Act, there was a tax that we could collect up to…. I think it was $1.4 million a year. That was adequate for a number of years where we had minimal orphans. Then for some companies, we would also require security. So between the two funding mechanisms, we could actually restore orphans.

[1:30 p.m.]

R. Glumac: It’s around the security deposit. I’m not clear on how that worked. I’m reading examples in here of where security deposits were collected, and then they were returned. They were returned before any work was done to restore the site.

How do security deposits work? Is it solely based on the financial health of a company? If so, why is that? Shouldn’t the security deposit be there to secure the funds to adequately restore the site regardless of the health of the company? That’s my first question on that.

P. Jeakins: Certainly with security it is, I guess, the historic approach that all the oil and gas regulators use in Canada. That’s kind of where we grew into it as the Oil and Gas Commission. Security has been overseen through the financial health up to probably a year or so ago, when we started to look in a lot more detail in terms of the directors, the compliance history. That’s certainly one of the findings in the report that we want to address immediately.

I don’t know if you want to get into a little more detail on how security is working or going to work in the future.

S. Curry: There’s a piece in there that I think you’re referring to: the LMR and that ratio that we use. What we’ll be looking at is that the LMR will stay, and the ratio, but we’ll be adding additional things on there.

We’ll be looking at compliance history and their ability to do things that we ask them to do or tell them to do. We’ll be looking at the health of the company and what it’s doing. We’ll be looking at the directors and their history. We have links in with the AER, Alberta Energy Regulator, and some discussion going on, on the performance or the ability of certain directors of certain companies. We will keep that line of communication open. So we have a bundle of things that we look at around company performance, company response as well as their financial health.

R. Glumac: For a lot of people that may be listening in and curious about how this works, if you could elaborate on…. What I’m hearing now is that we are going to adequately fund the orphan fund so that all orphan sites can be fully restored over a period of time. How does the security deposit factor into this, now and historically?

P. Jeakins: Right now we have security from a number of different companies, most of which are viable. When a company goes into insolvency or bankruptcy, if they have a security with us, then we can take that to do the work. So we use, like I said, both security from the company that has gone insolvent as well as the orphan fund to deal with it. So we have either the orphan fund or the security to draw upon.

R. Glumac: I guess I’m not understanding the reason for two mechanisms like that.

P. Jeakins: I guess, as with most things, we don’t require 100 percent security when a company starts a well program. It is, again, a percentage based on their liability management rating. So it’s not 100 percent. I don’t think we do 100 percent security for anything in our society.

It was, again, something that the commission had been working with and certainly something we discuss with the ministry as to whether we should be requiring more security, less security, but right now, the overall policy is that the security is a portion of how we would deal with risks to a company going bankrupt.

K. Paulson: If I could just expand, security is company specific, whereas the orphan liability or the orphan levy is an industry levy. Based on the liability management ratio, which we’ve used in the past, which the Auditor has pointed out needed modernization and which we’ve pointed out that we’ve…. Sean mentioned a number of the steps we’re taking to modernize LMR. We have calculated the security based on the previous LMR, so going forward, the modernized LMR will include a modernized security component as well.

R. Glumac: In the previous recommendations from the Auditor General, one of the recommendations was to make sure that there is an annual public reporting of the risks on these sites.

[1:35 p.m.]

I’m wondering what happened. In the report, it says that in 2013, reporting on restoration stopped due to resource constraints. Was the Oil and Gas Commission given…? Was the budget lowered in that year? What happened in 2013 that that stopped?

P. Jeakins: Our budget at that time did go down fairly dramatically. One of the things we looked at is: what are the things that we could maybe do on a semi-annual or biannual basis and move those out? Our budget, because of industry activity — because we’re fully funded by industry — had dropped, and the decision at the time was made to start to go to a couple of years for some of these things. But we see that probably…. I think we’ve got adequate resources now and into the future so that we’re not going to do that again, but that was what we decided at the time.

R. Glumac: I see.

Final question for now. One of the other recommendations was around working with various stakeholders and ministries to develop a formal program for conducting cumulative effect assessments. What happened with that?

P. Jeakins: On the cumulative effects? Certainly, we’ve been working that internally. We’ve got something we call area-based analysis, and we started that back in 2011. Sean oversees that as well. That’s something that we look at to see what the footprint of oil and gas is and could be, what the reclamation opportunities are. Again, we didn’t have a lot in the past, but we do now. We work with First Nations on that. We work with industry on that. Then we work with the other government agencies as well, in terms of their approach to cumulative effects. We use our area-based analysis to feed into the overall cumulative effects approach. That has been going for quite some time.

R. Glumac: What is the result of that? The formal program for conducting this — what is the result? What are the cumulative effects of all of this in B.C. right now?

S. Curry: As Paul mentioned, we have this area-based analysis program, and we have a variety of environmental values that we monitor. That would include wildlife, old forests, water quantity. In conjunction with the Ministry of Forests, Lands, Natural Resource Operations and Rural Development, we’ve been collaborating on ensuring that we are assessing the values I just mentioned identically to the way that that ministry is. We’re linked, and our assessment processes are very similar.

What we do is…. It’s kind of, like I say, a traffic-light approach — green, yellow, red. Given the amount of disturbance in an area, it’ll be coded as green, yellow or red. The amount of activity is governed by that traffic light scheme. The amount of work that a company has to do with an application increases as the traffic lights increase, and the amount of work that the commission does also increases, in terms of review and extra…. We escalate the decisions up through our staff.

We have this process that we’ve built. It’s been operating since 2015. It’s linked in with what FLNRORD is doing.

P. Jeakins: I think that’s another good point — that our area-based analysis is used for our statutory decision–​makers when they’re looking at an application that comes into our system so that we’re testing against that cumulative effect, using that tool.

R. Sultan: I find the presentation and the audit reassuring. I must say — and I’ll admit my own bias, having spent some time engaged with this industry in Calgary myself — that you do project an image of concern, competence and awareness of what in the hell’s going on out there. I think for us, and particularly for British Columbia, this is critically important, I would think, as we seem to be on the brink of a huge expansion of the industry and a huge expansion of your responsibilities and liabilities.

[1:40 p.m.]

Correct me if I’m wrong, but with the LNG project steamrolling ahead, which both sides of the House…. All three sides, in fact. No, correct that. Two sides…

S. Bond (Chair): Two out of three.

R. Sultan: …applaud. These issues are only going to multiply in importance.

It’s terribly important that, as I think you’ve illustrated today, we preserve the confidence of the public in the integrity of the regulatory process. I think today you’ve given us a sample of that, so I congratulate you.

I guess, really, that is in fact my first question. Do you see a huge expansion in your operations, and are you equipped to deal with the new challenges that this greatly enlarged LNG industry is going to thrust upon us?

P. Jeakins: Well, thank you for your remarks, first of all.

Yeah, our staff work very diligently on what we think the future is going to look like. Certainly, that’s one of the reasons we’re working with First Nations in a big way right now. We’re working with landowners up there. We’re working with affected parties. We’re looking at the legislation.

In terms of a big steamroller, that’s one of the things our geologists and our reservoir engineers are looking at. We’re not seeing, in the future, a huge push all of a sudden in well applications and well sites.

Moving from the conventional approach of one well on one well pad in about 1.4 hectares to what we have now, which is upwards of 30 wells on one well pad, which is about five hectares…. We don’t think there’s going to be a massive uptick in the short term — certainly not for the next few years — while they’re developing the LNG sites on the coast.

Even after that, because they can concentrate the number of wells on a well pad, that should reduce the footprint from what we would have had if we had one well per well pad. We wouldn’t have allowed that, anyway.

It’s not going to be a massive push all of a sudden. But certainly in the Montney area, there will be more intensive development. That’s certainly, again, something we want to see with the reclamation. As we see activity increasing, we want to see reclamation increasing at the same time. Bill 15 really has helped us with that balancing act.

R. Sultan: Well, I wasn’t aware of that. I find that reassuring that we’re going to have, as I understand it, a huge increase in production but not a huge increase in the number of wellheads to be monitored…

P. Jeakins: That’s right.

R. Sultan: …which simplifies the overall challenge.

P. Jeakins: It does. But again, there is some concentration around parts of the Montney that we’re certainly looking at and working with local people to address.

R. Sultan: And these orphan wells, which are, of course, concerning…. I take it that is, to some significant degree, a consequence of the downtown, the cyclicality, of the industry in the recent past?

P. Jeakins: It’s that. It’s also our inability to get companies to decommission in a timely manner. Now that we have that, I think we’re going to see a limiting of orphans. I’m hoping that, anyway. I know that there are still a couple that are in insolvency now that we’re concerned about and watching. But we think that the ability to require reclamation sooner than they were doing on their own will help with that as well.

R. Sultan: I notice three numbers in the report that I picked off the page. On page 5, it refers to the fact the Oil and Gas Commission did not collect enough money from operators to restore orphan sites. They’re short $16 million in 2016-17 and short $13 million in 2017-2018.

Are those cumulative figures, or does it refer to the same sum, except it’s not quite as large as it was? It’s $3 million to the good. Or is this an annualized figure? Could you explain what that number means?

