The committee met at 9:01 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Good morning, everyone. My name is Bob D’Eith. I’m the MLA for Maple Ridge–Mission and the Chair of the Select Standing Committee on Finance and Government Services, a committee of the Legislative Assembly that includes MLAs from government and opposition parties.

I’d like to welcome everyone listening and participating in this public hearing for Budget 2021, these consultations.

I also would like to acknowledge that I’m joining you from the traditional territories of the Katzie and Kwantlen First Nations and also want to recognize that members from all over the province on the call and presenters are meeting and presenting from their traditional territories. Thank you for that.

The committee typically visits communities around the province to hear from British Columbians about their priorities for the next provincial budget. However, due to COVID-19 and the pandemic, all public hearings are being held virtually this year.

Our consultation is based on the Minister of Finance’s budget consultation paper, which people can see at bcleg.ca/fgsbudget. We also invite British Columbians to provide written submissions or fill out the online survey. Details for this are on the same website at bcleg.ca/fgsbudget. The deadline for input is 5 p.m. Friday, June 26, 2020.

We will be carefully considering all input to make recommendations to the Legislative Assembly on what should be in Budget 2021. The committee intends to release its report sometime in August.

As far as the format of the meetings, in addition to holding meetings virtually, we’ve made some changes to the format. This year, presenters have been organized into small panels, based on theme. Today’s focus is on natural resources. We’ll be hearing presentations relating to mining, forestry, agriculture, oil and gas and others.

Each presenter has five minutes for their presentation, and we’d kindly ask that presenters be respectful of this time.

Today’s meeting is being recorded and transcribed. I’d like to thank Hansard for all their work on this. All audio from our meetings is being broadcast live via our website, and a complete transcript will be posted.

Now I’d actually like the members of the committee to introduce themselves.

We’ll start with you, Rich. Go ahead.

R. Coleman: Rich Coleman, the MLA for Langley East.

[9:05 a.m.]

R. Leonard: Hi, everybody. I represent…. I’m sort of a Gemini. I’ve got Courtenay and Comox. I’m the MLA for Courtenay-Comox.

I’m sitting here in the traditional territories of the K’ómoks First Nation.

D. Clovechok (Deputy Chair): Hi, I’m Doug Clove­chok. I’m the MLA for Columbia River–Revelstoke, a riding that’s only got about 40,000 square kilometres of mostly mountains and rivers.

M. Dean: Good morning. I’m Mitzi Dean. I’m the MLA for Esquimalt-Metchosin and Parliamentary Secretary for Gender Equity.

N. Simons: Good morning. I’m Nicholas Simons. I represent Powell River–Sunshine Coast.

I can actually see Comox from here. So hello, Ronna-Rae.

B. D’Eith (Chair): Donna is not joining us today, but she’ll be joining us later on.

We also have with us Susan Sourial and Stephanie Raymond from the Parliamentary Committees Office — and thank them again — and, of course, Michael Baer and Dwight Schmidt from Hansard Services. Thank you very much.

We will be calling our first witness today. First up is Patty Vadnais from North Coal Ltd.

Budget Consultation Presentations
Panel 1 – Natural Resources (Mining)

NORTH COAL

P. Vadnais: Thank you very much. I appreciate your time today. My name is Patty Vadnais. I am the communication lead for North Coal.

North Coal is an emerging steelmaking coal producer in the Elk Valley. We anticipate creating 500 construction jobs for a roughly 18- to 24-month period and then 300 family-supporting jobs once operational.

The Elk Valley has been hit hard by COVID job losses. The area, while strong in mining, is also a recreational and tourist destination. That industry has been hard hit by the necessary COVID restrictions. Our project can bring stimulus to the area with near-term construction jobs, as well as Indigenous economic benefits and business opportunities.

We are working through the provincial and federal environmental assessment process, and we are targeting a submission in Q3 of this year. To date, we have spent roughly $50 million in the local, regional and B.C. economies. Looking forward, we will spend another $35 million in pre-construction capital. This will generate provincial tax revenue to the province of $30 million to $60 million in the first five years of operation. That, of course, is dependent on commodity prices.

I think the really exciting work that we are doing, though, is found in our environmental work and our work with Indigenous peoples. Our project is in the traditional territory of the Ktunaxa, and Qukinɂamakɂis is the Ktunaxa name for the Elk Valley. In 2013, at the project’s inception, our team started conversations with the Ktunaxa First Nation. We have built upon that relationship over the past seven years. and we continue to nurture it.

Elk Valley coal mining is a major economic driver for First Nations in the area, and we are working on procurement plans and business partnerships in support of their goals. We are meeting with the Ktunaxa Nation and with the four bands of Tobacco Plains, ʔAq̓am, ʔAkisq’nuk and Yaqan Nuykiy.

In 2018, we signed an engagement agreement with the Ktunaxa to guide our environmental assessment work, and something, I think, that is rather unique is that this agreement includes having the Ktunaxa co-author the reclamation and closure section of our environmental assessment. With this, the Ktunaxa knowledge holders have visited the site in different seasons to collect data and information for our baseline studies.

This group of Elders and knowledge holders has been critical to the project’s development and design. Through their work and sharing their traditional knowledge — we call it the furbearers group because they’re studying things like bears, coyotes and badgers — they’ve identified critical east-west corridors, and we have now incorporated their observations and that information into our project design. It has become part of our conservation area. This is critical to minimizing our environmental impact.

North Coal has also been laser focused on water protection and environmental management. To meet the targets in the Elk Valley water quality plan, we have used proven innovation from around the world. We gathered water and mining experts with global experience. We had them throw all the ideas on the table. We tossed out the ones that didn’t work; we refined the ones that did. What we’ve developed is a multi-pronged adaptive management strategy.

