The committee met at 9:02 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Good morning. Thank you all for being here this morning. I appreciate it. I know everyone has incredibly busy schedules.

Today we’re going to take an entire day, although we’ll see how progress works throughout the day, to deal with a number of important audits that have been released over the last number of months.

We’re going to start this morning’s work by considering the Office of the Auditor General’s report Understanding Our Audit Opinion on B.C.’s 2018-2019 Summary Financial Statements. That report was released in July of 2019.

I’m very pleased this morning to welcome the Auditor General, Carol Bellringer. She will be bringing us some opening remarks and then walking through her PowerPoint. We also want to recognize the comptroller general. Carl Fischer is here.

I would ask that both of you introduce staff as necessary, as they participate, for the record.

We’ll get underway. With that, we’ll turn it over to the Auditor General.

Office of the Auditor General

FINANCIAL STATEMENT AUDIT
COVERAGE PLAN

C. Bellringer: Thanks so much. Good morning, everyone.

Before I get started, there was one small matter that I just wanted to draw to your attention. I thought this was probably the best section of the agenda to bring it up, as we’re about to talk about the summary financial statements. It’s a financial statement issue. It’s about the planning around our financial statement audits. This committee, of course, approves the financial statement coverage plan each fall. That will be coming up in the next month or so, I hope, and we’ll be bringing that financial statement audit coverage plan to that later meeting.

In the meantime, we just wanted to let you know…. Unfortunately or fortunately, life goes on between meetings and between plans, and we just had a couple of small changes to that plan that we’re having to deal with immediately. It doesn’t require any kind of approval from the committee, because it will just be rolled into the plan that you get when it comes back to you in October, November. But what we did say in that last year’s plan is that we would be taking on the audit of the new B.C. Financial Services Authority, and we normally take on the audit of new entities.

However, as we started our planning, we determined we didn’t have the staff available, so we took another look at some of the audits in the plan, and we reassessed it.

[9:05 a.m.]

We did look to see if it was an audit that was necessary for us to get the coverage we needed to sign off on — the summary financial statements, which is the subject of this section of the agenda — and also if it’s where we believe we can best spend our time. So we chose to drop the financial statement audit for the Financial Services Authority because we would have to be starting to plan that audit in the next couple of months.

We have a couple of other changes to the plan that we’ll be presenting to you as well. The big one is that, going forward, we’re not recommending the audit of the financial statements for the school districts. We’ve traditionally done five out of the 60, and we do think that there are other ways to take a better look at getting the information that the Legislature needs on the performance of the school districts, rather than doing a small percentage of the total. That is rolling forward as well. It didn’t affect the ones that we just completed. It will affect the ones for next year.

I’ll move on now to the presentation on understanding the statements, unless you have any specific questions about what I was just mentioning.

S. Bond (Chair): I think we do have a question from Mitzi, and then I will also ensure that the financial audit plan is brought forward at the next meeting so that we can get….

C. Bellringer: Oh, perfect.

S. Bond (Chair): At that time, I’m assuming it will include these revisions that you’ve given us a heads-up about.

C. Bellringer: Indeed. When we got to the later agenda item on the performance audit coverage plan, we can…. I’ll repeat it then, but last year there was a wish by the committee to have a look at that at the same time. So we’re doing the work now to have both available to you, within the context of it also going to the Finance and Government Services Committee for budget approval, which will happen later in October. It all happens all at once. You’ll have both of the plans, though, presented to you for the approval of the financial statement coverage plan.

S. Bond (Chair): Okay. Thank you for that.

M. Dean (Deputy Chair): Good morning. Could you just say a little bit more, then, about the school districts? Do you know what the alternative is to going into five school districts a year?

C. Bellringer: No, we haven’t…. We’re starting to explore what those options are. It could be a performance audit on one matter that we then carry across to all 60. It could be a selection of a performance audit that would only look at a handful of them. It could be also looking more towards some sort of, if you will, outreach, networking, training, education piece on things that we might have seen in the past that we think need more attention by the governing bodies of those school districts.

We’ll have conversations with the ministry as well as others who have an interest in where we would direct our time. The other element of all of that is ensuring that we’re providing enough information to the Legislature. The school districts would still be having external financial auditors come in. Like, the other 55 school districts we’re not auditing are audited by external public sector accounting firms. So it would mean having those done that way and finding a way to communicate the important matters to the Legislature.

S. Bond (Chair): Does anyone else have any further questions about that before we move on to the audit opinion?

All right. Well, thank you for that heads-up. We appreciate that very much, and we’ll look forward to seeing that revised plan.

Now we’ll move on to Understanding Our Audit Opinion.

Consideration of
Auditor General Reports

Understanding Our Audit Opinion
on B.C.’s 2018-19 Summary
Financial Statements

C. Bellringer: With me at the table for this section of the agenda is Peter Bourne. Peter is a principal in the office, and he leads the audit of the summary financial statements. Russ Jones is also here. Russ is the lead Deputy Auditor General on the financial statement work.

Recognizing that the public accounts are an important public accountability document, it helps to measure the well-being of the province. And we do have one qualification in the audit opinion on the statements, a qualification that’s been included now for eight years. This committee is well aware of the conversation around it, and it was certainly also a topic of conversation at the recent conference of legislative auditors and Public Accounts Committees.

[9:10 a.m.]

We’ll speak to what those qualifications are. We did re­move the qualification we had on last year’s statements on rate-regulated accounting. Peter will go through further information around why.

With that, I’ll turn this over now to Peter, who’ll take you through the slides.

P. Bourne: Thank you, Carol.

Good morning, Members.

As noted, this report discusses our audit opinion on government’s fiscal 2019 summary financial statements, also known as the SFS.

Our presentation covers three topics: the use of generally accepted accounting principles, or GAAP, by government; the removal of the qualification we had last year related to the use of rate-regulated accounting in the summary financial statements; and the one remaining qualification, which relates to when government recognizes some of its revenue in the summary financial statements. This is mainly the recording of revenue transfer from the federal government.

The BTAA, which was enacted in the year 2000, requires government to prepare its financial statements in accordance with independently set, generally accepted accounting principles for senior governments in Canada. The GAAP for senior governments in Canada are recognized to be those accounting standards set by the independent Public Sector Accounting Board, or PSAB. The accounting standards that PSAB issues are known as public sector accounting standards, or PSAS.

Our audit report on the SFS states whether government has prepared its financial statements in accordance with Canadian public sector accounting standards. In 2010, government changed the BTAA, giving itself the ability to create regulations that can modify the generally accepted accounting standards it was meant to follow. Since 2010, government has created regulations that impacted the accounting standards for rate-regulated accounting and the accounting standards for the recognition of revenue from others.

We are pleased to note that in November 2018, government removed the regulation that impacted the rate-regulated accounting standards. However, as of today, government still has regulations in place that change the accounting standard for the recognition of revenue received from others — for example, funding from the federal government.

The three following slides show excerpts from both the Budget Transparency and Accountability Act and the Auditor General Act. This slide shows the change that was made to the BTAA in 2010. The BTAA notes that government must report in accordance with GAAP, unless Treasury Board makes a regulation that states otherwise.

This slide shows further details of the changes that Treasury Board can make to GAAP. In essence, Treasury Board has given itself the ability to alter the independently set generally accepted accounting principles used across Canada. Government has been accounting for revenue from government transfers differently than what has been specified in the existing public sector accounting standard.

This slide is the excerpt from the Auditor General Act that states, under subsection (2), that we are required to report whether the summary financial statements conform to GAAP. Reporting against GAAP is also what our professional auditing standards would normally require and what the public would expect.

For the 2018-19 summary financial statements, our audit report was again qualified because the statements did not comply with PSAS. We believe that government should apply PSAS without modification and rescind any regulations that modify GAAP.

Moving on to our removal of last year’s qualification of the SFS, related to the use of rate-regulated accounting, we qualified the summary financial statements in both fiscal 2017 and 2018. We had concerns with the prescribed accounting standards that B.C. Hydro was required to implement through Treasury Board regulation. B.C. Hydro itself received a clean audit opinion, based on the use of the prescribed — i.e., not GAAP — accounting standards that they were using. However, when B.C. Hydro’s figures were consolidated into the summary financial statements, B.C. Hydro’s figures did not conform to GAAP as required in the SFS.

As noted previously, we have to provide an audit opinion based on GAAP accounting standards. Our main concern was that government’s regulation and directions were impacting the regulator’s ability to make determinations over such things as hydro rates and eligible costs.

[9:15 a.m.]

Without an appropriate regulatory framework in place, B.C. Hydro is not eligible to use rate-regulated accounting standards. Therefore, if the regulatory accounts are not GAAP, government would not be able to include the net regulatory account asset balances in the summary financial statements.

This slide shows an excerpt from the BTAA regulation that allowed B.C. Hydro to modify the accounting standard that is typically used for rate-regulated accounting. As noted in subsection (3), the regulation did not require that the rates be established by an independent third-party regulator, such as the B.C. Utilities Commission.

However, since our qualification of the 2018 financial statements, government has made some changes to the regulatory framework of B.C. Hydro. The regulation noted on the previous slide was repealed in November 2018. B.C. Hydro has adopted appropriate GAAP accounting standards, being international financial reporting standards. One of the most concerning regulatory accounts at B.C. Hydro was written off, meaning the balance will no longer be collected through B.C. Hydro’s ratepayers. Finally, government has committed to improving the ability of BCUC to regulate B.C. Hydro, as is required by the accounting standards. Based on the changes government made, we removed our qualification in fiscal 2019.

Our office has also taken over the audit of B.C. Hydro as of April 1 this year. We will be keeping a close eye on the regulatory process that is in place to ensure the requirements of GAAP for rate-regulated accounting are met.

Our remaining qualification on the March 31, 2019, SFS relates to the deferral of revenue received from other levels of government and externally restricted funds from non-government sources. As Carol mentioned, this is the eighth consecutive year for this qualification.

Government’s accounting treatment for these funds is to recognize them into revenue, either when the related expenditures occur or, in the case of capital assets, on the same basis the assets are amortized. That is, the revenue is recognized over the asset’s useful life. In our view, this is a departure from public sector accounting standards.

PSAS requires the funds to be recognized as revenue when received or receivable, unless the funding agreement creates a liability, such as a situation where the money received might have to be repaid. In the case of capital assets, funds should be recognized as revenue by the time the funds are used for the purpose for which they were intended, which is usually by the time the asset is purchased or built. It would be very unusual for B.C. to have a liability — i.e., to have to repay the federal government once an asset has been built with the funds received.

The funding agreements do not contemplate the need to return funds at a later date. Therefore, government generally recognizes this revenue in its financial statements later than required by PSAS, which distorts the financial statements both now and in the future.

At March 31, 2019, this difference in accounting results in an overstatement of liabilities — in this case, deferred reve­nue — by $5.7 billion and an understatement of accumulated surplus, revenue and annual surplus by the same amount. That is, government’s financial statements state that $5.7 billion is due back to the federal government and others, despite the fact that the money has been spent and the buildings and other assets are already constructed.

You will note that our qualification states that if government had corrected this error in its 2019 financial statements, that revenue would increase by the full deferred revenue balance of $5.7 billion. Therefore, the annual surplus would be $7.2 billion, rather than the $1.5 billion annual surplus reported by government.

This is technically correct; i.e., the $7.2 billion surplus is what would be recorded in the SFS. However, the reasoning for the large increase in annual surplus was not explained well in our report. The reasoning is that the public sector accounting standards have determined that if an auditor raises a concern or error in one year, and the government chooses not the correct that error, then the government may not correct that error on a retroactive basis in the following year.

One reason for doing this is so that government cannot decline to record an expense in one year and then be allowed to record the expense retroactively; i.e., in a prior year in the following year’s financial statements. In effect, this prevents government from being able to hide the recording of expenses by purposely not recording an expense in the current year.

[9:20 a.m.]

In B.C.’s case, rather than not allowing an expense to be recorded retroactively, the accounting standards also do not allow revenue to be recorded retroactively. Because the government has not corrected the revenue error since it was first pointed out in fiscal 2012, the amount of error that would have to be corrected in the current year keeps growing. The qualification amount has increased every year since fiscal 2012. This means that government has understated the revenue from transfers every year since 2012.

Finally, although we are saying that the 2019 annual surplus should be increased by $5.7 billion, this increase in surplus does not mean that government would have additional cash. In most cases, the money has either already been spent or is earmarked for specific projects.

As noted on the screen, we always revisit our position on accounting issues, and we will again assess our position against the accounting standard during the current year.

This ends my presentation of our report. I believe Carol would like to make some concluding comments.

C. Bellringer: When we did the first run on this, I think they saved the last point for me, but I’ll repeat it.

Really, in terms of what we now are left with, in terms of differences, it’s twofold. One is the ability to modify GAAP — the existence of regulations, which is something that Treasury Board does, as opposed to something that…. The comptroller general can’t change it. That draws into question…. Currently the only modification that we’re concerned about is this one, on the capital transfers.

Because it’s been going on for eight years, and the application across Canada has been evolving over that same period, the conversation has been changing as well. I’m not entirely sure whether we’re in disagreement with the application of the standard — that we think it should be done one way, and the comptroller general another — or whether we’re talking about…. It may indeed be a flaw in the standard itself.

We don’t have the option to not tell you what those differences are from how things are being done versus what the standard would say has to be done. But at the end of the day, this particular matter is one that took…. It was over seven years before the public sector accounting standard board could reach a resolution on the initial standard put into place. Then when they looked at how it was being applied, there were again some pretty colourful discussions going on as to whether or not it should be revisited, and it was not revisited.

We are aware. There is one jurisdiction in Canada that says if you have…. This is money that has been received, and it is set aside for the use, for the construction of capital items. So they’ve been constructed. You’re now using them, and there’s depreciation being charged on them that’s going through your accounts.

The way the government is doing this is matching that revenue to that depreciation, so there’s no impact on the annual statements. The way the accounting standards set it out is: “No, actually, you should see that inflow of cash early on as revenue, and there is going to be a mismatch.” It recognizes that mismatch, and that is the way the standards have been set up.

I’m a little bit of six of one, half-dozen of the other as to whether or not I agree with those standards themselves, but we don’t see a liability. We do see a restriction on use, though. There’s a bunch of discussions going on in the accounting profession to see whether or not there’s a need to alter the framework so it’s more understandable to the public and to those using the statements.

We will take a look at this. I’m still of the belief that, technically, we’re applying what we see as being a strict interpretation of that standard. I think we’re down to a disagreement on whether the standard itself makes sense as opposed to whether or not it’s being applied right.

[9:25 a.m.]

It’s a complicated one. I can’t reach a different conclusion today and say: “Look. We’ve talked about this for eight years. You know what the issue is. You understand the impact of it. We could show you all the comparisons across Canada. It’s being applied slightly differently in other jurisdictions.” At the end of the day, could we live with that? Because of the restriction in use, I don’t know. I can’t say I’m ready to change my position, but I am prepared to reconsider it because of the change in practice over this last eight-year period.

I’ll leave it at that. Carl can fill you in on the other side of the story.

S. Bond (Chair): All right. Well, thank you for that. I’m sure there will be some questions as to what a reassessment of that view looks like in the days ahead.

Carl, over to you for, as the Auditor General said, the other side of the story.

C. Fischer: Thank you very much, Chair.

Diane Lianga, the executive director of financial reporting, is with me today. Diane is the chief accountant for the province and provides leadership in that area across all ministries and Crown agencies. We’ve worked together for over 20 years, and she’s an excellent accountant.

We’re just getting the presentation set up, and Diane can run through it. We’ve kept our comments very short, because we have discussed all these issues before. The one thing I will say is that, from my perspective, it’s been a very positive year in terms of grappling with some very high-level issues and working collaboratively with the Office of the Auditor General to challenge ourselves to find the best way forward.

With that, I’ll pass it over to Diane to run through the presentation.

D. Lianga: Great. Thank you, Carl.

Good morning, Members. Thank you very much for the opportunity to discuss the Auditor General’s report on the audit opinion on British Columbia’s 2018-19 summary financial statements.

The Auditor General has identified one point of qualification in her opinion on the 2018-19 summary financial statements. The previous year’s qualification, as they mentioned, on the use of rate-regulated accounting has been removed for the 2018-19 fiscal year. The remaining qualification on the deferral of government transfers revenue has been noted as a point of reservation in each year since fiscal 2011-12.

The qualification on the use of the rate-regulated accounting was first identified in the 2016-17 fiscal year. It has been removed from the opinion for 2018-19 but remains noted in the audit opinion as it relates to the comparative figures that are presented within the summary financial statements. Going forward, we understand the Auditor General will continue to monitor the implementation of government’s policy direction in this area.

The qualification on the deferral of government transfers revenue has been noted in the audit opinion since 2011-12, as I mentioned, when the Public Sector Accounting Board issued a new standard on government transfers.

The Auditor General’s position is that restricted funding received for capital assets should be recorded as revenue when the asset is purchased or built, and the related amortization expense should be recognized over future periods as the assets are used to provide programs and services. This means that the current operating results will not reflect that the funding was restricted for future program delivery, and future operating results will not disclose government’s obligation to use those assets to deliver programs and services as stipulated.

B.C. continues to recognize restricted contributions when the service delivery obligations are fulfilled. This approach better reflects the economic substance of the restricted funding arrangements and best serves the public interest.

The comptroller general and Auditor General are committed to discussing our respective positions on the recognition of the deferred government transfers issue and working towards a resolution that continues to serve the public interest. More importantly, our two offices continue to collaborate on the significant accounting standard changes being proposed by standard centres on the way financial performance is reported to the Legislature and the public within those financial statements.

That concludes our presentation today, and we would be happy to take any questions.

S. Bond (Chair): Thank you very much. We appreciate the comments and the presentation, and I know there will be questions from members of the committee.

[9:30 a.m.]

I want to begin by just recognizing the Auditor General’s office. I think we had this conversation that 40,000 hours goes into the preparation of this work. That is very significant, and we wanted to recognize you and your team for the amount of time and effort and the scrutiny and the careful work that you do. I was astounded when I heard that it was 40,000 hours, so I just wanted to, on behalf of the committee, recognize that that is a great deal of work.

It’s important that we, then, take a look at and pay serious attention to the work that’s been presented to us. Thank you for that work, to the Auditor General and her team.

With that, we’re going to start a speakers list. John is up first.

J. Yap: Thank you to both the Auditor General and the comptroller general for your comments.

It seems to me that, you know, here we are again after seven or eight years, and I heard both of you kind of acknowledge that you see each other’s point of view. So in effect, you’re both right, to cast it in that perspective. On the one hand, the comptroller general is saying we should do a matching of the funds received to the useful life of the asset. I recall from my previous accounting courses that matching is a principle in accounting, and also the principle of cash versus accrual accounting. It seems like this is an attempt to accrue the funds received. Of course, the Auditor General’s point of view that, well, this is not GAAP should be reported under the PSAB standards as received.

In reviewing comments from the comptroller general on page 6 in the report, there’s one bullet that says: “Adopting the Auditor’s recommended approach of immediate recognition would result in” — and this is the bullet I’m interested in — “restricted contributions no longer being disclosed as a provincial obligation for future service delivery.”

My question is this. How strong is this obligation? At the end of the day, the province has some sovereignty to decide on what’s best in the public interest to deal with the funds received.

C. Fischer: Yes, that’s quite correct. The province has sovereignty, and if the province is willing to take money provided for a specific purpose — say it’s a school or a bridge or whatever — and use it for some other purpose and deal with the consequences of satisfying the funding partner, the province could do that.

Our expectation is that every level of government works collaboratively in good faith for the express purpose of providing programs and services to the public. The expec­tation of the intention has to be that when you receive a contribution for a highway or a school or a hospital, the intent is to deliver that program or service, rather than build or buy a building and use it for some other purpose.

It’s been our experience in British Columbia that when circumstances change and the implications kind of impact a funding arrangement or transfer from the federal government, for example, it’s really pragmatic to go back to the federal government and seek to change the arrangement or the terms that the funds have been provided for.

It’s quite true that traditionally, transfer agreements did not include the specific form clauses that have been antici­pated now under the new guidance, but I think it wouldn’t be correct to assume that the intention was not there. It’s very easy going forward. We can make sure that transfer agreements include all the provisions that are anticipated for new transfers. But traditionally, because the form was different, I think we have to work a little bit harder and look at the substance of the arrangement.

J. Yap: Right, so….

Oh, do you want to respond, Carol?

C. Bellringer: Sorry. Not to offend one memory, but the matching…. We probably learned the initial accounting classes around the same time. It used to be a fundamental principle in accounting, and it’s changed since then, just in terms of…. Yes, it is really behind this particular disagreement, but there’s no longer a matching principle in the application, both in the private and the public sector. It’s different.

[9:35 a.m.]

J. Yap: Thank you.

You mentioned a few moments ago, Carl, about collaboration, a collaborative approach to working with the federal government, for example. To me, “collaborative” is an interesting description, because it doesn’t sound like the word “obligation,” which sounds a lot stronger — obligation in the sense that if you don’t do something, there will be a consequence. In a collaborative relationship, the consequence of not following through — say, building that bridge or building that hospital — might have some impact, but it doesn’t sound that it would be as strong as if it was a hard-cast obligation.

I’m wondering if that’s where the grey area is. The government is saying: “Well, it’s an obligation.” But in point of fact, yes, as a sovereign entity, priorities can change, and we have seen in the past that funds can be allocated to something else. Then there might be a consequence from the federal government, the funder. Then that would be subject to some kind of negotiation.

I’m wondering if you can comment on my description of this area.

C. Fischer: I think you capture it well. Traditionally, before 2010, there was a degree of ambiguity in terms of government transfers. Government transfers are different than other types of contracts because they’re not exchange transactions. If you were to engage in an exchange transaction, you pay your money, you get a product or service, and the terms are very clear.

With government transfers, particularly in Canada, because we have multiple levels of government that interrelate in a very kind of specific way…. The nature of non-exchange transactions, ones that are by definition one-sided…. That can happen on the transfer side, because the federal government or the provincial government, in our case, decides to make a transfer for a purpose to another province or a school board or a Crown agency. The discretion is really imbalanced. It’s a very one-sided transfer.

In our case, for example, the province’s case, we are very clear in legislation about the requirement for school districts or health authorities to use capital funding for those specific purposes. If you take a look beneath just the form of the transaction, what we’re talking about, really, are financing transactions.

An alternative to giving $1 million for a school up front at day 1 could be to give the school district $100,000 for each of ten years to pay for their amortization. The reason that governments don’t traditionally do that is that’s very expensive. It’s much cheaper for governments to borrow at a very, very low rate of return and then provide the money up front when the cash is required.

The real problem comes when we try to compare budgets and actual results. Look at either independently, you have a lot of flexibility about how you want to approach it. But since 1999 in British Columbia, we’ve recognized it’s critical for the public to be able to directly compare budgeted amounts, including the authority through appropriation, with the actual results at every level of government. The only way to do that is to recognize the accrual of revenues and expenses coming from assets and liabilities on the same basis that the budgets are prepared, because budgets deal only with revenues and expenses. It’s very absolute that they represent the actual flow of funds.

One problem that we have, everything else aside, with the interpretation or the application of government transfers is that it does not anticipate the need to match the actual results with the budget. And because the budget reflects the real flow of funds, we think that is an appropriate measure to report to the public to ensure government’s accountability, not just year to year but over a long period of time.

[9:40 a.m.]

Part of that includes the obligation for the recipient, whether it’s government or a school district or a health authority, to recognize their obligation, a form of deferred revenue, for recognizing that funding over the life of the asset that they’re meant to finance, rather than recognizing it all up front.

S. Bond (Chair): All right. The Auditor General would like to respond.

C. Bellringer: Well, sorry. It’s just a quick comment on the budget actual. The last thing you probably want is the next hour of the two of us arguing on this one. We’re in total agreement around the fact that the statements should show you the budget versus actual on the same basis so you can compare the two. We’re not in agreement on whether that restricts how you develop your budget.

S. Bond (Chair): Any other questions from the committee?

M. Dean (Deputy Chair): I’m interested in how the British Columbian public understands this information and can move to…. We can all move to a situation where we’re all happy and in agreement, and British Columbians can understand the situation as well.

If we were going to move to what’s been proposed by the Office of the Auditor General, how would that happen, and how would the public understand that? Do we have options of being able to make that shift, or would we have to do it in one year and recognize the surplus? How could that happen if there was going to be a way of moving forward?

C. Bellringer: Who are you asking?

M. Dean (Deputy Chair): Well, both yourself and the comptroller as well.

C. Fischer: In terms of the accounting side, once again we’d need to separate it between the reporting of actual results and the budgetary process that the province works under. In terms of the accounting side, I think the only way that accounting standards anticipate making the change would be on a prospective basis. That would mean recognizing the full amount in the current year.

In terms of the budgetary side, not just British Columbia but all provinces who have grappled with this problem have kind of come to the conclusion that the only way we could do that would be to have two slightly different budgets or two slightly different financial statements. There’s no other way to make them match and represent the same information on the same basis going forward.

C. Bellringer: The question does also hit an element that we’re really very much aware of, which is why we’re prepared to reassess the whole thing — being the public understanding. I think that’s at the heart of where….To be blunt, we’ve taken a few hits in the media around the qualification in the audit opinion. It surprised me that after eight years, it’s the first year we’ve really seen any discussion on it. So the discussion is good.

I think the misunderstanding is that there was a suggestion that…. I was saying that there was another $7 billion available to be spent. And I mean, that’s really also drawing out our awareness of…. The public understanding is important, and there are way more complex issues that need to be really well explained publicly so that there is a better understanding of the difference between cash flow and financial results, some accounting treatments and the budgeting being a really important component of that.

There are a lot of dimensions to that that we’re trying to tease apart and say: how can we better communicate to the Leg. Assembly and, therefore, the public around what the statements mean and, when we have a qualification such as that, what the qualification means?

[9:45 a.m.]

The way Carl described it is true. It would run through the current year. Let’s say you changed it next year. This year I think it was the magnitude of the number that got the public attention. It had been in the $4 billion to $5 billion range, and then last year it was offset by a Hydro number in about the same range. This year it stands alone. It would mean that the surplus, rather than $1.5 billion, would have been 7.2. You go: “Wow. That doesn’t seem reasonable.”

There was a reference to the fact that we can’t possibly understand…. You know, the public is thinking that there’s more money to be spent, and that’s not what it means. We’ve described some of it as because it’s a cumulative effect, and the other being that there still needs to be some way for the statements to indicate so that you understand that there’s a restriction on the use of those funds. That element of it is still an important component.

That’s why I’m thinking maybe there’s another way to show it that we can be both satisfied with what it’s telling you. I think it is great that probably this Public Accounts Committee understands this issue better than any other jurisdiction in Canada because it has come up for conversation for so long, which is a good thing.

M. Dean (Deputy Chair): Thank you for that. I’m really encouraged by the fact that you’re aware of that as an issue. I’d really like to see some kind of a solution come back that does make it more straightforward and transparently accountable to British Columbians so that it can be understood easily.

R. Sultan: We’ve covered this matter before at the last meeting, but I think, once again, it would be appropriate for this committee to acknowledge that the government and Treasury Board have moved halfway, at least, to eliminating these qualifications through the abandonment of the regulatory account regime, despite a $1 billion hit that that entailed. I would presume that was a tough decision that the government took. They took it, and I commend them for doing that.

Back on the issue of the day, first question: have rating agencies raised this discrepancy and this qualification, to your knowledge, in recent times?

C. Fischer: We do engage with the rating agencies at the release of every budget, public accounts and updates. Rating agencies are very sophisticated users or consumers of financial statements. We have worked through this issue as we do with every qualification issue that has come up over the years. They understand the nature of it.

The rating agencies…. My perception is that this issue particularly resonates with them because they are in the business of funding and cash flow analysis. The rating agencies over time have told me that were we to shift or adopt, they would have to adjust out to understand the true flow of funds that are supporting government’s capacity to borrow at any point in time.