K. Paulson: It’s an annualized figure based on the revenue into the orphan fund as well as securities taken into the orphan fund less expenditures taken and also declared liabilities with any orphans for that particular year. So part of it is cash flow; that would be work done on orphan sites. The biggest bulk of it is declaration of liability, which doesn’t include corresponding cash flow in that year.

R. Sultan: If I understand what you’re saying, over a ten-year period, say, it’s conceivable you could have $100 million of, shall we say, unfunded liabilities there. Is that the way the numbers work? You’re adding $16 million or $13 million every year. It accumulates.

[1:45 p.m.]

P. Jeakins: I guess the way it works for us internally is that if we have a series of orphans come in and the total liability would be $30 million, let’s say, there is a component of that that we would have to get to right away. We would have to book that liability right away. But the rest of the $30 million…. Say if we did $15 million that we were going to do work on, we still had $15 million that we would be working on over the next ten years or so. We wouldn’t be booking that right away. So as Ken said, it’s not a cash flow thing where we’d need $30 million in that one year, but we’d still have to take that onto our books.

R. Sultan: Is that a British Columbia taxpayer obligation?

P. Jeakins: Not at all. Not at this point. It is fully funded by industry.

R. Sultan: You go over to page 8 of the report. You mention $30 million, the Oil and Gas Commission “having a $33 million liability to cover obligatory costs for restoring sites.” That, in fact, is a snapshot of the liability at one moment in time.

P. Jeakins: Yes, that’s true.

R. Sultan: And you are confident that the industry itself will, at the end of the day, pick up the tab and not the taxpayers?

P. Jeakins: Absolutely.

R. Sultan: Well, those are really the only comments and questions I have.

B. Ma: I’m hoping for your help in understanding some of these numbers. From what I understand, there are currently, or as of 2018, just under 7,500 inactive wells not decommissioned, of which just under 5 percent are considered orphan wells. Is that right?

P. Jeakins: Sorry. Maybe give the number….

B. Ma: So 7,474 inactive wells not decommissioned in 2018. Then later on in the report, it says just under about 320 are considered as orphan sites. That would be about just under 5 percent or so.

P. Jeakins: Yes, it’s about 1 percent of the total wells but 5 percent of that number.

B. Ma: So 5 percent of that. How many total wells are there in B.C. right now?

P. Jeakins: We can get the exact figure, but there are about 25,000.

B. Ma: About 25,000. And how many decommissioned wells are there?

A Voice: It’s in the report.

B. Ma: There are so many numbers in this report.

P. Jeakins: There are about 3,000, 3,200 — somewhere in that number.

B. Ma: Okay. So that’s about 7,400 inactive, not decommissioned, and about 3,400 that have been decommissioned, and about 330 of them are orphan wells out of a total of 25,000 wells, both active and inactive?

P. Jeakins: Yeah.

B. Ma: Thank you very much.

Now, I also had a question. My question is primarily around bankruptcy. My understanding is that with Bill 15, you are now able to collect enough securities to resolve any orphaned wells, or that’s the intention. If a company goes insolvent and goes into bankruptcy, that’s the intention going forward. Is that correct?

P. Jeakins: Well, I think the securities…. We had the ability to collect security before Bill 15. Bill 15 allows us now to collect more money for the actual orphan fund. So security will be based on the liability management rating that we’ll be modernizing over the next few months.

B. Ma: Okay. Now, just in January of this year — I think it’s actually mentioned here in this report — the Supreme Court ruled that, contrary to what the lower courts had decided in the years before, bankruptcy did not absolve a company from needing to complete their obligation to decommission their wells. On page 42 of the report, there are examples of companies that had gone insolvent and then said, “We’re not taking responsibility for these wells,” and so forth. Based on the latest court decision, is there any intention to go back to these companies and then attempt to…? How do you enforce them to decommission wells when they’re already insolvent, now that we’ve gotten to where we are today?

P. Jeakins: Yeah. That was called the Redwater decision. It was in Alberta. Redwater was a company in Alberta where a smart receiver decided to take to court whether they could disown a portion of the assets that were no longer viable and sell off only the good assets, whereas for both Alberta and B.C., you had to sell the whole thing as one. That was the model that both provinces had been working on.

[1:50 p.m.]

When that came up, that was a big, big shift when the initial ruling came out of Alberta — that a receiver could just carve off the good stuff and orphan the rest of it. Obviously, we were not very happy with that, so B.C., Alberta and Saskatchewan fought it for quite some time to make sure that it pulled back together.

In terms of going backwards and trying to address, for instance, the Terra insolvency where that did occur, I don’t think we have any authority or ability to do that now, because that process still went through. That said, companies can still approach us — or the receiver can approach us, if it’s orphaned — and say: “Well, we’ve got this ability to transfer, say, 25 out of 100 sites that are good, and 75 that are bad we’re just going to orphan. Are you okay with that?”

It’s a statutory decision that we can make. It’s certainly not one that we would want to make. We would want to sell it as a whole. So we’ve been working with industry as to what that’s going to look like going forward. But certainly, we have that ability to now say no. Redwater didn’t allow us…. The initial ruling didn’t allow us to say no.

B. Ma: So it only benefits us moving forward. There’s no ability to go back.

P. Jeakins: Yes.

B. Ma: All right. Thank you very much.

M. Dean (Deputy Chair): On the legacy sites, your proposed response to the recommendation is to get a draft plan ready by March 31, 2020. I’m just wondering whether there are are any urgent risks. Is there any way of knowing whether there are actually any other urgent risks that need to be tackled sooner than that?

P. Jeakins: Absolutely. And if there are, we’ll tackle them right away. Our inspectors go out on a regular basis to test against the highest-risk sites. Our approach to compliance and enforcement is risk-based, while also addressing all the other sites that are out there. So it’s not that a site, just because it’s not a high risk, is never looked at.

But on the high-risk sites, our inspectors do a lot more inspections. Those are the sites that if we see something, we will address it right away, whether it’s with a company or with orphans. So when we were starting to see orphans increase, we made sure that the inspectors went out and tested every single site. We addressed all of the high-risk deficiencies that needed to be addressed right away.

It would be the same with any company as well. So for all the legacy sites, it’s the same thing.

M. Dean (Deputy Chair): Thank you. You also say that your improved approach will define environmental risks, but it doesn’t say that there’s a commitment to addressing and mitigating the environmental risks and what the timeline might be.

P. Jeakins: Yeah, sorry. We would do that immediately. Like I say, we have those tools now, and we would be immediately addressing anything we saw out in the field if there was something to address. We have all those tools now. I guess that’s why we didn’t, maybe, put it into our response, because that is something we just do on an ongoing basis. That absolutely would be immediate.

M. Dean (Deputy Chair): On the certification of reclamation, you set a target sample of 10 percent for your audits that you would be doing. Where did you get that figure from?

K. Paulson: It’s based on…. The AER does similar audits of restoration. Certificates of restoration are their authority, so we based our target on what we thought was a reasonable percentage of those coming in, to give us a representative sample compared to what was happening in Alberta.

M. Dean (Deputy Chair): And you have the resources to do that?

K. Paulson: Yes, we do.

M. Dean (Deputy Chair): Okay, thank you.

Finally, you talked about collaborating across ministries, with a number of ministries, on the issue of fracking. I’m just wondering if you could explain how that collaboration is working and what your priorities are.

P. Jeakins: Well, again, there’s the scientific panel that we’re just going through, so that’s a multi-agency review of all the findings in that. I think there were 98 recommendations coming out of that. Certainly, that’s a multi-agency collaborative project that we’re working on.

On individual things such as water use, we’ll be working with the Ministry of Environment and the Ministry of Forests, Lands and Natural Resource Operations on that individual topic. On seismicity, we work with the Ministry of Energy, Mines and Petroleum Resources. So on some things it’s a multi-agency thing, and on some things it’s just us working directly with another agency.

R. Glumac: I’ll just pick up on that topic, because it is mentioned in the report, of the results of the independent panel on hydraulic fracturing. One of the things that…. A lot of times they mention that there’s a lack of transparency, a lack of data, a lack of information, and they’ve had challenges in all the recommendations. A lot of the recommendations are related to getting more of that information. What role do you play in ensuring that that information is available and transparent?

[1:55 p.m.]

P. Jeakins: I think within our mandate, any information that we take in, we should be putting out there on our website or on…. We have several websites where we’re trying to do that. As I said, in 2017 we made a real push to try to get information out there on our website, and there is a lot. We do quarterly and annual water reporting. We’ve got our compliance statistics out there now. We’re pushing out a lot of information, but it takes time to go from a raw data dump on to a website to actually do some analysis on it.

That’s what we’re working on right now. Again, our staff are very much thinking about, for anything they take in: “How do we get that back out to the public?”

R. Glumac: I guess my question is: do you have the ability to require that that information be provided? For example, in the scientific review in the report, they said there’s a lack of information on groundwater, particularly to the extent of the thickness of the aquifers. There are very few groundwater well records that can be used to map aquifers with any degree of confidence. Is this something that you can require?

P. Jeakins: Well, we’re working on a research project right now.

I don’t know if you want to elaborate on that.