[9:10 a.m.]

We will have three pieces to this. It will be water diversion to keep clean water clean; passive water treatment — things like saturated rock fills and suboxic mine rock storage facilities; and, if necessary, active water treatment that has been costed into our plans.

We know that water leaving the mine site must be safe to the bull trout, the cutthroat trout and the local waterways. Our mine design modelling shows that we can build an economically viable mine while protecting waterways, fish and other aquatic populations.

The North Coal Michel project is a greenfield project with the benefits of existing rail, roads and power. We will connect to B.C. clean hydro. Our truck fleet will be hybrid electric to minimize our carbon footprint. The project will create good jobs for a variety of people. The mining sector, as I am sure that you will hear again from MABC, creates two indirect jobs for every direct job, and this project will contribute to our province’s economic recovery.

For seven years, we have been collecting environmental data that is guiding our mine design. We have been engaged with local Indigenous and local communities. We have drawn on proven innovation from around the world to protect the environment while building a strong, economically viable mine that will provide good jobs and add to local, regional and provincial economies.

I thank you again very much for allowing us to share a bit about our project today.

B. D’Eith (Chair): Thank you so much, Patty. I appre­ciate your comments.

Once again, for the panellists, we will be doing all three presentations first, and then we’ll be opening the floor up for questions.

Next up we have Kendra Johnston from the Association for Mineral Exploration British Columbia.

Please go ahead.

ASSOCIATION FOR
MINERAL EXPLORATION B.C.

K. Johnston: Good morning, Mr. Chair and committee members. My name is Kendra Johnston. I’m the president and CEO of the Association for Mineral Exploration, or AME for short.

I would like to recognize that I am sitting here on the traditional territory of the Squamish, Musqueam and Tsleil-Waututh Nations.

On behalf of AME’s 300 corporate members and almost 5,000 individual members, we are pleased to have the opportunity to present our recommendations today. Like many industries, the mineral exploration sector has been affected by the COVID-19 pandemic, both through difficulty in raising venture capital and by delaying or reducing mineral exploration activities this summer, particularly in proximity to remote Indigenous communities.

However, the pandemic has also put a spotlight on the essential services that our members provide in supporting the continuous global supply of critical minerals and mining materials, which we need to support and power our low-carbon future.

In B.C., these metals can be sourced and developed ethically. Our companies have been leaders in environmental responsibility and economic reconciliation with Indigenous peoples by developing benefit agreements and employment opportunities right across the province. With further geoscience research and a competitive suite of fiscal incentives, the mineral exploration industry in B.C. will be better poised to attract investment and continue the good work that we are already doing.

Mineral deposits, of course, are rare and hidden. Finding one is described as finding a needle in a haystack. Government-funded geoscience programs, such as those conducted by the B.C. geological survey, an agency of the Ministry of Energy, Mines and Petroleum Resources, helps to point our mineral explorers in the direction of that proverbial haystack.

The B.C. geological survey conducts mapping of the province to outline potential areas for mineral and coal development, and thus future economic activity, primarily in those rural areas. Government geoscience programs are globally competitive, and jurisdictions ranging from Australia to Ireland have continued to increase their programming to match the demand for new geoscience and thus are leading to new discoveries and new deposits in those jurisdictions.

B.C. is currently underfunded and falling behind our competitors. Therefore, our first recommendation today is to ensure that the B.C. geological survey receives $6 million in funding in the next fiscal year. This will help to develop programs and leverage its activities with organizations such as Geoscience B.C. to help the province to remain globally competitive in our jurisdiction.

Our next two recommendations today build on the work of the B.C. Mining Jobs Task Force, which contain 24 actions, one of which was a study on the potential for a government-funded investment fund with the mandate to invest in homegrown mineral exploration companies that are exploring within our province. The resulting report confirmed that there was potential for this fund and recommended a structure similar to Quebec’s SIDEX fund, which is now entering its 20th profitable year.

AME believes that this fund can provide multiple opportunities for B.C., including leveraging and increasing investment in the province, elevating the social and environmental performance of our funded companies and using the evidence to reclaim legacy sites and support capacity-building and training of Indigenous people for jobs in the mineral exploration and mining sectors.

[9:15 a.m.]

Finally, AME recommends that government build on two tax-related action items that were outlined by the Mining Jobs Task Force and were endorsed by the committee but have not yet been implemented. We recommend that the government increase the existing B.C. mining exploration tax credit, or METC, for companies from 20 percent to 30 percent over the entire province. It should be noted that B.C. METC already is at 30 percent for the majority of the province — in fact, 85 percent of the province, which is also known as the pine beetle area.

Furthermore, we request that government increase the existing B.C. mining flow-through share tax credit for B.C. investors from 20 to 35. This would place B.C. as the most competitive jurisdiction in Canada, ahead of both Manitoba and Quebec.

As mentioned last year, the Mining Jobs Task Force recommended increasing the rates for B.C. METC and the mining flow-through tax credit for a three-year trial period. AME recommends making these increases permanent in Budget 2021 to support multi-year investments in mineral exploration and allow companies to plan for the long term.

Mineral exploration and mining is one of B.C.’s foundational industries and spans all regions of the province. AME’s recommendations, if implemented, will help B.C. regain its competitive edge and will also provide opportunities for economic recovery throughout the province.

Thank you so much for your time this morning. We will be submitting a formal paper that expands on these recommendations, and I certainly look forward to questions after our next speaker this morning. Thank you.

B. D’Eith (Chair): Thank you very much, Kendra.

Next up we have Michael Goehring from Mining Association of British Columbia.

Please, go ahead, Michael.

I think Michael may have frozen. In the meantime, perhaps we could open the floor for questions.