The rating agencies have a slightly different perspective on financial statements, but they recognize, and we don’t have any complaints or negative feedback from them at this point.

R. Sultan: Without delving into forbidden areas of confidentiality, would it be fair for me to guess that the impetus for maintaining this discrepancy, this qualification, on our financial statements is primarily a staff-driven imperative at Treasury Board and not a politically driven imperative?

C. Fischer: Diane and I meet with the Minister of Finance every year at the start of the year-end process, and our first piece of business is to review all of the outstanding commentary that we’ve received from the Auditor to seek policy direction. It is only government, through Treasury Board, that has the capacity to determine the accounting policy of the province, and they have to do that in the way that they feel best meets the public interest.

[9:50 a.m.]

In my experience, everyone involved, either as Minister of Finance or as a Treasury Board member, has been keenly interested in this issue, as well as any issue that we have qualification from OAG on, and they have pursued it in a way that is so critical that I think a lot of people would be amazed.

It was last discussed with the Minister of Finance before the release of the financial statement. The Minister of Finance confirmed the policy direction in this area. It is those specific reasons that have kind of led us to keep to this path for the past eight years. It’s in the public interest to do so. There’s currently no way that we’ve been able to determine to meet all of the other obligations of government for transparency and accountability in financial reporting that were adopted in 2003 with the BTAA.

R. Sultan: Aha. Carl, you used the key phrase “in the public interest.” So the staff, in this case, as I understand the process, has presumed to be a superior judge of what is in the public interest in terms of financial reporting, as opposed to the various accounting boards that have come forward with GAAP. Is that correct?

C. Fischer: No, I think my understanding of public interest is best defined by the 1999 Budget Process Review Panel, led by Doug Enns and followed up in 2009 with their follow-up report.

R. Sultan: Well, it would seem to me that the issue here, which may seem arcane and, in fact, kind of weird…. Here we have a government deliberately understating its revenues, and politicians are generally driven in the opposite direction. But in this case, it seems to me the fight is worth fighting. I would hope the Auditor General, as she reconsiders the issue, doesn’t weaken too much in her resolve.

It seems to me what’s at stake here is a principle, and the principle is that we follow GAAP accounting. It’s GAAP. It’s not GAAP, B.C.-modified. I think, good or bad….

We can quibble with the judgment of various accounting bodies across North America and in Canada, saying: “Well, GAAP is kind of silly in some ways.” Maybe so, but GAAP is GAAP, and we should not say: “Well, we’re kind of special here in B.C. We are going to continue to invent, to suit our own convenience, our version of GAAP, and so we are.” I think that’s a mistake.

C. Bellringer: Actually, we were going to make a comment on the Enns report. I wasn’t around when it took place, nor when it was reviewed in 2009 — so created in 1999, reviewed in 2009. My understanding is all of…. It was basically a support of “apply GAAP.” The Auditor General Act is so clear. We have to audit to GAAP. I have a legal obligation to do so, regardless of…. Where I may not like all of the standards, we will — I can assure you — be auditing to GAAP.

That Enns report did recommend a ten-year review. That would be a policy call as to whether or not one would choose to do so. The amendments to the BTAA took place after that, so there’s a bit of, possibly, an opportunity for a refresh on that.

S. Bond (Chair): Russ, did you want to make a comment?

R. Jones: I just wanted to mention to the committee that while the Public Sector Accounting Board in Canada right now is not relooking at the transfer standard, the International Public Sector Accounting Standards Board is. There’s an awful lot of work going on right now that we’re following to see where they’re going to end up. They are tackling the issue of what you do with capital transfers. They’ve been doing it for about the last six or seven months. Just looking at what they’re talking about, it’s not an easy issue to deal with. But it isn’t something that we haven’t been following. There is still some work being done.

S. Bond (Chair): Thank you for that.

Are there any other questions from the committee?

[9:55 a.m.]

I have a couple. I typically wait till the end of members, and then…. I’ll just continue on that vein. I think what the Auditor General said was really important. This is an issue that is now eight years in the making, and it has spanned two governments — not one but two.

The issue, as I understand it, that the Auditor General is raising today is that there is actually discussion about the standard itself, not the application of it. Russ has just pointed out that the international body is taking a look at the standard and grappling with that. So I’m assuming that is what has led to a sense of “maybe we’d better assess where we’re at with this,” because it has been eight years and two governments. So is it the look at the standard itself that is driving an attempt to try to reassess the differences here?

C. Bellringer: It’s a great question. Actually, if I had to think about…. Why are we prepared to reassess it? One is because I get it that the public doesn’t understand it. That element of it is one factor.

The other is…. I can’t speak to other jurisdictions in Canada, but it has started to move towards consensus. There are some outliers, and I’m not understanding why they have a different view. Is there…? You know, it’s a bit of a….

Far be it for anyone in my office to ever admit this. If we do, we always come forward, and we are open about it. Did we get it wrong? I don’t believe we did, but at the same time, if there are other views, we want to hear what they are. We’ve started to enter into a deeper dialogue with my colleagues across the country to better understand why they are comfortable with a different position, if they are.

That’s really it. The changes in the standard are definitely an additional factor. Probably the most significant element of that is….

Russ mentions the difference between Canadian and international. Canadian standard-setters on the public sector are assessing currently whether or not they’re going to move closer to the international standards, which would actually be a fairly dramatic shift in a whole spectrum of…. It wouldn’t just be this one. It would be a lot of standards that would then change, and the whole accounting for government would be quite different if there was a switch to international.

That’s under discussion as well. No question that that’s a piece of it but not the full motivation.

S. Bond (Chair): Well, I do think that reporting to the Legislature is important, but public interest is paramount, from my perspective. I think no matter how we describe it, if you suddenly have a plus-$7 billion surplus…. You know, far be it from me to speak for every British Columbian, but in many people’s minds, surplus equals spending, that you suddenly have $7 billion available. I do think that the public, to Mitzi’s point and others, do not understand that. I think, if we keep at the heart of this, what is in the public interest in terms of transparency and what best reflects and finds that balance….

I have to say that in the comptroller general’s response on page 6…. John referenced the first point, but I had looked at all three points. They’re pretty sensible in terms of what the implications would be if the shift was made.

I’m not arguing for or against the shift, but there are implications. I’m not sure that there’s much there to disagree with. The Auditor would probably agree with what is required. When you think about it, budget and actual results would no longer be directly comparable, and I think you’ve referenced that there would need to be some sort of language or context for that.

Anyway, I think we’re seeing…. First of all, I think it’s good news that we only have one qualification now instead of two. That actually matters when you’re talking about credibility. I think that’s important. So I’d like to just speak to the removal of the one qualification for a moment.

On page 4 of the report, it mentions the removal of the qualification for this year. I’m wondering if you could just…. Does that mean that it is contingent upon future action? Does that mean it’s permanently removed? Or what does the monitoring look like?

[10:00 a.m.]

I’m hopeful it’s gone for good. But it did sort of reference for this year, and there’s a reference to monitoring. So can you just give me a sense of what that looks like? In your opinion, is it likely gone from now on?

C. Bellringer: We absolutely have to do it on an annual basis to assess where things are at, not the least of which would be if…. We’re talking Hydro. So if, let’s say, there was a qualification within the financial statements of Hydro on anything, that might be significant enough to roll forward and be a qualification in the summary financial statements. Every year, as you do the individual audits, we have to determine whether or not there’s an impact in the summary financial statements.

Specifically on rate-regulated accounting and the factors that we were considering, Hydro is now reporting in accordance with international financial reporting standards. As long as they continue to do so, we can tick that one off.

The adjustment of the actual accounts to remove the rate-smoothing account…. As long as it doesn’t re-emerge or a similar kind of account emerge, that one also takes care of that difficulty.

The process around the regulatory framework is the most complex of the factors because it needs to be done in an independent regulatory framework manner, so that would be something we’d have to assess annually. As long as they are having full public discussion on the rate applications, and there is an independent assessment of the regulatory accounts…. There may be accounts they don’t permit, or there may be accounts they do. We do have to watch that.

The government still has the ability to put regulations in place. So we would be watching to see whether….

Directions and directives. If they are put in place, whether or not they impact the ability of Hydro — again, for the regulatory framework — to work independently. We have to look at that annually. Where they are currently, if it were to stay there, then we wouldn’t have a problem. If it were to deteriorate in any of those areas, we would have a problem.

S. Bond (Chair): I think that is very helpful. I appreciate that. I have one other question about the Hydro reference that you made, and then I have a question, one final one, for the comptroller general.

On page 10, it talks about government having repealed and amended previous government direction and issued a new direction, allowing…. It talks about BCUC setting rates for B.C. Hydro. It’s qualified somewhat because it says “broadly speaking.” Is there a concern about that, or is that just the way that it was written?

It’s the last paragraph on page 10. It says: “Government repealed and amended some of the previous government direction and issued a new direction that, broadly speaking, allows BCUC to set rates.” Is that a qualification of some sort? Is there any concern there that it doesn’t entirely address the issue that was raised?

C. Bellringer: My quick answer to that is that it is correct to say that it does not entirely address the issue raised. Let me just see if I can say it and not go on for 20 minutes on this one. Peter might need to jump in on this one.

The new direction does still include some elements that…. Part of it is timing. The biggest issue is around the extent to which the regulator can look at the existing deferral accounts, the regulatory accounts. There are some restrictions within the directive as to what they can and cannot use to approve the rates. We still have concerns around that.

[10:05 a.m.]

Somehow, somewhere, someone is going to have to look at the remaining $5 billion sitting in deferral accounts to make sure that they can flow into future rates. Some of that comes about through the application for the rates. I mean, there are several thousand pages of documents that get filed with the regulator when the rate is being approved. But one of the things we were waiting for when we did that rate-regulated accounting report last year…. We were waiting to see the ten-year plan so that we could assess whether or not the deferral accounts could be absorbed in future rates at the rate levels that were desired.

We still have to see something coming from the regulator on that, and that is the one area that the directive is still not perfect on.

S. Bond (Chair): Following up on your comments, then, you said somewhere, someone, somehow. Is there a process that will continue to look at that particular…? And I use qualification. It’s almost inappropriate in the sense that we’re talking about major qualification to the financial statements. Is there a next step from your perspective? So progress has been made, and you’ve been pleased to see that. But when I see broadly speaking, that is basically code for saying there is something else that needs to be pursued. So do you have a sense of how that follow-up might take place?

C. Bellringer: The most straightforward way that that will take place, and it’s already started, is the financial statement audit of B.C. Hydro. So they do have to meet the international financial reporting standards, IRFS, which will mean that they have to record those regulatory accounts in a certain way. That’s something we’ll be looking at through the financial statement audit. We also had issued a report on BCUC itself two or three years ago. It’s in our follow-up list.

We don’t have a specific follow-up identified on that, but we still meet with them regularly to understand what progress is being made on the regulatory side.

S. Bond (Chair): Okay. That’s a good thing to hear. I figured that’s where it would go next, as you continue to audit the financial statements.

Anyway, I just wanted to flag that, because I think that is an important piece of ongoing work.

My last question is related to the PowerPoint that the comptroller general’s office provided. It notes that the current government has reviewed this issue. I think it actually said that it has decided to maintain the long-standing accounting treatment because it best serves the public interest.

Can you describe for me the process that the government undertook? The word “review” has implications about what was done. How did that review take place? How did government take a look at this?

C. Fischer: We start off within the Ministry of Finance as part of our ministry accounting reporting committee, which includes the office of the comptroller general, Treasury Board staff as well as provincial treasury to look at each and every implication that might impact government’s ability to be consistent in reporting through the variety of different financial reports that we have. For us, it’s a very good process, because it allows us to get a very good understanding of not just the implications from the financial statement perspective but also from the budget perspective, from Treasury Board staff and the cash flow perspective from provincial treasury as well.

We do undertake to review all issues every year, regardless of whether we see a need for a change or it’s a new issue. We do take that information under the direction of the deputy minister, meet with the Minister of Finance as part of our year-end financial statement planning process. We provide all of the briefing information, including past conclusions as well as any new changes or new information from the Office of the Auditor General throughout the year.

[10:10 a.m.]

We have the discussion with the minister to determine whether the minister feels that there is a need for an additional process to review, examine, reconsider or whether the minister wants to refer the matter to Treasury Board for broader discussion. Sometimes ministers do decide to have the discussion at Treasury Board. At other times, they seek to provide the direction themselves and determine whether or not there’s a need for any change in the year.

S. Bond (Chair): Did the review agree or generate the three bullet points that were included in your comments here that reflect on what would happen if the shift was made?

C. Fischer: Yes. I think it was…. I’ll look to Diane. I might not remember whether it was two or three years ago that we worked with Treasury Board to test or validate our concerns, including their perspective or their concerns about public communication of the budget documents. At that time, it was actually a very useful process, because it pushed us to go beyond the technical challenges we had, from purely an accounting perspective, to understand and articulate the public interest issues or the real impacts that the public would feel from the change.

S. Bond (Chair): Thank you for that.

Any other comments or questions?

Well, thank you. Is this the eighth year now that the Public Accounts Committee in its various forms has had this discussion? It seems to me that the Auditor’s comment that “we have worked through and resolved many other accounting issues with the government in the past, and we still wish to do the same with this one….” So I hope, as we work our way through the next year, that the Public Accounts Committee, in whatever form it takes next year, will see a qualification-free presentation. That would be a signification step, I think.

Thank you very much again to the Auditor General’s office for the work that has gone into the work they do and also to the comptroller general and staff for the response today. With that, we will move on to our next report. We’ll just maybe take a very brief pause while we set up again and invite our other guests to join us. Thank you again, to both of you, for your presentations this morning.

The committee recessed from 10:12 a.m. to 10:28 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Thank you for coming back so promptly from that short recess. We are going to move on to our second report of the day. Not that all reports aren’t important, but this was a really significant piece of work done by the Auditor General. We’re going to consider the report that was released in June of 2019. It is a progress audit, so it’s really a follow-up to an audit that was done previously by the Auditor’s office. It’s entitled The Education of Aboriginal Students in the B.C. Public School System.

We will use the regular process that we undertake here at PAC. We’ll start with the Office of the Auditor General making a presentation. The Auditor General will make some opening remarks.

I think, Sheila, you’re going to do the presentation.

S. Dodds: Jessica and Emily are going to do the presentation.

S. Bond (Chair): Well, the Auditor, I’m sure, will introduce her staff. Then we’re very pleased to have senior leaders from the Ministry of Education. We do want to recognize the deputy minister, who’s here today.

At Public Accounts, we very much appreciate it when we see the senior leadership team here at these meetings, because it’s so important that we have a good sense of what’s happening from the top right on down.

We want to recognize you, Scott. Thank you for being here.

[10:30 a.m.]

We’ll take a moment after the Auditor General’s presentation. We’ll change seating positions so that the ministry can provide its response. Then the committee will ask some questions in follow-up.

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

Progress Audit: The Education of
Aboriginal Students in the
B.C. Public School System

C. Bellringer: Thank you so much. As Madam Chair pointed out, this is a progress or follow-up audit. I will just say that as those follow-up audits go, this one involved a significant amount of work, from our perspective, to ensure that we had a good sense of where things were at. So the staff put quite a lot of effort into this.

Sheila Dodds is the Deputy Auditor General who was responsible for the original audit and for this progress audit. She’ll make the introductory remarks about today’s presentation and then introduce the rest of the staff.

S. Dodds: Thank you, Carol.

Good morning, Madam Chair and committee members. Thank you for inviting us to present on this progress audit.

In 2015, our office reported on the education of Indigenous students in the B.C. public school system. The government had committed to close the gaps in education outcomes between Indigenous and non-Indigenous students. In 2015, we found that there were still significant gaps in education outcomes for Indigenous versus non-Indigenous students, and we made several recommendations to the ministry at that time. We conducted this progress audit to assess the ministry’s progress in implementing those recommendations.

On a personal note, as Carol noted, I was part of that original 2015 audit team. We visited several communities as part of that audit work. We went to Fort Nelson, Prince George, Port Hardy and Vancouver, and our team members were all moved by the stories that we heard during that 2015 audit that highlighted some of the barriers to closing the gaps for Indigenous students.

Three years later what did we find? We did find that the gaps are getting smaller. Overall, we found that the ministry has taken significant action to address the 2015 recommendations. The ministry is working and collaborating more with Indigenous communities now than we observed in 2015. However, more work is needed in areas where we assess progress as partially complete. Many initiatives that address our recommendations are still in the early stages of implementation, and in a few areas, it’s not clear if the planned actions will actually address the recommendation.

With me and Carol today, we have Jessica Schafer, who is the manager on the audit, and analyst Emily Yearwood-Lee. They are going to take us through a presentation of the progress audit and the findings.

J. Schafer: Thank you, Sheila.

Good morning, Madam Chair and committee members.

In 2005, the B.C. government committed, in the transformative change accord, to close the education gaps between First Nations and non–First Nations students within ten years.

In 2015, our office audited the education of Indigenous students in the B.C. public school system. We conducted the audit to determine whether the Ministry of Education had exercised its duties and powers to meet government’s public commitment to close the education gaps. At that time, our office found there was still a gap in outcomes, which we’ll look at on the next slide. We found that despite government’s public commitment in 2005, the ministry had not fully exercised its duties and powers to close the gaps for Indigenous students.

At that time, our office made 11 recommendations. Our 2019 audit reports on the progress the ministry has made on those recommendations.

When we talk about the gap, we’re most often talking about the graduation rate. But there are also gaps in other areas, such as learning assessments, the foundation skills assessment and in how safe Indigenous students feel in school. Education gaps can have a significant impact on how life goes down the road for a student in the post-secondary system and the workforce and on their overall health and well-being.

This graph from the progress audit report shows the provincial average graduation rate for Indigenous and non-Indigenous students from 2000 to 2018. In 2000, there was nearly a 40 percent gap. The gap was 24 percent in 2014, at the time of the original audit. In 2018, it was 16 percent. So things are improving, but there is still a gap.

What’s important to remember here is that this is the provincial average. There are districts with a smaller gap than the provincial average. For example, there were ten districts with less than a 2 percent gap in 2018, and there were three districts where the gap went in the other direction, where Indigenous students had a higher graduation rate than non-Indigenous students.

[10:35 a.m.]

However, there were also five districts with a gap that was more than double the provincial average. There are also larger gaps for particular groups, such as First Nations students living on reserve and Indigenous students in care, so the provincial average isn’t the whole story on how things are going.

The 2015 audit report included 11 recommendations. They are listed on pages 5 and 6 of the progress audit report. I’ll just note that for the purposes of the progress audit, we split recommendation 6 into part A and part B, so the progress audit talks about 12 recommendations. The recommendations from 2015 fell into three categories.

Recommendations 1 through 6 relate to the ministry providing leadership to the system. In 2015, it was the provincial government that set a systemwide expectation for closing the gaps, but the nature of B.C’s co-governed education system meant that much of the practical core work would have to happen at the school district level. In 2015, we found there was confusion about how this was supposed to happen, so our recommendation included the ministry collaborating to develop a strategy with key groups and to set clear accountabilities. We also recommended that the ministry take action with school districts where gaps persisted.

Recommendations 6(a) and (b) were about creating a safe, non-racist learning environment. Recommendations 7 to 10 were about using data to address unequal outcomes. The school system collects data from assessments, attendance tracking and the recording of student information. That data can be analyzed to demonstrate how well the system is working, where inequalities exist and what strategies are effective.

We recommended giving responsibility within the ministry for a systematic approach to the analysis of Indigenous student data, working with school districts and Indigenous communities to develop local capacity to use the data and to ensure that standardized monitoring and assessment is happening. The recommendation was about reporting on results. We wanted to see the ministry defining and implementing expectations for regular reporting, provincially and in the school districts, on Indigenous student achievement, on progress in meeting targets to close gaps and on the effectiveness of strategies for Indigenous students.

This graphic from the report summarizes the ministry’s progress in implementing the 12 recommendations. A green dot represents fully or substantially implemented, and yellow is partially implemented. Overall, we found the ministry has taken substantial action and has made progress on all of our original recommendations, including four that it has fully implemented. The remaining eight are partially implemented.

Emily will walk you through those findings in more detail in the next slides.

E. Yearwood-Lee: Thank you, Jessica.

We found that the ministry has fully or substantially implemented four of the recommendations from our original audit, and these are listed up here on the slide, which I’ll go through now.

Recommendation 5. The ministry has revised its policy to ensure that school districts are only granting Evergreen certificates to students with significant disabilities. An Evergreen is a certificate given to students with significant disabilities who are not able to complete graduation requirements. During the 2015 audit, we heard that Indigenous students were more likely than non-Indigenous students to be granted an Evergreen, even when they didn’t have a special need. The ministry revised the policy and also monitored and followed up to make sure that the practice was fixed.

Recommendations 8 and 9. For this, the ministry recently hired a director of Indigenous analytics to improve how it uses data to focus on the gaps between Indigenous and non-Indigenous students. The ministry also demonstrated that it is embedding data analysis in its own planning and policy work.

Recommendation 6(a). The ministry has implemented a new curriculum to teach all B.C. students about Indigenous culture and history.

This slide goes over the recommendations that we found were partially implemented and on track. We found the ministry was on track to fully implement five recommendations if it keeps going with what it has planned.

The B.C. Tripartite Education Agreement, or BCTEA, was particularly significant to the ministry’s work on many recommendations. The BCTEA was signed a year ago by the federal government, B.C. and the First Nations Education Steering Committee, or FNESC. It sets out how the three parties will support First Nations students to be successful in the education system. Several of the provisions under BCTEA, as well as other works separately undertaken by the ministry, will address the recommendations if carried out.

[10:40 a.m.]

Recommendations 2 and 10 were about making sure that districts have the capacity to do the things that are needed to close the gaps. The ministry piloted the Equity in Action program in 21 districts and, in 2019, committed to rolling it out across the province. That program guides districts through an intensive year-long process of identifying and addressing local obstacles to Indigenous student success. The ministry is also running a program to support data analysis capacity in districts.

Also under BCTEA, there’s funding and support for districts to negotiate local education agreements, or LEAs, with local First Nations. For everyone’s information, an LEA sets out the terms for a First Nation to pay money to a school district in exchange for educating its students. This can include terms that set out which data the school district will collect and provide to the First Nation on their student outcomes.

Recommendation 3 was about taking action with districts that had not achieved expected results over a period of time. Under BCTEA, the ministry is planning for team-based interventions in particular districts. The teams will include a representative from FNESC. We also saw examples of the ministry taking action in individual districts.

Recommendation 4 was to evaluate the effectiveness of enhancement agreements and targeted funding. These were two key Indigenous education strategies at the time of the 2015 audit. Since then, the ministry has moved away from enhancement agreements, while targeted funding is being reviewed as part of the larger funding model review that is being done by the ministry.

Finally, recommendation 6(b) was about supporting a safe, non-racist learning environment. This includes professional development for teachers to support them in their work with Indigenous students and families, as well as cultural awareness training for district employees and promoting more Indigenous educators in the system.

We found that under BCTEA, there is a requirement for a yearly professional development day for teachers, as well as a yearly meeting co-hosted with FNESC for school district officials, which includes cultural awareness. The planned rollout of Equity in Action across the province is another example of the ministry implementing those recommendations.

The final slide here with the final three recommendations. It is not clear whether the planned action will lead to a fully implemented recommendation.

Recommendation 1 was to collaborate with key groups to create a systemwide strategy for closing the gaps. This is important because the ministry has a lot planned and there are multiple groups involved in doing the work. We found the ministry drafted a strategy, but it was never released. So there is no single plan pulling together all the different elements of the work with clearly stated accountabilities.

Recommendation 7 was to collaborate with key groups to define and implement standardized monitoring and assessment at key stages in a student’s education career. We saw requirements under BCTEA for a data committee and certain types of data collection, and the ministry has increased the data it collects, for example, through the revised student learning survey. But there is a key problem with the implementation side of things.

The foundation skills assessment, or FSA, is the earliest provincially required assessment of reading, writing and math skills. It is supposed to take place in grades 4 and 7. But participation has been lower than the level required for the results to be considered valid. This is core to being able to say that standardized assessment and monitoring are being implemented.

Lastly, recommendation 11 was for the ministry to ensure regular reporting on achievement for Indigenous students on progress and closing gaps and on the effectiveness of stra­tegies for Indigenous students. We found this was happening provincially, especially with the new provincial reporting website. However, the expectations for school districts were much less clear.

The ministry’s previous accountability framework for districts, which included required reporting, was removed in 2015, with the communication that it would be replaced by the framework for enhancing student learning. This had not been rolled out by the end of the audit, and it wasn’t clear, during the audit, what the framework would expect in terms of reporting by districts on Indigenous student outcomes.

In closing, we wanted to acknowledge that full implementation of our recommendations requires multiple parties to be part of the solution, including government, school districts, teachers, unions, parents, students and Indigenous leaders and communities. Much good work has been done, and the ministry has taken action to address many of the original recommendations. The gaps are getting smaller, but the ministry needs to continue its work to close the gaps.

On a personal note, it’s been a real highlight to be involved with this progress audit. Back in the mid-’90s, I was part of a group of high school students in Prince Rupert who took the very first First Nations studies 12 class as it was piloted. I remember the teachers telling us that the people who made decisions about what gets taught in schools would be interested to see how the class went.

[10:45 a.m.]

That class had a real impact on me, and this audit has provided an opportunity to reflect on that. I’m grateful for that. So thank you.

S. Bond (Chair): Sheila, can you just do me a favour and put the slide back up at the beginning, the one of the graph, for a minute? I just think people should take a minute, before we hear from the ministry, to actually…. I mean, no one is suggesting today there isn’t more work to be done. But I think it’s important to just take a look at the graph for a minute.

I just think it’s important sometimes in our work to also just take a look at where we come from. You know, there’s more work to be done. We currently have a 16 percent gap, but look where it started. I think that’s an important segue into hearing from the ministry about their response.

Scott, are you going to begin?

S. MacDonald: Yeah, I’ll begin.

S. Bond (Chair): Scott, we also need you to introduce your staff as part of the record.

S. MacDonald: For sure, I’ll do that.

S. Bond (Chair): As you begin, maybe just let us know who you’ve brought with you.

S. MacDonald: Thank you, Madam Chair and Members.

Right off the top, I think it’s important that we also acknowledge that we’re on the traditional territory of the Lək̓ʷəŋin̓əŋ-speaking people and the Esquimalt and Songhees First Nations.

I am joined by members of our team. It’s a collective team here, with Jennifer McCrea, our assistant deputy minister for our learning division, with the responsibility for all of our Indigenous programs; Cloe Nicholls, who is our executive director in the same division, with responsibility for this file; and Mary Mollineaux, who has joined us today. She is a K-to-12 policy analyst with the First Nations Education Steering Committee and really very much part of our team.

We look at this as a collective more than just a ministry endeavour. It’s one that involves all of our partners as we do this. FNESC is key in the work that we do in the education system in British Columbia.

I’m very pleased, Mary, that you’re able to join us here today.

I will walk through a series of slides. We’ll start, maybe, with the first piece, just a quick overview of this report from our perspective. I think the opening comments were very significant. I appreciate putting this slide back up to talk about some of the changes and improvements that have happened. There has been some significant action on this file, I think one that we should be very proud of.

I think everyone agrees there is much more work to be done. Quite frankly, that work never will be done. It’s something that’s ongoing and a focus for our ministry as we talk about the success of all kids. We truly mean that. It’s all kids. The strategies and processes we’re putting in place will highlight some of the things we’re doing collectively to do that.

I speak with some confidence that I’m hopeful we can come back in future years and see that graph continue on that same trend, to the point where there is a point in the future where we actually don’t have a gap and we’re talking about all kids and improving everyone’s outcomes, with no gaps.