K. Paulson: I can expand a little bit, and then I’ll let Sean fill in the details.

There’s a research project going on under the University of British Columbia, the Oil and Gas Commission and, I think, Geoscience B.C. with respect to installing a network of 30 new groundwater monitoring wells up in northeastern B.C. to address some of the deficiencies with respect to baseline groundwater quality and other pieces that are described.

There have been other studies done on groundwater quality in northeastern B.C., including testing of a number of private wells, but because of privacy concerns from individuals whose wells were tested, not all of that data is publicly available.

Sean, I don’t know if you have more to add on to that.

S. Curry: Maybe just to link it back into the hydraulic fracturing panel. One of things where we are working with Ministry of Energy, Mines, Ministry of Forests, Lands, Natural Resource Operations and Ministry of Environment — it’s a three-ministry and commission team going forward — is identifying additional things that could be done, in addition to what Ken is talking about. That’ll come forward in the report, the summary, that we’re pulling together.

Then we’ll be looking at what other things we could do, each of our respective agencies, in order to address that specific question or the other specific questions that are in the hydraulic fracturing panel report.

R. Glumac: I guess, specifically, my question is: you guys, the Oil and Gas Commission, do you have the regulatory authority to ask for this information from…?

P. Jeakins: Before a company is drilling?

R. Glumac: Yeah.

P. Jeakins: At this point, we haven’t done that, I don’t think. Sometimes we put the onus on government to do it, because it’s such a broad issue. Like an aquifer sits on maybe seven different companies’ tenures, and really, it’s government’s responsibility to assess and decide whether a company can, should, drill where they’re drilling and what the safety requirements are. That’s why we’ve taken it upon ourselves to do that research.

R. Glumac: When you say government, you don’t mean you. You mean….

P. Jeakins: No, us working with the other government agencies.

R. Glumac: My question is: do you have the regulatory authority to ask a company to provide information on groundwater or the thickness of aquifers and all of this information that clearly was lacking up until now? Do you have the authority to require that that information be provided going forward, and do you plan on doing that?

P. Jeakins: That’s a good question. I don’t know if we have authority specifically to do it. If we did have the authority, it would mainly be to fill in the gaps that Sean and Ken were just talking about. We can certainly ask companies, under the Oil and Gas Activities Act, for any information we think is important. At this point, what we’ve been focused on is making sure that the companies do not do anything that would pollute the groundwater — not to ask them for the information.

It’s a good question. Maybe that’s something we’ll take back when we look at how we’re doing this research with the other agencies.

R. Glumac: I’m glad that you’re saying that. I’m very curious with what your role is in terms of ensuring that groundwater is safe in this province. I’m struggling to understand how we can have the confidence to know.

[2:00 p.m.]

A three-member panel doesn’t have the confidence to know because they don’t have adequate information to know the thickness of aquifers and stream flows and all this information about water that people drink and that affects the environment. We don’t seem to have that information. How do you feel confident that risk is being reduced and that the development that is going on right now is safe for the people of British Columbia and the environment?

P. Jeakins: Yeah, I think we were agreeing, in advance of the report coming out, that we needed more information on groundwater and on what the interaction is with oil and gas — both drilling and hydraulic fracturing. We hired a geohydrologist three or four years ago to actually start to address those issues. She was starting to do some mapping of the northeast so that we could provide that information to companies and so that we could see that they were addressing it. This research is going to fill in a lot more gaps.

In terms of how we know that it’s safe right now, the regulations that we have coming out of the Oil and Gas Activities Act and other agencies’ legislation make sure that groundwater is never going to be polluted by hydraulic fracturing or any of the chemicals that are in there. Right now we’ve got things like how cement casings go down, how the metal casings go down, how there is separation from the drilling itself into groundwater.

I don’t know if you want to elaborate on it.

K. Paulson: Well, the human health risk assessment report, which was done in 2014 as well, pointed to possible transmission mechanisms and risk associated with human population health in northeastern B.C. They identified a similar piece, which is a need to have better information on baseline groundwater quality.

As Sean points out, the issue is broader than just oil and gas activities. Water users on the land base in northeastern B.C. include forestry, recreational users, Indigenous users, agriculture, etc. So as we’re co-developing, as Sean mentioned, a response to the hydraulic fracturing report — which, I believe, is due in early May — there’ll be joint ministry responses, because the management of water has elements which the commission does, MOE does and FLNRORD does as well.

P. Jeakins: Right now, very much, the protection that we have through our legislation and our regulations is working. We don’t have any groundwater contamination. We haven’t seen that yet at all.

C. Bellringer: Just because it may be of interest — it’s unrelated to the answer that was given — we do have an audit that is now complete, that we’re just finalizing and that will be out in the fall. It’s on the effective management of clean drinking water. It’s quite a large performance audit.

S. Bond (Chair): Are there questions? I just have a few.

Can you just walk through again for us how…? I think Ralph asked the question. Obviously, some of the orphan wells were related to the downturn in the economy, but the number increased pretty dramatically, from 45 to 326, during the course of this look. The comments that have been made today are that they’re going to continue to increase. Can you provide us with a bit better sense of why that’s the case?

P. Jeakins: Sure. I’ll give it a bit of a historic look. I know that I certainly lost a lot of sleep when we went from 45 to 300 in one day. I think staff responded incredibly well. That was back around the Christmas of 2016. Before that, we were 45. We were getting maybe two, three, four or five every couple of years. We had all the resources and money to deal with all those, and I think we lulled ourselves to think that that was going to be a stepwise increase like that.

When Terra went bankrupt — part of the reason was because of the economy and management issues — that certainly jumped it up, and we had to respond fairly quickly. Between the financial aspect and the staffing aspect, we pulled together a pretty damned good team to make sure we were addressing that. We meet biweekly on exactly those issues — which ones we’re monitoring, which companies we see hovering, which ones are actually in receivership right now.

[2:05 p.m.]

We’ve got one in receivership right now that has got a fair number of wells in there. We’re trying to work with the receiver on making sure that a company could come in and purchase the entire package so that it doesn’t land on the orphan fund. We’re working with other companies now to say: “Hey, how do we start to have you take on some of the liability of these things?” There are a number of ways that we’re trying to address that. Staff certainly are working that every day. We’ve got a whole team now working on orphans and pre-orphans, as to how we assess that.

When we say that we think they’re going to increase, it’s because we are seeing one company in particular, right now, that is in receivership, and others that are on a smaller scale that we think might tip over to receivership over the next little while. We’re making sure that we have the resources internally as well as financially to address if they do come our way, but we are trying to mitigate those prior to them coming in.

I don’t think there’s going to be a constant ramp up. About 80 percent of the activity in B.C. right now is with five large companies that are very solvent. We’re looking at maybe a quick step up again — maybe this year, maybe next year — and then it’ll start to slow down again. I don’t think it’s going to be a constant series of large companies going bankrupt in B.C. We just don’t have that many that would be that large. I think we’re going to see a few go in the next few years, but not many.

S. Bond (Chair): You referenced the fact that perhaps there’d been a bit of a lull there in thinking about monitoring the economic health of those companies. I’m assuming that you’re assuring us today, with that explanation, that there is much better monitoring of the health of those companies so that you can better anticipate another increase in the number of orphan wells.

P. Jeakins: Absolutely. Again, that’s why we’re meeting every two weeks — to assess that and to make sure that the liability management rating program is modernized to start to address some of the realities that we’ve been seeing over the last couple of years.

S. Bond (Chair): An audit was done in 2010. Maybe this is to the Auditor General’s staff, before we come back to the OGC.

Obviously, this particular version of Public Accounts cares a great deal about action plans and whether people did what they said they were going to do. I don’t know what the process was, and probably, Carol, you weren’t here either. The audit was done in 2010. Was there an appropriate response? Did the issues that were raised in 2010 resurface in this report? Were there actions taken to address the issues in the 2010 audit?

M. Sydor: Actions were taken to address matters raised in the 2010 audit. My recollection is that in that particular report, we had nine recommendations. It was a more general examination of the Oil and Gas Commission. It wasn’t focused on the tail end, as we’re doing here, looking at: are you reclaiming and restoring sites? It was more focused on: are you managing the contamination risks over the operational cycle?

We did have a number of recommendations that are consistent with what we have today. For example, there was a lot of talk today about orphan sites. We had recommendations at that time, as well, to examine the risks around orphan sites and restore those where restoration is needed. I think at that time there were about 38 orphan sites. So the number, as was just indicated, increased very slowly over time. It’s only within the last few years that it took a big jump up.

Another area was inactive wells. We had a recommendation that those sites be assessed as well to see whether there were any priority ones that needed to be dealt with. Also, the legacy sites. We talked about those. It was in that report that we did have a recommendation around looking at the cumulative effects. As was indicated, there is a model in place now. I think it’s called adaptive management.

A lot of the recommendations that we had have been addressed, but as you can see, the nature of the business is that even if the activities are being addressed, the requirements to stay on top of those continue on over time. Even if we deal with the orphan sites we have today, it sounds like, over the next few years, there may be another bundle coming along.