Doug, please go ahead.

D. Clovechok (Deputy Chair): I just, first of all, want to say, Kendra and Patty, thank you so much for the work that you’re doing for Teck Coal and, of course, AME. Such an incredibly important industry in our province and, certainly, in the Kootenays out here as well. I know my colleague Tom Shypitka is very much engaged with you all. We just really appreciate all the work that you’re doing on behalf of our communities, because we couldn’t do it without you.

Just a quick question for Patty. Great that you’ve engaged the Ktunaxa people. I’m wondering if the Shuswap are involved, because that is a traditional territory of theirs as well.

P. Vadnais: Yes, we have also had conversations with the Shuswap. So they are outlined in our environmental assessment as a group to work with, and we are working with them, hopeful that they can reconcile more with the Ktunaxa and come back into that. That is one conversation that they’ve been having as well.

D. Clovechok (Deputy Chair): Yeah. There’s lots on the go on that, for sure. I totally understand that. I always want to make sure that the Shuswap folks are always on the forefront. I promised the Chief that I would do that at any opportunity I got. So thank you very much.

P. Vadnais: Perfect.

B. D’Eith (Chair): Great. Thanks for the question.

It looks like we have Michael back again.

Michael, did you want to please go ahead with your presentation?

MINING ASSOCIATION OF B.C.

M. Goehring: Thank you, Mr. Chair. Good morning, everybody.

I’m pleased to present to the Select Standing Committee on Finance and Government Services on behalf of the Mining Association of British Columbia. Just briefly, MABC represents the steel-making coal, metal and industrial mineral producers, as well as smelting operations and advanced development companies in our province. Our mandate is to encourage a safe, responsible development and operational environment in B.C.

Our mines are the largest producers of copper and steel-making coal in Canada. We are the second-largest producer of silver and the only producer of molybdenum. We’re also a significant producer of aluminum, gold, lead and zinc, and we produce 20 percent of the world’s supply of germanium, which is a critical element in thermal scan thermometers. Together, these commodities account for 24 percent of our province’s exports, second only to forest products.

[9:20 a.m.]

As the economists at the Business Council mentioned the other day, we’re one of our province’s value-added industries that drive the economy and help pay the bills. Mining is definitely critical to our standard of living and our future prosperity, particularly as we restart our battered economy, present day.

To that end, our sector generated $12.3 billion in economic activity in 2018. Our mines injected almost $3 billion into more than 3,700 small and medium-sized businesses across B.C. That’s in 215 B.C. communities. We supported more than 33,000 high-paying jobs for British Columbians, and strikingly, more than 1,200 of those businesses call Metro Vancouver home, earning nearly $1 billion for the region. Clearly, mining benefits every person in every city and town in B.C.

It’s important to remind you that B.C.’s mines and smelters also contributed nearly $1 billion in direct payments to government in 2018, helping pay for the public services that all of us rely on. But our industry’s importance goes beyond our economy.

Take the following three points, please. B.C. currently has some of the lowest GHG-intensive mines and smelting operations in the world. Our products are essential and sought after for the production of electric vehicles, renewable energy infrastructure and consumer technologies like smartphones. Two, our members employ high-technology and innovation to conserve more, waste less and reduce their environmental footprint. We’re continuously improving our environmental performance while operating to some of the world’s toughest regulatory standards here in B.C. And third, mining is a leader in advancing economic reconciliation with B.C.’s Indigenous peoples.

I just want to acknowledge the province’s response to the COVID-19 pandemic and the measures taken, to date, to deal with the ensuing health and economic crisis. The response has provided critical supports to businesses that have kept British Columbians working safely and assisted those most in need. The deferrals of the employer health tax and the hydroelectric payments, for example, have helped maintain liquidity within the natural resource sector and enabled several of our mines to continue operating and to keep people working.

Tragically, COVID-19 has taken loved ones before their time while entire sectors of our economy have been shuttered with nearly 400,000 jobs lost in March and April. B.C.’s economy has been devastated, and I think the younger generation has taken the biggest hit. As you policy-makers begin to formulate the next provincial budget and try to make sense of the uncertainty, we urge you to think boldly. Nothing short of bold action will help get our province on the road to economic recovery in what will be, I think, a somewhat harsher and less forgiving global economy.

Together, as British Columbians, we have a lot at stake. However, with our province’s mineral wealth, skilled workforce, education, infrastructure, assets, there’s a significant potential for mining to help our economy grow and recover and create new opportunities and social benefits throughout, while helping the world transition to a low-carbon future. To help to realize this potential, however, we urge policy-makers to focus on improving the fiscal and regulatory conditions in our province to enable our industry to compete and succeed in global markets. If the global recession becomes protracted and commodity prices fall further, this will be paramount.

Prior to COVID-19, our mines were already challenged by softening commodity prices, a complex and slow regulatory process and an increasing cost burden. The economic crisis brought on by COVID-19 has shone a bright light on the challenges facing B.C. companies across all industrial sectors that are competing to sell their products in global markets.

While the duration and extent of the global recession remains uncertain and commodity markets are expected to remain soft, a focus on competitiveness for B.C.’s resource sectors is essential — not only as a jurisdiction in which to invest capital but as a producer of competitive and responsibly produced minerals and metals and other natural resources.

With an eye on the time, I’ll approach my main point and recommendations. Looking to the long term, the fundamentals are strong. Demand for our minerals and metals will increase as we move to an increasingly lower carbon economy. As an open trading economy, we can position ourselves to take advantage of the inevitable economic upswing. But to do so, we must improve our ability to compete and succeed in world markets to keep our minds open and to support and encourage mine expansions and new mines.

[9:25 a.m.]