I think the first piece on this…. We acknowledge, obviously, that the report made 12 recommendations that really begin to start to close the gap and achieve parity of educational outcomes. From our point of view, the 2015 audit…. The ministry found that in many ways, we had not provided sufficient leadership in some cases and the direction to close the gaps that we needed to do.

Some of the analysis on the learning outcomes data and the monitoring that goes along with that required some additional efforts as we went forward. I think even though we’ve reported on some of those outcomes, there’s much more work to be done.

We took the approach to, obviously, accept all 12 recommendations in the report. I think we’ve worked very closely to begin to make progress on them. I think the progress report of 2019 is evidence of that. I’ll go through each one of those recommendations as we go further to kind of walk through what’s been done and more work that can be done.

This is, obviously, a key priority for the ministry. So we welcome those recommendations. I think it did an effective job of shining the light on where we want to go, where we’re doing well and areas where we can improve, with a focus on closing those equity gaps for Indigenous learners.

[10:50 a.m.]

I think as much as we’ve made, as I said, significant progress going forward, there’s significant work to be done going forward. So we’ve taken the analysis that you see there on the slide, and we’ve actually, for own internal planning processes, grouped them not in two categories but three. I think there is agreement that four of the recommendations have been fully implemented. I’ll walk through some of the things that have happened there.

Then there are eight that are remaining. Of those eight that are remaining, there are five of them which we would characterize collectively as being on track. They’re certainly not fully implemented, but they’re on track. It will take time to make some of the full implementation of those things. But we’re confident that the work and the initiatives put in place will lead us there.

Then there are three that are partially implemented and that, I think, are going to require a little bit more effort and dedicated focus to ensure that we can get there. We’ve submitted, as part of this, a very detailed action plan that includes all the specific actions we’re doing, all the details and resources. I, obviously, won’t go through that in detail today. I’d like, over the next few slides here, just to give you a bit of an overview of what some of those are and give a sense of some of the things we’re doing.

In the fully implemented category, there are the four items that we have: Nos. 5, 6(a), 8 and 9. Five is the one that we often call the Evergreen certificate. It’s officially called the school completion certificate. I think, as noted earlier, there was, in some ways, maybe, a misinterpretation of how that was being used. It was being used in ways not intended originally.

In 2016, the ministry actually changed the student credential order to ensure that the Evergreen certificates are limited to students who have been designated one of the categories of the inclusive education policy and have, importantly, an individual education plan to support that. So it’s limited to those students, limited to the focus it was intended to do and, in that process, ensures that we maintain high standards for everybody else who should be on a regular program. We notified the districts of that, and we continue to monitor for ongoing compliance.

I know there’s been a decrease in this. We’re starting to see a decrease of inappropriate use of this, and we have a commitment that we will continue to monitor this with school districts over time.

So 6(a) is talking about our new curriculum, something that I think the ministry is very proud of. We’ve had some significant recognition globally for the work that has been done in British Columbia as we’ve updated and modernized our curriculum. The world around us is changing in significant ways, and our curriculum is making an effort to keep pace with that. It will be interesting to see, as the world continues to change, how we keep pace with that change.

A big, big piece of that, of course, has been the establishment of Aboriginal content all the way through the entire provincial curriculum. That’s being fully implemented this year, right from K through 12. I think we’re probably one of the only jurisdictions — certainly, in Canada and probably in the world — that has been able to have that kind of a focus that’s woven right through the entire curriculum.

We published Aboriginal Worldviews and Perspectives in the Classroom. It’s a teacher guide. As much as we have a provincial curriculum, it’s also important that we have some other support materials for teachers to ensure that they have the supports necessary to implement the same properly in the classroom. The teachers that I talk to and work with all want to do the right thing. They’re worried about making mistakes in that process. Having additional resources is a tool that’s very helpful and welcomed by them as they do that kind of work in their classrooms.

So 8 and 9 really kind of connect together the whole notion of having a systemic approach around data analysis and then using that in a way to make informed decisions. We talk a lot in our ministry about doing the diagnosis before you write the prescription. You need to understand what’s happening in your district, and it comes from a deep understanding of what’s happening with your kids. You saw the chart there at the provincial level. But you’re right, there is a great diversity that happens in individual communities. We have a diverse province with 60 school districts, with 1,600 schools. They’re all unique and different. We need to understand that context and understand what’s happening and use that information to inform our decision-making.

We’ve enhanced some of our website materials, so we could disseminate that information out to schools. We’re getting better around the systems we’ve put in place on the technical side. We have regular meetings with FNESC and other partners to improve some of those data strategies that we’re doing. We’ve increased the capacity inside of our ministry as far as just basically hiring people and investing in the right kinds of tools so we can use these new insights in ways that make sense for us.

[10:55 a.m.]

In fact, we’ve hired a new staff person. We have a director of Aboriginal analytics in our ministry, and her job is entirely focused around understanding this complex world of what’s happening with student performance from an Aboriginal lens in all of our schools in the province.

Beginning this year, we’ve actually got some new assessments. We’ll have new assessments in grade 10, soon to be coming in grade 12, that are required for graduation. You’ll see good participation rates around some of those assessments, which become an interesting lens for us to understand what’s happening in students. We often refer to them as early indicators.

When you can see if there’s a student in grade 10 not performing where you’d expect, you still have time to make an intervention and change their trajectory in time to get them back on track for graduation. We’ve got a number of districts that we are working with and monitoring and helping that have had some profound impacts by making some very subtle changes based on that information that they have available for them going forward.

Our next slide talks about some of the things now that are more substantially implemented, starting with recommendations 2 and 3, where we talk about the capacity-building across the districts. And then I’ll go further on to taking action.

Around capacity, we’ve been able to secure some resources that we’ve put out — very targeted — specifically around building their capacity with school districts to work collectively with their local First Nations. This is done in the context of our B.C. Tripartite Education Agreement. This is a key thing where we’re actually asking districts to negotiate local education agreements that really begin to put a focus around the kind of quality of programs that they have in their communities, based on their local needs. It takes some work to do that, and we’re investing and ensuring that they’ve got the time and ability to begin to do some of that kind of work as they’re doing things.

We’re working on a thing we call the Equity in Action project. I’ll talk more about it later, but it’s an interesting process where we’re actually able to go into districts and ask some of those really hard questions and get underneath some of the things that are happening in our districts to find the root causes, the actual things that may be driving behaviours, that may be driving performance issues in their districts, and for them to fully understand what’s happening in their district. With that understanding, it’s much easier to understand some of the things they need to do that are going to have positive impacts for their students in their local communities.

We continue to host provincial gatherings of folks together. I’ve been successful in bringing our superintendents together on a regular basis for regular conversations. We’ve brought FNESC into those rooms to meet with us. This is a collective challenge we all have, and there’s a sense of accountability that comes with that. Our next meeting will be on October 16. We’re bringing all of the superintendents and all of the First Nations together, and this is the agenda. This is the topic that we’re working on.

There’s a tremendous amount of shared expertise in our province. There are examples we can share where you’ve got districts where their Aboriginal kids are out-performing the rest of the kids in their district. There are showcases that we can use to help other districts. We talk about our shared responsibility. We have one education system, and collectively we need to work together and show that everyone can be successful as we do some of that work.

We also do a number of different regional sessions as well as we get people together, given the fact that, often pragmatically, it’s easier to get people together regionally, but also there are a lot of shared interests there and shared learning that we can do around those kinds of work.

We’re also setting up something we’re calling educational outcome improvement teams. These are teams that can actually begin to come in and help folks that need some additional supports. There are areas that we have identified where we’re not quite where we want to be. There may be some challenges, sometimes turnover of staff, but there is expertise we can bring from other parts of the province to come in and share someone’s learnings.

We’ve had some really interesting examples when we actually come into communities and bring in a provincial lens. But then you add the local lens into that conversation, and it’s very, very interesting to see some of the things that happen and some of the very immediate responses you get from communities as we do some of that work.

We’re quite optimistic that we are building the capacity inside of the system. It’s substantially implemented, but I would argue that it’s one of those things that will never be done. It will be ongoing work that we need to do as we continue to improve around the province.

The taking action piece is the other part of this. I talked initially about these Equity in Action projects. We’re working with districts, often with historically low outcomes with their Indigenous learners, and they’ve requested to be a part of this initiative. They’ve voluntarily coming in, and we’re actually looking at ways in which we can work collaboratively with districts to address their problems and come up with what we often call co-developed solutions as we do that work.

[11:00 a.m.]

In cases necessary, we have the ability inside of our School Act to bring in a special adviser. We’ve done that in a number of cases where we have appointed a special adviser to come in and actually help the district. It’s not meant to be a punitive thing, but it’s one where we can actually bring in some expertise that can help them solve some of the things that they’re working on in their individual districts.

We’ve got examples of the educational outcome improvement teams. That’s part of the BCTEA agreement. And we’ve got districts that are actually building district capacity plans. We’re getting them targeted data analysis to do some of this kind of work. And I’ll talk later about the work we’re doing underneath our framework for enhanced student learning, which is a critical piece of our overall action plan as we go forward.

Moving on to more items that are substantially implemented. This is No. 4, and then 6(b). They kind of talk about the effectiveness of the targeted funding and enhancement agreements. These are strategies that have been in place historically. I think when you look at that trajectory we’ve had and where we started back in the late ’90s, some of these things have been working. I think it’s important for us, as a ministry, to understand what tools we have available that are working, ensure that we maintain them and make the adjustments necessary — having a reflective look at that is, I think, really important for us in the work that we’re doing — and ensure that our policies are constantly updated and improved as we go.

Related to the targeted funding, folks in the room are, I’m sure, aware we’ve been doing a review of our funding model. This is right across the board — the $6.6 billion that goes out to school boards. We’re looking at all aspects of that. Front and centre of that has been an acknowledgment that we need some resources that are in some way dedicated and identified for First Nations students as part of that review, and the report that came out was very clear about that piece of this. We’re seeing this as an effective tool that districts use — those resources. They’re able to apply them in ways that drive better outcomes and better services in their particular communities.

As an interim step around that, last year we actually increased the per-student amount. It’s up to $1,450 per student. It’s targeted out for them. That’s on top of the rest of the student allocations that go out around the province. We’re seeing that there are resources out there necessary to do that. We’ll continue to look at that and monitor it as we roll that out and as we make decisions around our funding formula. In the year ahead, this will be front and centre in that work as well.

I can point back…. In 2016, we did formal research. We contracted some researchers from a number of universities in B.C. to gather research on the effectiveness of the enhancement agreements — how effective they were in closing gaps in the outcomes of Indigenous and non-Indigenous students. Much of that research was actually captured inside the Equity in Action project. As part of that, we made a policy decision that we’d want to invest in that type of activity. Knowing we’ve had a certain number of results around the enhancement agreements, it was time to pivot and make some further investments that kind of get at, as I described, some of those root causes. It has been, so far, quite successful.

We have additional research underway right now to monitor those and to see the effects of that so that we actually know those investments are working and we can use an evidence-based assessment to say that this is an effective measure, going forward, or make adjustments as necessary, as we move forward in that.

Another thing we’ve done around this is professional standards for educators. This is actually a pretty significant piece of work that has happened through our B.C. Teachers Council. We have a number of standards that guide the profession of teaching, as you would in any profession. For the first time, we’ve added a ninth new standard, and this one really does talk about the whole notion that we need to address racism by stating that educators respect and value the history of First Nations, Inuit and Métis in Canada, and we need to understand the impact on the present and the future that they’ve had.

Educators have a significant role to contribute to truth and reconciliation and a better understanding of the history and the cultures of First Nations, Inuit and Métis in our country and in our province. These standards encourage educators to critically examine their own biases, their attitudes, their beliefs, their values and practices to facilitate change. So that’s something that’s out there for the 40,000-some-odd teachers in the school system today.

The other things we’re looking at…. I mentioned earlier that we’re doing some more professional development. Professional development days are key as a part of the tools we have to improve our teaching force on a regular basis. We have dedicated time this year and over the next couple of years so that we are focusing some of that training around Indigenous education.

[11:05 a.m.]

This is a responsibility of all teachers to ensure that all students are successful, and they understand that as they’re moving forward.

I’ve also mentioned that we have some other funding. We’ve done some other pilot projects that we have, and we’ve actually been investing in some teacher education programs to add additional seats.

The population of our First Nations teachers in the province lags behind where it should be on a per-capita basis, based on the rest of the population. I think there’s some more work to do. So some of those investments will start to pay off as those students move through those teacher-training programs in our B.C. universities.

Moving on to recommendation No. 10, it talks more about developing a capacity to use data and evidence — a number of initiatives that have taken place here. Here, I’ll talk a little bit about the framework for enhanced student learning that we’ve put in place, and we’re working actively with school districts. This really becomes our accountability framework that we use with the school system and includes all the things that we want to be doing around driving better outcomes.

We’re working very closely with the School Superintendents Association and all their chapters to begin to start having a much increased capacity around evidence-based planning and finding ways to involve their local education partners, including boards of education staff and the Indigenous community, in planning for those processes.

We’ve done a series of regional sessions around the province. We’ve done system-wide capacity building, including team-based supports that focus on continuous improvement and supporting of Indigenous student success. Much of this work is done in compliance with the BCTEA agreement we’ve talked about that takes steps around building a provincial capacity team.

We’ve got a provincial advisory group for enhancing student learning with all of our education partners. They’ve been helping us shape up some of the work that we’re doing.

We have targeted analysis of school districts. I’ve spoken a bit about that — around how we’re actually looking at the individual performance of districts and then doing some very targeted follow-up around areas that need some increased support.

I’ve also talked a little bit about just our own staff capacity in the ministry — that we’ve actually got dedicated staff with the skills and the tools necessary to do this work. It’s being led by our director of Indigenous analytics.

The last ones I’ll talk about are the ones that really have been partially implemented. We have more work to do around this. The first one is the recognition around the notion of a provincial Indigenous education strategy. This has a bit of a history in the ministry. I’ll just give a little bit of context in that we were in the process of developing a strategy.

I think the strategy, quite frankly, was not well received by a lot of our partners. I think we could do better with it. So we actually pulled back on that process in a way that, rather than forcing a strategy that may not get the outcomes we’re looking for, let’s do this right.

What it is that we’ve materialized out of that is that through these processes, we negotiated a successful B.C. Tripartite Education Agreement. This is an agreement with, obviously, B.C. First Nations, with the province of B.C. and also the federal government. The federal government has a role to play in the funding of First Nations students in on-reserve schools.

There are the three of us together that have a shared responsibility around this. We have an agreement. That agreement really is our strategy. It shapes the things we’re trying to do. It addresses this notion of equitable funding.

For a long time in our province, we didn’t have equitable funding around the province. We have that now — a way in which we can flow those resources back and forth as kids move. It’s important that we as bureaucrats understand that we need to be putting the process in place so that kids aren’t disadvantaged through some arbitrary rules we have. So equitable funding is key.

Transportation. It sounds obvious, but to learn, kids need to get to school. Lots of barriers around that. This agreement has provided resources from the federal government. We’re putting processes in place. As you know, in your communities, there are always complications around scheduling and getting the services in place. That’s in play now. We’re working actively with every district to ensure that that’s happening. So that’s part of our strategy.

We talked about outcome teams earlier. This is part of our strategy as well. We’ve got dedicated staff with the right kind of capacity focusing on the right outcomes.

We’ve got our own FNESC ministry data team. They spend their time drilling this thing in and understanding where we need to put our efforts collectively. Part of our strategy is our professional development day that we have. We have teachers all across the province actually spending their time focused around how they can improve outcomes for First Nations students.

That’s the broad framework. Building on that is our framework for enhanced student learning. I’ve talked a bit about that. But this is really a provincial-wide system around accountability. We want to look at the right kind of indicators that we have where we can monitor the success of kids.

[11:10 a.m.]

Are they coming to school well prepared? Have they got the numeracy skills necessary? The social-emotional skills, numeracy, literacy? I’ve talked about that. Are they prepared for careers in life after school and post-secondary education? Quite frankly, we looked at the chart already, around graduation. These are the key measures that we look at that are part of our framework for enhanced student learning. They all fit underneath this and give us direction as a strategy of what we’re doing.

I’ve talked a lot already around our Equity in Action project, which is a systemic approach to really look at what those gaps are, identify the systemic barriers. We often talk inside the context of that or this notion — the racism of low expectations. We need to have high expectations, high standards for all kids. Our job in the system is to make sure that we hold that high standard for them and help every single kid get to that high bar. That’s work that’s going to be ongoing in our ministry and in our sector for quite some time.

Our next slide talks about No. 7. Again, this is around implementing standardized monitoring and assessment of some of our key indicators. We’ve done a fair bit of work, and I’ve talked already about our framework. I think it’s important just to kind of understand that we do have some very good tools in British Columbia. We’ve got our student learning survey, which gives us a really interesting lens into the social and emotional well-being of students, self-reported by them, and some great insights that we can actually follow up with, with districts.

We talked about our foundation skills assessment, which assesses foundation skills in grades 4 and 7. We’re adding in grade 10, which is a requirement. There were some comments around the participation rate. I think what’s important around the participation rate is that it’s varied around the province. People often criticize that it’s low and not valid because of it. It is valid in a large number of districts. We have districts with a 100 percent participation rate. There’s not a single kid who doesn’t write that assessment. There are a large number that have 90, 95 or 98 percent of their kids writing this.

We also have districts with very low participation rates. So you can’t just look at the overall average. You have to look at it by district. We have some strategies following up and some very direct conversations with a number of districts where, if their participation rate is low, they have an obligation to understand which kids are not at reading level, which ones have issues. These assessments are fantastic predictors of things that happen later in life, and our ability to understand how kids are performing allows us to do our job, collectively, very well.

There’s more work to be done on that for sure. These are some of the tools we have available for us, and we’ll be looking at adding some other measures that help us and give us a better indication of how the system is performing and, most importantly, give us some insight around which strategies we need to take where, to ensure that all kids have got the outcomes they deserve.

The next one is partially implemented. It’s No. 11, which is to define and implement expectations for regular reporting. I’ll reference again the work we have done around our accountability framework. This is being worked out over the next year. We’re working in a number of districts right now.

I’m bringing together all of our superintendents in October, along with their board chairs and the secretary-treasurers. The focus of that work is around the strategic planning that they’re doing and their need to begin to report out on these things in a public way that’s transparent and a way that actually puts the spotlight on some of these things.

We have some very good examples in this province where they’re doing fabulous work around this, and some others where we need some more improvement. We do have a systematic approach around some of those kinds of things, and we’ll be looking at an annual reporting cycle with districts and increased expectations around that as we go. We’re working with our educational partners, with a number of different advisory committees and different types of things, to have the right kind of mandatory reporting and multi-year strategic plans going forward.

In summary, thanks for your patience going through this volume of information. I think, clearly, the report — I can say this — from 2015 was significant in the history of education in British Columbia. It was a call to action in many ways, I think, for our sector. We were seeing some results that were improving, but it’s a good reminder that we need to do a whole lot more.

You’ve got a ministry, and as a sector, everyone is saying the right things, doing the right…. There is an acknowledgment that we have this work to do, but we need ongoing discipline. It’s about execution on some of these plans. Its about us maintaining that focus on a regular basis to continue this work that will be ongoing, quite frankly, forever, as we do our work around improving outcomes for kids in our province as we go.

[11:15 a.m.]

The partnership that we have with FNESC — I think other jurisdictions in Canada would be envious of that. We work very well together, and I think there’s a collective vision that we have for our province and the outcomes that we’re looking for. I think we can say that we’ve been very successful so far, and we look forward to seeing even more progress as we continue to work forward in the years ahead.

I’d like to thank everyone for their time today, and I look forward to any questions that people may have for the Ministry of Education.

S. Bond (Chair): Thank you very much for not only the report but the work that is being done. Thank you, also, to the Auditor General’s office for their presentation. And thank you for your personal comments about the First Nations studies program. It’s always good to see the end result of some of those things that happen in the school system, so thank you for sharing and for your presentation.

I am sure there are lots of questions, so we’re going to start a speakers list. I know I have a large number of them. I’m hoping my colleagues will cover off some of them in their questions. I think there’s such a significant interest by committee members around this topic.

J. Thornthwaite: Thank you very much for your presentation and, obviously, for the work that you’re doing on behalf of all First Nations students — and, obviously, all students that aren’t necessarily First Nations. I do have a lot of questions, so you can maybe take others in between.

S. Bond (Chair): Why don’t you get started, and we’ll just work our way through them. I’m sure that everyone is in a similar situation. I know that you have an interest in the school system, from your past.

J. Thornthwaite: Exactly, yes. I know that when I was on the school board, way back in the olden days, the performance of Aboriginal students was really, really important, and I was very interested to see that graph that the Auditor General had brought forward. I appreciate that this 70 percent rate is actually an average and that not all school districts are up there and that some school districts are higher.

I’ll start my questions. In No. 3, page 5, the comment is: “Take action when school districts have not met…the expected results.” First of all, what are the expected results, and are they just graduation rates? You had mentioned a special adviser, but what exactly does the special adviser do for school districts that are not meeting whatever these expected results are?

S. MacDonald: I’ll frame this around the…. I’ll start with the expected results. I’ll talk a little bit about some of the things we’re doing inside of our framework for enhanced student learning. The expected results are a number of things that really align up with the values we have in our school system. What do we value as outcomes for our system? I think most people would agree that in a successful system, students meet the basic requirements to graduate. That’s certainly one of the things we’ve talked about.

Increasingly, I think, in today’s world, a graduation certificate is not sufficient anymore. It’s now into post-secondary education to be prepared for the workforce. So I think we’re looking at those indicators to see: “Are we actually adequately preparing students to make a successful transition to post-secondary with the skills necessary to be successful there and then transition to the workforce?” None of those things happen without the right kind of foundation, and it often starts with social and emotional well-being. You have to have that foundation. If kids don’t feel safe in school or they don’t feel welcome in school or they don’t have adults who care about them, they’re not going to be successful.

We have now tools available to actually begin to understand those elements. It’s an expectation that schools are creating that environment for kids. We’ve got examples from the past where First Nations kids didn’t always feel that way, and then we wonder why they didn’t graduate or didn’t complete. Those are some of those foundation pieces.

Then there’s the other, learning, side. It’s the basic literacy skills, numeracy skills. We’ve got some really interesting information that shows that you can predict very early on, in grade 4, in grade 7, the likelihood of them graduating, the likelihood of them being successful in post-secondary, based on those kinds of outcomes. Those are the kinds of things that we look at collectively. That’s from a provincial lens.

When we go into districts, they often have much more detailed, community-based information that they look at. There are indicators of things that are successful for them, be it individual course structures…. They look at attendance kinds of things that are indicators they can monitor and do some work. Where we find districts that might be challenging, often they need some help in actually pulling themselves together, and it’s helpful having an outside expert come in.

[11:20 a.m.]

This is sometimes where a special adviser may come in, and it can be done formally or informally, where someone is available to come in and actually help facilitate a conversation, maybe connect them with some other outside resources. They can come in and do some work with them, ask some of those tough questions. Often we’ve found, when you go in, it’s just facilitating the conversation. Many times they know the answers themselves. They need to be asked the right kinds of questions, and they understand these things.

To give you an example, we had an adviser working in one district, and we were struggling to find out what was happening — in this case, their Aboriginal results. We found, as we looked closely at it, their girls were doing extremely well. In fact, almost all of them were graduating. The challenge became their boys.

Then the next question is: why? What happened? We could actually trace them down very early on. As early as grade 4, we started seeing early warning signs. The districts often knew who those kids were, which families they were, which schools they were. Then the question becomes what strategy to put in place to begin to change that.

We talk about changing the trajectory for kids. What can you do for that kid in grade 4 that’s going to put him on a different trajectory so that graduation becomes automatic eight or ten years later?

That’s the kind of work that happens. There’s no one set formula with it. I think it’s important to understand, in our 60 school districts, with the diversity we have, there are very, very unique and different kinds of approaches and strategies, and depending on the context and the time is what we’d end up doing in those particular cases.

J. Thornthwaite: Thank you. I guess my point is: how do you encourage school districts or, in this case, individual classrooms — or it could come down to individual teachers — to actually take ownership of the results of the success or not success of individual students?

S. MacDonald: I guess you’ve summarized the work of the Ministry of Education. That’s what we do, for every kid at every level.

There are a couple of ingredients that are interesting in this case. One is we have a new curriculum that’s in place that has very clear outcomes and expectations we have around Indigenous learning that permeates through the entire curriculum.

One of the features of that that I think is very powerful is it’s not a separate course over here, or it’s not an instructor over there that has responsibility. It’s every teacher in every school who has responsibility in every subject area. It’s not something that just happens down the hall in a First Nations class. It’s in my math 8 class. There’s stuff I need to be covering, and I’ve got a responsibility. In my grade 4 class, I’ve got responsibility for it. I think that’s important.

We’ve changed the standards for teachers. It’s a requirement. It’s an obligation you have as a teacher, as a professional in our province. The values we have in our province are that you have a respect and a belief in our values and understanding of your role as an educator as it relates to Indigenous education. It’s our ninth standard we put in place.

I think the rest of it is, you know, what we are doing with superintendents, who are managing their principals, who are managing their teachers. How do you create that environment where that happens? It’s a multipronged approach that you have, and it’s an evolution.

I think in British Columbia you see we’ve got a 20- or 30-year overnight success story. These things percolate, and they change over time. We’re much better than we were in the 1990s and the early 2000s, and I think we are still on that journey. I would hope that another ten years from now, you’ll see an even greater engagement with teachers, a better level of sophistication and understanding as the new generation of teachers who come through have a greater appreciation.

Having spoken with the deans of education and knowing about the programs that are run at the universities, they were very different when I went through and did my teaching degree a long time ago. The new teachers coming out have a much greater sophistication and understanding of the responsibilities they have, the expectations they have. The tools that they’re given now to be successful in this kind of environment are ones that I think didn’t exist 20 or 30 years ago.

J. Thornthwaite: Is it required that all teachers attend the professional development days?

S. MacDonald: Yes, it is.

J. Thornthwaite: So every single teacher.

My last question before I let somebody else go is…. I’ve got lots more. You mentioned…. In my day, one of the barriers to getting data with the FSAs was this campaign that the union had to discourage parents from allowing their children to actually take the FSA. Obviously, in the ministry’s goals is getting the proper data and data analysis. I do know that the Representative for Children and Youth at the time wasn’t very supportive of the FSAs because of that exact reason, but needless to say, it was always a barrier.

[11:25 a.m.]

Certainly, when I had kids in the school system, we were heavily pressured not to take the FSAs. I’m just wondering: in what area does the union have influence on getting data?

S. MacDonald: As I’ve indicated, there’s a very wide range of participation rates, and there are districts and schools with a very high degree of commitment to understanding how their kids are performing. This isn’t so much about writing an FSA; this is understanding how your kids are performing in the areas of numeracy and literacy. Are they at the stage you would expect them to be? We have districts, literally, that have 100 percent participation rates. It’s a commitment that they’ve made. They’ve shared that with their parents. They understand it, and they hold them accountable to do that. It is a provincial requirement to do the foundation skills assessment.

There are four or five or six districts that have a very low participation rate. We’re working on engaging with them around that, and there has been an active campaign. But I think we need to think about the benefits we have around these types of things — that they have in our system. The fabric that we have in our education system requires us having that understanding. Representative of Youth has been clear about that. It shows up in the work that we do here, as a piece, and I think we need to be putting some of those things aside and focusing on those needs.

That being said, this is one measure inside a vast array of tools and information that we have around student performance, and I wouldn’t want it to be the only measure that we have. Schools and districts have lots of other touchpoints with kids and lots of classroom-based information we use to understand how they’re performing.

Often, when we go into a district, that’s the starting point of a conversation. We say: “Look. We see this pattern emerging in the FSA. But what does that tell us? What more do we know?” And it starts it. We wouldn’t want to make a decision just based on one single data point, one single assessment. It’s just that starting point in that conversation. So I think you’ll see that districts, in many cases, have layers of information underneath that, which allow them to make informed decisions around the kinds of programs and services they offer kids.