So there was action taken. We did a more focused examination this time around to look at the tail end, because everything else…. One of the areas we did look at was compliance and enforcement during the operational cycle. As was indicated here earlier, our examination this time around looked at that and found that those risks were being adequately managed. We didn’t have a recommendation in that area this report.

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

Did you want to add anything?

P. Jeakins: No. I think that’s good.

S. Bond (Chair): Yeah. It’s probably a good time to stay down, because when you hear that it’s been….

P. Jeakins: Yeah. I’ll just be quiet now.

S. Bond (Chair): That’s probably wise.

[2:10 p.m.]

M. Miller: I did want to note that in 2010, we had a similar recommendation around collecting…. What was it? It was that the OGC ensure that operator net assets and security deposits were sufficient to cover the potential cost of restoring orphan sites. So the LMR program was put in place in response to that recommendation, but we’re still in a similar situation today.

S. Bond (Chair): Thank you for that segue, because it leads to my next question. The report, in several places, refers to the fact that the orphan fund was not responsive to the increase in the number of…. That’s actually the language that it uses.Is that solely because there were gaps in legislation that didn’t allow you to collect the kinds of security, or, as Rick pointed out, the funds that were necessary? Like, the report several times says that the orphan fund was not responsive to an increase in the number of sites. Can you give us a bit more of a sense of why that was?

P. Jeakins: Sure. Specifically, the orphan fund was hard-wired into the Oil and Gas Activities Act. It wasn’t any piece of legislation that we could deal with. It wasn’t a board regulation that the commission could deal with. That was something that we were trying to push. It allowed us to collect a maximum of $1.4 million a year — which, again, years ago, was adequate. We were dealing with all the orphans as they came in.

That stepwise increase from 46 to 300-plus suddenly caused a big shock to our system. We began addressing the things that we needed to address so that there was no risk to the public safety or the environment, but we knew we needed more to deal with 300-plus wells and pipelines. So the hard-wiring nature in the Oil and Gas Activities Act didn’t allow us to do anything. Bill 15 now allows us to collect the money that we need to collect. It’s not open-ended, but certainly, we work with Treasury Board on how much we need.

S. Bond (Chair): In your response to the Auditor General’s report, you point out that $15 million is required in order to manage the program. Do you have a plan in place that actually…? Well, first of all, you now have authority, I’m assuming, to collect the $15 million. Do you have a plan in place that will have you collect that amount of money to deal with the program you have laid out?

P. Jeakins: Yes, we’ve begun that. We’ve been working with industry on that and making sure that they understand why it’s coming in and how much is coming in. Certainly our staff, as we meet biweekly, goes through what our plan is for the coming year, how we are going to use that $15 million.

I think our first year of bumping it up was just this past year. We actually gained a lot of efficiencies in that, to the point where in our original budget, we had more money left over than the sites we thought we were going to do. So we added — I can’t remember how much we added at the end there — four or five sites on top of that.

S. Curry: Yeah.

P. Jeakins: I think, as we’re learning how to deal with these things — how we’re working with First Nations, how we’re working with industry, collectively — to make sure that we have efficiencies across the entire northeast, those dollar figures are going to come down, and we’ll be able to deal with more sites quicker.

S. Bond (Chair): In terms of your authority and your ability to take action — I gather that Bill 15, or whatever you’re working on now, gives you additional tools — you’ve always had the ability to explicitly order decommissioning. I heard you earlier, or maybe it was Morris. I’m not sure. Someone referenced the fact that that was in specific safety-related cases.

If that authority existed…. I gather there were legislative gaps. I don’t know if those were identified in 2010 or not. There were legislative issues with the trigger that requires industry to do it. Why didn’t the OGC just routinely order decommissioning? Were there specific frameworks or were there specific situations in which you were able to do that, or was it a tool that was underutilized? You do have authority to explicitly decommission.

P. Jeakins: Yeah, we did. Again, I think…. Well, first of all, our staff would go out and have a look at them to see if there was anything that really needed that order. We did issue a number of orders over the years to make sure companies were cleaning up where they needed to clean up if there was a risk.

But it was felt that was kind of a blunt instrument and not needed on a global scale. So we were pushing for the changes that we received in Bill 15 and certainly did issue orders.

K. Paulson: We did. When a site becomes inactive, it has to be rendered safe and in a condition that is environmentally safe as well, in response to any potential environmental risks. That’s a requirement for all existing sites. So when it becomes inactive, then it has to be suspended within either six months or a year. After that point, we would generally issue an order only if there was some ongoing unmitigated risk to the environment or public safety, which wouldn’t be the case if a site is properly suspended.

[2:15 p.m.]

S. Bond (Chair): I think you’re missing my point. The point is you were seeking legislative change that routinely creates a trigger for decommissioning, yet in essence, you had a tool that could’ve routinely done that. You would’ve had to explicitly order it. You reference that as a blunt instrument. But at the end of the day, the changes that you are lobbying for will require…. There will be a trigger that will make that happen automatically. Is that correct?

P. Jeakins: Well, the blunt instrument aspect would be if there was no issue or public risk or environmental risk. Then, if we were to push that envelope, there’s a lot of process that we’d have to go through. The company has to have an opportunity to be heard. We have to listen to them to see if, in fact, there is a risk or there isn’t a risk. I think the legislation is pretty tight around what sort of things we can order or not order on.

It wouldn’t have been a blanket thing that we could’ve used, whereas now, with the regulations that are being developed, it’s blanket. We can now, in any instance, say: “Whether there’s a risk or not a risk, we want it cleaned up.”

One of the things that we heard from First Nations is that every community has high priority sites that they want dealt with. Whether those are cultural…. They might not be a public or environmental risk, but there are cultural aspects that they want us to make sure are dealt with.

Within the regulations, we’re looking at: what does that look like? How would we deal with those types of issues? Whereas we don’t have that authority right now, under the Oil and Gas Activities Act.

S. Bond (Chair): I just point out that you did have the ability to explicitly order decommissioning. I gather that you used that sparingly and when you felt it was most necessary. But we are moving now to a state where, in fact, it will be routine. So we do need to look at that.

From the perspective of the general public, they want to be sure. In essence, it gives licence, in many ways, for there to be an oil and gas industry when we know it’s going to be cleaned up and taken care of when…. I think it’s a pretty essential piece of it. I just raise the point, because I think it’s important for both sides of the argument to be heard here. You did have authority to do that had you chosen to do it on a…. Yes, there may have been more specific criteria, but it could have been used, potentially, more broadly if that was a significant issue.

I would like to just ask. You talk about the comprehensive liability management plan in the report. It’s on page 11. Do you have a timeline for that work being done?

S. Curry: Yes.

S. Bond (Chair): Good. Maybe you could share that with us.

S. Curry: Yeah, I’m just going to dig up the exact dates so that we get it right.

P. Jeakins: I think there are different components to it that have different timelines. Maybe that’s why….

S. Bond (Chair): Okay. Well, I don’t want to belabour the point. I guess we also see that in your response to the report itself. We see a 2020 timeline to look at restoration measures being put in place.

I guess our urging to pretty much everybody who appears here is: we want it done thoroughly and properly, but we also don’t want it to be so far down the road that we’re continuing to increase risk in certain circumstances because it’s taking a long time. We just want to urge some sort of public — to Rick’s point — transparency about timelines, so that we have a sense of when on earth that work will be done.

P. Jeakins: Absolutely. We fully agree. We want to get them done sooner than later. All our staff are pushing towards that.

S. Bond (Chair): Fantastic. Just my last question, and then I’ll leave room if there’s anyone else to whom anything’s come to mind. You referenced in the report, and I thought it was really interesting, the use of technology to try to increase frequency, efficiency and effectiveness of monitoring — for example, the helicopter with a methane detector. Are you contemplating the increased use of technology to look at how that’s monitored?

In fact, it was actually encouraging because as you did those flights, there were, in one set of instances, no examples of methane leakage, and in the second case, there was one — or something. I think that helps free up resources if you find more effective use of technology. Is that part of the OGC’s future?

[2:20 p.m.]

P. Jeakins: Absolutely. Again, we’ve been working with drones. We purchased a number of drones that we’re using on a number of things, not just methane. We’re looking at other aspects of compliance and enforcement. It is something that we want to be working on.

S. Curry: Maybe I can add one thing. The commission, in conjunction with the Ministry of Environment and the Ministry of Energy, Mines and Petroleum Resources, led the establishment of the B.C. Methane Emissions Research Collaborative. It’s a cooperative to look at better understanding and measuring actual emissions of methane and quantifying what they are, because there’s not a lot of data globally on what that is.

One of the envelopes that we’re looking at is the use of technology. We were evaluating the efficacy of satellite drones. There are microchips that can be attached to various pieces of equipment to get real-time monitoring. We’re looking at innovative ways to do that so that it’s not just a sample, but it’s a continuous monitoring throughout the sector. Pretty exciting. There are a lot of different technologies that are out there.

S. Bond (Chair): Any of my colleagues, any other questions?

We want to thank you very much for the time spent here. This was your first visit. I’m sure you’ll be back at some point in time.

To build on Ralph’s earlier comments, we really appreciate the expertise that you brought to the table and that you have taken this audit seriously, as you did the 2010 audit. You do important work, and we’re always reassured when we have experts at the table who answer the tough questions and demonstrate that they know what they’re talking about. From our perspective, we appreciate that.