I mentioned B.C.’s mines are among the lowest GHG emissions–intensive in the world. Increasing the global market share of copper, gold, steelmaking coal and aluminum from B.C. will lower GHG emissions globally. Yet right now B.C. mines pay the highest carbon tax in the world, which places our products at a distinct cost disadvantage in the global marketplace.

Our primary competitors — Australia, China, Chile, Peru, Russia and the U.S. — do not price carbon, not yet. Other Canadian jurisdictions whose mines compete with ours — Alberta, Ontario and Quebec — protect their trade-exposed industries like mining. In stark contrast, B.C. continues to offer no protection for mining or our province’s other trade-exposed industries.

With the increasing opportunity available for B.C.’s responsibly produced minerals and metals, I ask the committee to please consider why B.C. has chosen not to offer our mines and other trade-exposed sectors in B.C. the same protection. We are among the cleanest in the world. But we’re not competitive.

On behalf of our membership, I offer three recommendations for the committee to consider to support our industry and the benefits it provides to British Columbians.

First, level the playing field with our competitors in other provinces and capture the low-carbon opportunity by making the CleanBC industrial incentive program available to mines and B.C.’s other trade-exposed industries to reimburse every dollar of carbon tax paid below $30 per tonne, effectively aligning B.C. with the federal government’s output-based pricing system.

Second, address the competitiveness challenge posed by the provincial sales tax by removing this input tax from all production machinery and equipment used in mining operations. I would say that policy would apply broadly across all industrial sectors in British Columbia.

Third, and finally, implement new measures to reduce upward pressure on electricity rates to ensure we regain our low cost and clean electricity advantage. This includes incenting new mines and the expansion of existing mines through lower interconnection costs and enabling the deferral of a portion of B.C. Hydro payments during the capital payback period for mine expansions, extensions and new mines.

We will be providing our recommendations in our submission to the committee. Just to close, as we reopen our province, with the right policy measures in place, mining offers British Columbians a significant opportunity to help our economy grow and recover, creating new job opportunities and social benefits throughout, while helping the world to transition to a low-carbon future.

I thank committee members for your time.

B. D’Eith (Chair): Thank you, Michael. I allowed you to go significantly over your time, which also, unfortunately, cut most of our time for questions. Because you represent the mining industry, I thought it was important for you to get the recommendations out.

We have time for maybe one or two quick questions, if members have any questions. Okay.

Great. Well, thank you very much, panellists, for your very thorough presentations. We really appreciate it. And your recommendations — of course, we’ll look at those.

Nicholas is giving you the thumbs-up. So we’re all good.

D. Clovechok (Deputy Chair): Michael, just to let you know…. You weren’t on the line. I want to thank you and your organization for all the work you’re doing on behalf of British Columbians. It’s really important in rural B.C. I just want to say thank you to you as well.

B. D’Eith (Chair): Members, if we could take a short recess. We will come back at 9:35.

The committee recessed from 9:29 a.m. to 9:35 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Okay. Let’s bring the committee back into session, please.

Thank you very much. The committee is back in session.

Next up we have the natural resources forestry industry panel. Just a reminder to presenters that if you could please limit your comments to five minutes, we will go through each panellist individually and then, at the end, pose questions to the group.

If we could start with Bob Lindstrom from B.C. Pulp and Paper Coalition.

Bob, please go ahead.

Budget Consultation Presentations
Panel 2 – Natural Resources (Forestry)

B.C. PULP AND PAPER COALITION

R. Lindstrom: Okay. I’m with the B.C. Pulp and Paper Coalition. I sent you a pack. Hopefully, you have that in front of you. I’ll just quickly go through the slides.

If you look at page 2, where the map of B.C. is with a bunch of triangles on it, that just really indicates where our mills are. We’re actually part of the whole forest sector here. We’re an integral part of the supply chain. Our primary input is wood chips, which come primarily from sawmills and from pulp logs from logging activities.

If you think about the way sawmills work, they really make rectangles and squares from cylinders. We receive all the rest of the log as wood waste — in our case, wood chips. We also use the bark and sawdust and shavings for fuel for our boilers. With all that, you can see that pulp and paper is a big user of fibre in the province. We use over 40 percent of the timber harvest in B.C. You can see where our mills are on the map. We primarily are in rural communities.

Flip the page to page No. 3, the importance of the pulp and paper sector. I won’t go through the bullets, but you can see from the information that pulp and paper is a key driver in B.C. We have about 11,000 direct jobs. These, again, are primarily in rural communities. For instance, we are B.C. Hydro’s largest industrial customer, and we’re the largest bioenergy — i.e., green electricity — producing region in North America. We’re also a major shipper and user of the many services throughout B.C.

Flip the page to the next one, which is just an overview of the pulp and paper market. From a market perspective, I think it’s fair to say the lumber markets are relatively weak at this point due to the housing market. But pulp markets remain steady, as our markets are tissue, towel, packaging and some medical grades. We’re a little bit out of sync with the sawmill sector. I think they’ve seen a little bit of a rebound in the last couple of weeks. Essentially, we kind of view that the housing market’s going to be sluggish for the next period of time, so a lot of our feedstock is not going to be coming as planned, so we have to look for additional supply.

Also, you should be aware that the fibre supply…. We have had a fibre shortage for our mills for some time. These are all the causes — things like the reductions in annual cut based on the pine beetle, wildfires and sawmill closures. So our mills have had a constrained fibre supply for some period of time. Now, coupled with COVID, we’re seeing a further drop in wood chips from the sawmills to our mills — again, due to this economic hit and probably a drop in the housing market.