B. Ma: I also have quite a few questions here, but I think what I’ll do is kind of ask them all in a block and then turn the floor over to somebody else to answer them. So be prepared for a few questions coming out your way.

I do want to first acknowledge what the Chair had mentioned earlier in the session. That’s that while absolutely there is much more that needs to be done in order to close the gap, looking at the graphs when I was reading through the report, going from 39 percent to 70 percent is nothing to sneeze at either. That is a substantial improvement. I’m sure there will be a lot of critics who will be critical of the timeline and insist that it needs to happen faster, and it probably does, but I do want to acknowledge the success and the improvement so far that has occurred as a result of the work of many people over the last 19 years and even further, into the 1990s, as you’ve mentioned before.

I am also very grateful for Ms. Yearwood-Lee’s comments, as well, about her experience with that first pilot course back in the ’90s. I know that when I was going through high school and school in the ’90s and early 2000s, this wasn’t a part of our curriculum, and I see it now being represented. I see now that knowledge, the knowledge of Indigenous peoples and what we have done to them, as settlers and colonial governments, is really expressed and represented very well by young students today.

I mean, really, when it comes down to understanding why we need to reconcile for what we’ve done in the past, it’s not the young folks that we need to convince of that fact. It’s the folks that maybe went to school a little bit before that who are where the gap in knowledge is. So I think that the school system has done very well so far in improving people’s understanding of our relationship with Indigenous peoples and how we need to make that better.

Reading through the report, it also reminds me…. There’s part of the report that talks about, of course, the impact of the residential school system and how much impact that continues to have on students today. I’m reminded of a beautiful story by….

[11:30 a.m.]

Actually, it’s out in North Vancouver. There’s a school called Eslha7an. I’m not sure if you’re familiar with it. It’s in North Vancouver, and I believe it’s operated by the Squamish Nation. It’s called Eslha7an, and it’s an alternative school. The building used to be a residential day school. Today it’s been converted into a school that is operated by the Squamish Nation. It’s a place for them to actually reintegrate culture and reteach culture to their students who have been, maybe, struggling in the regular school system. I think that’s an absolutely beautiful story. A lot of that goes into, kind of…. Pieces of those kinds of stories go into the kinds of successes that I think we need to continue to see, moving forward.

I’m going into my questions after that diatribe. I’m wondering now, though…. It sounds like there is a very wide range of success and improvement among the different school districts. I’m very curious to know which specific school districts are beating the curve and doing very well and which ones are very, very far behind. I’m also curious whether regionality has anything to do with whether or not school districts have had more or less success. The reason why I bring up regionality is because you mentioned transportation challenges. Certainly, transportation challenges are more acute in certain areas of B.C. than in others.

I’m also curious about the variance in graduation rates, even within Indigenous peoples — among people of Métis descent, people of Inuit descent and First Nations. Whether or not…. I’m not entirely sure how strong the various populations between those three groups are in various regions. Are there substantial differences there that you’ve noticed that are statistically significant?

I’m also curious about some numbers around the use of the Evergreen certificate. How much have we improved in terms of not misusing that designation? Do we have any numbers around what it was like then versus now and how much further we have to go through?

Finally, my last question is actually about the B.C. transformative change accord, which was signed in 2005, and how that relates to or is different from the BCTEA that was signed in 2018. Can we get a sense of…? I don’t really understand what the transformative change accord is in comparison to the BCTEA.

Thank you so much.

S. Bond (Chair): Maybe when you discuss…. When the ministry responds on the Evergreen certificates, if they could also…. I’m trying to clear off some of mine at the same time as Bowinn is bunching hers together. Maybe just let us know…. There are still some school districts apparently not in compliance and are continuing to issue Evergreen certificates when they shouldn’t be.

Maybe when you answer Bowinn’s question, could you tell us what you do when a district…? This audit pointed out that there were still some issued. The number was smaller. Are there consequences? Does somebody go and work with that district to make sure they’re in compliance on that issue? I thought I’d just add that so I don’t have to ask that one later.

S. MacDonald: Thank you. I appreciate you bundling those together. I’ll take the first part of the questions here, and then I’ll hand it over to Jennifer McCrea around the Evergreen and talk a little bit about the B.C. Tripartite Education Agreement.

The first question was really around variance around the school districts. I think part of your question is around trying to unpack that and understand what the contributing factors are. We spent a lot of time looking at that, looking for patterns.

You mentioned regionality. We can say yes, and then we can also say no. We have some districts in some very small communities, very remote communities, with transportation issues and all these kinds of things, who do astoundingly well, like remarkably well, with their kids. I look at that and say: “What’s happening there?” There’s something going on there that we need to learn from, and we need to bring people together to understand that.

We’ve got some large urban districts doing very, very well, as well. A large number of Aboriginal students are in urban areas, and they’re doing great. We’ve got districts where their Aboriginal students outperform other students in their graduation rates and other kinds of things.

There’s an interesting thing as we start to tear apart what all those elements are. We partnered with the federal government this year and had some researchers go out and actually interview and research two categories of schools and districts: those performing extremely well and those maybe not doing so well.

[11:35 a.m.]

We’ve been able to take that research, and our team is now unpacking that. We’re using that to begin starting to shape some of our professional development activities, sharing some of the things we have out in schools around communication to teachers and those types of things. It’s often the things that aren’t quite on the…. They’re not the simple things. They’re not the things that are really visible on the top end. In some cases, they’re very simple foundational pieces.

It’s schools that set very high expectations for their kids. They have an expectation that their kids are going to perform very well. They focus really hard on those foundation skills early on, making sure kids can read and they’ve got the numeracy skills. It shows up in our foundation skills assessments, those kinds of things. They create the right kind of welcoming environment in their schools, as kids feel welcome. They’ve got a sense that they celebrate the Aboriginal characteristics of students in the schools. They don’t shy away from those types of things.

There are a number of things that are backed up, and backed up by a bunch of research that we’ve looked at, that help us understand that. I think from the ministry’s point of view, it starts with us just knowing the performance of districts, which we do. We’re, on a regular basis, in contact with districts, focusing a lot of our efforts in ones that need some additional support and guidance in doing some of that work as we go forward. So it’s an ongoing piece of work that’s an interesting puzzle for us to unpack.

On the Evergreen certificate, I’ll ask Jennifer McCrae to give a bit of an update on some of the numbers and then also some of the things that we do when you find cases where we’re not quite having the level of compliance that we would expect.

J. McCrea: One of the things that the audit was able to help us with, back in 2015, was around the Evergreen certificates. What we found and the auditors found, which is what we had suspected, is that there were young people that did not have designations and have the learning plan associated with that to be on the Evergreen certificate.

What we have been able to find in our latest data of the 2017-18 school year is there were 779 Evergreens that were issued. Of that, 231 of them, or approximately 30 percent, went to Indigenous students. From that, what we do is we go district by district through our list, and what we have been able to identify is that there were actually ten Indigenous students in the province that have received an Evergreen that should not have got it. That’s in six districts.

What we do is we phone every superintendent as soon as the data becomes available. We need to understand why this happened. Sometimes it’s that assessments are in place or hadn’t yet been able to be received. We also ask: “So what are you doing about other students that are coming up? How are you changing practices? What have you done around administrative procedures? What are you doing around working with parents?” While ten is still too many in the province for our Indigenous learners that have received Evergreens in the ’17-18 school year, we do phone every single superintendent.

We also have our outcomes team now through the B.C. Tripartite Education Agreement that…. I have an Indigenous advocate on my team now, Denise Augustine, that is the ministry lead for the outcomes team, along with the FNESC representative. When we go into those school districts…. We’re working in Prince George right now as the first school district, meeting with First Nations, meeting with school districts. This is some of that data and some of those conversations that will be happening face to face as well.

Interjection.

J. McCrea: Yeah. Maybe I can just add around the B.C. Tripartite Education Agreement. This is the second agreement that we have had with Canada and the First Nations Education Steering Committee representing First Nations in this province in education.

The first one was the Tripartite Education Framework Agreement. It was in place for five years. This new agreement replaced that, as it’s no longer a framework; it is how we do business in the province. What is unique and different from the transformative accord that you mentioned is that that was very much a Premier to Prime Minister–level agreement. This is very specific to education, and it’s working towards First Nations control and leadership over First Nations education. So this is very focused, working directly with the First Nations Education Steering Committee, helping us to understand what that looks like.

The deputy mentioned that B.C. is the only province that has this type of agreement in place. So the fact that we have two and we’re entering into year six…. We are the envy of the rest of Canada. We have had this work profiled right around the world, and working with New Zealand and Australia about what that looks like for our province as well.

[11:40 a.m.]

We are also the only province in a consistent way…. There are other agreements with certain nations or certain school divisions around the country, but we are the only province that has full parity. A First Nations school receives from the federal government exactly what B.C. pays for regular public schools.

S. Bond (Chair): If you don’t mind, Mitzi…. I know John has to pop out for a moment. Why don’t you…?

Do you have questions, John?

J. Yap: Yes, if I may.

S. Bond (Chair): Why don’t you do them, if you don’t mind. Then we’ll go to Mitzi.

J. Yap: Sure. Actually, just a very quick one.

Thank you, Scott, for your comprehensive presentation.

Thanks to the Auditor General for the good work.

Now, it was mentioned that there are some districts that are not only very close in the gap, but some have exceeded, and actually, now there’s a negative gap. They’re doing very well.

With regard to recommendation No. 3, which states that those districts not achieving expected results take action, what about the reverse, when they are actually blowing away the results and are doing better? Is there a process? Is there a way for their success to be shared with other districts? Is there a forum for this, in sort of an intentional way, to get this out to others so that all can learn?

S. MacDonald: Good comment. I’ll ask Jennifer McCrea to give you some details on the work we do there.

J. McCrea: Absolutely. I think that that’s important — learning from each other and learning from the successes. So when we look at our Sea to Sky school district or our Fort Nelson school district that are exceeding in those areas, what can we learn? Why is that? What have they changed around their governance or their intention or their staffing practices? How do we share that across the province?

There are a number of different ways that that happens. In fact, we will be having, in October, the joint superintendent and lead of the First Nations education advisory committees come together, and there will be districts like that sharing their practices.

We had Gold Trail, at the superintendents meeting last year, talk about their racism campaign. Superintendents and senior leaders in that district stood up and put their own…. They were very vulnerable in their community and had billboards on the side of the highway talking about their own bias and their own prejudice that they were raised with and how they’re working with their First Nations communities and building relationships and building their own learnings.

We take all of those learnings. We share them across the province. We learn so many things from our First Nations schools. We’re looking at how we can learn. Our First Nations on-reserve schools are doing amazing things with languages and culture. How do we partner with them and have them come in and help our independent schools and our public schools learn from those experiences?

It is definitely not a one-way. We have a lot to learn, and we have a lot we can learn from our First Nations schools.

M. Dean (Deputy Chair): Thank you for all the work that’s gone into this and the thoughtfulness and the attention and coming to this committee and answering questions and sharing the details with us. It’s really helpful.

Just picking up on what was being discussed around where some school districts are still not meeting expectations or provincial standards, when the Auditor’s team went in, did you see any of that? If you saw that standards weren’t being met, what did you do with that knowledge? Did you pass it on straight away?

J. Schafer: Yeah, so we were looking at…. We went to four school districts, as examples, to understand what was happening on the ground. But the audit was focused on the Ministry of Education and its fulfilment of its commitments and responsibilities. We weren’t officially auditing the school districts, but we did do some interesting data analysis to identify school districts that….

There are many factors that influence student outcomes. It’s not just things that are within the control of the school district, but there’s a big portion of school district activity and policy that does have an impact. So we did some data analysis to identify districts that looked like they were doing better than expectations and others that maybe were doing less well than you would predict based on the various factors that influence education results.

That helped us when we were going to the school districts to consider and discuss and think about and raise issues that might identify where there were differences or similarities that could be related to the outcomes. That was definitely information that fed into our audit work, and that was discussed with the ministry when we were working with them on the findings and recommendations.

[11:45 a.m.]

M. Dean (Deputy Chair): Thank you. On page 15 of the Auditor General’s report, you talk about the audit scope and method. You talk, in the second paragraph, about speaking with other key parties. I’m just wondering how the methodology of the audit included engagement with Indigenous communities. Or was it just with students and school staff, or school district representatives or whatever?

J. Schafer: When we originally did the 2015 audit, we spoke with quite a wide range of stakeholders and met in person with Indigenous communities and other education stakeholders while we were in the districts.

For the progress audit, we spoke primarily with the provincial-level representative organizations for Indigenous education stakeholders and other education stakeholders beyond the ministry — so the trustees and superintendents.

M. Dean (Deputy Chair): Okay. I wonder…. I mean, I really appreciate the progress update and looking at which recommendations are partially completed and fully completed. But I don’t know whether anyone can comment on if the easiest work has been done first and the hardest work is actually yet to come. Do you think that the pace of progress in completing the other recommendations will be able to continue? Do you have a projected completion date?

Maybe that’s for you, Scott.

S. MacDonald: I don’t want to be too facetious, but there will never be a completion date. The work never ends. I think that when we are doing this work, it’s constantly looking at making the system better. It’s kind of a roundabout way of dodging this a little bit.

I don’t think we took the easy ones first. I think we have a comprehensive look at how we’re driving outcomes in the school system and improving them. This is a big part of that work. That work is ongoing. We are working on multiple different things all at the same time. Some are getting a little more traction than others as we go.

I don’t think we’ve picked off the easy ones or got the hard ones yet to come. I think that if we came back here in five years, we would be still seeing, I’m hoping, that gap much, much closer. But also, we need to keep that sense of urgency — that it’s not done, that we have to keep improving. Even when you get to a point where you’ve got 86 percent of our kids graduating, well there’s still a whole bunch — 14 percent — who don’t.

I think there’s an ideal that we need to be thinking about around our education system — how we’re preparing kids. Then there’s the whole notion that those are averages, which hide areas where we need to do greater work, where they’re far lower than the provincial average. So I think this is an ongoing piece.

I appreciate the work the Auditor has done. It’s put a spotlight on a number of areas. I suspect that as we go, we’re going to learn things and find new things we need to put more emphasis into. I’m hopeful we have the processes in place to identify some of those new things we need to do and adjustments we need to make as we go along.

M. Dean (Deputy Chair): I appreciate that vision — aiming for the best system and making sure that urgency remains there in the ministry as well.

Just lastly, you did talk a little bit about gender. So you’re able to get into details around students, Indigenous and non-Indigenous, and gender — binary differences and maybe diverse gender as well.

I’m interested in both the office and the ministry. Do you keep information within your staff groups about Indigenous and non-Indigenous staff members?

C. Bellringer: Only if identified. Sorry, I’m not sure what….

M. Dean (Deputy Chair): Could you tell us how many Indigenous staff members you have?

C. Bellringer: I don’t know. I don’t know the number. Maybe Shelia….

S. Dodds: We initiated some work a couple of years ago around improving the cultural awareness in the office, and as part of that exercise, we did a survey of all staff. At that point in time, we knew who had self-identified as Indigenous. But it’s not been something that we’re formally tracking.

I think we would be looking to do that survey again. It was just to understand where staff were, in terms of their comfort in being able to engage respectfully, and with that cultural understanding, with Indigenous peoples. It was also to help us understand how we can leverage the experience and expertise we have in the office. But it’s early days.

[11:50 a.m.]

S. MacDonald: It’s a similar response, a little bit, in the ministry, in that there’s a self-identification process. I’ll add a little bit more detail to that.

There are two layers. One in the ministry. There is also the sector, the education sector, which is about 95,000 employees. We have a number of folks in our ministry who’ve self-identified, playing some interesting roles in our ministry, both in the outreach out in the system and the engagement work that they do on different projects, but also inside our ministry in having us focus and think a little differently about our work and the approach that we take, which is a healthy discourse to have.

We’re seeing changes now happening in the senior leadership roles in the school districts. You’re seeing principals showing up. We’ve got a number of superintendents with an Aboriginal background that are Aboriginal heritage. That’s interesting. They are actually rising up to these leadership roles in their communities, that they reflect the communities in which they’re working.

That being said, we’ve got 11.7 percent of our students in British Columbia who identify as Indigenous. I don’t have the exact staffing rate, but it’s much less — probably about half of that right now.

We’ve got some work to do across this. That’s why we’re making investments in our teacher training programs. You start it early and build these things in. Our sector is very much a closed sector. You don’t get people mid-career coming into the teaching system. They, kind of, come right up — vertically up — from teacher training in university.

I’m seeing a positive trend line. We’ve got much more work to do, and I think there’s a leadership role we can take in the ministry around bringing people in. We’ve done this on secondment opportunities. You bring them in from the district, spend a year or two in our ministry, and they get to see a perspective that’s different.

Then deliberately, we put them back in their district with that broader perspective, and they bring a bunch of other learnings back into their own home districts in their new roles when they get there.

M. Dean (Deputy Chair): Good to hear. Thank you.

R. Sultan: About two weeks ago, MLA Jordan Sturdy and I took a trip. I drove up to Pemberton where he lives. It’s about a 2½-hour drive north of Vancouver through Whistler. He and I then got into his very rugged four-wheel-drive truck. We drove through Mount Currie and then on to something called the Highline Road, which is really a not-very-much-modified construction access road paralleling the B.C. Hydro tower line from its main generating facility at Bridge River down here to the south.

About an hour and a half of very treacherous road — impassable for a passenger car — we arrived at Seton Portage and Shalalth, where B.C. Hydro operates two of its large generating plants — Bridge River 1 and Bridge River 2. I don’t want to emphasize my age, but I helped build those plants 65 years ago as a student engineer.

In those days, the local First Nations band, from our perspective — as people plunking down this huge Hydro project in the middle of land without any permission, I think that’s what the record shows — hardly existed. They didn’t seem to be part of the money economy.

When we got to Shalalth and Seton Portage this time, what a transformation. I think they call themselves the Tsal’alhmec Nation. It’s a couple of hundred members. A nice, modern hotel. Many of them work for B.C. Hydro. Each day they’d try and send 12 students to high school. This is a challenge. I mean, it was a challenge for me and Jordan to get there. It only took us four hours driving north of Vancouver.

It takes their students another hour and a half to drive to Shalalth and then up Mount Currie, where I was the official driver for B.C. Electric in the old days. But then they didn’t trust me anymore and took me off that job because they didn’t want to roll down this steep mountain. Over the top, down the other side to Terzaghi dam and then drive down another gravel road to the Fraser River on the Bridge River and then south to Lillooet. It only takes an hour and a half, and then an hour and a half to get back.

We had lunch with some of the councillors and the band manager Crystal and asked them how they are doing. They are obviously doing much better than they did 65 years ago materially. But they want to educate their kids.

[11:55 a.m.]

They have a schoolhouse, but they can’t hire any teachers to live in Seton Portage–Shalalth. So for high school, they drive them all the way over to Lillooet and back again. If you don’t think they don’t want education, well, you’re dead wrong, because that’s a very dangerous trip. I don’t know that, if I had kids up there, I’d really allow them to go on that road every day, because chances are that school bus is going to roll down the mountain some day.

My question is…. This is hardly a unique situation in remote British Columbia. How can the ministry educate the kids in Seton Portage–Shalalth?

S. MacDonald: Thanks for sharing that experience. I had to pull it up on the map to see exactly where that was. I think you’ve identified some of the unique challenges of British Columbia. I think you’re right; that’s not one of the only communities that are like that, where we’ve got a very, very diverse geography, some very isolated communities and some big challenges for us. It’s certainly one that…. If you wanted to do a little follow-up, I can do that with the local school district and see what some of their plans are.

It does begin to focus us around what we’re doing around our vision for education and where we go in the future and how you can provide educational opportunities for students like that in those kinds of communities. We have technology today that didn’t exist in the past that allows us to do things differently. You think about kids travelling for an hour and a half when they could have some kind of a virtual experience that might be better in some ways than actually even in a classroom experience.

I think we need to challenge ourselves to think differently about those kinds of delivery options. I think having kids in community is, obviously, a big part of that and having the right kind of experiences for them that are brought to them.

You’ve also touched on the issue, too, around just acquiring staff. What kind of incentives do we have for staff to take an opportunity in a beautiful community like that? It’s often challenging to get them and then to retain them and keep them in those kinds of communities. I know, as we’ve seen changes in our labour force across the province, there are challenges in remote communities to get professionals to come in — and teachers being one of them. So I think it’s an ongoing challenge for us that we can begin to look at.

I appreciate you sharing that story. It’s a place I should probably add to my list of things that hopefully one day I could get out and see as well. I will certainly follow up with the school superintendent to ask a little more to get a better understanding myself.

J. Thornthwaite: I won’t take very much of your time, since it’s now noon. Just another appreciation of all the work that you’re doing and your successes as well. I was really heartened to hear the emphasis on, obviously, the new curriculum, social and emotional learning and predicting those who are struggling even in grade 4. Ideally, I guess, you want to identify them in kindergarten if you can.

My last question is…. Now you’ve identified…. I mean, this goes on not just to First Nations students but also other students. What’s the intervention then? What is available to kids when they’re struggling right at the school level, and are you experiencing waiting lists for counsellors or elders or whoever is identified as the person that could probably help these individuals? Are there waiting lists? How does that intervention occur?

S. MacDonald: Thanks for the question. I think it’s key to the whole educational experience that we want to make sure, as the first step in that, that you’ve been able to identify kids who may need a little bit of extra support.

Most kids move quite nicely through our school system. They start in September, they have a year’s progress in June, they come back, and they make steady progress through. But we also know that kids learn at differing rates and at different paces. I think it’s our job to make sure we get the process in place to identify those ones that might be lagging just a little bit or need a little bit of a nudge. That is a range of interventions.

In some cases…. You’re right. Earlier is better. Every­thing we know about education is the earlier you make the interventions, the better. So I talk about trajectories, and if you can change earlier in the trajectory, you can correct them much more effectively.

Making those interventions can be as simple as a six-week dedicated reading program for a kid in grade 1. You identify early the lagging, that we’re not quite where we want to be — boom, we’ll catch up, and then they’re fine after that. You wait until grade 4, and you’ve got, now, a full-year program or special needs or something else that happens. You’re playing catch-up after that.

It’s simple little things like that that can happen. Then that’s on a whole scale, from kids who just need a little bit of a nudge to others who may need much more intervention.

[12:00 p.m.]

They’ve got larger challenges or other kinds of abilities that need additional supports. Depending on the range of that and the district, they would have to determine how they do some of those kinds of assessments and those types of things as they go forward. So there’s a range of different scenarios that would play out in different districts.

S. Bond (Chair): All right. I know it’s always dangerous standing between committee members and their lunch, but I do have a few things. I usually take the last spot.

First of all, I think that this is the kind of discussion and follow-up that needs to happen after an audit takes place. I think the progress audit is a good way to do that. It identifies progress, but there’s still more work to be done. So we really appreciate the ministry’s thorough response and their efforts to continue to make progress.

On page 7 of the report, it refers to the work that needs to be done — an alignment with UNDRIP. I’m wondering if you can tell me more specifically: do you expect that there are other implications because of UNDRIP? It has been difficult to define. So I’m wondering: are there going to be other steps that currently aren’t contemplated in this plan as a result of the commitment to align with UNDRIP?

It’s on page 7. There was another series of alignments as well, but that one stood out for me because I know that work is currently being done across government to deal with the issue of UNDRIP. I guess, at this point, more definition is required. I’m wondering if you know where the education system fits in that.

J. McCrea: I think education fits in that as an underpinning foundational piece to support all of that work. The United Nations declaration on the rights of Indigenous peoples is a bit of a road map for us. What we’re using is that document, but we’re also using the Truth and Reconciliation Commission.

While there were specific recommendations in that report for education, what we have done as a ministry is we have gone back and said: “Yes, we recognize there are these four recommendations for the Ministry of Education. We are looking at all of the recommendations to see where education could play a role or a support piece within that.” We also have the ten guiding principles that this government has endorsed from the federal government.

How do all of those guiding documents layer? I think the most important piece that we’re learning from is First Nations. First Nations control over First Nations education is helping to guide all of our work. Partners like the First Nations Education Steering Committee saying to us: “We want to do this. We want to try something different. How about that? If you’re looking at a First Nations strategy, let us lead it.”

We are looking at all of our work through a very different lens. We’re looking at our own colonial views within the ministry and within our staff and where we may be having racisms of low expectations within our own teams or our own performance or not understanding the trauma that some communities have come through.

How do we leverage all of our pieces of work? We have the new early learning framework that FNESC and Métis Nation B.C. were a huge player in. The early version didn’t have the First Nations lens in that. We’ve now revised that work.

How do we look at all of the learning pieces that we have, basically, from zero right through to post-secondary and graduate work? I think it’s a continued learning journey that we’re on. I think the commitment, certainly for myself and my team and the entire ministry, is….

This is not an Indigenous education part of the ministry to work on. It is all of the ministry. It is all of the leadership teams. As we learn new pieces, our plans will change. They will shift, and we’ll put an intentional focus on….

S. Bond (Chair): Thanks, Jennifer. I gather that as UNDRIP becomes more defined…. I understand government may be bringing in legislation. Who knows what’s going to happen in the next steps? I’m assuming, then, if there are specific recommendations, they would simply be incorporated in the work that you are already doing.

J. McCrea: We would absolutely meet with FNESC and understand what that would look like for us, moving forward.

S. Bond (Chair): Okay.

I wanted to ask some that are sort of short snappers here. When you talk about a non-instructional day focused on Indigenous issues and First Nations students, are all educators included? Is that a specific day that’s set aside?

[12:05 p.m.]

I noted that in 2016 there was a day, and now there’s a 2019 requirement. It looks like there may not have been one every year. Who attends, and how is that characterized and captured in the overall number of non-instructional days?

S. MacDonald: Let me start. Then I’ll hand it to Jennifer to add some more colour detail.

It’s one of the non-instructional days. The ministry has the ability to designate one of those days, which we’ve done. We’ve done that through ministerial order. Our expectation is that districts would do that and that they would involve all their educational staff, broadly defined. You’ve got an awful lot of educational assistants and other people who provide services to children.

It needs to be — we know this from our own practice — a whole-of-school approach. It’s not something that just one person owns. We want to invest heavily in ensuring that people have the skills and the capacity to understand the intent of what we’re doing and feel comfortable with these kinds of new challenges.

Our experience is…. With the vast majority of educators I’ve talked to, they all want to do the right thing. They’re nervous about making mistakes. So giving them the time to talk through those things professionally with their colleagues, with the right kind of leadership and some supporting materials…. We’ve got some materials coming out that our team has put together to help — these old-fashioned lesson plans, teacher resources and support materials. To help them implement that is the approach we’ve taken.

We also know it’s not a one-shot deal. We can’t do it once and be done. There’s a continuation of this over the next few years that we would expect.

Now, school districts also have discretion on other days. This is not just one day. They’ve got multiple days, depending on their contracts. You’ll see many districts actually doing a multiple approach through the year as they do this. They weigh it out with all the other pressures they have.

This is one of those core ideas that kind of transcends everything you’re doing inside of the schools. We talk about driving better outcomes for all kids. We mean, truly, all kids. The strategies we learn here have impacts right across the whole program.

S. Bond (Chair): In essence, it will be one of the ones designated by the ministry.

S. MacDonald: Correct.

S. Bond (Chair): There are some that you get to decide, and every district will then have to have at least one. As you say, they may choose to use one of their other days voluntarily to do a similar thing.

Okay. On page 18, it talks about a capacity fund, BCTEA. It’s a capacity fund to help districts. I’m wondering if that has…. Is there a budget allocation for that? How is that allocated? Do districts apply? Is that part of the budget that you currently have? Are there actual dollars attached to the capacity fund? If so, how do districts get selected to receive those funds?