Obviously, I think the Auditor General and her team, Morris and others, should feel really, I hope, encouraged by the fact that the report was taken seriously — that lots of work is underway. It is important work. British Columbians want to know that these orphan wells are taken care of properly.

With that, I thank you for your time. We appreciate that.

We will take just a five-minute break here as we switch up for the next report.

The committee recessed from 2:22 p.m. to 2:31 p.m.

[S. Bond in the chair.]

S. Bond (Chair): All right. We’re going to call our final…. Well, we actually have a couple of quick agenda items following this report, but I want to, first of all, thank my colleagues and the Auditor General’s office as well. I know this was a very intense and long meeting for us. Typically, we try to make them a bit shorter, but the Auditor General’s office has been releasing a number of reports, and we try to stay current. We’re getting close to catching up again.

This afternoon we’re going to consider the report from the Office of the Auditor General that is entitled The Short Term Illness and Injury Plan. It was released in January of 2019. The normal practice…. I’m not sure if our government team has participated before, but the Auditor General will make some opening comments. Her Deputy Auditor General will then walk through the PowerPoint. It’ll then be over to the B.C. Public Service Agency, and we’re pleased to have the deputy minister here with us today and a number of staff.

If I could just ask that when you make your presentation, you introduce your staff so that their names are captured in Hansard. That’s important for the record.

With that, we’ll turn it over to the Auditor General for her opening remarks.

The Short Term Illness
and Injury Plan

C. Bellringer: Thank you so much, Chair. So that nobody is worrying about being bored going forward, we have several new reports coming out over the next couple of months, so there’ll be much more for the committee to look forward to.

Sheila did not work on this audit by herself, but she is the only one here today to present the audit report, so I will do the opening comments.

The short-term illness and injury plan, which is commonly referred to as STIIP, is the program that provides eligible government employees with most of their earnings in the event they aren’t at work because of illness or injury to a maximum of six months.

We looked into this program because STIIP requires employees to self-report, which means that controls are necessary to reduce the risk of misuse. Supervisors are the key control for the detection of errors or issues, and the foundation of the program relies on the integrity of individual employees and supervisors who enter and then review the information.

Overall, we found there is an effective control framework in place to manage STIIP, with controls to prevent, detect and correct errors. But there is room for improvement. We concluded that the PSA could improve its oversight of STIIP to better monitor usage and coordinate with ministries.

I’d like to thank the staff at the Public Service Agency and also the Ministry of Children and Family Development and the Ministry of Forests, Lands, Natural Resource Operations and Rural Development for their cooperation and assistance during our work on this report.

I’ll just also point out that this is one of our CCR audits, so it’s that control, compliance and research area in the office where we focus on some smaller audits to look at issues of interest that also work well with our schedule for staff.

S. Dodds: Good afternoon, Chair and committee members.

In this audit, we looked at the controls that the Public Service Agency and two ministries use to manage the short-term illness and injury plan. The two ministries that we looked at, as Carol mentioned, were the Ministry of Children and Family Development and the Ministry of Forests, Lands, Natural Resource Operations and Rural Development.

Overall, we found that the PSA in both ministries are effectively applying controls to support employees’ appropriate use of STIIP. However, we found that the PSA could improve its oversight of STIIP to better monitor usage and to coordinate with ministries.

[2:35 p.m.]

STIIP is the benefit program that provides eligible government employees with most of their earnings in the event that they aren’t at work because of illness or injury to a maximum of six months. Most employees use STIIP for common shorter-term illnesses such as colds or the flu, but STIIP also covers longer duration leave for more serious illnesses and injuries. Between 2008 and 2018, the STIIP benefit program cost government about $39 million a year.

There is a risk in any workplace that unethical employees may use programs like STIIP to claim that they are sick or injured when they are not. The purpose of our audit was not to identify people who have misused STIIP. Employees’ supervisors are in the best position to do this in their capacity as managers of employee attendance. Instead, our purpose in this audit was to examine government controls that are in place to support employees, including supervisors, in using the STIIP program as intended.

In terms of preventative controls, we expected to see that the Public Service Agency and the two ministries were using information system controls to support the accuracy of STIIP leave. We also expected to see them providing employees and supervisors with adequate training and other health and wellness supports.

We found that the information system controls are in place to support employees’ appropriate use of STIIP. Although training and health and wellness supports do exist, these could be better communicated and monitored by the Public Service Agency and ministries to ensure that employees and supervisors are using the supports and are getting the training they need.

In terms of detection, we expected the Public Service Agency and the two sample ministries to be reviewing staff leave reports for validity and accuracy and to be collecting and analyzing data to detect possible STIIP issues, errors or misuse. We found that supervisors provide the primary control over ensuring that employees’ STIIP leave is valid and accurate and detecting those occasions when it isn’t.

In addition to STIIP approvals, we found a variety of detective controls being used by the Public Service Agency and the two ministries. However, we didn’t see either the PSA or the ministries using data analysis in a robust manner to detect ministry STIIP issues, errors or misuse. Robust detective controls are important, as they help ministries monitor the nature and extent of STIIP leave. Further, controls communicate to employees that the organization cares and is paying attention in this area.

Finally, looking at correction mechanisms, we expected to see that the PSA and the two sample ministries corrected STIIP benefits when any errors were detected and that action was taken when misuse was identified. We also looked to see if policies, procedures and other controls were regularly evaluated and updated to improve STIIP oversight and management.

We found that when errors or issues are identified, there is a process to ensure they’re corrected. We selected some test samples and found evidence that when errors are detected, they are corrected. However, data on the misuse of STIIP isn’t being analyzed to learn lessons and improve controls, policies and procedures, and controls are not regularly reviewed. Details on STIIP misuse cases can potentially provide quality information to improve training and other supports and control procedures. Up-to-date control procedures, policies and training are important to ensuring an effective control environment.

We made five recommendations in this report, including for the Public Service Agency to regularly analyze data on identified or suspected STIIP misuse so that it can improve preventative and detective controls. We also recommended that the PSA develop and maintain a summary overview of all available resources to support the STIIP program and to support user understanding and the ability of users to locate resources efficiently.

This concludes our presentation.

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

Now for the response. Okenge, are you leading that, or is someone else?

O. Yuma Morisho: I’ll be presenting, Madam Chair.

S. Bond (Chair): Okay. We’ll just take a moment and load up your PowerPoint, and then we’ll get started.

Welcome. If you want to begin and introduce yourself and your team, that would be fantastic.

O. Yuma Morisho: Good afternoon. Thank you, Madam Chair and hon. Members.

My name is Okenge Yuma Morisho, and I currently serve as the deputy minister and head of the B.C. Public Service Agency. With me today I have ADM Bruce Richmond, who is responsible for corporate services. I have Dr. William Lakey, who is our medical director. And I have Sheldon Staszko, who is a director with the workplace health and safety branch.

[2:40 p.m.]

We are very pleased to have an opportunity today to come and address this committee and answer any questions you may have about not only the findings and recommendations but also the action plan that we’ve put in place to try and address those recommendations.

Being mindful of the committee’s time and understanding that members have been at it for quite a few hours, I will try not to repeat elements of background that have been so eloquently presented by the Office of the Auditor General with respect to the nature of the program and the scope of the audit.

With the Chair’s permission, I would like to move to slide 5 that talks to the issue of the findings and then walk through the different recommendations. At the risk of paraphrasing the Auditor General, the key findings here are twofold. One, the B.C. public service does have an effective framework to manage the STIIP program. But we can put in place a number of things to actually make it better.

In that spirit, the Auditor General’s office has made five recommendations that fall under three categories. Recommendations 1 and 2 fall under the category of prevention. Recommendation 3 falls under the category of detection. Recommendations 4 and 5 speak to the category of correction.

What I would like to do is walk you through what we intend to do with respect to each one of those recommendations. But before I do that, I want to say very clearly that the B.C. public service has reviewed those recommendations and has accepted all five recommendations without any comment.

With respect to recommendation 1, what we are committing to do — in fact, what we have done already — is to develop and launch a webpage that we have put on the MyHR website and to make sure that a summary overview of all the tools available to employees and employers is available in a user-friendly way. For instance, we’ve made sure that this page has its own URL, its own webpage address, so that it’s easy to find, easy to access. All the different tools are really outlined in a way that makes them very, very accessible.

Now, we understand the importance of on-line tools. But we’ve also made sure that print resources are available to employees and supervisors. This is something that we’ve done effective April 1. We’re quite happy to be able to report on that.

With respect to recommendation No. 2 that also speaks to the issue of prevention, our timelines are a commitment to actually address this recommendation by the end of the calendar year. What we intend to do is make sure that we bring together the right people, not only within the agency but also across ministries, to ensure that we can develop options to basically optimize tracking and enrolment of all the relevant training for both supervisors and employees. Our commitment is: this calendar year, we’ll have addressed this particular recommendation.

Recommendation No. 3 is the only recommendation that speaks to detection. It’s a recommendation that’s actually broken into four different components. Now, we are at different stages of action and analysis with respect to these different subcomponents. So I would like to take a few moments to actually make a difference among those.