We’re all hoping for a fast recovery, but realistically, we’re expecting a sluggish housing market for the next year or two. This has forced significant curtailments in our sector. You’ve seen recent announcements from Canfor, West Fraser, Mercer and Paper Excellence paper mills. Our concern is that if this carries on for any length of time, this will lead to mill closures.

Flip to the next page, which is what we can do about this.

[9:40 a.m.]

There are really two key successes for the pulp and paper business: cost improvements and reinvestment in our mills. From a fibre supply perspective, at this point, with our traditional sources of supply down or lower, we’re going to need to replace that volume with other types of fibre, and we think a non-traditional source is our best way to target that extra fibre. In fact, our target is the damaged, problem or decadent forest stands that normally contain a higher degree of pulp logs, but they also have a higher cost to log. This can also apply to things like logging waste left on a logging site, which we can access for pulp material as well.

To target these stands obviously takes some extra effort and takes some extra costs, but there are numerous benefits, as you can see, that are listed there. It’s an important lifeline for us to keep our essential business running. We can put the loggers, who are currently not working at full capacity, back to work, regenerate these poor stands up to high-value stands and improve forest health.

All these things are benefits if we can get a program to help us target these stands and give us the necessary feedstock for our mills. This is not a new idea, but this program would be highly focused and would generate these targeted results. I’ve given an indication there of the kind of funding dollars that might be required.

The last slide I’ve got just talks to the reinvestment possibilities here. There are numerous opportunities to reinvest, and a lot of these are carbon solutions and improve the sustainability of operations at the same time. Some of these opportunities, I would say, are on the near-term horizon, and some are still under active development. We should also realize that we’re in a global development race for a lot of these products. If we don’t invest in them, if we’re not in the race, we’re going to be left behind by the progress of other countries and other companies.

I’ve included in the appendix — and I won’t go through that today — four key themes of the Pulp and Paper BioAlliance, which we’re working on in partnership with both UBC and FPInnovations. We believe this work can be the foundation to create an advanced bioproduct strategy and cluster for British Columbia. It’s our view that B.C. is a forest leader, and we also need to lead in these new and developing areas of clean technologies for our mills.

Therefore, we’re suggesting a holistic approach to this opportunity to develop these bioproducts, to adapt this new technology and to work with the B.C. government to do that. We’re also suggesting that we need some help with funding for early innovation right through de-risking the most promising technologies for the future in a more program-like way. Funding will obviously have to come from multiple sources, but we would like B.C. to step up and be one of those.

That’s my presentation. One: focus on fibre to keep our mills operating. The other: focus on diversification and reinvestment for a bright future for our sector.

B. D’Eith (Chair): Thanks, Bob.

Next up we have Bonny Skene from Domtar Inc.

Please go ahead, Bonny.

DOMTAR

B. Skene: Good morning. Thank you for the opportunity to submit to the committee. We appreciate the invitation.

My name is Bonny Skene. I do public and government affairs for Domtar in Canada. We operate four pulp and paper mills across the country — one in Quebec, two in Ontario and one in Kamloops, B.C. Of course, that’s the one that I’d like to speak specifically to you about today.

In Kamloops, we operate a pulp mill, providing raw materials for consumer products and other products — building materials, those kind of things. We employ 340 people at the mill, with 1,500 direct and indirect jobs, including a number of those coming from Indigenous communities. We make 400,000 tonnes of pulp in a year and about 460,000 megawatt hours of green power, which is about enough to power half the homes in Kamloops. That’s an important piece of our sustainability story. We’re the largest corporate taxpayer in the city of Kamloops, contributing to the economy in a wide range of ways.

I’d like to just build on Bob’s comments, if I can, looking at slide 3. If we looked at the pulp mill in Kamloops three months ago, we were on a path of pursuing significant capital investment to improve the environmental footprint of the mill in terms of greenhouse gas emission reductions, effluent quality improvement and reducing particulates. We also had components of that project to improve the competitiveness of our mill, which is an important piece of that sustainability stool, really setting the mill up for the next 20 years or so.

[9:45 a.m.]

That all was put on hold in the context of the COVID-19 pandemic. I can tell you that even pre-pandemic, one of the challenges that we were facing in making the solid case for investment at Domtar was the fibre supply to the Kamloops operation. Domtar operates 13 pulp and paper facilities across North America. Kamloops competes with its sister mills, as we refer to them, for that scarce capital investment. One of the constraints, or one of the challenges, that we were facing as we were promoting this very significant investment was the fibre supply.

The comments that I’m going to make, building on Bob’s comments, are really around fibre accessibility. We think there are some things that the government of British Columbia can do to make it more accessible, to make it cost-effective, and therefore, support the industry in its future endeavours.

On that slide, you see that we did engage a third party to do an extensive fibre study around the Kamloops pulp mill, which, as you know, is in the central Interior. It indicated very clearly that the fibre is available, if the government can adopt the appropriate policy to increase its utilization. You see a picture of a waste pile there. That’s one potential source. There are other ways of increasing the utilization of fibre in British Columbia.

I can tell you that coming from a context in the East — I happen to be located in northern Ontario, at another facility that we own in Dryden — it’s just a stark contrast when you contrast utilization in British Columbia, compared to what happens in Ontario and Quebec. The good news for B.C., I think, is that there is a very significant opportunity there, should the government choose to act on it.

Looking at slide 4, pulp mills in B.C. have a cost issue in terms of fibre. It’s not a fibre availability issue. Recently we’ve seen the selling price for our product fall by about 30 percent over the last two years. The cost of fibre specifically in British Columbia has increased by about 20 percent over the last two years. What that’s done to B.C. pulp mills is…. We have moved from first quartile, or the most competitive 25 percent of the sector, to fourth quartile, which is the quartile where you don’t want to be, when you’re competing for those scarce capital dollars.