S. MacDonald: There’s an actual budget. Money is available.

I’ll let Jennifer walk through how we’ve divided up the $3 million that we have available for that to ensure that it’s allocated effectively across the system.

J. McCrea: Of the $3 million, $1.5 million went to FNESC to help support First Nations capacity. The first piece that we worked on through the B.C. Tripartite Education Agreement was around local education agreements. So this is to help First Nations communities be able to build their capacity on that.

In addition, $1 million went to school districts. The way it was distributed was based on districts that did not have a current LEA in place, to help that.

And $500,000 was given to a shared-service model, what used to be called our education resource acquisition coalition. That is to help if First Nations need a mediator or a negotiator. We’ve put some money in there to procure some experts, and they’re working through that piece right now.

S. Bond (Chair): Scott, you may need to answer this one, or Jennifer. Obviously, there are going to be changes made to the funding formula, broadly speaking, for school districts. That work is underway. Obviously, districts have various views on how that will work and what it will look like. That’s been the case since time began. They’re always worried about the funding formula.

There is a draft…. In the report from the Auditor, it talks about a draft Indigenous targeted funding policy. That’s in progress. Apparently, in April, that work was done. As I understand it, that would be wrapped into the funding allocation changes. Can you just describe that? I’m assuming, obviously, by the name, it will stay as targeted funding. But how does it impact the other changes that are being made to the broader funding formula changes and the envelope of money that’s available?

[12:10 p.m.]

S. MacDonald: Thanks for raising that. As you’re aware, we’ve initiated a review of our funding model — how we distribute the money out to school districts in the province. We had a panel that went and travelled the province and met with hundreds and hundreds of people and gathered input.

They prepared a report with 22 recommendations. One of those recommendations was very clear around how we need to ensure that we maintain the resources necessary for First Nations education. So it was clear in the report. What we’re looking at is: how do those tie in with the other, now, 21 recommendations and this whole suite kind of come together?

We’ve done some initial policy work around what that might begin to look like. We have a series of working groups right now working through a number of issues. For example, there’s a working group on inclusive education, and there’s overlap. Obviously, we have special needs students who are also special ed students, who are part of those kinds of programs. So how do these things kind of dovetail together?

There’s a regional element to that conversation as well around how you distribute money to ensure that these different regions get resources. We just heard a great example up past the Pemberton area, in Lillooet, of how you allocate resources for a community like that that might be different than West Vancouver. So that’s part of that whole process.

We have a series of engagements planned with the sector through the fall. As early as early October, we’re going to bring people together to have that kind of a conversation, and that’ll be part of that going forward. So we would expect to be able to make some announcements and decisions around what that funding formula might begin to look like in the year ahead. We have a legislated requirement that each year we announce the funding allocation for school districts on March 15 for the following school year, and that gives districts a certain level of certainty around what their funding is so they can do their staffing and planning for the year ahead.

That’s kind of the broad timeline that we would have to make some of those decisions. I can assure you that the funding related to First Nations education will be an integral, key piece of that.

S. Bond (Chair): Probably you can’t answer this, but I’m going to ask it anyway. When those changes to the formula are made, obviously an issue of concern for all of us at this table would be reallocation of those funds using different criteria from the same funding pie — in other words, reallocating funds within. And that, frankly, has caused some anxiety. Is that all being taken into consideration? Obviously, we don’t disagree with targeted funding, but it’s where that funding comes from in terms of the broader funding in education. Is that part of the discussion that’s taking place?

S. MacDonald: The fundamental part of the discussion is: how do you actively, fairly distribute those resources around the province to ensure that people can deliver the services necessary to do that work? And there may be some changes as a result of that as you reprioritize different types of things. If there were to be…. Not to presuppose what the outcome might be, but there may be a need for some transition years to blend some of those things out. But it’s really premature to see what the outcome of that would be. There’s more consultation that needs to happen around that as we look at it.

There have been a couple of factors that have been playing into the funding, generally around the quantum over the last couple of years. One has been some steady enrolment growth, which, as we’ve seen enrolment, we’ve added more resources to the system. So that’s allowed more resources to flow in. Our early indications show that around the province we’re seeing another uptick in the numbers of students in the province.

Generally, there’s been a lift to the budgets overall. In the last couple of years, we’ve seen $960 million more flow into the education system than we had previously. So there are significantly more resources coming into individual school districts, and I think that’s been welcome and given them some flexibility around some of the decisions they’re making locally.

I guess the message is to stay tuned as we allow that funding model process to go through. This is based on about ten years of calls from trustees asking for us to take a look at it. We’ve done so, and we’ll let that process run through and make some decisions later this year.

S. Bond (Chair): Two final questions. I wanted to ask about…. In the action plan — by the way, we appreciated seeing the detail that was there — it talks about, in regard to number 4, again, talking about funding. I’ll just read it to you so that you don’t have to, because it’s very miniscule print, believe you me. I needed to squint to read it.

Here’s the quote: “Key shifts being considered include mandated consultation with First Nations and Indigenous partners on the use of funds and more flexibility to support student outcomes.” It then goes on to talk about the Indigenous education targeted funding policy.

[12:15 p.m.]

Do you have a sense in your planning what that looks like? School districts budget and plan, and this shift is talking about mandating consultation around the specific use of funds in a specific school district. Can you give me a sense of how that might work?

J. McCrea: I can give an example. We were able to give some money out to school districts for mental health supports last year. We asked them to focus on socioemotional learning, trauma-informed work or mental health literacy. Within that direction to school districts, it said to consult with First Nations communities in order to decide how best to use this money. So you’re starting to see the practice of the ministry as we’re able to put some of that funding out.

S. Bond (Chair): In some districts, there can be a dozen First Nations, for example. So there’s an expectation, I’m assuming, the ministry would be helping districts attempt to do that, because it can be quite complicated with relationships between First Nations. There can be multiple First Nations in a district. So I can imagine that when you’re looking at the specific allocation of funding, there’d be a lot of interest in how that’s used. I’m assuming that before it’s mandated, there would be guidance, support.

It’s an interesting…. I think it’s a laudable concept. I just am trying to visualize how that works at the district level. Those of us who’ve been school trustees know how complicated that can be.

J. McCrea: The local education agreements will help support that work as well. To your point, it is around that relationship piece, and it’s around understanding the complex communities in which school districts are operating.

I know there are many school districts that have…. I’m thinking of a school district that has 13 First Nations in it, to your point. Then there are other First Nations that have their kids being boarded in town. It’s not their traditional territory, but their kids are going to high school there. So that is the work of the school districts now. It really is around forming those relationships and knowing their kids and knowing their families.

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

My last question is about…. Where on earth would we be without the fantastic teachers that we have? You know, I get to see that not only with my kids but now with my grandkids, and how excited they are about going to school every day. Well, the nine-year-old is getting a little less enthusiastic, but so far, so good.

In the report, it talks about the importance of training teachers, and it references money that was provided in February of 2018 by the government for UBC to pilot a community-based Indigenous teacher education program in Williams Lake. I think that’s fantastic. I’m wondering: can you give us an update? It was supposed to attract 20 Indigenous students. I know that in September, the government also committed to funding another 15 Indigenous teacher-training seats. We know that that’s so critical.

I think Mitzi asked about the number of First Nations employees. This is a really important step forward — training Indigenous teachers. Can you just quickly give us an update? Has that started? Was it full? Will there be, in your view, continuing additions to the number of training spaces? I love the fact that there are some being considered remotely in Williams Lake. That’s the absolute best way, to train closer to home, because then they stay there and work. It sounds like a really promising initiative. Could you just give us a quick update on it?

S. MacDonald: Yes. Thanks for highlighting that, because I think it’s one of those important initiatives that we have that talk about changing a little bit of the fabric of the teaching force we have in British Columbia. I completely agree with you. We celebrate great results in British Columbia, due in large, large part to the expertise we have in classrooms. It’s that relationship we have between the teacher and the kids that makes the difference.

If you take all the other policies that we have and you boil it all down, it comes down to that relationship they have with them. And the better skilled people we have in the classroom, the better. So you’re right. We have invested in those programs, with a deliberate design choice, also, to make them regionally focused and getting folks out into communities where they may possibly come from or, more importantly, where they may want to work later on, as we look at distributing our workforce around the province.

We’ll have to get back to you on specific follow-up around the actual uptake and where they are. The ones who just started last year will be just starting to do their first year. Depending on the program and the number of years it goes through, some of these things…. If it’s a post-graduate year, they usually do it in a year and a bit. If they’re starting right from scratch, it’s often a five-year degree.

[12:20 p.m.]

These are investments in the future. It’s on the right track. I can’t make a commitment around future investments we have. Obviously, we’ve got a pretty robust post-secondary education program. It graduates about 1,600 students a year out of our B.C. post-secondary institutions, folks joining our workforce. This will be part of that fabric and part of those investments we’re making. We can circle back if you need specific numbers.

S. Bond (Chair): It’d be great if you could just send back that information to us about that program.

Any other questions or comments from my colleagues?

Well, again we want to thank the Auditor General and her staff for presenting today. I’m sure you found the audit…. I’m sure it was a good professional experience, and we appreciate that, and we can tell by the report that you’ve provided. We appreciate that.

To the ministry team that’s here today: thank you very much.

We do want to recognize the work of FNESC. I had the opportunity to work with them. We know how dedicated — and the difference they’ve made in the improvements that we saw in that graph….

Thank you, Scott, for leading your team here today. I think all of us can keep in our minds the vision of that graph. We look forward to that gap being made ever smaller — to the point where, as Scott says, we’re talking about all kids, all students. Thanks for the progress report. We appreciate it.

With that, the committee will recess for lunch and be back here at one o’clock.

The committee recessed from 12:21 p.m. to 1:07 p.m.

[S. Bond in the chair.]

S. Bond (Chair): What we went through, particularly on the education progress audit, I think was really helpful. It’s a really good example of how the committee works well and ministries respond positively.

Our first item of business, for the afternoon, that we’re going to tackle is the consideration of the Office of the Auditor General’s report, Detection and Response to Cybersecurity Threats on B.C. Hydro’s Industrial Control Systems. The report was issued in March of 2019. Obviously, we’ll begin, as we always do, with the Auditor General making some remarks. Her team will make their presentation, and we also have representatives here this afternoon from B.C. Hydro.

Welcome this afternoon. We’ll make sure that we shift the PowerPoint when it’s your turn to present, and you can make your introductions for the record at that point.

Over to the Auditor General for her opening comments.

Detection and Response to
Cybersecurity Threats on B.C. Hydro’s
Industrial Control Systems

C. Bellringer: Thank you so much. This first report this afternoon is our report on the Detection and Response to Cybersecurity Threats on B.C. Hydro’s Industrial Control Systems, which are used for generating and delivering electric power in B.C.

With me today from the audit team…. I have three members of the audit team in the room. Greg Morhart is sitting in the audience. He’s a senior member of the audit team. At the table we have Ada Chiang and John Bullock. Ada was the engagement leader for the audit, and John was the engagement manager.

I’ll turn it over now to Ada to introduce the topic.

A. Chiang: Thank you, Carol.

Good afternoon, Madam Chair and committee members.

Electric power systems as part of the energy sector are one of the critical infrastructures most at risk of cybersecurity attack. B.C. Hydro’s power system, like systems at all organizations, faces increasing cybersecurity challenges, but for an electric utility, a successful cyberattack could be more than just another data breach. Instead, it could result in a major power failure, causing significant disruptions to the well-being of the people in B.C.

[1:10 p.m.]

Because a successful attack could have such a large impact, it is important that B.C. Hydro has appropriate measures to protect the power infrastructure from the ever-evolving cybersecurity threats.

Today cybersecurity protection of the electric power infrastructure is no longer only about prevention but also about effective detection and response. In this audit, we therefore looked at how well B.C. Hydro was managing cybersecurity threats to its electric power infrastructure by detecting and responding to security incidents.

I would now turn it over to John to provide you with an overview of the audit and its findings.

J. Bullock: Good afternoon, Madam Chair and committee members. To illustrate the significance of current threats, we captured this video loop of actual cyberattacks a few weeks ago. But the picture is the same every day. Cyberattacks, represented by the red lines, happen seven days a week, 24 hours a day. They never stop. The yellow dots represent computer infections, which can have the same net result: compromise of a system.

There are millions of attacks daily. Under such a high bombardment, some attacks will eventually get through. Preventive measures are no longer enough. It’s essential to also have strong cybersecurity detection and response capability.

B.C. Hydro is the largest public utility and the main electric power supplier in B.C. It delivers electricity to 95 percent of the people in B.C. B.C. Hydro’s electric power system is considered critical infrastructure because it provides an essential service to people’s lives and for functioning of the economy. Globally the energy sector is one of the most attacked of all critical infrastructure sectors. For these reasons, we undertook the audit.

Producing and delivering electricity is technically challenging. It requires, among other things, sending and receiving high-speed control signals over long distances. This is only possible through the use of industrial control systems, ICS. ICS is a collective term that refers to all of the different types of computerized systems and devices used for this remote monitoring and control of the power system.

The slide illustrates how electric power is delivered. Electricity is generated usually, in B.C., at hydroelectric generating stations and converted there to a very high voltage for efficient transmittal. Then it is moved over long distances, through the high-voltage transmission lines you see while driving the remote stretches of B.C., before finally arriving at the local distribution stations we see in our neighbourhoods. The high-voltage electricity is then reduced to a lower level, where it’s safely delivered to our homes and businesses through the local distribution lines.

As the system operator, B.C. Hydro centrally controls the entire electrical network, balancing electricity supply and demand while ensuring the stability of the electric grid.

The B.C. electric power system does not operate in isolation. It’s part of an interconnected grid with Alberta and the western United States. The interconnection of all these grids with different jurisdictions allows transmission of power and the supply and demand of electricity to be balanced throughout the western region. This all works towards having a continuous supply of power in B.C.

To protect B.C.’s electrical system from major failures and to help prevent a power failure in B.C. cascading to utilities in other jurisdictions, like in the huge blackout of 2003 impacting the northeastern part of North America, B.C. Hydro must comply with mandatory reliability standards, a set of regulatory standards for utilities that are accepted across Canada and the United States.

These standards focus on ensuring the reliable operation of the power system as a whole, but they do not cover all components of the electrical grid. The standards cover system components that deal with higher voltage and power levels. These are components upon which a large-scale disturbance could end up affecting the reliable operation of the larger electrical grid.

The standards, however, do not cover components operating at lower power levels, the thinking being that when they fail, these smaller components will cause smaller outages. This ignores the aggregated power outages that may be possible if a large number of small components are impacted.

[1:15 p.m.]

In this audit, we focused on ICS cybersecurity incident detection and response, because we know that cybersecurity is no longer only about prevention but also about quickly detecting and responding to attacks. When cyberattacks happen, some are almost certain to get through.

Overall, we found that B.C. Hydro is effectively managing cybersecurity risk by detecting and responding to cybersecurity incidents on the parts of the electric power system covered by the mandatory reliability standards. However, this is not the case for components where standards do not apply.

As explained earlier, the standards are mostly about protecting system components with a higher power capacity to prevent outages at one utility from cascading to other utilities. They are less concerned with components of lower power capacity, such as those in our local neighbourhoods. It is nonetheless important to protect these lower power components, because they, too, are vulnerable to cybersecurity threats. Undetected threats on them may cause localized power outages in B.C., and in aggregate, they may have a large effect on the overall power system. We therefore concluded that B.C. Hydro needs to expand its detection efforts to include system components that do not fall under the mandatory standards.

A strong capability for cybersecurity monitoring and response is fundamental to good cybersecurity practice. As such, we made three recommendations to B.C. Hydro in our report. First is for B.C. Hydro to assess the cybersecurity risk to make sure appropriate detection and response measures are implemented. Second is for B.C. Hydro to maintain an inventory of hardware and software components, regardless of whether they fall under the mandatory standards. Third is for B.C. Hydro to implement detection mechanisms and monitoring in real time for unusual activity on industrial control systems and devices not currently under the mandatory standards.

For security reasons, we did not disclose any findings in this report that could expose B.C. Hydro’s power system. Instead, as with most audits we conduct of this nature, we provided B.C. Hydro with a detailed technical report of our findings.

In conclusion, it’s important for B.C. Hydro to address cybersecurity risk for its entire electric power ICS environment, not just the systems that fall under the mandatory standards.

That’s our summary and concludes our presentation of the B.C. Hydro audit.

S. Bond (Chair): Thank you very much, John. I think you should get an award. I don’t think we’ve ever seen movement on the screen before. The fact that we had some audiovisual was fantastic. That was great. Not that what happened was good, with those dots. But we haven’t seen that before, so we’ve just upped the game for everyone else presenting. Thank you for that.

We’re now going to ask for a response from B.C. Hydro.

K. Morison: Good afternoon, Madam Chair, committee members and officials from the Office of the Auditor General. It’s our pleasure to be here this afternoon.

I’d first like to introduce myself. My name is Kip Morison. I’m the chief information officer at B.C. Hydro. I’ve been with B.C. Hydro for about 25 years now in a variety of engineering and technology roles and have been chief information officer since early 2015. With that responsibility comes the accountability for the overall cybersecurity of B.C. Hydro as an enterprise.

With me today is Paul Choudhury. I’ll ask Paul, perhaps, to introduce himself.

P. Choudhury: Thank you. Good afternoon. My name is Paul Choudhury. I am the director of transmission and distribution system operations for B.C. Hydro, which means I look after the control centres that control the generation and transmission of power across the province. I’ve been with B.C. Hydro for 26 years and Ontario Hydro for four years before that.

K. Morison: Before I begin, I’d like to thank the Auditor General and her staff for the professional way this audit was conducted. I think the meaningful and comprehensive report that came out of this audit is quite valuable.

I’d also like to thank Madam Chair and the committee for giving us the opportunity to talk about this audit. Cybersecurity is certainly top of mind for B.C. Hydro. It’s one of our top priorities. We’re always very interested in discussing our opportunities for improving our cybersecurity posture at our utility.

I’m going to make a short presentation on our view on the audit and give some insight into our action plan for the audit. I hope that between Paul and myself, we can answer any questions that you might have at the end.

[1:20 p.m.]

Before we actually dive into the audit response itself, I think it would be helpful if I described a little bit about the technology landscape at B.C. Hydro to help set the context and maybe better understand the focus area for the Auditor General’s audit.

B.C. Hydro has a very complex network of generation, transmission and distribution, as mentioned, that delivers electricity to our more than two million customers in the province. To make this system work, we have an overlay of quite a complex variety of technologies that really have to be protected, from a cybersecurity perspective. I’d like to talk a little bit about that.

To help understand that broad technology landscape, I think it’s helpful to divide that landscape into two pieces. The first piece is associated with the extensive business systems that are used to run B.C. Hydro. Those are things like our HR systems, our financial systems and our billing systems. Those systems are conventionally referred to as information technology, or IT. They reside in our head offices, they reside in our field offices, they reside in our two big data centres in Kamloops and Calgary, and they reside amongst all of our employees in our handheld devices and our laptops.

Now, despite the fact that there are no mandatory standards for those IT environments, the cybersecurity posture in that environment tends to be quite mature, and the protections and controls tend to be quite strong. The reason for that is that that environment has been attacked by cybersecurity for many, many years, and we’ve had a lot of time to develop more robust controls and protections in that environment. That environment, however, was not the focus area for the Auditor General’s audit.

That brings us to the second big piece of that technology landscape at B.C. Hydro. Those are the systems that interact with our assets in the field — that interact with our generators, our transmission and distribution stations. These are typically called operational technologies, or OT, and they are called that because they have a direct influence on the operations of our business.

Most of the operational technology resides within 330 of our generating, transmission and distribution stations in B.C. So we have this large landscape of more than 300 stations in which industrial control systems play an integral role in delivering power to our customers, and it’s that environment that we need to really protect. That area — that OT environment, those 330 facilities — was the focus area for the Auditor General’s audit.

Now, that environment can be broken down further. We’ve determined that 54 of those 330 facilities…. If those are compromised through a cyberattack, they could have a medium to a high impact on that interconnected grid. That means they could cause widespread blackouts or they could cause instability within our networks. We want to do all we can to prevent that, and as a result, there are mandatory standards that we have to follow for those 54 stations. And B.C. Hydro is certainly diligent in responding to those standards.

Also as a result of the standards, the cybersecurity posture tends to be quite mature for those facilities and its protections and controls quite strong. This is true for most utilities that have met the cybersecurity mandatory standards that are in place.

The balance of those stations, the 276 that I haven’t talked about…. Those stations, we’ve determined, if they’re compromised through a cyberattack, would have a low or, in fact, no impact on the interconnected grid. That means it’s unlikely that a compromise of those stations would result in a rolling blackout to our interconnected grid or instability for that interconnected grid.

However, we know that those 276 facilities could interrupt our customers if they were compromised by a cybersecurity attack. They could compromise our customers, they could influence our communities, and they could, in fact, impact our economy if they were done on a large enough scale. So we’re really appreciative of the findings from the Auditor General that focus on the need for us to increase our cybersecurity strengths in those 276 facilities, in particular, in that landscape. Hopefully, that clarifies a little bit about the landscape we have and the complexity of it.

I want to just provide some overview comments on the audit itself. The Auditor General found that B.C. Hydro has a well-developed cybersecurity program and is able to respond to the cybersecurity incidents when detected, and I think this is absolutely true at B.C. Hydro. We’ve spent a lot of effort in the last number of years on our cybersecurity program and, in particular, on our incident response.

We have a cybersecurity incident response plan that is invoked any time there is a detected incident in cybersecurity. If that cybersecurity incident response plan indicates this could be a significant event, it triggers another plan, our IT service continuity management plan, which escalates the response to that incident. If that IT service continuity plan indicates that this will be very a severe event, like an emergency, that triggers our B.C. Hydro emergency response plan, the highest emergency response that we have in the company.

[1:25 p.m.]

We believe that through those three layers of incident response plans, we can respond to any type of cybersecurity incident with the appropriate level of weight behind the response. We practise those plans. We have tabletop exercises within my group and within the company, and we also do inter-utility exercises that exercise those plans every two years, as part of the North American Electric Reliability Corp. initiatives.

The Auditor General also confirmed that B.C. Hydro is meeting our security standards to prevent a cyberattack that could trigger blackouts across the interconnected continental grid. I mentioned those 54 facilities that have high and medium impact to the grid. Indeed, we are compliant with those mandatory standards.

We’ve spent great effort in obtaining compliance and maintaining that compliance. In fact, in the most recent set of standards, we’ve invested more than $30 million to ensure that we’re compliant with those standards. We take this is a very serious thing at B.C. Hydro, not just from the point of view of compliance but as a responsible utility operating within this large, interconnected grid.

Also, the audit pointed out three recommendations — which we’ll talk to in a moment and also talk about our action plan associated with them — that were made to improve B.C. Hydro’s ability to detect and respond to cybersecurity threats to industrial control systems. We’ve recognized that, yes indeed, we do meet the reliability standards, and we operate very well for those kinds of incidents that may cause widespread blackouts, but we do appreciate the fact that the audit highlighted the need for us to improve our cybersecurity posture when it comes to the industrial control systems that could impact our customers. We take that as a driver for our action plan going forward.

I’d like to talk now a little bit about the key findings and recommendations. There are three listed here that I think are important. The first one is that cybersecurity incidents could threaten the local delivery of power. We’ve talked about this, around those 54 stations that we’ve protected in the large landscape that we need to improve our protection and control on. We take that, as I mentioned, as an important initiative for moving forward with improving our cybersecurity posture.

The second is that B.C. Hydro’s program for cybersecurity incidents is well developed but missing some key information. This is an important issue as well. When we have an incident and we want to recover back to the state before the incident, it’s important that we have the needed information in order to do that. That would include things like configurations of applications, versions of software, the models of the assets that we’re trying to restore, and some history.

Now, we do a very good job of that for those systems that fall under mandatory standards — those 54 stations that I talked about — but we do a less rigorous job, certainly, for the remainder of that landscape. We agree that we need to do a better job of maintaining inventory of this.

In the first bullet here, I should mention that the recommendation really was to do a risk assessment over that entire landscape so that we can see where we should be investing to improve our cybersecurity posture. That’s the key recommendation we see from the audit. The second point here really talks about using that risk information to determine which sites and how much detail we have to collect and inventory to be sure that we’ve protected ourselves when we have an incident on that portion of the landscape.

The third recommendation is around B.C. Hydro’s being unable to detect cybersecurity incidents on some system components, and this is key as well. In those 54 stations that we meet the mandatory standards on, we do a good job of monitoring in real time for any kind of anomalous behaviour that might indicate a cybersecurity attack, and we do a less rigorous job on the rest of the landscape. So we agree that we need to really look at risk assessment and determine where in our system we should be adding additional real-time monitoring so that we can more quickly detect incidents as they happen.

You can appreciate that the faster you can detect an incident, the more quickly you can react to it and then recover back to normal, so this is a very important notion as well. We agree with these findings and the recommendations, and we’ve developed an action plan to address them, which I’d like to talk about next.

This is a summary of our action, and the first one is really the key. The first recommendation that was given on the previous slide was that we should do a risk assessment across the entire landscape of that operational technology at B.C. Hydro, and we agree with that.

To address that, we’ve engaged an internationally recognized firm that has expertise in this area to work with us on developing that risk assessment. That work is now complete; we have finished the study. We have a draft report which now is undergoing review. That will go to our executive team on October 22. We expect that that report will be finalized by the end of October. We’d be glad to discuss here the framework or the approach used in that study if you’d like to.

Between November 1 and the end of December of this year, we intend to develop a program plan that will take that risk assessment and determine what stations we need to focus on, what inventories we need to improve and what real-time detection mechanisms we should implement throughout our systems. That would be completed by the end of this year.

[1:30 p.m.]

We expect the work of that program to commence early in January of the next year, of 2020. We fully expect, because of the scope of the work, as you can appreciate — 330 stations, thousands of industrial control systems — that this will be a multi-year program, prioritized based on that risk assessment, to address these recommendations and implement the remediation that’s indicated in our action plan.

Those investments that we make to address the audit findings here will, of course, have to be coordinated and reconciled with other investments that we’re making around our mandatory standards implementation as well as the other enhancements that we have to make on our IT system for cybersecurity to protect our entire company.

That is a summary of our action plan. Just in summary, I’d like to wrap up with a couple of points. One is that staying ahead of cybersecurity threats is a never-ending and growing task. That map showed the attacks that are going on, day by day. Threats are growing continually in the cybersecurity world. The attacks are getting much more sophisticated. As we create a larger digital footprint at utilities like B.C. Hydro, we create more of a landscape for attackers to attack.

It’s very important that we stay ahead of cybersecurity and invest in maintaining our cybersecurity posture and improving it as we need to. We’ve been investing significantly, as mentioned, in order to comply with legal requirements, particularly around the NERC mandatory standards. We’re meeting all those right now in order to ensure that we are not only meeting compliance but, as I mentioned, are a responsible utility operating within that large interconnected system.

The Auditor General’s report, however, provides us very good guidance for areas that are not addressed by the mandatory standards but still pose a risk to the local delivery of power to B.C. Hydro and to the businesses in B.C. This is a responsibility, I think, we have to our customers. We’ll address those recommendations that we’ve just outlined in this multi-year program that will be coincident with our other cybersecurity investments.

With that, I think that concludes our comments on the audit.

S. Bond (Chair): Thank you very much for that very fulsome response. We appreciate it.

I’m going to entertain questions from committee members.

J. Yap: Thank you for the presentation. I’m sorry I missed the first part of the Auditor General’s presentation. Maybe it was covered there. Thank you, Kip, for your response.

A couple of questions. This is an area that…. Many people have seen references in the popular media and in the entertainment world about what can happen if the power grid goes down. There’s that sort of image of the disaster that could happen. We are all so dependent, in our daily lives, on electricity. Certainly, our economy is fully dependent on electricity flowing.