On slide 9, you can see that we have fully implemented the first subcomponent of this particular recommendation. We’ve been able to review and update our accountability framework for human resources management. For the other three subcomponents, the commitment is to have everything in place by mid–calendar year 2020.

[2:45 p.m.]

Here, we will make sure that we develop a performance framework with clear performance metrics. We’ll make sure that we have the tools in place to not only monitor and assess but investigate those performance metrics. Then, obviously, we’ll make sure that once we have all this in place, we communicate that in an effective and an efficient way. That is our commitment with respect to these other three subcomponents.

Recommendations 4 and 5, as I stated a few minutes ago, speak to the issue of correction. As stated by the Auditor General, this audit was not about misuse of STIIP by employees. But we understand that we can definitely do more to ensure that we take a hard look at that and, basically, take measures to improve our ability to detect and prevent.

We’re going to do two things. Our commitment is, again, to be able to address this recommendation by the end of the calendar year. The two actions we are going to take fall under the following streams: (1) explore technology that can actually help us track and report much, much better when it comes to any misuse and potential misuse; and (2) we are going to look at actual grievance cases, and we are going to develop case summaries so that we can take them back into the B.C. public service and train people so that we can learn lessons from grievance cases that we encounter.

Last but not least, recommendation No. 5. This one, obviously, is something that is always good to do, and we are committed to put everything in place — that is, development and launch — by the end of the calendar year. We will have an effective framework to actually do a regular review of all of our policies, processes and controls to ensure that they are up to date and are actually what we need to address the issues of the day.

In a nutshell, the Auditor General came to the conclusion that we do currently have an effective framework to manage the program. But they also came to the conclusion that we can do more to improve it. Five recommendations were made. We looked at them. We agreed and accepted all five recommendations. We have already started the work to address those recommendations. We are committed to have addressed most of them by the end of the calendar year. Three subcomponents of recommendation 3 will take us a little bit more time, but we should be done by mid next calendar year, in June. That should be the sum total of our effort, at that time, to have everything addressed and in place.

I would like to thank the Office of the Auditor General for the work they did and for the insight they provided us in terms of giving us ways to improve the work we do.

I’d like to thank the members of the committee for giving us an opportunity to present today. We are happy to answer any questions.

S. Bond (Chair): Thank you very much, Okenge. We appreciate that.

Questions from committee members.

J. Thornthwaite: Thank you very much for your presentation. My question is based on the fact that you had said that the intent of this audit wasn’t really to pinpoint misuse, but you obviously recognize that there’s probably — whatever the percentage is — misuse.

Is there any way of commenting on that right now, or are there any measures to assist, say, supervisors in detecting possible misuse?

O. Yuma Morisho: Thank you for the question. As you correctly stated, yes, this was out of scope for this particular audit. Human nature being what it is, one can assume that in an organization of over 29,000 individuals, there may be some misuse — but, quite frankly, some misuse that’s also based on misunderstanding about what the rules are, for instance.

The first thing that we need to make sure of is that everybody understands the rules, the eligibility rules, both supervisors and employees. I guess misuse always lends itself to thinking that there was some kind of ill intent, and somebody was trying to game the system. Well, the first order of business is to make sure that everybody understands, both supervisors and employees, what the eligibility rules are so that there is no mistake made just based on misunderstanding.

[2:50 p.m.]

Secondly, we need to use technology to try and be a little bit more laser-focused on trends and patterns we may see in the system — places, maybe, where the numbers are significantly higher than the average — and try to see if there is anything systemic going on. This is the work that we are committing to doing in the coming months, and we’re sure that we’ll be able to put something in place that will actually pass muster.

J. Thornthwaite: Could I follow up, Chair?

S. Bond (Chair): Go ahead.

J. Thornthwaite: I very much appreciate your answer. Sometimes when you collect the data…. I would assume that if there were patterns, then perhaps that could be related to their work environment, be it the supervisor’s environment or whatever. For instance, employees are having issues with their mental health or whatever that maybe had not been identified, yet the actual workplace environment is exacerbating that.

I appreciate your answer, that that’s kind of where you’re going. There’s the preventative end of it so that everybody knows the rules and regulations, etc., but there’s also recognizing patterns of perhaps not necessarily wanton misuse but a symptom of something that’s perhaps graver.

O. Yuma Morisho: Yes, I agree with the member’s comment. Again, it may be a bit early for us to comment on what we will find and the extent to which there may be a problem or may not be a problem. But our sincere hope is that by offering more clarity, more support in the training and coaching, by being able to review and update our accountability framework, we would actually resolve a significant portion of the risk. Then if people are trying to game the system, as the Auditor General mentioned earlier, controls are there to send the signal that we care and that we’re paying attention. That’s what we intend to do.

M. Dean (Deputy Chair): Thank you for being here today. This is really interesting. Because it’s about health and wellness, just following on from what my colleague was saying, it’s really important to have the data there to have a look at the system.

Do you have a breakdown by gender, by diverse gender, by culture, by Indigenous identification to be able to actually have a look at where there might be systemic patterns?

W. Lakey: As far as the sick leave data, we don’t have all of those variables to break it down, but we do have it by gender and location. As to the work environment, there’s been quite a bit of work in the public service around measuring the work environment. In that survey, which is biannual, we’re actually measuring the work environment and the subjective exposures employees have so that supervisors actually can address work environment issues to try and prevent mental health conditions.

M. Dean (Deputy Chair): So as you move forward…. You’ve talked about creating committees and working groups and those kinds of consultative methods. Will you give some thought to the composition on those to make sure that there’s a really good gender balance, to make sure that there’s gender diversity and ethnic diversity?

O. Yuma Morisho: The short answer, Member, is yes. This is something now that is very well accepted across the public service, and great attention has definitely been put on that aspect of things. So the short answer is yes.

M. Dean (Deputy Chair): Thank you.

Just a question for the Auditor General’s office as well. You say that it costs $39 million a year, but how is that measured against retention and productivity? By having this program of allowing staff members to take time off and still be paid, is that $39 million just kind of a straightforward, applied number? It doesn’t have a value-added kind of analysis to it?

S. Dodds: It’s just a straightforward number — just the cost of the benefits.

M. Dean (Deputy Chair): Okay, thank you.

Just one more. Is that okay?

S. Bond (Chair): Yes.

M. Dean (Deputy Chair): You said you’ve already done the work of the review and updating. What was it that was updated in the accountability framework for HR management?

[2:55 p.m.]

S. Staszko: Thank you for the question. We actually added an appendix C, which is a specific appendix that deals with the responsibilities of employees, supervisors, the executive and the agency overall for workplace health and safety. We broke it down to say that this is what the deputy minister is responsible for, for the agency, what deputy ministers and senior officials are, supervisors and individual employees.

I think it goes to what Okenge was talking about; that is, making sure that everybody knows what their role is so they can properly see, when there are issues or questions that come up, where those questions can be addressed, either from the agency or from the ministry.

G. Begg: I think, to continue the theme, there is a responsibility — and you acknowledged it — to create a healthy working environment. We collectively have that responsibility. Healthy work environments create healthy mental attitudes, which create productive employees, and we all benefit because of that.

I think, as well, to acknowledge the point that has been made about arming or gearing our employees to do that, providing them with resiliency training, providing them with coping mechanisms…. All of those things are tremendously important. Obviously, some of that is at work, because the average here is much lower than the provincial average across the country, as was noted in the report, and in other federal government agencies. I think that’s important to be acknowledged.

The only other thing I’ll say is I took part in a similar survey of a large federal government department, and one of the things — you may be aware of this, at least in the Public Service Agency — is there is another phenomenon at play in the workplace. That is a phenomenon called presenteeism, where the employee actually shows up for work loyally every day but is basically checked out. I just offer that as an interesting contrast — absenteeism versus presenteeism and the value for dollar that is lost. I’m sure that because we have so many employees, that will be true as well.

O. Yuma Morisho: Thank you for the comment. When it comes to the issue that you raise, absenteeism versus presenteeism, I think that it really speaks to the training and support we provide to supervisors, to be able to clearly articulate what the desired outcomes and outputs are that are expected from a particular employee, a particular position. Showing up to work is the beginning. In the end, we’re here to serve British Columbians. We’re here to actually deliver specific results.

What we are encouraging is conversations that are not just an annual thing and a one-time conversation with a very heavy paperwork process but conversations that are frequent, where people can receive feedback. We try to lead by example by trying to do it at the executive level and make sure that it trickles down through the organization.

I think that the first order of business for us is to make sure that each employee understands what the expectations are of them so that they can deliver on those results. In that spirit, mandate letters for ministers are a very helpful thing, a helpful guide. It starts with this and then our responsibility to create an engaging work environment. But an engaging work environment doesn’t actually free us from the obligation to deliver on the results. That has to be articulated very clearly for people to know what they’re supposed to do.

G. Begg: I’d just commend you for the way you articulated that. I think it’s important. If your view is representative of the Public Service Agency, I think it speaks well of the group, and hopefully, it does trickle down. Thank you.