Current mill status at Kamloops. Due to COVID-19, the major capital investment was put on hold. It’s not cancelled, but it’s on hold. We think that it provides an opportunity to, in an urgent way, really address the fibre challenges being faced in the province.

We’re also facing a significant challenge with respect to green power. It’s an important source of revenue. At this time, there’s a lack of affordable and accessible biomass, despite our efforts to invest in a bush grinding operation, even for us to make our baseline power commitments to B.C. Hydro.

During the COVID outbreak, we have worked closely with Unifor Local 10B and our employees, focusing on three priorities: protecting the health and safety of our workers and their families; helping support the health authorities as we flatten the curve — and coming from an Ontario context, I’ll commend B.C. on the action and the results that this is achieving; and third, business continuity.

I think the irony in our story is that on the first two, we seem to be making very, very solid progress. Ironically, it’s the third one, in terms of business continuity, that is posing the biggest challenge for the mill, as evidenced by some of the announcements by other companies. Making pulp in B.C. is becoming less and less viable under these conditions.

On the last slide, slide 6, we think there are seven things that the government can undertake to make fibre more accessible in the province. I won’t go through them in detail. But things like establishing a forest licence to cut, making sure there is a solid strategy for the utilization of marginal pulp stands and pulp wood, and extending funding for the Forest Enhancement Society.

[9:50 a.m.]

I won’t go through them all, but those are some ideas that we think could be implemented in fairly short order that would improve the access and, therefore, the cost-effectiveness of access to pulpwood in the context of the pandemic and also, importantly, over the long run.

It’s all about utilization, and we view B.C. as having a huge opportunity in providing access to underutilized fibre.

I’ll leave it with that. I thank you for the opportunity.

B. D’Eith (Chair): Thanks, Bonny.

Next up we have Megan Hanacek from the Private Forest Landowners Association.

Nice to see you, Megan. Please go ahead.

PRIVATE FOREST
LANDOWNERS ASSOCIATION

M. Hanacek: Thanks for having me here today to present. My name is Megan Hanacek. I’m a professional forester and a biologist. I’m also the CEO of the Private Forest Landowners Association.

Our association represents private land owners, both those in class 1 and also class 7, primarily, throughout the province. That’s over 20,000 unique individual forested land owners, and they’re diverse, as much as the ecosystems throughout B.C.

They’re anywhere from one hectare all the way up to hundreds of thousands of hectares. Many of them are multigenerational and have transferred through four generations of families. The unique thing about our private forest land owners is that they are managing for a variety of values in amongst their private investment but also a myriad of public values, as well, in a sea of Crown land in the province.

Within B.C., we represent about 0.8 percent of the total forested land within Canada. In B.C., that’s about 2 percent of the total land base. It seems small, but it’s significant in terms of being an economic powerhouse. Every year we generate over $1 billion in economic activity when we’re running at full tilt. That’s over 4,500 full-time jobs and also about $150 million in tax revenue.

It’s a very interesting position to manage private land within a sea of Crown land within B.C. We do applaud the government for the work done to date, for the stimulus, in regards to the COVID-19 pandemic. We do appreciate that forestry was listed as an essential service and also that…. We had requested that class 7 have the school tax rate reduced compared to other classes that have been granted that, and that was achieved. So we do thank you for that. That helped ease some of the economic hardships that our members were going through.

Just moving forward, I did want to highlight the balancing act of our private forest land members and what they do need to balance. We manage for long-term forest values. Often many of them are public values that intersect with private land. The private land owners do own the timber, but that being said, they do have to manage for public values.

Just over half of the private forest land within B.C. has voluntarily elected to go into class 7, the managed forest program, which is a different classification. It’s somewhat akin to class 9 agricultural land. We manage for crops. Our crops are longer term. As such, the original bill that was passed…. The incentive for members coming in voluntarily to class 7 was to have a tax reduction, but that’s something that hasn’t necessarily been achieved in recent years because of the methodology on how that’s calculated.

We have a bare land calculation, and we also have a cut timber calculation. Just to give you an example, last year we were told by B.C. Assessment that on the coast, the bare land calculations were going to go up 11.7 percent, and in the Interior, almost 20 percent. The cut timber was going to go up on the coast by 15.7 percent, and in the Interior, 5.7 percent.

We’ve been working with B.C. Assessment on the methodology for this classification. We highly encourage our members to go into class 7, but there have to be incentives for them to go into that program, or else they’ll just keep it in another class, such as class 1, where there is no long-term incentive for long-term forestry management. Currently these values are around water, fishery, reforestation and soil.

[9:55 a.m.]

We’re working right now, currently, with your government on the managed forest review. That has gone out for consultation. There has been input through various stakeholders. We welcome the opportunity. I will tell you, as a professional forester and biologist, I see a lot of gaps, and I see where we can do a lot of improvements. So we welcome that opportunity, but we’re very sensitive to the fact that we have an outstanding tax and assessment file concurrently happening with potential regulatory change, and we just want to bring those two along at the same time.

The other issue that’s problematic for us right now for our members is that there’s been a ripple effect on the coast in terms of fibre and having access to international markets for private land owners. I’m making that distinction with Crown versus private land. It’s important for the business, all the way from the bigger players down to our smaller players. There are 23 First Nations, four community forests, hundreds of other private land owners that rely on the bigger players to have access to international markets.

I can send you further information in conjunction with our submission today that shows this pricing differential offshore. Madison’s does a monthly report, and often we’ll see the prices for various species anywhere from 30 to 50 percent higher in the export market. Our members aren’t asking for full access to export completely offshore, but it’s part of the equation. If you have more access to your export market, you can redirect more fibre to the domestic market.