It’s interesting that the statement is made in the report that it’s a fact of life — cyberattacks happen — and that they eventually will succeed. I mean, I had to read that over again for it to sink in. That’s the world we live in, right? I have heard, from the popular media, that there are different classes of hackers: the 30-something-year-old man in his mom’s basement, the popular image, who is working away on his computer all day; and state actors, who want to do damage to Canada and to British Columbia.

I guess my high-level question is: what interaction does Hydro have…? What level of government…? Is it Hydro’s responsibility to be aware of these potential national security threats? I’m mindful that at a recent conference in Niagara — four of us attended — there was a speaker from CSIS, the Canadian Security Intelligence Service, who identified cyberattacks as a big worry.

Conceptually…. You don’t have to give away state secrets. My question is: are you getting some intel from those players whose day-to-day life is to think about national security, the security of British Columbians and Canadians, as far as the grid is concerned? Hydro has to be a part of that. So that’s my question.

K. Morison: Yeah. That’s a great question. The way we address that primarily is with our collaboration with other entities.

[1:35 p.m.]

There are some key ones, like E-ISAC, Electricity Information Sharing and Analysis Center, which is a sanctioned group under the North American Electric Reliability Corp. They are solely aimed at, really, providing information around these kinds of issues associated with electric utilities. We also have very close ties with the Canadian Centre for Cyber Security in Ottawa, and the RCMP. We do have connections with CSIS as well. In fact, CSIS was in our office last week. And we have, of course, local contacts throughout the WECC, the Western Electricity Coordinating Council, that collaborate and put out notifications of potential issues that are occurring.

J. Yap: A follow-up question. I’m glad to hear that’s happening. As far as the risk…. From reading the report, the standards were first set in 2003. So I take it that before that, there was no…. I mean, there must have been some security, but I guess at that time, the Internet was not what it is today and where it seems to be going. I assume that the standards between 2003 and today have been updated to reflect where we are.

Secondly, it seems to me, from what I read and hear, that we’re on the verge of an even greater explosion, with artificial intelligence and 5G coming. I assume that’s going to have an impact on Hydro and the need for even more security.

K. Morison: Yeah, I think that’s absolutely correct. The mandatory reliability standards that are imposed to improve the security of the electric power grid have certainly evolved since 2003. The first set of standards that we saw was the NERC critical infrastructure protection, version 3. We just have upgraded to critical infrastructure version 5. We’re working on version 6 now, which will be implemented in October. We’re planning for a version 7, which we expect in the next few years. Those are continually expanding to address these kinds of threats you’re talking about — and the ever-expanding digital footprint, as I mentioned, within utilities.

On the other side of the house, on the IT side of the house — which doesn’t have a direct impact on the grid but has, certainly, an impact on the operations of B.C. Hydro…. There are no standards in that domain, but there are lots of frameworks — like the NIST framework, for example, which the Auditor General has alluded to — that are used to assess your maturity and to guide your development into a strong cybersecurity posture to prevent those kinds of attacks.

J. Yap: One more question, if I may. You’ve mentioned that you do testing. You referred to two types of testing — that every two years you do a test, and the other type of testing with other utilities. I assume that…. Again, I’ve read that one way to test your system is to hire a hacker to do that and to see how good he or she is in trying to get into your system. Is that something that Hydro would consider doing?

K. Morison: Yeah. I’ll let Paul answer part of that question because he was involved directly with that. But the two types of tests I mentioned were explicitly aimed at incident response — so testing, ensuring that you can respond to an incident once you’ve detected it. That kind of testing is typically aimed at finding out if there are vulnerabilities in your system, that someone would actually entre your system.

Paul, did you want to talk about some of the penetration testing that’s been done?

P. Choudhury: Sure. In the arena of our control centres, where our most critical infrastructure exists, whenever we upgrade significant pieces of that infrastructure, we’ve actually hired an American firm to come in. We’ve given them access to our corporate systems, and they have then tried to access our OT systems and have not been able to do so. Our OT systems are segmented from the Internet, and despite their best efforts, they weren’t able to get in. So we need to do more of that, on a regular basis, because we need to stay ahead where the best hackers in the world are.

K. Morison: Perhaps I could just add to that, though, that we also have done social engineering tests, where we’ve hired entities to try to hack or enter physically into our facilities, because people are typically a very weak link in businesses where insiders can let strangers into the building or leave Post-it Notes on devices.

We’ve used firms to make sure that we have good, strong social protections within the company as well.

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

M. Dean (Deputy Chair): Thank you for being here today and sharing all of this with us and for all of your work on such an important matter. I have just a couple of questions.

[1:40 p.m.]

You talked about your investments and that this is going to need to be across lots of different systems, and there are going to need to be investments, like multi-year investments, as well.

Then, also in your detailed plan, you mention about getting approval from BCUC as well. So can you just describe a little bit the process of how you’re actually going to be able to create that detailed plan across systems and years and what the mechanisms are for making sure the funding is there for what it is that you think needs to be done?

K. Morison: Yeah, I think we do this the same way we do with our other cybersecurity enhancements in our company. We’ve gone through the NERC CIP programs where we develop programs and develop the costs of those programs over a large landscape. We do also the same for the investments we make in our IT, part of the landscape in developing the investments we need. Those are basically all prioritized together to prioritize, obviously, first the ones that are going to be in compliance, the second ones that are around reliability and productivity, and the third ones that are more discretionary investments.

We expect that we’ll be able to, in the period between November and December, come out with a working plan that will start us on that journey to be able to do some of the tasks, but the full costing of the implementation or remediation of these recommendations will take some time.

M. Dean (Deputy Chair): Okay. So am I hearing that you have some internal resources that you’ll be able to use and dispose to respond to some of the recommendations, but then it’s going to take some time to do the full costing?

K. Morison: I think that’s true. We know that some of the recommendations can be dealt with fairly readily, at low cost and with little resources on our behalf, but some of them are quite large. Some of them could involve quite a large capital project to change the infrastructure that’s associated with some of the ICSs, for example. Those have to be really detailed out before we can come out with a firm cost associated with those.

Our expectation for the order of magnitude of cost is only…. Our sort of benchmark for that is the work we’ve done through the reliability standards, which is a similar kind of effort in terms of remediating a physical station out in the field with the appropriate cyber protections, and we have a fairly good handle on what kind of costs those would be. So we will try to use that information together with the findings of the risk assessment to come up with a detailed costing of what the remediation will ultimately cost.

M. Dean (Deputy Chair): Lastly, you did talk about how part of the operating terrain that’s outside of what’s mandated is where there are potential vulnerabilities, and you talked about customers, communities and economies being affected. I just want to know whether there’s a certain kind of demographic that is more overrepresented in those vulnerable populations. Is it more because of how the system is set up or because of how connectivity is through the province, that rural communities or Indigenous communities are therefore more at risk because they’re not caught within the mandated system that is better protected?

P. Choudhury: I think it’s fair to say that the 54 substations that are protected to the higher level are spread out across the province, from the north, at our major generating stations, into the south Interior and then at the major transformation stations which are also across the province.

The bulk of the ones that aren’t represented are also spread across the province but serve smaller communities. For example, I live in Coquitlam. Como Lake substation feeds my house. It’s not one of the high critical substations, yet it serves the community of Coquitlam. So I think that there’s no specific community that is unfairly disadvantaged by this lack of protection. It’s spread across the province.

B. Ma: This is recognizing the seriousness of these attacks. It’s also very fascinating hearing about how B.C. Hydro responds to them. Now, I remember a conversation several months ago with someone in government who had mentioned that the B.C. government itself, even outside of B.C. Hydro itself, experiences…. I can’t recall the exact number of attacks, but it was in the tens of thousands a day, I think.

I was wondering, firstly, how many attacks, on average, B.C. Hydro receives per day. Like, what kind of rate are we talking about?

[1:45 p.m.]

My second question is about whether or not there’s any sort of standardization between how B.C. Hydro responds to attacks and how the B.C. government responds to attacks. Is there an overall strategy throughout government? Or is Hydro doing…? Do they have a setup on their own that’s different from the rest of government? Does a Crown corporation deal with cyberattacks in a different way?

Sorry. To clarify, you mentioned that there were partnerships with the rest of the powered network. I’m just wondering whether there’s a relationship there between that and how the B.C. government generally deals with it. Or are they totally separate?

K. Morison: I’ll take the last part of that question first. We do work very closely with Gary Perkins for cybersecurity amongst the province and certainly work with him in any kind of provincial incident that might happen.

We don’t, at this point in time, have a clear framework for how the entire province and all its large Crowns and companies would respond together on those things. It’s mostly, right now, through collaboration. I think the notion that Gary was talking about at one point — having a cybersecurity operations centre to centralize detection and response to cybersecurity within the province…. There was a notion that we’d probably do that.

The intent was that entities like B.C. Hydro would share in the use of that kind of facility. We would provide information to it, and it could be a hub that would allow the province to respond en masse with its entities as one, rather than individuals. That’s the second part of the question. I hope that answers the question.

To the first part, I don’t know the numbers off the top of my head — I should; we made a presentation to the board with lots of numbers about the volumes of attacks — but they are very, very high. The number of malicious IP addresses hitting our firewalls every day is in the thousands. That’s why, in our systems, we have very good protections to try to avoid that.

We have other threats to the business that may seem more innocuous, particularly around phishing, which is something that…. Although it’s not directly involved with industrial control systems, it’s a big threat to many industries right now. We get around 80 million emails a year in our company. About 90 percent of that is spam or junk. With the ones that get through, a portion of those may, in fact, be phishing emails. Those, of course, can be weaponized to have malware in them that can be used to do things like get credentials, like happened in the Ukrainian event. People would get credentials and use those credentials to access other parts of the network.

That’s a possible scenario, which is why the hygiene for cybersecurity has to be very strong within all parts of our organization, including the IT side of the house.

B. Ma: There are a lot of phishing emails getting through on the Leg. system emails as well, and 90 percent spam. That sounds a lot like my Gmail account. So I feel for you.

R. Sultan: Who is doing the attacking? I can think of three categories: basement teenagers, blackmailers and national governments. Do I have them pretty well circled?

K. Morison: Well, we don’t always know. Sometimes we find out, but I think it’s unlikely that we have, at B.C. Hydro, a large threat from national governments or nation states. I think the Centre for Cyber Security in Ottawa agrees with that — not directly attacking B.C. Hydro. But of course, we could be collateral damage if Russia decided to attack the U.S. in some way — the power grid — and we were collateral damage as a result of that.

Most of the attacks that we see, at least the ones that we have evidence from that come through in terms of, perhaps, a ransom attempt or compromising a system, are likely to be individuals, people that are doing things for business reasons, but not generally organized crime or nation states.

R. Sultan: So the vast majority of them are just folks fooling around. Is that possible?

K. Morison: Fooling around may be true, but I think some of the attacks that we would likely see would be about people with serious causes, perhaps protesting some construction we might be doing or initiative we may have, and deciding they’re going to use a cyberattack in order to do things like attack our website or try to attack our industrial control systems.

R. Sultan: Could we protect the entire B.C. Hydro system through compartmentalizing and cutting ourselves off from other entities such as it appears Texas has done, from the diagram, or, as I understand, Quebec, to some degree, with direct current–only inter-ties?

Gordon Campbell, of course, had this vision to make us completely self-sufficient. I’m not quite sure what was driving that idea. But can we sort of cut ourselves off from this messy world and just run our own little thing here?

[1:50 p.m.]

K. Morison: Well, perhaps I’ll let Paul comment on the isolation of Texas and Quebec, because that’s really around the power system, not so much around cyberattack. Then maybe I can follow up with the cyber perspective.

P. Choudhury: Sure. The province and B.C. Hydro have reaped significant benefits from being interconnected with the rest of the connection, both from a reliability perspective and from a financial perspective, in terms of being able to trade power and support each other when we have disturbances.

I think that if we were to segment ourselves from the rest of the western interconnection, one could say: “Well, then we could have our own standards, which could be more stringent or less stringent.” But we’d still be facing the same cyber risk because we’re connected through the Internet on our IT systems.

Our operating technology systems are segmented from the Internet. So we don’t do email on our industrial control system platforms, and we don’t have access to web browsers and connections to the Internet on those platforms. They’re relatively segmented.

R. Sultan: To use your phrase the “hygiene of the system,” by interconnecting and integrating to the degree we have here in B.C. with IPPs…. Now we have all sorts of people who want to put a solar panel on the roof and tie it in to the grid and plug the Tesla car in at night and become part of your grid — and windmills. Does this have the potential, at least, of degrading system security?

P. Choudhury: The more connections we have to the system, there is a slightly increased risk to local reliability as those devices — be it power walls or electric cars or solar panels — interact with our system. There’s also a safety implication as well. We need to know what’s connecting so that when there is an outage, and we send our crews out there, there isn’t a solar panel generating, backfeeding into the distribution system that we’re trying to fix.

As we move to a more digitized world and those devices talk to B.C. Hydro and allow us to, maybe, control some of them and take energy from some of them, we’ve got to be very careful about the protocols and the connection methodologies to ensure that they’re done over very secure mechanisms and only do what they’re supposed to do and don’t have access to the rest of our operating technology or information technology systems.

R. Sultan: Again, to use your phrase “hygiene,” I guess I grew up thinking that the American grid was probably state of the art in the world, and we were pretty good too. Yet I pick up the newspaper and I read that Pacific Gas and Electric, now in chapter 11, is now being held to account for, basically, poor maintenance, cutting back here, there and everywhere. An investor-owned utility, now, unfortunately…. A poor example for capitalism, by the way.

I mean, how many of these entities in the United States are as reliable and as hygienic as we are?

P. Choudhury: I can comment at a very high level. All of those entities have to follow the same standards that we do. So we’re all in the same boat together.

They will have classified their major substations as high or medium or low-risk and will have invested in the high and medium substations to meet the standards to ensure the reliability of the interconnected system and to avoid penalties from their regulatory agencies. They will have a set of substations that are deemed to be lower risk, that are vulnerable to cybersecurity attacks, in the same way that we have some.

R. Sultan: That’s the standard they’re expected to meet. But it doesn’t necessarily mean it is the standard that they do meet. Is there any way to test the integrity?

P. Choudhury: Yes. Each of those entities and ourselves are audited on a regular basis. So every three years, we have a team of auditors come into our control centres that make visits to our facilities to ensure compliance with those 103 or so standards that are in effect in British Columbia.

J. Thornthwaite: I’m just going to refer back to your real-time map. I guess it’s the Auditor General’s real-time map. I don’t know whether or not the photo that you have on the sheet, as well as what you showed up there, is reflective of a lot of real time or just that particular time that we’re looking at. It just didn’t seem that Canada was…. There wasn’t much going on in Canada. So that’s my first question. Except for…. I see this one. There’s something going on, on Baffin Island, for some reason.

[1:55 p.m.]

What is the difference between an attack and an infection? Are these just the ones that you know about? You would think that there would be a lot of infections that you don’t know about.

K. Morison: I think I’ll take a shot at that. The difference between an attack and an infection, in my thinking, is that an attack is an attempt to get into your system. That could be rebuffed. It could be blocked. Many of those dots you see flying back and forth would be somebody attempting to get into your firewall, for example, by shooting a packet at it and trying to get access to your system. That would be recorded as an attack, and it would show up as one of those bubbles going back.

If it’s successful, that attack, it means it gets into your system somehow and may drop a payload, meaning it puts in a malicious piece of code like some malware. In that case, that would be an infection within your system. That map doesn’t show you how many infections there are or what success rate. It’s not incident. It’s around attack factors. That would be like us measuring our firewalls on our external system and looking at all of the different folks trying to get into our system, either by intent or just randomly, and saying: “That’s the traffic that we’re seeing that are attacks coming at us each day.”

The number of incidents we have is extremely low. Many incidents, of course, that occur in utilities or businesses aren’t reported, because people don’t want to disclose that they have a vulnerability. It’s very hard to get information around what kind of infections actually happened and what kind of impacts they ultimately had. Even if you’re infected, it doesn’t mean a bad thing’s going to happen. That infection has to do something before a bad thing happens.

J. Thornthwaite: What about what I said about how it didn’t seem that Canada had that much, in comparison to…?

K. Morison: I think that’s true. If you look at some of those detailed maps, you’ll see that there is a significant amount of traffic to most big cities, Vancouver being one of them, because we have trade routes to China and we’re connected to the U.S. But by and large, you’ll see the usual centres, like China and Russia and the U.S., being lit up on those maps.

J. Thornthwaite: Because they’re infecting us, as opposed to the other way around, or…?

K. Morison: Both directions I think you’ll see when you look at those maps. But it depends on who’s publishing the map.

J. Thornthwaite: Right. Thank you.

S. Bond (Chair): Any other questions?

I just have a couple. I apologize if this is repetitive. I missed the first part of Mitzi’s question. Hopefully it’s not repetitive.

First of all, we’re grateful that B.C. Hydro agrees with the recommendations. So the recommendation regarding maintaining an inventory of hardware and software. Are there budget…? Well, obviously there would be budget implications for that. Has that been considered, and how would that be covered? Do you have any sense of what the quantum would be for you to meet that requirement or that recommendation from the Auditor General?

K. Morison: I think it’s too early to know the answer to that question. But, certainly, the risk study that was done in order to prioritize the work will also, as I mentioned, identify the priority that we’re going to assign to that inventory — how extensive it will be, how many stations we’d have to provide it for. Similarly to the real-time detection — how many of those stations and what the priority would be on implementing technologies to do that.

It’s too early right now for me to say what those numbers would look like or even to have a quantum on them, frankly, because we haven’t got through the risk report. But once that is digested, then, I think in that period between November and December, we’ll have a better handle on those numbers.

S. Bond (Chair): Does it literally mean a physical inventory of supplies? When we read it, that’s what it sounds like — that you’re going to have backup parts or you’re going to have whatever’s required in the event that something happens and you need to move quickly. Is that what it actually means?

K. Morison: What typically it means is that we would have a database of some kind that would contain within it a list of all the assets — so the type, make and model of the industrial control system or systems. It would have the latest configuration. It would have the latest patching. It would have the latest versions of hardware and software. And it may indeed have stored with it a backup image of, if possible, what was on that device before it was compromised, meaning that when we have an event, then we can quickly go to that database and say: “Okay. We’ve got to restore back to that format that we had earlier.”

We do that currently, now, for our IT landscape. We do it for the ones that fall under mandatory liability standards. It makes restoration, of course, much easier, and it just looks like a backup of our system. That’s effectively what it looks like.

S. Bond (Chair): I wanted to just follow up on a comment in the report made by the Auditor General to ensure that there are ongoing conversations with Hydro.

[2:00 p.m.]

As you can imagine, not all of the specific details are in this report, and neither should they be, because by simply even having this discussion, you wonder about the vulnerability. Even though lower-level issues are being considered here, even bringing the information forward identifies for everyone in the world that we have a vulnerability at some level.

Now, I gather that the Auditor General’s office weighs the risk. I’ve certainly seen reports previously, for example, with the Ministry of Justice at that time, where you have to be careful what you put out in the public. What threshold does it require to meet that test? I’m assuming this report has not exposed us in any way that would be damaging, but I do want to follow up on the last paragraph of page 4 of the report that says: “We are not disclosing findings that could expose details of these power systems. Instead, we provided B.C. Hydro with a detailed technical report that specifically outlines our findings.”

I’m assuming that because B.C. Hydro now has that information, they’re also taking action on any other recommendations or anything to deal with those higher-level security issues. There’s some other process, because we’re not going to have the opportunity to monitor or know what happened there, and probably we shouldn’t. Is that being taken care of, if there were any specific recommendations?

K. Morison: Yes, that’s correct.

S. Bond (Chair): And secondly, the threshold. How does the Auditor General decide what’s in the public interest to release so that we’re not exposing our vulnerability?

C. Bellringer: In terms of follow-up, there’ll be the follow-up, as there is with all the action plans, with what is in the published report. We do a less formal follow-up with all of the IT organizations where we’ve done an IT review, where we’ve given them a more detailed report. We generally get…. On some of them, I’m envisioning that they actually come in once a year, and they give us an update on where things are at. So we follow it through.

If we were to determine that, based on what we’ve seen, we felt things weren’t moving along, then we would share that with the committee through a subsequent communication, but there isn’t a formal mechanism for that.

Sorry. What was your other question?

Interjection.

C. Bellringer: Oh, in terms of what we report and what we don’t. It’s fairly much an ongoing discussion throughout the audit, and then when we get to the end, we do base it on our best judgment of what can be made public. Then when we’re sharing it with the organization we’re auditing, there may be a further discussion to say: “You know, this part might be a little too sensitive. Can you leave it out?” And we may choose to find some words that capture the notion, but we take out the detail.

In this case, I’d say there was some of that discussion that went on through the finalization of the report, but it wasn’t a major disagreement over what was to go in and whatnot. As you described, some of the other reports that we’ve done we couldn’t even take to this level with any comfort.

The main thing…. It’s an important one. We are saying that the areas covered by the mandatory reliability standards are well managed and well controlled and that they’re meeting those standards, and those audits that are done on a regular basis are providing that assurance. So it’s a major positive finding, and there are implications to what we have raised. But at the same time, we have a common understanding of what the risks attached to that are.

S. Bond (Chair): I’m glad to hear that there’s some back and forth between the auditee and the Auditor, because, I mean, at times, the work gets done, but there could be unintended consequences. I think that’s prudent to have that conversation where Hydro says: “We’d prefer you didn’t specifically refer to that.” Obviously, it’s up to the Auditor to make that final judgment call.

Lastly, I just want to…. Because our system is connected to other states and provinces, when you describe “localized” outages as a result of the lower level outlets that we’re talking about that may have some vulnerability, localized means as specific as a community. It doesn’t mean British Columbia as a localized piece of a broader system. It means that it could be Vanderhoof, for example.

K. Morison: That’s correct. Yes.

S. Bond (Chair): Okay. I think there’s a substantive difference if localized means the province of British Columbia versus the village of Valemount or Vanderhoof, right?

[2:05 p.m.]

K. Morison: Yes.

S. Bond (Chair): Localized means it could be as specific as an impact in a smaller community, not the entire province of British Columbia.

K. Morison: Correct.

S. Bond (Chair): Okay. Thank you.

Does anyone have any other questions?

Well, I want to thank B.C. Hydro on behalf of the committee for, first of all, getting a good outcome. I think this report is very clearly saying that there are safeguards in place where they are most needed but that there’s some more work to be done. I think that you’ve laid out a plan for us, not with the specifics yet — we’ll be watching for those — and that you recognize that there is some additional work to do.

Thank you to the Auditor General’s staff, as well, for the presentation. Again, you’ll go over in the column of innovation now that we’ve actually seen some media up on the screen. That was pretty exciting for us here. It doesn’t take much to excite us here at PAC, but seeing those flashing lights was really great. Thank you for your time this afternoon.

With that, we’ll move on to the next item on the agenda. We’ll just switch over the presentation materials, and we’ll move right on.

[2:10 p.m.]

All right. I’m going to make sure we keep moving here. I know that people are…. We’ve had a busy workday, and I want to make sure that we work through this agenda so that we’re as efficient with your time as possible.

An important item for us now, as we discuss this…. I very much appreciate the Auditor’s opening comments about the financial statement audit coverage plan. I also heard her nudge me to make sure that the Deputy Chair and I get this on the agenda soon. So we will be sure to contemplate that.

This is the Performance Audit Coverage Plan 2019-20–​2021-22, basically the workplan of the audit team at the Auditor General’s office.

[Interruption.]

S. Bond (Chair): I’m hoping that’s outside the building. Either that or we’re having a cybersecurity issue. Kate will check that out. We’ll just keep going. There are no alarms ringing or anything.

With that, we look forward to the Auditor perhaps reiterating some of her comments earlier, and we’ll ask her to walk through the performance audit coverage plan.

Office of the Auditor General

PERFORMANCE AUDIT COVERAGE PLAN

C. Bellringer: This section in the agenda started because of the letter that we wrote to the Chair on July 18. It is a request for us to get access to WorkSafe in the context of an audit of avalanche safety. When we were putting this together for…. It needs a PAC approval in order for us to get access. We can explain what that’s all about in a minute.

It seemed logical to provide it in the context of our performance audit coverage plan, where the avalanche safety audit had been listed last year. That plan hadn’t come specifically for any kind of approval to this committee. We had distributed it to the committee. Last year, when you were approving the financial statement coverage plan, you asked for a copy of the performance audit coverage plan, which we provided to you, but it was never on an agenda item.

Then, when we were asked where the avalanche safety audit falls within that plan, it was also important to note that now the plan is almost a year old, and we’re actually right at the very end. When you say to put it on the agenda, Madam Chair, please not too soon, because we’re not quite finished yet. It will be finished for the presentation to the Finance and Government Services Committee, which is on October 21. We’ll be done by then.

There will be a fair number of changes from the plan that we submitted to you last year. It was a good time today to just walk you through, if you’re looking at last year’s plan, which are the audits that were included in that plan that have been completed, which are the ones that we’re still working on and which are the ones that remain from last year that we’re reconsidering for the year going forward.

We’ve got that presentation for you. We’ve also got this request for the audit of WorkSafe. So I’m not sure how you’d like to proceed with the section. Do you want me to deal with the avalanche first and then move on to the plan?

S. Bond (Chair): No. If you don’t mind, let’s walk through the plan in its entirety.

I think members now have a copy of the letter of request from the Auditor. I would encourage you, if you haven’t read it yet — I know it came yesterday — to have a read through that, because if you have any questions about the process and how and why, it would be good to have those ready.

If you don’t mind, Carol, would you mind having your team walk through the performance audit report?

C. Bellringer: Absolutely.

S. Bond (Chair): Then, at the end, we will consider a motion or some step as the committee deals with it.

C. Bellringer: Okay. Very good. It’s actually two very completely different things. In terms of going through the plan, you’re just going to see avalanche as one line in there. Then we’ll get into a discussion on avalanche.

There were 17 audits that were in process last year at the time that we submitted the plan. Since then, eight of those have been published. There are 13 that we’re working on currently. Nine of that 17 were in process last year. Three we’ve started since, and one is a new addition. That’s the Legislative Assembly Management Committee.

There are future audits. In the last-year report, there were 50 of those. Three of those we’ve started, which means there are 47 that haven’t yet been started. They’re still being considered as we go forward to update the plan.

[2:15 p.m.]

I mentioned that eight had been published, of the ones in progress from last year. Those eight have either all come to this committee or…. I’m not sure if there’s anything remaining that hasn’t come here. I think we may have covered them all off today.

Emergency health services. The industrial control systems, which we just covered. The environmental risks of non-operating oil and gas sites. Contracted residential services for children and youth. Two progress audits, correctional facilities and the education of Aboriginal students, which we had on the agenda today. Protection of drinking water is a fairly recent one. I don’t think we’ve covered that one yet. And the rate-regulated accounting at B.C. Hydro. Those are the audits we’ve published since January.

The ones that we’re working on currently. Of those, the ones that are bold were started after last year’s coverage plan was published. That’s access to cancer care, Community Living B.C., the Legislative Assembly — it was mentioned in the preamble, I believe, to last year’s coverage plan, but it wasn’t on the list — and the provincial nominee program.

Other ones that we’re working on. You’ll see No. 2 is the avalanche safety. The B.C. sheriff services will very soon be released. Forest revenue. The asset management. Cybersecurity controls is another broader cybersecurity audit that we’re working on, an internal audit. Conservation lands was listed in the coverage plan as wetlands, and we’ve refined it into looking at conservation lands. The same thing with forest service roads. It was listed as resource roads. No. 11 on that list, offshore and group 4 schools, was the fine-tuning of international education. Palliative care. We ended up looking at Interior Health.

Those are the ones that staff are currently busy…. Some of them are a little earlier than others. Many of them are just being finished up and in process. A few of them are actually at the reporting stage.