R. Sultan: First of all, let me confess. I feel very inadequate to discuss this subject because it’s been so long since, I guess, I’d say that I’ve worked in an environment where we actually sort of had a fixed starting time and a fixed quitting time. You either showed up…. You stamped your card at the time clock or whatever. However, the world has changed.

[3:00 p.m.]

On page 12, what struck me as an interesting issue…. It says, and this is under the key findings and recommendations: “For example, supervisors will receive a system-generated notification when employees are nearing the end of their STIIP leave benefit.” So I guess there is a defined leave benefit, and if you’re getting close to the end of it, I guess this computer system will send you a notice saying, “You’ve only got, like, one day left,” or whatever.

My question is: what is the leave benefit? I wasn’t even aware there was one. Can you help me understand what’s going on here?

O. Yuma Morisho: Absolutely, Member. I’ll let Sheldon give you more details, but the overall principle is that you get up to six months and about 75 percent of your salary.

Sheldon, I don’t know if you want to say more, maybe give more details about this.

S. Staszko: Sure. Thank you for the question. Okenge is right. The employee benefit is up to six months, and it pays 75 percent of your salary. There are opportunities to be able to bring that up to 100 percent of your salary, depending on whether you’re a unionized employee or an excluded employee. But there is the opportunity to use your holidays, let’s say, if you want to use it to top up the other 25 percent.

The email notification….

R. Sultan: This is in the event of illness — longer-term illness, for example.

S. Staszko: Yes.

R. Sultan: Okay, I understand.

S. Staszko: After six months, that is the start of the long-term disability program, and that program you need to apply to. We encourage individuals at three months of short-term illness to apply to long-term disability. Our carrier at the moment is Canada Life, so they would adjudicate the medical information that’s sent in and make a decision at that time.

The notifications that you indicate are important, because in the busy days of supervisors and managers, it’s sometimes easy to know that your employee has been off three months, four months, and so forth. It’s a notification for them to help them manage the case and work with the employee while they’re off and work with our program on returning an individual back to work.

R. Sultan: Well, thank you. That’s reassuring. What I thought it was: “I get a couple of sick days every month, or I get five or six days every six months. I haven’t used them all up yet, so I’m going to sign off ill and go to the beach or whatever.” That is what I thought it perhaps implied, because you do hear….

My daughter is a public servant in the United States, and she talks to me that she’s got so many sick days kind of saved up in the bank, and she can sign off sick. I would guess this is not uncommon behaviour, but perhaps I am just simple-minded, don’t understand the world very well.

B. Richmond: If I could just add to Sheldon’s comment. You mentioned how you want to notify supervisors earlier in the process — that it’s because if we have somebody with a serious illness or injury, we don’t want to have time lag between getting on to LTD past STIIP, or the employee would go without benefits, perhaps for weeks or a month. It’s really to just make sure that relationship with the employee is solid throughout the process, given any serious situation.

R. Sultan: I guess that leads to my second question. It says here that you offer training and can perhaps improve the training in the area, I presume, of sickness and wellness. I’m just wondering. What would that training be how to avoid picking up germs or how to, you know, get eight hours sleep at night? I mean, how do you train an employee to avoid getting sick? I’m curious.

[3:05 p.m.]

W. Lakey: Thanks for the question. In fact, when we looked at presenteeism in the public service, the No. 3 cause of sick leave was actually common colds. I’ll take that part of the question.

We implemented a cold and flu prevention program, which is much more than a vaccination. It’s actually a series of common behaviours that are used to prevent transmission of disease. If you go to any government worksite, in the bathroom stall or on the mirror above the sink, you’ll see our promotion materials promoting improved protective behaviours during the cold and flu season.

R. Sultan: Wash your hands. Okay, I understand. That’s good. I’m sure it works; I’m sure it has an impact.

W. Lakey: We’ve seen an impact.

R. Sultan: No further questions.

S. Bond (Chair): Anyone else?

All right, I just have a couple of questions. One of the comments in the report on page 11 is related to supervisor scrutiny and the fact that the way that you’re going to make sure there is less misuse is making sure that supervisors provide some level of scrutiny over the information. Just perhaps help me out here.

Are most of the transactions technological? Does an employee send in some sort of email to say: “I’m not well”? How much interaction is there that’s person to person, and how do you see the whole issue of supervisors following up on what might be routine requests, but then there are some that might require some further analysis? How much interaction is there, face to face? Is it done mostly by technology? Does someone…? I gather there’s an IT system where people enter information. Then how do you improve the scrutiny that supervisors would employ in order to reduce misuse?

O. Yuma Morisho: Thank you, Madam Chair. Before I ask my colleagues to provide a more expert answer to that, I want to provide a piece of background. A significant part of the B.C. public service is in the Victoria region. People have access to members of their teams. They may work in the same building, etc. But this is not the case for every supervisor-employee relationship. In this current job and in other jobs I’ve had, people were reporting to me who were not even in Victoria.

Obviously, for those kinds of working relationships, technology is absolutely essential. Great improvements have been made, because now in addition to emails and the phone, we actually have a system where we can video conference not only two people at a time but several people at a time. There are means to interact.

Ultimately, we can always get on a plane or on the road and go visit an office — which is something, for instance, that I’ve done in every position I’ve occupied where I have a member of the team in the region.

I guess the initial instinct is to try and have as much face-to-face interaction as you can, and that would be the advice given to any supervisor. But there are realities to the way teams are organized, and we have to simply face those realities and adapt to them.

Now, in terms of improving scrutiny, I don’t know if one of my colleagues wants to say a bit more about that in general.

Sheldon, anything?

S. Staszko: Thank you for the question. The relationship between the employee and the supervisor is vitally important throughout the agency. Although we provide oversight to the short-term injury and illness plan, we know that supervisors are our allies in working out in the ministries.

For simple illnesses — cold and flu, and so forth — our branch normally does not get involved in those. It’s just a simple conversation between the employee who is off and their supervisor. I expect that’s probably handled in different ways, depending on the ministry. It could be a phone call, which is what we do in our office, or it could be an email from the employee to the manager saying that they’re unable to come in.

Now of course, if the employee indicates that they have the flu and that flu turns into a three-, four-, five-, six-day extended period of time, then at that time the supervisor has the option of then requiring the employee to go to the doctor and get a form that’s called the ST02 filled out.

[3:10 p.m.]

That form — one part of it goes to the manager and really provides the limitations and restrictions for the individual to come back to work, and the other part of the form actually comes to our branch, where we have our specialist team, whether they’re occupational health nurses or return-to-work specialists who are able to look at the information and see if they’re able to lend a hand. We typically get involved on cases where there are complex diagnoses that are picked up by the occupational health nurses. Then we would work alongside, with the supervisor or with the employee.

It’s really that connection between the employee and the supervisor that’s vitally important, especially in — this is where we want to get to help educating our supervisors — the area of mental health. It’s very easy for an employee to come into the workplace and have a cast on their hand and show the supervisor they’re going to be off for a week because they’ve broken their arm and they cannot type, where it’s a lot more difficult for someone who’s struggling with something internally to come and have that conversation with their supervisor.

First of all, it’s continuing, as a society, to break down the stigma in regards to that but also equip the supervisors and managers with tools to help them have that conversation with their employee and then point them in the direction of the resources that are available to them. That could be through our employee and family assistance services program, where you can talk with a counsellor — there are certain sessions that are involved where it’s group or individual — or whether it means coming and talking to one of our staff to get that assistance as well.

B. Richmond: If I could just add, on the computer system side of things, the expectation is that the employee would enter time into an absence management tool, and then it prompts the supervisor to sign off, to make sure that that illness was valid. If the employee is not able to do it themselves, the employer can actually go in and key in the time. That’s sort of the best way of tracking it once we get through, obviously, all the personal interaction on the illness itself.

S. Bond (Chair): In terms of data and the management of…. Certainly, the public service in British Columbia is recognized — Garry pointed out that the number, when you look at short-term illness, is lower here — as a pretty good place to work. It’s been recognized nationally, because a lot of effort was put into improving workplace relationships and culture and all of those things. That’s been an ongoing process, and I think we’re beginning to see the benefits of that.

In the Auditor General’s report, it points out that two ministries were looked at, and one had higher than average absenteeism and one had lower. With the data that’s available — I think Mitzi was referring to this from a different perspective — do we look at that and analyze where there are difficult workplaces? It’s not necessarily because of the people or the culture; it’s because of the work they do. It’s just hard. It’s emotional and many of those other things. Do we then look at how we support those staff members working in some of those ministries that have a higher absenteeism rate? In other words, does data drive improvement and support and resources in particular areas?

O. Yuma Morisho: Thank you, Madam Chair, for the question. I think this is a very important question. I’ll turn to colleagues in a moment.

You’re right. A number of our ministries, given the mandate that they’re given, do show numbers that are above average. In fact, intuitively, anybody who’s been working in the public service would understand why. Social development; poverty reduction; children and families; public safety, with all the corrections system — those are difficult jobs. They’re not an easy nine-to-five, going to the office and typing on your computer and producing briefing notes. Not that this is necessarily easy all the time. But when you deal with a lot of human suffering, a lot of difficult social situations, mental health, etc., yes, you, as an employee, are affected.