That’s one thing that’s happening right now. Some of our bigger players are down on the coast. They’ve been down since the end of November. That has also dramatically impacted our smaller member operations. Twenty-five percent of the managed forest land, class 7, actually resides throughout the Gulf Islands. I get calls daily from our smaller members that no longer have access. They have been hit by COVID-19, with furniture businesses, and they also now no longer have access to try to sell their wood through an export market conduit.

In terms of our wants, we did put a submission in. But in light of the COVID-19 impacts, our want is very general. The first want is to consider how private lands can be part of the solution in terms of economic stimulus. Usually on the coast, the coastal harvest is anywhere from about 16 million to 20 million cubic metres. Right now, between private and Crown land, the projection is looking at seven million. That has a whole myriad of spinoff impacts.

Our private lands offer significant municipal taxes, local, stable, well-paid jobs that the unions support. We’re looking for that fine balance between access to international markets while still providing fibre to the domestic fibre inputters.

B. D’Eith (Chair): Megan, could you please wrap it up? We’re well over time.

M. Hanacek: Okay. Our second want is just that we had also talked to B.C. Assessment last year in terms of considering going through the managed forest review. And COVID-19…. We would also like the consideration for a freeze on bare land and cut timber rates for this year. We were granted it for bare land last year, but it’s another consideration for our members.

Thank you for allowing me to talk today.

B. D’Eith (Chair): Great. Thank you very much.

We’ve actually gone pretty much through the entire time.

Members, if there are any questions, if we could keep them short, I’d appreciate that. Members, any questions at all?

N. Simons: My question is to clarify. I’ve never heard that the cost of fibre was the issue. I always heard it was the supply. I represent a riding with two pulp mills. So can you clarify on that?

The second one is about non-traditional sources of pulp or fibre. I know that there’s a lot of innovation taking place in the sector. I’m wondering if other sources, like hemp fibre, have been looked at as possible alternatives. Is that actually part of any discussion? Whoever can answer those, I’d appreciate your insight.

B. Skene: I’ll take a crack at the first question. It’s Bonny from Domtar.

As supply tightens, it drives your cost up. You have to go farther and farther afield for your fibre.

[10:00 a.m.]

I think what we’re saying is that there is enough underutilized fibre within an economic radius of the Kamloops mill and, presumably, other mills that providing access to that underutilized fibre will help with the cost issue. It’s closer to the mill. It’s accessible. It’s not used by other sectors or other members of the sector in terms of the solid wood business, but it’s fibre that can certainly be used in a pulp mill.

I think, from a framework, there’s a philosophy in British Columbia, and rightly so, that is built around this idea of dimensional lumber, with the residuals, as Bob said, flowing to the pulp mills. We just need some mechanisms to get at the fibre that isn’t used by the sawmills.

M. Hanacek: Nicholas, I could take a stab at your hemp fibre supply.

The one thing about British Columbia that’s very unique in the world is that we’re lucky we have very specific biogeoclimatic zone mapping, and we plant native species here, so that’s another consideration. To do hemp on a large scale would actually displace native flora, which wildlife and other species rely on. So if you were trying to do it on a big scale, you would have that consideration, as well as displacing native tree species.

B. D’Eith (Chair): Thank you.

Any other questions from members?

R. Leonard: Thanks for your presentations.

The question that I have is around the COVID-19 impacts to your industry. I know that there’s this declaration that they are part of the essential services sectors. The question that I have is: what is the impact? Are you having to reduce operations to create the physical distancing? Where are your pinch points? And is there impact in terms of recovery?

B. Skene: Just speaking from a pulp mill perspective, our material, our product, goes into consumer products like bath tissue, paper products, some specialty papers and wrappings for medical use, those types of things. So demand for our product has been high. We’re very appreciative of having been deemed an essential service. That continues to allow us to operate, to meet the demand that is being driven or increased by the COVID-19 pandemic.

At the mill, the way we operate has changed very significantly. We’ve implemented social distancing, increased hygiene and handwashing. The way work is done has had to change. We’ve changed shift schedules so that employees are minimizing their opportunities for interaction. For example, a group of employees will be at home on an off shift while another group of employees is in the mill, and then they alternate.

As the province comes back gradually, we’re bringing folks back to normal shifts. We’ve almost completed that process. But I can tell you that the way things work inside the mill is very different than it was three months ago, and we expect that to continue to be the case, obviously, for very good health and safety reasons.

Full credit to Unifor Local 10B. They’ve really stepped up and helped us make sure that we’re walking the talk in terms of what’s being required on the floor in the manufacturing facility.

For your question about impact on other businesses, perhaps Bob can address it. I think that a lot depends on customer demand, so I’ll let him speak to other markets outside of pulp.

[10:05 a.m.]

R. Lindstrom: I know we’re out of time here. From a demand point of view just…. The pulp and paper sector is strong with our grades, and we’ll continue to run as long as we have affordable fibre.

Our issue here goes back to the question of affordable fibre. Sawmills provide the lowest-cost, best-quality chips. Those are down, or we’re getting less from them, and they will be…. That’s a sector change because of the pine beetle issue. So if we’re going forward, we have to get more pulp logs from the forest or from logging sites.

B. D’Eith (Chair): We’re completely out of time, folks, but thank you very much for your presentations.

I apologize, Members. We’ll have a shorter recess. We’ll be back at 10:10.

Thank you very much for your presentations and for all the work you’re doing in the forest industry.

The committee recessed from 10:06 a.m. to 10:10 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Next up, continuing with the natural resources panels, we have agriculture. We have two sessions of agriculture presentations.

We’d ask if you could please limit your comments to five minutes each, and then at the end, when all three of you have had your chance to talk, we’ll open it up to members to speak. Thank you very much.

First up we have Glen Lucas from B.C. Fruit Growers Association.