CCR is the compliance, controls and research group. It’s the one where we do some smaller audits through the year. It very much flows around staff who are available to do things. We have them sitting on a shelf ready to go. We only list the ones, in the coverage plan, where we’ve already confirmed that it’s soon, being worked on currently or about to be.

We had given you a longer list than that outside of the plan. We always get a little bit nervous about that, because we’re never sure which ones we’re actually going to do until we get there.

The ones we published this year…. You would’ve seen recently the school district 36 executive expenses. We had issued school district 61 last year. Then we did it again in school district 36, that same audit. We did the audit of directly awarded contracts at the Liquor Distribution Branch. The first one on there — IT users identity and access management, fondly known as IDIR — was a new one that had not been included in the coverage plan, but we have already published it.

The two that the staff are currently working on…. One is investigational capacity, which is within the Ministry of Finance, and post-secondary international student tuition.

I won’t go through the list of 47 that remain. These have not been started, other than some initial thinking. Preliminary planning might have taken place. Other than that, we haven’t confirmed whether or not we’re proceeding with these. It very much is dependent on our budget. We’ll be reassessing it and putting that into the budget submission.

There are a few on here that are not optional. We’ve had Site C on there for a couple of years. We’ve got to do something at Site C. We’ve started some planning. We sort of had a start and stop, and now we’ve got to start it up again. It’s a critical one to do.

[2:20 p.m.]

Some of the others may drop off for various reasons. We’ll share that with you in the next plan as to what choices we’re making and why. We’re finding our audits are tracking larger than they used to. We’re doing what we can to reduce the hours on each audit. I mean, you get a very comprehensive audit here that includes a lot of dimensions. Those take time, so we can’t reduce it so much that we’re just rushing through this list. We have to wait.

If it’s an area that deserves a deep look, it will take time, and that will mean we can’t do some others. So we’ll be going through that to make that assessment before we submit our budget — and demonstrate the budget impact if we were to do a little bit more or a little bit less.

That was it on the coverage plan.

S. Bond (Chair): Thank you. Do we have questions about the coverage plan? We’ll deal with WorkSafe in a minute, but let’s deal…. Okay. So, Ralph, yours is about WorkSafe.

M. Dean (Deputy Chair): Just a couple of questions. I noticed that domestic violence is listed, and I’m wondering what your definition of domestic violence is and what scope you think that will be. Does it, for example, include sexual violence? And are you looking at programs, or are you looking at government policies for staff? That’s a huge topic.

C. Bellringer: Indeed. That is the first stage when we start to do an audit — to do the planning so that we can answer exactly the questions you’re asking. We narrow it down to what we consider to be the highest-risk areas, areas of significance. Where can we contribute to the discussion? What is something that is in demand in terms of information by the Legislature? At this point…. I’m looking at the right people, am I not, for that particular project? Malcolm is the Deputy Auditor General on that one.

By the way, I haven’t introduced the staff. I very much apologize for that. Malcolm Gaston is one of the Deputy Auditors General who is responsible for putting the performance audit coverage plan together. He’s also responsible for the domestic violence audit, so I’ll get him to speak in a second.

Laura Pierce and Jane Bryant both work on our performance audit team. Laura takes the lead role on putting the coverage plan together, with a great deal of help from sector teams right across the whole office. But, still, she really does carry the weight of getting the mechanisms pulled together. Jane is the engagement leader on the avalanche project, so she’s here to answer questions on that one.

Malcolm, I’ll leave it with you to discuss where we’re at, because we’re still exploring what areas to look at in domestic violence.

M. Gaston: Thank you, Carol.

We’ve just started looking at that one, actually, so at this stage the scope that we’re looking at is fairly broad and I think covers any of the areas that you’ve just mentioned. But as part of our early planning, we seek to gather as much understanding and as much information as we can and, from that, with an assessment of risk significance and so on, then narrow it down to what we think the best scope is for that audit and where we think we can add most value. Jane’s actually involved in some of the work around that as well.

I don’t know if there’s anything you want to add, Jane.

J. Bryant: Well, we have just started meeting with a number of ministry staff and also external stakeholders, which is part of our normal process for just understanding the area and the history of what government’s been looking to achieve in the area of domestic violence.

M. Dean (Deputy Chair): Thank you. I would just offer as a resource…. Even though it’s in the Ministry of Finance, we do have a gender equity office, and we have staff within that office as well. So domestic violence is clearly a part of the mandate of the gender equity work that the government is doing. Happy to be of service.

My second question is around the plan beyond 2022. I see, Carol, that you put in your introduction that you don’t want to set up a new Auditor General to have a predisposed workload and that they will want to come in…. A new Auditor General, for sure, will want to make their mark. But I did think that there was some kind of a natural pattern of certain types of audits being included in the plan.

[2:25 p.m.]

We’ve only got a certain number of health authorities, and we have a look at them. As a year passes through, you do see some priorities that would naturally be picked, and many of your team are actually creating the plan. So are we not going to see any kind of…? I would think that we could actually have a tentative plan, knowing that a new Auditor General might want to come in and change some of those priorities. But I get the impression from what you’ve put in here that we’re not going to see any kind of a plan beyond then.

S. Bond (Chair): Maybe before the Auditor General answers, I’m sure my other colleagues…. Not that I want to pile on, but I had virtually the same question that Mitzi has. I think continuity is important. You are the current Auditor General, and I think people have a great deal of confidence in a plan that would be laid out.

Like Mitzi, I would hate to see sort of a dead stop where we see blank pages. Maybe you can reassure us that there will be some sort of plan that still leaves room for a new Auditor General but doesn’t leave us sort of scrambling at that point to wait till that Auditor becomes familiar with the province or whatever. I just want to totally agree with Mitzi’s question, and maybe you could just put our minds at ease.

C. Bellringer: I also have 120, give or take, staff in the office asking for the same thing.

I would make the distinction between planning versus the plan. We do have an ongoing planning process. We will be planning right up to the…. The 2022 reference is that my term ends September 15, 2022. There will be somebody in after that.

What we’re distinguishing between is…. People will be working on things the day I leave that won’t be finished yet. It’s not that we’re saying: “If they won’t get finished, they won’t get started.” Not at all. They’ll still start things that will be in process the day I leave. What I don’t want to do is provide you with a three-year plan that takes you through to 2025, in effect, to say: “Over this next three years, here are the next ones they’ll be working on.”

I’m thinking about…. I mean, we still haven’t designed…. What does it look like in that period where we’re running out of inventory of projects, and now we have to keep planning, but we’re cautiously leaving it open for somebody?

I’m also looking at, for the current year, a summary of some sort by sector so that when you look at the financial statement coverage plan and the performance audit coverage plan by a sector, you get some sense of what kind of work we are doing to look at risks within that sector. In some cases, we’ll be doing financial statement work. In other cases, we’ll be doing performance audit work. Yet again, we may be doing a blend of both.

When we talk to school districts, how are we going to get some appropriate information to the Leg. Assembly on the school districts? In education, you can look to the sector and see the way that we’re getting that coverage. So I could see the planning producing a public report in my last year that says we’ll lay out the planning we’ve done to identify what we believe to be the risk areas that some attention needs to be paid to by the office, and then it will be up to the next Auditor General to really fine-tune that.

We won’t stop the planning in the office, but we will be cautious on how we lock things in for somebody who may want to take it in a slightly different election.

S. Bond (Chair): Is that better, Mitzi? I just had visions of blank pages from the years….

C. Bellringer: It’s tempting.

S. Bond (Chair): Please, no. We actually think…. I think that’s a reasonable response, to say that we’re not going to lock it down, but we’re also not going to vacate the playing field because we do have an entire office and plans that are…. There’s a pretty long list of them here. As we continue into 2020, for example, there will be more added. So I think we have a greater sense of comfort about that, that there will be a road map that has the option for some detours if that’s necessary.

C. Bellringer: One of things that I’ll add, even though…. This will be something that you’ll see when we present the plan with the updated one in a couple of months. There are some areas not on this plan that are, to me, very important for us to be looking at. The Legislative Assembly is one, where we have a first report that will be released publicly next week. There are three further reports that we’re identifying as important for us to look at. That is going to be described in that report. That’s not currently in the plan.

[2:30 p.m.]

The other thing I’m finding that we’re not providing enough information to the Legislature on…. It flows from the first item on the agenda today, the report on the summary financial statements. I think we need to do more work in providing you more information about the kinds of things…. More than half of our staff…. The 40,000 hours of staff time go into financial audits, yet we produce very little for your discussion. I think we need to up our game on that side.

The school districts, I mentioned. Anti–money laundering is an important topic in which there are a lot of different areas that we could be looking at.

Lastly, the citizen inquiries. The number of people writing to us with concerns about particular things is increasing dramatically. They’re valid areas, and we just don’t have time to get to them.

All of that…. I’m not positioning this…. Well, maybe I am in a certain way. I’m not trying to, in any way, influence the budgeting process. But of course, it takes resources to do all these things. Certainly, there are concerns that I’ve got that we’re just not getting enough work done.

S. Bond (Chair): You’d be hard-pressed to convince anyone sitting at this table of that, as we scramble to keep up with you on a regular basis.

Anyone else?

Could I just ask a follow-up question, then? I do think that…. You’ve made the argument before, and we certainly see the products and pay a lot of attention. This is a committee that works really hard to do their homework. I just want a little bit of clarity, and I think it’s important. I think I understand — but I want to make sure the committee understands — that the audit work you’re doing related to the Legislative Assembly….

The first question is: did it displace other items on your workplan? Did you have to, basically, readjust because of the work being done there? Secondly, while it’s on your performance audit coverage plan, I don’t believe it comes to PAC. I think it goes somewhere. I’m not exactly sure where.

I’m wondering if you can, just so that our committee has the understanding…. One, did it impact other things you would’ve been doing? I’m assuming the answer is yes, but we’ll wait to hear about that. And secondly, what is the process? You’re going to release a report, but I don’t believe it comes to Public Accounts. Maybe, between you and the Clerk, we can have some clarity about where that goes.

C. Bellringer: The first question around what it displaced was also asked at…. We had an update meeting with the Finance and Government Services Committee, and they asked us the same question. It did mean just using existing staff to work on that particular audit. We hired two contractors to assist, but at the end of the day, we didn’t ask for additional budget money. So in effect, it displaced something but nothing specific. It wasn’t a one-on-one. It wasn’t like: “Okay. Those of you working on project A, stop and come over here.” It just meant that the way we scheduled things changed.

At the end of the day, though, we could have had one other audit done with someone somewhere in the system. With 120…. Well, it’s not 120 auditors, but with all of the auditors within our staff working on different things, the scheduling is quite a network of who works on what.

S. Bond (Chair): So it may have just bumped something further down the priority list?

C. Bellringer: It would have bumped something down. We decided that was the best way to manage it from the involvement of executive and other…. I mean, there’s only so much we can actually manage in total in the office. We can’t just hire for a specific audit and have the whole audit done by somebody externally. At the same time, using the contractors was an efficient use of our time plus using theirs. So that one worked out quite nicely.

We conducted the audit and are issuing it under two different acts — therefore, two sections. One is section 11(8) of the Auditor General Act. It’s under the authority of both that, as well as, I believe, section 5 of the Legislative Assembly Management Committee Act. That gives us the authority to go in and do an audit within the Legislative Assembly, which isn’t that clear in the Auditor General Act.

[2:35 p.m.]

The Auditor General Act — because we use that section to do some of the work under that — then goes on, I believe in section 11(10), to say that all reports issued under section 11(8) must be provided to the Public Accounts Committee. So it comes to you. I don’t know what you do with it once you get it.

S. Bond (Chair): All right. Well, I’m hoping that Kate will make that clear for us, right?

K. Ryan-Lloyd (Acting Clerk of the Legislative Assem­bly): Thank you very much, Madam Chair and members.

The work of the Auditor General is, as you know, quite comprehensive. We very much wanted to thank the audit team for their extensive work in both examining the financial statements of the Legislative Assembly, as well as the performance audit work that was described this afternoon. We look forward to working through the results and findings of those audits to ensure that we can move things ahead in a sound manner here.

To date, the audit work that has been previously completed at the Legislative Assembly has been considered by the Legislative Assembly Management Committee. Those include the findings of previous audit reports such as the results of the 2012 audit.

In addition, I note that, by way of a motion adopted in February, the Legislative Assembly Management Committee has invited the Auditor to undertake the additional performance work. So in addition to their regular financial work that was ongoing and that was in the hands of the Legislative Assembly Management Committee, it is my understanding that it is the intention of the assembly to also have the performance audits considered in that venue.

The Auditor, of course, is quite correct with respect to the provision in her act, but there are some mechanisms to clarify where the direction of these reports might go on a future basis. My understanding is that it would be the view of the committee that they would very much like to turn their minds to receive and consider the reports, as they are well positioned to action conclusions and findings.

S. Bond (Chair): Okay, so LAMC will receive the report and deal with it.

K. Ryan-Lloyd (Acting Clerk): These are still matters to be finalized in the next week or so. But I think there are some proposals to simplify both what happens to the performance audit that will be released by the Auditor next week and any subsequent audit work, including ongoing consideration of financial statement audit work, as well as the other performance audits.

S. Bond (Chair): All right. Mitzi, did you want to ask a question?

M. Dean (Deputy Chair): Yes. When it’s released by the Auditor General, it goes public?

K. Ryan-Lloyd (Acting Clerk): That is my understanding. Carol can speak to the details, as planned for next week.

C. Bellringer: It’s being released, as would any of our performance audit reports, through the Speaker to the assembly. At that point, it is considered a public document. We hold a teleconference on the day of report releases.

In the past, I’ve spent a considerable amount of time following the release of a report with individual media contacts. A couple of months ago I decided to change the practice and only hold the teleconference. That will be the case next week. I’ve done that now for the last two reports that went out. Any media contacting us are advised to call in to that teleconference.

That’s the only contact I will be having with the media. They can be fairly persistent, and that might happen. But I’m feeling, more and more, that it is important for me to direct my work, the results of the work of our office, to those to whom we report, which is the Legislative Assembly. The discussion of it is primarily through this committee and, of course, through other committees. But that is where I will be directing my attention.

S. Bond (Chair): Thank you for that clarity. Certainly, we are not at all lining up to add complexity to this matter. I am sure that LAMC will manage through this. We will take on whatever role is expected. But we recognize that there is a plan for the release and that the Clerk will keep us posted on what steps are taken in terms of the discussion of the actual performance audit. I do think it was important to raise it here, considering it is on the performance audit plan.

[2:40 p.m.]

I’m not going to speak for the entire committee, but we’re not looking to insert ourselves in this process. We’re supportive of the steps that will be taken to make sure that it’s public and will be dealt with by a committee.

C. Bellringer: I’m just reflecting on some of the conversations that often take place at the annual CCOLA-CPAC conference. Across the country, they are often talking about…. They don’t always look at every report that the Auditor presents. Some jurisdictions get a voluminous annual report. They may have 20 chapters in it, and they’ll choose five for discussion at PAC and so on. Coming to the committee is a different discussion, around: “Now that you have it, what do you choose to do with it?” So just to recognize that.

The one element of it that I think is important and that I’m being careful not to lose sight of is follow-up. When a report comes here, there’s an automatic follow-up process, which we’ll talk about in a minute. When it goes to a different committee, there would not necessarily…. Well, there isn’t a formal process. We wouldn’t want to lose sight of that.

S. Bond (Chair): That’s an important observation. I think that message will be passed along. I think we might actually have LAMC members here. It would be an important thing to suggest, perhaps, that…. We use that as best practice here. It may well be something that may want to be considered by LAMC as they move forward. Thank you for making that point. I note that MLA Begg is madly writing that suggestion down, so we are thankful for his presence here.

Any other comments, then, about the performance audit coverage plan before we deal with the WorkSafe-specific issue?

Thank you for that presentation and for the very aggressive plan that you have. I think it’s important to note — and we will also take note of it — the whole issue of citizen inquiry and where that fits in this whole process. You’ve pointed out that the workload is pretty heavy in just managing what we have now. That whole avenue isn’t something we’ve spent a lot of time thinking about, but in order to validate that process, at some point, we do need to grapple with the fact that if they never make it onto the list, that’s a disincentive, in many ways, for the public. I just think that was an important reminder to us about that venue, that avenue, for bringing suggestions forward. We’ll make note of that and give some thought to that.

Do committee members have questions?

I think the Auditor…. Did you want to make any specific comments about the WorkSafe request? I think you’ve already done that. We do have your correspondence.

C. Bellringer: Anything that I would add is included in the correspondence. It’s just very simply that WorkSafe is excluded from the government reporting entity. So the definitions are important. Within the context of the Auditor General Act, it’s outside of our jurisdiction, unless a committee of the assembly approves our doing an audit there. We have done the financial statement audit in the past. We actually contracted it, but we signed the opinion. We do not do that any longer. We don’t currently do any audits at WorkSafe. For the avalanche audit, we would like to include it, and in order to do so, we need your permission.

R. Sultan: Well, I certainly think the committee should give permission to the Auditor General to perform a performance audit focusing in particular on avalanche safety at WorkSafeBC. But in so doing, I would caution the Auditor General that it didn’t take much imagination on my part, when I began to ponder what the meaning of the word “avalanche” encompasses, to realize that the scope can run off in many, many different directions. I jotted down six of them.

MOTI — well, that’s obvious. We have snowslides; we have rock slides, avalanches galore in this steep province. EMPR — a little bit fuzzier. We have open-pit mine cave-ins. We have underground cave-ins. We have dam failures. Certainly there are Workers Compensation Act issues. I don’t know if the miners themselves would characterize many of these events as an avalanche, however.

[2:45 p.m.]

Thirdly, we have sport-related avalanche, risk-taking recreational activities — high-marking with your snowmobile, mountaineering, heli-skiing, snow, rocks, glacier. There’s no lack of injury, and I presume that some of these people might have WorkSafe coverage.

Four, perhaps as a broad public policy issue, government should think and ponder the prospects for extensive real estate development in steep terrain. I’m thinking of the folks who live alongside the backside of the Lions, as I look out every day from breakfast, on the steep hillside of Howe Sound. There’s lots of stuff coming down that mountain over time, yet we continue to allow houses to be built there, and workers are involved.

Five, hydroelectricity dams, irrigation dams. Dams fail. We know that. Is that an avalanche? Some might say it is.

Six, debris flows. If you drive up to Whistler, you’ll see cautioning about not stopping on bridges because of the risk of debris flows. Well, MOTI obviously thinks that’s a substantial risk, or they wouldn’t have put the sign up.

Beyond that, spending time, as I mentioned previously to this committee, with Jordan Sturdy, he explained to me the debris-flow risk from Mount Meager, which is considerable. The federal government geologists are spending quite a bit of time up there pondering this mountain — and it is a mountain — which isn’t a typical mountain. It’s just a bunch of crumbly crap, and it might let go some day. And the consequences all the way down to Lillooet Lake could be substantial. Is that an avalanche? I suppose so. Are workers going to be injured? I’m sure they would be.

We have issues of scope here, Auditor General. But I give you, from my point of view, clear sailing. Go ahead and see what you find.

C. Bellringer: If she wouldn’t mind, Jane can give you a brief overview. One of the first things we do when we’re planning is determine the scope. She has given quite a great deal of consideration to that already and can give you just a brief overview of where we’re at currently.

J. Bryant: With avalanche safety, what we’ve done, after a considerable number of meetings, is we looked at how we were defining what an avalanche actually is. So for the purposes of what we’re going to be proceeding with, an avalanche is going to be a snow avalanche.

As you mentioned, there are many other kinds of avalanches, from debris flows to dam failures — all extremely good and important issues and some that I would like to see us, maybe, cover in the future. Carol has to put up with a lot of us wanting to do a lot of audits. Some extremely good points, but we do look to see how we can scope something that’s manageable so that we can have a report out in a reasonable period of time. So we will be looking at snow avalanches for the purposes of this audit.

R. Sultan: Yes, indeed. I think the key is manageability. You could run off in all directions, and we’d never hear from you again.

S. Bond (Chair): Anyone else?

All right. I just have one question. I’m wondering if you have broached this subject with WorkSafe. One would assume that you’ve had a conversation. I’m hopeful that they would see the benefit of being included in the work that’s being done. Have you reached out to WorkSafe?

C. Bellringer: I’ll let Jane fill it in. I would be equally as hopeful, but I’ll let her share with you the progress so far.

J. Bryant: WorkSafe. We have, obviously, reached out to them and been in discussions with them for a number of months now to come up with the proposed plan. They have indicated that they are quite busy dealing with a number of other audit-type areas.

An audit always does take up people’s resources, as much as we try and minimize the impact on our auditees. But from our perspective, we would like to look at this and include WorkSafe. Almost all of the worksites that we’d be talking about are covered under WorkSafe, not under Energy and Mines. The majority of worksites affected by avalanche are non–mine sites in the province.

[2:50 p.m.]

S. Bond (Chair): Okay. I take from that that if there was resistance, it was related to resources and the ability to manage another audit along with other work. So it wasn’t based on the principle of being included in the audit. Is that fair?

J. Bryant: That’s fair.

S. Bond (Chair): Okay. Is there a member that’s willing to make a motion about this?

M. Dean (Deputy Chair): I move: “That the Select Standing Committee on Public Accounts approve the request of the Auditor General to include WorkSafeBC in the planned performance audit of the avalanche safety program, listed on page 10 of the Performance Audit Coverage Plan 2019/20 – 2021/22.”

S. Bond (Chair): Is there a seconder? Is there any discussion about the motion on the floor?

Motion approved.

S. Bond (Chair): That will be noted and formalized and, I am assuming, conveyed to WorkSafe.

All right, thank you for that.

We’re going to move on now and have a discussion about action plan progress assessments. I’m really going to encourage our committee members to participate in this discussion. This is something that…. I think all of us have agreed, while we appreciate having witnesses here at committee — and we see the action plans — that there are times when we are concerned about that ongoing follow-up.

To give this some context, I know the Auditor and her team will present here. I believe, Carl, you’ll be making comments as well? All right.

I think it’s fair to say that there are times we want to ensure that there is some ongoing discussion or dialogue, including the possibility of having someone come back to this committee to address some of those concerns.

I think what I’m hoping for as an outcome today is to look at what the current process is, and how we, as a committee, want to see that either changed or confirmed. I think it’s important to remind the committee that we do have the opportunity to shape what this looks like.

We can make a decision about what comes back to committee. We can make a decision about how that comes back, whether we think…. I mean, I don’t know about you, but I took a look at the list of action plans that have been downloaded on our iPads for us to look at. Unless you spend a lot of time going through…. I think there are 30 of them there now.

I think this discussion is really about how we want to shape what this committee does in terms of making sure that audits and the commitments that ministries have made are being followed up on. With that, I hope we’ll hear the presentation, but this is our chance to suggest how we would like to see this work moving forward.

Carol, why don’t you begin your presentation? Then we’ll hear from Carl, and we’ll work on…. Committee members can have their questions ready so that we can have some dialogue.

Action Plan Progress Assessments

C. Bellringer: Excellent. I’m joined for this section by Stuart Newton, Deputy Auditor General, who is the main contact in our office around the follow-up audits, and Laura Pierce, senior manager in performance audit.

I believe, Laura, you will lead us through the slides.

L. Pierce: Good afternoon, Chair and committee members. This has been a bit of an evolution. We came to the committee in April, where we provided a really in-depth discussion, a walk-through of the action plan progress assessment process — or the APPA process — that’s in place to provide you with up-to-date information on how audited organizations are tracking towards implementing our recommendations.

As you know, after an audit report is published, each auditee is required to prepare an action plan that outlines how they intend to address our recommendations and the expected time frame for that. Auditees then submit action plan progress assessments annually after that, outlining the progress they’ve made on their plan and our recommendations.

We use those APPAs to determine progress audits for the coming year and make suggestions for audits that can be removed from future requests. That’s what we’re here to discuss with you today.

In January, the OCG requested action plan progress assessments for 30 audits that were published over a six-year time frame from April 2012 to February 2018.

[2:55 p.m.]

Of these, we’re recommending that nine can be removed from future requests because, for the most part, the recommendations are largely implemented, and the outstanding risk is considered to be relatively low. There are a few exceptions to this. One is the audit of biodiversity, where the recommendations are still, for the most part, assessed as partially implemented. However, the landscape has shifted so much with the introduction of new tools that it would make more sense to follow up through a progress audit on some of our more current work, including the grizzly bear audit or managing cumulative effects.

The other anomaly among that list of 30 is the audit of the effectiveness of B.C. community corrections, but we’ve not made a recommendation on how to proceed with that one. We’re really looking to the committee. The audit examined whether the community corrections division at Public Safety and Solicitor General was achieving its goal to reduce reoffending. It also attempted to identify specific areas that were impacting its effectiveness.

The report was tabled in 2012, and we did a progress audit in 2016. The progress audit found that only one of the six recommendations that we looked at had in fact been fully or substantially implemented.

Although the division had accepted all recommendations in 2012 and again in 2016, it recently confirmed, through its action plan progress assessment, that it no longer accepts recommendations 2 and 3 and that no further action will be taken on these.

We still see the value in implementing these recommendations and believe that the recommendations can be implemented with additional effort. However, we want to draw your attention to this, to discuss whether you see value in continuing to request for an APPA or whether a follow-up discussion with the division is warranted.

Back to the list of 30. We had identified nine that could be removed. We also used the action plan progress assessment to identify progress audits, and we’ve made recommendations to carry out two progress audits this year, the first being on the JUSTIN audit. This one was selected because of the significant data that’s held in the IT system — arguably, some of the province’s most sensitive data — and our IT group believes that there’s a lot value to be gained from verifying the security controls there.

The second progress audit that we’re recommending is An Audit of Compliance and Enforcement in the Mining Sector. That was a report that we published in 2016. There’s still significant public interest in the area, and the ministries have indicated that many of the risks that were identified have now been addressed. So we feel it’s timely to go in. However, the entity responsible for the compliance and enforcement audit is currently being audited through avalanche, which we’ve just discussed. To accommodate this overlap, we’re postponing our progress audit until the avalanche audit has been completed, which is likely in summer of next year — summer of 2020.

That concludes our presentation. We’ve identified some areas for discussion above, which we’re hoping to run through with the committee — specifically, whether the committee endorses our recommendations on the nine audits to come off the future request list. We’re also looking to discuss how we should proceed with the audit of B.C. community corrections, whether there are additional audits that the committee would like us to consider for a progress audit and, lastly, whether there are any APPAs that PAC would like to discuss in more detail or whether there are witnesses that the committee would like to bring forward for further discussion.

C. Fischer: As mentioned, we’ve been working with ministries to collect and work through action plan follow-ups. Generally, the response has been quite favourable from ministries. We do get a lot of feedback that annually having to go through the reporting process can be challenging, particularly because the timelines intersect with other program priorities. For example, in the Ministry of Finance, action plan updates related to budget process review conflicted, in terms of the timing, with the budget preparation process last year. We have worked with Mr. Newton and the staff at OAG to try to kind of work out those timing challenges. So far, it’s been quite positive.

[3:00 p.m.]

We have, for the first time, a situation where we have an auditee that has changed their opinion on recommendations from 2012. That is the community corrections division. They report to us that they have worked through an exhaustive research process and concluded that there’s no way to proceed with two of the eight recommendations.

There’s also an issue where they feel that they have met the requirements of recommendations 4 to 8. OAG, in this case, disagrees. So we have a situation where despite our helpful encouragement, the ministry feels very strongly that they’ve done everything they can do with those recommendations.

We recognize that OAG certainly can’t cross the line to tell them what to do or how to do it, because that would conflict with their independence, and we recognize that the ministry or the minister responsible has the executive responsibility for deciding what gets done within that ministry.

We talked about this potential a year and a half ago, I think, and now we have the opportunity to get some additional guidance from the committee.