[3:15 p.m.]

Some of those ministries — it’s undeniable — would require the kind of help that maybe others don’t get, in terms of frequency or volume. I know that some ministries will actually use more of the agency help when it comes to some of the employer relations and labour relations, for instance. We recognize that, and we try to adapt to that, because the numbers don’t lie, so we’re not pretending. The ministries of children and families are not going to come and see us, so we try to just make sure we have the resources available to address them, the expertise available to understand the needs of that ministry.

Is it something we can tailor to every situation in all domains? Probably not, because resources are finite, and there are limits to what we can do. But you’re right that we look at those numbers and we try, to the best of our ability, to adapt the services that we offer.

Now I’d like to turn to Dr. Lakey to see if there’s anything more you want to say on the health side, per se.

W. Lakey: I would say, in answer to your question, yes. We’re using data to shape the responses we provide. This is one sick leave plan for short term, so within that plan you have the incidental absences because of cold and flu, and you also have the six-month absence because of a major medical or psychiatric problem.

At the most granular level, it’s actually not helpful, because a single absence that’s long can throw the numbers quite a bit. Where it’s been more helpful is when we look at the ministry level and the ministry-level performance. That’s helped us fine-tune some of the training and psychological supports that we provide. We have a team of health planners that actually work with the strategic HR in those ministries to fine-tune the response more at a ministry level.

Ministries can approach us for targeted support. To Okenge’s comment, we have a bit of difficulty on prioritizing where we do that, so we have quite a wide suite of services through ourselves or through our benefit providers, and we connect ministry managers or supervisors to those services for their teams.

S. Bond (Chair): Anyone else?

I think, also, that it’s encouraging to hear that we, as the public service in British Columbia, are grappling with the whole issue of more than broken fingers and flu. Mental health and wellness are incredibly important. I know that it is much more difficult, probably, to measure and all of those things. But I gather, from what we’re hearing today, that that is something that an employee can, as difficult as it is, certainly come and take advantage of this benefit, whether it’s the flu or whether it’s depression or whatever it is — that those are treated in an equitable way as best we can. Is that fair to say?

W. Lakey: Yeah.

S. Bond (Chair): Okay. Well, I find that very encouraging, actually, to be part of an organization that recognizes that it’s hard enough to admit it, much less get the kind of support and benefits that you should be getting.

Any other questions or comments from my colleagues? All right.

Well, thank you very much to the Auditor General and her staff for the audit, and thank you, Okenge. First of all, we appreciate having a deputy minister here. That tells us very much that the public service agency takes this seriously — that you are here despite a busy schedule — so we very much appreciate that and for bringing a team of people who could answer our questions very thoroughly. I think most of us feel encouraged that there are measures in place. Misuse is certainly not acceptable, but generally, we have a pretty dedicated and hard-working and honest workforce that takes advantage of the benefit when they should.

Thank you for that. We appreciate the report. We appreciate the action plan, and we’ll be following up to make sure that there are progress reports as those timelines have been set out.

Correspondence

INSURANCE CORP. OF B.C.

S. Bond (Chair): We’re going to finish our meeting with just a couple of quick items of business, if that’s all right.

I bring to the attention of the committee the correspondence that was received by the committee. It arrived on March 15. It came from ICBC regarding a request that we made February 7 regarding commercial and private vehicle collisions and population statistics. That information has been provided.

I’m not sure if anyone wanted to make any comments, or if that satisfied the requests that were made. You should all have that correspondence.

[3:20 p.m.]

Hearing none, we will receive that correspondence. I appreciate the fact that there was a response provided, where people are starting to get the hang of the requests and the response. That’s a good thing.

Canadian Council of Public Accounts
Committees Conference

S. Bond (Chair): The only other item of business on the agenda for consideration is that I’ve asked Kate to provide the committee with a bit of an update on the CCPAC 2019 and 2020 conferences. As we all should remember, we are hosting the conference not this year but next year. We have done some work on being prepared for that, including partnering with the Auditor General’s office.

Kate, would you mind giving us a brief update?

K. Ryan-Lloyd (Acting Clerk): Thank you, Madam Chair, and good afternoon again, Members.

The annual conference of the Canadian Council of Public Accounts Committees is an opportunity to meet with members of public accounts committees, their equivalents across Canada, from every provincial and territorial legislature as well as the federal House of Commons.

This year the conference is being hosted by the Legislative Assembly of Ontario, and it will be held in Niagara-on-the-Lake. The dates are an arrival day on Sunday, August 18, with the program opening on Monday, August 19. It’s a two-day conference that’s held in conjunction with the Canadian Council of Legislative Auditors. Our Auditor General and some officials from her office are also expected to be in attendance.

It is a relatively brief conference. The first day features a number of business sessions that are held concurrently with legislative auditors. The second day, which is Tuesday, August 20, is the final conference day, and that particular day features separate business sessions, so two streams of conference: one for delegates to CCPAC, the Public Accounts Committee focus, and the second stream would be the legislative auditors, who meet separately and also undertake business sessions in that regard.

There is an annual general meeting at the close of the second business day, Tuesday, August 20. Departures could be arranged later that afternoon or evening or the following day, Wednesday, August 21. The conference hosts expect to publish a conference website with further details in the coming weeks. As soon as we receive an official invitation, I would be happy to share it with you all.

I’ll just note, with respect to logistics as well, that the conference organizers have offered to coordinate bus transportation for any attendees who are flying in to Toronto Pearson Airport or Hamilton Airport. They will arrange for a coach bus to take delegates to the conference site at Niagara-on-the-Lake.

In previous years, the members of this committee have regularly attended this conference. I believe that members who have participated in recent years have found it to be quite beneficial and helpful to their work on this committee as well as their participation on other parliamentary committees. I strongly encourage you to consider that, if your summer schedules might permit you to take part.

Last year we had a delegation comprised of the Chair, the Deputy Chair and one member from each of the main caucuses. The Green member didn’t attend last year. A similar approach could be undertaken this year. It’s also our practice to send one or two members of the committee staff. We would be hoping to receive your support in that regard again.

We’ll be in touch with further details, but I think the Chair’s intention today was to put it on your minds, give you an opportunity to confer with your colleagues. Then as soon as we have an opportunity to decide on the nature of the B.C. delegation, we can also work together to support you with any presentations that you might be inclined to participate in, panel discussions at the conference, and ensure that you have a worthwhile experience there.

S. Bond (Chair): Thank you. Kate, would you mind…? Have we settled on a date for…? I think we have.

Maybe Carol would like to comment on 2020.

C. Bellringer: We can do this one together. A member from Kate’s staff and two from mine have been doing the tour of the possible locations for 2020. They’ve narrowed it down now to one, which is…. I don’t have the date. I was just trying to get my calendar to show up. It’s around the same time as the 2019 dates, but roll it forward a year. So it’s like the third week of August that we’re proposing.

[3:25 p.m.]

I’ve given Kate the summary of the comparisons, which is what narrowed it down to the one. We haven’t gone through it together yet.

S. Bond (Chair): Okay, that’s fantastic. As you know, B.C. now has a seat on the executive of the organization. I can report that we had a very productive call with Ontario, as the Chair, and the past Chair — which was, I believe, P.E.I.

We are working our way through agenda items that would be meaningful for both Ontario and then looking ahead to our particular event here in B.C. That’s been a very constructive conversation. I think that with some of the changes that are taking place, B.C. is actually probably the most statesman…. I think we are the elder statespeople, at this point in time. We’re working our way through that.

There are changes all over the place. The current Chair was just elected in Ontario. She was sort of getting her feet under her as the Chair not only of Public Accounts but, obviously, of the national organization. We just wanted to be sure…. Obviously, the Deputy Chair and I have talked about this. We want to make sure the information is shared transparently.

B.C. will have a role to play, very likely, in the national conference. We do some things very well here in the province. I have already gotten phone calls as a result of our last participation about “how do we do this; how can we improve things” in their jurisdictions.

Any questions in particular? If not, what I hope we will do is go away and have a conversation about who might be interested, what the B.C. delegation might look like. We will obviously then assume the Chair of the organization this summer. We will then take on that leadership role as we prepare for the group to come to B.C.

J. Thornthwaite: Where is it in B.C.?

S. Bond (Chair): It will be in Victoria.

K. Ryan-Lloyd (Acting Clerk): The third week of August in 2020. We’ll just finalize some details and then share an update with everyone.

S. Bond (Chair): The rest of the country was very excited about coming to Victoria. They like doing that. But they certainly wanted to try to do it during the summer rather than later in their parliamentary calendar. I think we can accommodate that quite nicely, hopefully.

All right, so that’s that update. Are there any other items of business for the committee to consider? No.

Well, I want to, first of all, thank you all for doing your homework. That was a lot of homework.

Thank you to the Auditor General, the comptroller general for their attendance today, but especially Carol, to you and your teams that have presented.

Just when I was feeling comfortable we were caught up, the Auditor General let us know that there are more coming. We will continue to be diligent about getting these reports taken care of in a timely way.

With that, I will entertain a motion to adjourn.

Moved by Mitzi.

Motion approved.

The committee adjourned at 3:28 p.m.