S. Bond (Chair): All right. Well, thank you both for that.

I don’t know about you, but I think that would be a prime example of when it would be great to invite someone back to Public Accounts to walk through what the recommendations were and to have a public discussion about why those recommendations are apparently no longer applicable. I mean, that’s just a personal view.

I think that rather than us decide today that they should be on or off the list…. I don’t know about you, but I would certainly like to know what those recommendations were — yes, we have the action plan to review — and then have an explanation, in person, as to how they are no longer relevant or no longer able to meet that or they’re no longer willing to accept those recommendations.

From my perspective, that’s exactly the kind of thing, when you’re going to do follow-up, that would be a good thing — for them to come back and explain to us, who are currently the keepers of those action plans, ultimately, why that’s not the case. That would personally be my suggestion. Before we make a decision today about whether they’re on or off or whether we…. I would like to do my homework and have them come and present to PAC. That’s just an opening remark.

J. Thornthwaite: I agree, Chair. I had been the Chair of the Select Standing Committee on Children and Youth for four years a while back. There were recommendations that came from the Representative for Children and Youth to the ministry, but the ministry said they couldn’t do what was requested because the responsibility was on a different ministry.

My suggestion, to augment what you had said, if in fact that is the case, and we don’t know…. But if the responsibilities or the request are actually to be undertaken by another ministry, let’s get the other ministry in here.

S. Bond (Chair): I think that’s a very good comparator, and I appreciate that feedback.

R. Glumac: I guess my thoughts are similar to what yours are as well. But there are nine audits recommending to be removed. The one that strikes me that would be most important to really understand the complexities of why this one is going to be removed is the first one, the audit on biodiversity, because so many of the recommendations have not been fulfilled. I understand having a different process now and all of that. But still, it seems worthy of explanation.

On a lot of the other ones, it seems like they’ve been mostly fulfilled. But maybe that first one would be one to start with.

S. Bond (Chair): I also agree with that perspective. I can understand that there may be other mechanisms. But one of the things we may want to suggest here is…. If there are one or two that we’d like to see come back that we are in agreement about, I think we could do that today.

[3:05 p.m.]

I think another way to try to triage this is we may want to bring our agenda and procedure subcommittee together to walk through the 30 of them and just take a look and receive feedback from all of you as we grapple with how we’re going to manage this. Thirty action plans — that is a lot. There may well be some that we can take off the list, but there’s also that bigger part of the process where…. I think it encourages ongoing accountability if people actually have to come back once in a while to say: “Here’s what this means.”

We’ve heard two here already — Jane, in terms of community corrections, and Rick, in terms of biodiversity. I don’t have a challenge with either one of those coming back, and maybe we do that as a test to see what it looks like when one of the ministries has to come back and explain the differences.

I’m not sure…. Maybe the Auditor and her team could just respond to how they feel about the biodiversity one, because there was some sort of explanation attempted there in terms of why it should be taken off the list, but I think Rick has made some valid observations there.

There are probably…. I saw a lot of head-nodding around community corrections. In answer to the question on the PowerPoint on what should happen there, we might be fairly clear in suggesting that we think they should come back here and explain to us. Am I seeing unanimous agreement around that?

I think you have our direction on community corrections. We’d like them to come back and explain the difference and the shift in opinion.

Carl, I’m assuming…. We’ll formalize that here as part of the minutes, but we will have them come back and visit with us. Did you want to comment on the…? I don’t disagree with Rick’s view on biodiversity either. Did you want to respond to that?

C. Bellringer: As you say, I mean, we laid out the reason why we were recommending that. It’s so changed that it’s almost impossible to map through how to get at it without going back in and doing the whole thing all over again. We felt comfortable that the risks behind the original report would get covered when you’re looking at the grizzly bear management report or the cumulative effects.

Really, it is that simple. It’s just so different now from the time of that particular audit. We would not be in a position to, from our side, explain exactly what all those changes are without doing a great deal of work, which we’re choosing not to do. If there’s something you want us to do, we can, but we hadn’t chosen to do so.

S. Bond (Chair): Okay. Give some thought, then, committee members, to biodiversity and what we want to do with that one. What I don’t want us to spend today doing is going through a list of 30 and saying: “I want this one, that one.” I do think we need to go back through and take a look at those plans.

What we do need to do today, though, is come up with a general sense of what the expectations of the committee are in terms of reports coming back here and get a sense of how you would like that to work. This is really something that all of us agreed was really important, and we reference it quite frequently. So I just want to make sure we have a mechanism for bringing forward those ones that we want to have, perhaps, make a second appearance or write a letter about some issues of clarity so that we’re not just receiving a batch of these things and feeling quite overwhelmed at reviewing 30 action plans.

R. Sultan: Just as a generality and perhaps not responding specifically to your question, when I picked up the report and saw, well, we’ve got 47 — was it? — reports underway or contemplated…. Wow. That’s a big number. I mean, I think we have to be measured in our treatment of this huge beast which is the provincial government, all 150 or 200 entities, not to bite off too much. The idea that we should do some selected very important things well as opposed to covering the waterfront is sort of my instinct.

As far as having everybody routinely come back, if that, de facto, was our policy, that’s probably overkill.

S. Bond (Chair): I certainly agree with that. I think Kate wanted to make comment, which I found very helpful, so I asked if she would just share it. I think she’s got a pragmatic suggestion to deal with Ralph’s concern. I mean, we’re not going to have everyone come back, but how do we, in essence, triage those progress reports so we know? I’m just going to ask Kate to make a couple of comments here.

[3:10 p.m.]

K. Ryan-Lloyd (Acting Clerk): As the Chair mentioned, we do have a subcommittee on agenda and procedure that was established earlier this year, in March. Based on the discussion today and any further insights or input from committee members to representatives on the subcommittee, you might want to consider the option of flagging for follow-up on sort of a two-tiered system. So if there are some areas within the action plan responses that you feel could benefit from further written information, we could facilitate a letter back to the audited organization requesting more information — more details with respect to their position, with respect to recommendations and status of implementation.

Then the next tier, if required, could be to schedule time on a meeting agenda for reappearance more formally before your committee, but it could be a helpful mechanism to help screen a number of action plans, either first seeking a written response or, in essence, just prioritizing them for the level of detail that you feel might be required.

S. Bond (Chair): I actually think that’s a pretty pragmatic approach. I don’t know how the rest of you feel about that. I do think that one of the things that we could also…. We have done this, and we can certainly go back. Perhaps Ron could help us as we go back and look. There have been ministries or agencies that have appeared here who, during our discussion, we have indicated enough concern about that we, even in our time together as a group, have said: “They probably need a return visit. We need some further clarity.”

Often a letter comes back. We’re going to see a really good example of that today when we look at the correspondence around B.C. emergency health services. I think this is a perfect time for us to discuss that next process. We sent for additional information. We got correspondence back. The question I will have for you is, first of all: does it answer the questions we have? And is it time for a return visit?

I think what we can do to help shape this process so that we’re not receiving 30 of these things at once is, as these reports come through, we can foreshadow the fact that…. “You’ve been here today. There’s going to be a progress follow-up, but we’re likely going to want to hear back from you six months from now to see how you’re doing.” I think that’s based on what we hear and see in the presentation. I think that’s another way of sort of triaging almost in advance so that we’re not, after the fact a year later, going: “What on earth has happened here?”

We can try to be more specific about that. In terms of Kate’s suggestions or what you’d like to see…. I think we’ve decided that community corrections will be coming back. We’re going to look at biodiversity to see whether or not we should have some sort of presentation here to explain why it’s acceptable to take it off the list. As Rick points out, it’s a pretty important topic in our province these days.

Are you comfortable with looking at sort of a two-tier approach, starting with information requests and then, potentially, an actual meeting where we would have some follow-up presentations? To Ralph’s point, we’re not going to have all 30 of them show up, or it’ll overtake the other work we have to do, right? How do you feel about that — if we were to have a meeting of the subcommittee to just look at the 30 we have? All of you are welcome to feed information in. How do you feel about that as a next step?

S. Bond (Chair): Good? Everyone is nodding.

Carl and Carol, are you comfortable with that process?

C. Bellringer: Yes, we are.

C. Fischer: It’s a very good process. The one thing you might want to consider is whether you can save yourself some time by thinking about specific questions, if you do have follow-up. Ministries usually come back to us with questioning glares about what part of it. So the more we can narrow it, I think the more efficient we can be in getting responses.

S. Bond (Chair): I think that’s also good advice, Carl. We’re not asking them to come back here and represent on the topic. We should try to be more focused in our request if they’re going to be here.

Kate, do you feel like we have enough direction here?

K. Ryan-Lloyd (Acting Clerk): Yes.

M. Dean (Deputy Chair): Just clarifying and confirming. We’re not taking anything off the 30 yet.

S. Bond (Chair): I think that’s an important piece of information for all of you. None are coming off yet because we’re going to take some time to look at them, triage them. So in all of your spare time, which I know is not existent, if you have ones that you’d like to flag to the subcommittee so that we can have a sense of it…. Sadly, those of us on the subcommittee are going to have to take on some additional work and get a sense of those priorities and go through.

[3:15 p.m.]

We can, obviously, use the recommendations that the Auditor General has provided today as a guideline. If the Auditor is satisfied, that should send us a message about the work that’s been done as well. We can use that as a guide. But as of today, no one is off the list.

We will go through and do some work. Mitzi and I will call a meeting of the subcommittee when we return to the Legislature to look through these.

R. Sultan: I just wanted to clarify that. Basically the subcommittee will deal with this and bring forward the final recommendations.

S. Bond (Chair): We’ll bring forward recommendations. But what I am hoping is that if you have particular interests or areas of expertise, you would go through the list and make sure that you’re looking at the ones that you’re most familiar with or most interested in and feed that information in. Ultimately we’ll come back here and we will recommend that certain ones come back.

I think that perhaps after we’ve read the correspondence, we may already have two. If we consider community corrections, we may well want emergency health back here as well, after the correspondence. Hopefully you can take a quick look at that.

C. Bellringer: Just a quick reminder that even though we read through the action plans and we do have some background knowledge from the audits, we have not done any work on those. Unless we produce a progress report to you, we have not audited any of those action plans.

S. Bond (Chair): I think that’s an incredibly important point. The action plans are sent back and, in fact, they’re presented to Public Accounts. No one has vetted whether or not they, in essence, have formally met those tasks. In essence, if we want follow-up to be a priority, we have to take on some of that responsibility, to look through those action plans.

We take Carl’s caution in mind, that we need to be specific. We don’t want to take up unnecessary time when ministries are busy. But I think it is important to send that message that this isn’t one time you appear and send in your paperwork and it’s done.

Okay. I think we’ve made progress on that, which I feel better about, because we’ve had this discussion a number of times. I think we have articulated a process that’s both manageable and reasonable. Let’s quickly look at the correspondence received by the committee, then.

Correspondence

B.C. EMERGENCY HEALTH SERVICES

S. Bond (Chair): This is item 6 on the agenda. It comes from the CEO of B.C. emergency health services and, as we would all recall, a meeting that we had. I guess I would just like to canvass the committee to see if there’s a sense that this addressed your concerns that were expressed during that meeting and what steps you’d like us to take, whether you think this brings this item to conclusion or whether we need to take further steps. Anyone have any comments?

M. Dean (Deputy Chair): I would be keen to have them come back and talk through the actual steps that they’ve taken, more examples of where they’ve been engaging in community and success stories about how they have actually sat down and found a solution for a community that meets the needs of that community. I haven’t seen that, and I don’t see that what’s been provided enables us to reach that conclusion on a sound basis.

G. Begg: Just an observation more than anything else. It’s disappointing that an agency would…. I’m not even satisfied that it’s a response. It’s an envelope-stuffing exercise that’s not specific to any of the questions that we raised. I think, sorry, that perhaps the only avenue would be to ask them to reappear.

S. Bond (Chair): Anyone else? I guess it’s easier to probably phrase it this way: does anyone disagree, then, that we should ask this agency to come back?

[3:20 p.m.]

R. Sultan: Well, here’s my reaction. First of all, I was going through this three- or four-inch pile of paper trying to find it. It was there, but I didn’t know what it was or when it came in. Was it this year, last year? There’s no name on it. There’s no date. There’s no salutation. But now I heard it sort of came in as an attachment to an email. Talk about anonymity.

It’s really sort of a message that I interpret as saying: “Look, we’ve got to deal with these towns, and they’re really in charge. So buzz off.” You know, that’s sort of the message I get. Say: “Okay. Well, we’re going to show you we’ve got muscles too.” That’s my reaction.

S. Bond (Chair): I take that as a yes. You’d like them to reappear.

I do think it’s important though, and perhaps this is…. I hope that the comptroller general can convey this. I think part of what occurred during that meeting was that I’m not sure we had the right people in the room. And I think what happens is that it becomes frustrating on the auditees part but also on our part, when we ask the kinds of questions that require serious, thoughtful, detailed answers. So I think it’s fair to characterize it as a fairly frustrating experience for all of us.

I’m hopeful that as they are asked to reappear, there is a sense of…. I would suggest they go back and review the transcript — the questions that were there. I think you’re hearing from the committee today that while we have received the correspondence, we don’t feel we’ve received the answers.

I’m going to suggest that part of one of our meetings…. Mitzi and I will canvass you for another day. I’m sorry to do this, but I’m likely to ask for another day, rather than an hour or two running back and forth when we’re in the Legislature, although brief meetings are helpful. But this at least gets a good chunk of our business done. Mitzi and I will discuss a date and then ask the Clerk to canvass for us.

Carl, I’m hopeful that you can convey to officials that appear here that it’s an important process, and follow-up is equally as important. What we might do on that day is, perhaps, have a couple of returnees, to test how that might work. We might separate that off and do two groups in the morning and have them come back.

I think we agree, then, that BCEHS will be coming back, along with community corrections. Okay, thank you for that.

Canadian Council of Public Accounts
Committees Conference

S. Bond (Chair): The last item that we have, unless anyone has any other business, is we thought it was very important to provide you with a report of what happened during our attendance at the national conference, which is, of course, a joint conference of the Canadian Council of Public Accounts Committees and the Canadian Council of Legislative Auditors. I think you’ve been provided with a fairly in-depth summary of what occurred.

British Columbia had a very significant role, again, at the conference. As you would know, Kate is intimately involved. In fact, it was unanimously agreed that she continue to serve as the executive director of the organization for one more year, because of course, we’ll be hosting the conference next year, and British Columbia also now holds the role of president of the organization. So we thought it would be helpful to have Kate continue.

I really don’t want to make any further comment, but I would certainly invite either Mitzi, Garry or John to comment. I simply would want to thank them for attending and for the role they took. They took a very active role, as you’ll see.

Mitzi did an excellent presentation. There were many comments about how well done that was. John and Garry were active participants in a number of the round-table sessions and also in providing British Columbia’s perspective. So I think it was well worth the time and the effort of attending.

I did want to say that very shortly we will want to bring back to you an update on the plans for the British Columbia event. We don’t want it to be a surprise that this is what’s happening. Some planning work has been initiated by the Clerk’s office. Also, obviously, the co-host will be the Auditor General.

We intend to have an update meeting with the Deputy Chair, myself and the planning group. Then we will come back and have that conversation with all of you so that you know exactly what has been considered and also if you have input about topics or approaches.

[3:25 p.m.]

We will be hosting the entire conference next August, and we will certainly look forward to all of your participation and inclusion as we work our way toward those dates.

Did anyone want to make any comment?

M. Dean (Deputy Chair): I want to say thank you to Shirley, our Chair, who is now the president. That’s a really significant role. Our committee has only been working together for just a couple of years now, so thank you so much for stepping into that role. Shirley did a great presentation as well, but one of the lessons learned, I think, is it was the last session before everyone was running out with their bags to the airport and all that kind of stuff.

Thanks, again, to Kate for also just providing that continuity and the experience that you have in staying on in that role, especially as we’re going to be the host. It’s invaluable. Thank you for that. I think British Columbia is very well presented and represented at these events, so I’m very proud to be part of the delegation.

I do invite colleagues to think about what kinds of topics, how we want to organize. It’s usually a day and a half. Stuff gets done at lunchtime. What do we want to showcase in the evenings? What about the partners program? We have to think about that. You know, I feel like I’m going back to wedding planning again, which I didn’t enjoy the first time around. But really showcasing British Columbia’s coast and our food. We could even have a theme or something. So I really invite everybody here who knows and loves our province to come up with some of those ideas as well and to think about how we showcase the work that we do on Public Accounts Committees as well.

It’ll be great for all of us to be there and to share the hosting and to take part and to listen. It’s a great opportunity for us because we don’t have to go anywhere, apart from people who have to travel here. I understand. You know, to have that opportunity to really showcase our work, our province and to learn from colleagues across the rest of the country as well.

S. Bond (Chair): Thanks for that, Mitzi. That’s really important to all of us.

I also want to thank the Auditor General and her team. They’re obviously highly regarded across the country. Carol has a very good reputation, and it was obviously recognized during the meetings that we had jointly.

I’m going to suggest something very radical. What I’d like to do is probably convene a meeting over lunch that isn’t, obviously, a formal meeting. I’d like to do that in the early part of session and invite Carol and Kate and others to bring some of the initial planning to that meeting in a very infor­mal way so that we can sort of brainstorm together, rather than do it in this formal setting.

I will endeavour to find a day that works best for as many of us as possible, and we’ll just do an informal sort of lunchtime meeting where we can talk about and hear from you about what really matters, because I think Mitzi’s points are really well taken. This is our chance to showcase how we do business here but also the beautiful province we live in, the First Nations influence here on the west coast. It’s my intention to…. We’ll call that as a lunchtime meeting so that we can spend a bit more time informally together and have that discussion.

I did want to give Carol an opportunity to have a conversation, add her comments. I know that she and her team have already done some really good work, and we want to make sure that we’re all heading in the same direction.

C. Bellringer: The topics for the business session are really important. We don’t really have a theme for that yet, so I think it would be great to have that nailed down pretty soon. They had some interesting speakers. They had former everything, from former Auditors General to former Clerks and Public Accounts Committee Chairs. Peter Mansbridge did the lunch, and I think CSIS was there for a presentation on security.

I was just wondering if you can access the video.

K. Ryan-Lloyd (Acting Clerk): I can send a link to members with the video if we’d like to share it with everybody. It was an invitation that we prepared to share with colleagues at the conference.

[3:30 p.m.]

Just for your own advance planning, the dates next summer are August 16 to 18. As members of this committee, you are very much encouraged and welcome to attend the conference program next August here in Victoria.

I also — on behalf of Ron Wall, my colleague, and I — just wanted to thank the members of the committee who participated in the conference and to express our appreciation for being part of the delegation.

S. Bond (Chair): We will share the video. We’re working very hard to try to improve our public, out-facing communication. We’re going to encourage all of you to be part of that in the days ahead.

It was quite the experience. The Auditor General and the Deputy Chair and myself did a welcome that was videotaped and presented. In fact, we did it in two languages — some of us, the Auditor General, better than the rest of us, speaking personally.

People were very pleased. They see some innovation taking place in British Columbia. They also appreciated seeing that partnership between the Auditor General’s office and elected officials.

We’ll be sure to share that link with you. And remember, none of us are paid actors. It was very much a low-budget presentation, but it was well received.

J. Thornthwaite: Thank you very much for clarifying the dates, because some people might be planning holidays. So it’s good to know that we’re sticking around home between August 16 and 18. And I appreciate that you will be sending us the video.

My only suggestion, spoken from somebody that…. This is only my second year on Public Accounts, and not attending any of the national conferences. If British Columbia stands out maybe in a public face, because we have heard over the sessions in the last two years about what this means…. We were talking about — one of the topics this morning — how nobody really knows what we do. Maybe they don’t care, but maybe they should care.

My only suggestion would be: could we…? You had said, Chair…. I think your word was “out-facing” communication. So making sure that we let the general public know what we’re doing, maybe to showcase the work of the committee for our constituents here in British Columbia.

S. Bond (Chair): I think that’s a great suggestion and one of the things that we’ve talked about. We’ll spend a bit of time in the next little while looking at how we do exactly that.

One of the suggestions that the Clerk’s office has had…. They’re doing a much better job. They’re really trying. They have the B.C. Leg. account. They took a picture today. All of us need to retweet it and make comments — those kinds of things.

That’s exactly what…. One of the things we want to look at is explaining the role of the Public Accounts Committee. It is incredibly important. And you’re right. I would suggest that not even all of our colleagues know what it is we do when we’re here. So we’re looking at innovative ways, and we would welcome your suggestions.

One of the things we’re looking at is the potential, for example, to do an animated piece about Public Accounts — what it means and how it works — to try to garner some attention rather than just the typical static: “Here’s what we’re doing. Here are the meeting times.” I think that’s really important.

In fact, we were challenged to set some goals at this last national conference to say what you can do — one or two items that you want to improve over the next year — and report out on those. I think if we can demonstrate, for example, from a communications perspective that that’s a priority of ours and then demonstrate that when the group comes to B.C., that will be a very helpful thing.

Any of your creative ideas we would welcome. Mitzi and I are always open to hearing those and looking at how we can do that together.

J. Thornthwaite: Just one follow-up to that. Maybe you already know the answer to this question, and maybe you could share it with us. If there is a jurisdiction in Canada that is very good at their social media and letting people know, the general public, maybe we should know about it. We could either copy it or, hopefully, make it better.

S. Bond (Chair): Sure. As Mitzi said, the really unfortunate part was that the piece around communications was tacked on right to the end of the day. In essence, we presented, and it ended. There was no dialogue.

[3:35 p.m.]

I think your point, Jane, is a really good one. I think there are some examples we could share about what other jurisdictions are doing. So we’ll make an effort to sort of look at some of those and share them with you.

I don’t think there are any that are miles ahead of us. I think they’re all grappling with the same issue, and I think it’s a chance for B.C. to enhance its reputation even further by looking at what we can do differently. It’s time to put on our creative thinking caps and look at what we can do. Wouldn’t it be great to do some of those things before the conference so that when people come, we can actually share with them some of those things?

Thanks, Jane. I think those are really helpful comments.

J. Yap: Again, kudos to you and to Mitzi for your presentations at the Niagara-on-the-Lake conference.

One of the things that I take away from being at this conference and past conferences is that you really get an appreciation of the value and the importance of public accounts committees in the parliamentary system that we all operate in — the Westminster parliamentary system.

This year they had the Chair of the House of Commons in the U.K. Public Accounts Committee. She came to be a keynote speaker. She’s a great speaker and a very strong personality, a strong presence. I really learned a lot from her.

In the U.K., which is held as the ultimate, where public accounts committees should strive to get to, people want to be on the committee — MPs. It’s a status symbol to be invited to be on the Public Accounts Committee. The Chair, she was saying, gets the biggest office that MPs have in the House of Commons. That really piqued Shirley’s interest. I’m just kidding.

It’s very serious stuff. She also emphasized that their committee, as does ours, works in a very collaborative way. This is interesting. The point was made by her and by one other. I think the Canadian federal Public Accounts Committee is sort of getting there. This may be something for all public accounts committees to consider.

The members of the committee would be working collaboratively. It’s a non-partisan committee. You can close your eyes and listen to a question being asked, and you wouldn’t be able to tell if it was an opposition member or government member asking the question. That was kind of how it came out from Ottawa, from David Christopherson, kind of the dean of Canadian public accounts committees, who’s not running again — he’s finished as a Public Accounts Committee member — and from the MP from the UK who presented. So lots to consider.

I had just one question. Remember that at the end of the conference, there was a vote. There was an agreement that the CPAC would write a letter to welcome brand-new public accounts committees, after provincial elections, to consider using the Canadian audit foundation’s services. There was just an election in Manitoba.

I guess that is probably on your list of things to do, Kate, as the new executive director.

K. Ryan-Lloyd (Acting Clerk): Yes, thank you. Absolutely correct. On behalf of the CCPAC organization, we here in British Columbia also host their website. So ccpac.ca is run through our office. We would be monitoring the outcome of any provincial, territorial or federal elections this year.

Once those legislatures or parliaments reconvene and formally establish their public accounts committees, and therefore, we know we have an active membership, and the membership has designated a chair and vice-chair, then, on behalf of the national organization, we will be working with the executive — of which, of course, our Chair is now the president of the association — to extend a letter of welcome, to advise new members of the public accounts committee, to congratulate them for their new roles and to draw their attention to the resources on the organization’s website and then extend an early invitation to the conference next year.

As John mentioned, there was some discussion at the annual general meeting about how to inform and support new members as they take on those responsibilities. We will be highlighting resources from the CAAF, the Canadian auditing foundation. They have also developed many resources that have helped this committee over the years establish a recognition of good practices.

[3:40 p.m.]

I just wanted to thank again the members who participated in that conference. One of the exercises that I think was quite a helpful one was a review of PAC practices across the country. We all filled out sheets like this indicating how we compare with a number of identified good practices. I think just that exercise with the small group that was there was very helpful because we identified some areas for further discussion here in British Columbia.

I also recognize that one thing this committee has done since it was first activated in 2017…. I really very much appreciate your interest in reviewing the effectiveness of the procedures that you’ve developed to have regular conversations about how we can improve the practices of this committee, how our office can continue to support you effectively. I know that that is a recognized good practice across the country, and I think it really speaks to the effectiveness of this group.

The way that you’ve been able to undertake your work over the past few years and setting some goals for the remainder of this parliament, I think, is a very positive step and one that would be recognized as such by your colleagues across the country. I just wanted to mention that and thank you for your work and interest in your committee.

S. Bond (Chair): I want to thank John for his comments about…. I think if there was a significant takeaway, it really was that the whole purpose of a public accounts committee is a non-partisan approach to looking at this work. That image of, you know, not being able to tell who belongs to government and who’s in opposition — that’s very true at the national level. I could not tell you, and I’m sure that Mitzi, Garry and John can’t…. We met many, many Public Accounts Committee representatives, but I couldn’t tell you right now what their political persuasion is, whether they’re government…. I couldn’t tell you that. People come there with the intent to look at good public policy and practice, and I have no idea who…. And I think that also speaks to the quality of the conference itself.

The best-practice sheet was really interesting as we went through it, as our group gathered together to talk about, you know: what does British Columbia do compared to other jurisdictions? And there are some things that…. For example, in many other jurisdictions, the Public Accounts Committee appointment is for the life of the parliament. It means that we don’t have to go back into the Legislature every time that we reconvene. We prorogue, and we have to start all over again, and we have to get our caucuses to nominate, and it ends up being brought up in the House. So that is a practice that we could…. Except some of you may not want a lifetime on this committee. But those are the little…. There are differences between how these operate across the country. So that was a really helpful exercise.

I did assure everyone there that in this case, the Chair of Public Accounts here does not have the large office overlooking the harbour, unlike the Chair of the U.K. Public Accounts Committee. I don’t know about the rest of you, but I find myself scanning the television now when the U.K. Parliament comes on to see if we can actually see her. She was quite impressive, and there it is across party lines. People actually sort of lobby to get on the Public Accounts Committee because they do incredibly…. They do a lot of work. They probably far exceed what we do in terms of their authority and how they approach their work.

Again, I want to thank the members that did make the trip. I think the B.C. delegation was noticed and appreciated, and I certainly appreciated the support. I know that Mitzi and I were very glad to have you there and to have you contribute.

Looking forward to our opportunity to host and engage all of you so that you get to meet some of those people, but we do want to have your feedback. We will look for a date when Mitzi and I can host you, and we’ll sit down and have a brainstorming session. We’ll get a sense of where the planning has gone to date, and we want to make sure that you have a chance to influence what that looks like.

With that, are there any other items of business? If not, I can give you back one hour and 15 minutes of your life.

With that, I would like to have a motion to adjourn.

Motion approved.

S. Bond (Chair): Enthusiastically, yes. That’s the most volume I’ve heard all day.

Thank you very much to the committee. The meeting is adjourned.

The committee adjourned at 3:44 p.m.