Welcome, Glen. Please go ahead.

R. Ens: Mr. Chair, I think we’ve changed the order. It’s Reg from the B.C. Agriculture Council starting.

B. D’Eith (Chair): I apologize.

Budget Consultation Presentations
Panel 3 – Natural Resources (Agriculture)

B.C. AGRICULTURE COUNCIL

R. Ens: Good morning. Thank you for inviting comments to support your ongoing work to serve the citizens of British Columbia.

B.C. Agriculture Council, BCAC, is a council of associations proudly representing nearly 30 commodity associations, who in turn generate 96 percent of farm-gate sales in B.C. We are the only provincewide organization representing farmers and ranchers of B.C. to the government.

I really don’t need to say it, but we are in unprecedented times. Let me provide some observations on the status of the agriculture and food system. The Canadian food system isn’t broken. There hasn’t been an overall increase in the number of people going hungry. However, we have seen that it is fragile. People are looking at food security in ways that we haven’t seen since the Great Depression or World War II. Many of the disruptions appear to be rooted in panic buying.

The pandemic has shown what the industry knew: that our supply chains are highly centralized and complex. They are very efficient, but have very little redundancy or flexibility. We’re cautiously emerging from lockdown, and supply chains are adapting to meet the new normal. Many sectors like grapes, berries and cattle are still worried about what is yet to come. Farmers are challenged trying to predict what demand will be in six months.

Prior to the pandemic, discussions on food systems focused on sustainability, affordability and choice. Now it’s about resilience. Resilience is typically defined as the ability to withstand adversity and bounce back. Dealing with fires, floods, hail and pests is all part of normal adversity that farmers can’t control but have learned to prepare for. However, like most Canadians, preparing for a global disruption of supply chains due to the pandemic was not front of mind.

The question is: how does government support B.C. farmers and ranchers to be a key part of a resilient food system? We want to thank the provincial government for their leadership and prompt actions that are currently helping B.C. farmers during the pandemic. We understand that there are many parts of the B.C. economy that are in dire need of assistance right now.

Government and farmers have common objectives of wanting to ensure that consumers have safe and secure access to food. We also believe that farming and the food supply system can be an effective way to help restart B.C.’s economy. I want to provide three specific ways that government and farmers can achieve our common objectives:

(1) Ensure that risk management programs help farmers. The federal and provincial governments have created a suite of programs collectively referred to as business risk management, or BRM, to help farmers manage risk. Over the past number of years, farmers have let governments know that programs are no longer effectively helping manage risk. BRM programs were designed to help manage unpredictable but known risks. They were not designed to deal with global disruption of the supply chain. The province must continue to pressure the federal government to adjust programs to help manage today’s risks.

(2) Invest in infrastructure that helps farms adapt and innovate. One of the recommendations from the B.C. food security task force report released this past January is to adopt and implement the U.N. sustainability development goals in future agriculture policies. Partnering with farmers and ranchers to improve water and nutrient management systems would accelerate environmental sustainability, create jobs throughout the province and strengthen our food supply system.

(3) Support farms adjusting to changing labour markets. One of the most immediate impacts of the pandemic was the disruption of seasonal labour supply. The system used to connect employers and seasonal workers is highly complex, involving multiple governments. It was unable to adapt to all of the changes required in response to the pandemic. Government must continue to support collaborative efforts to build resilience into the seasonal worker system.

[10:15 a.m.]

We don’t know what the next crisis will be, but it is apparent that we need to be better prepared for it. Improved coordination and sharing of information across government and the agriculture industry is crucial to ensure workers and communities are kept safe.

Let me conclude by saying that B.C. farmers and ranchers understand that there are many high priorities and demands that require investment within the province. But as the food security task force stated, it is critical for all of us — government, academia and industry — to work together to achieve our common goals.

B. D’Eith (Chair): Thank you very much, Reg.

Next up I believe we have Glen Lucas from B.C. Fruit Growers Association.

B.C. FRUIT GROWERS ASSOCIATION

G. Lucas: Thank you for the opportunity to comment on the 2021 provincial budget. My name is Glen Lucas, general manager of the B.C. Fruit Growers Association.

Our organization represents 385 commercial tree fruit growers and is 131 years old. In that time, there have been 14 worldwide pandemics. The COVID-19 pandemic has refocused us on how to keep people safe. At this point in time, B.C.’s approach has been very successful in flattening the curve and, in fact, bending the curve down.

Beyond the immediate health concerns, however, the pandemic has caused us to rethink food security and the operations of the food system. First, though, there is an immediate need to continue with supports and investments in agriculture to stabilize what we have. Then there is a need to rethink our food policy.

With respect to the 2021 budget review, the BCFGA strongly agrees with the recommendations of the B.C. Agriculture Council. I’d like to bring our perspective to bear on three areas that Reg has outlined.

First, improvements to the AgriStability risk management program. Some positive changes have been made and are appreciated, but now is the time to implement some more significant improvements that we’ve been discussing for some time. Producer participation, important in this important risk reduction program, has been eroding over several years. The two key requirements to restore producer confidence in the program are program margin support at 90 percent and allowance of non-arms-lengths labour as an eligible expense.

Secondly, Reg mentioned investment in infrastructure. We know that without action, future water supply in the Okanagan is going to be a problem. Improved upland water storage is the obvious practical solution.

For fruit growers, another type of infrastructure is the trees that make up orchards. The B.C. government has consistently funded the replant program for about 25 years. For every $1 the government invests in the replant program, growers invest $4. That $1 government investment will produce 91 pounds of fresh, healthy, delicious B.C. apples and generate $201 of economic activity over the next 20 years.

The replant program is a relatively low-risk investment with fast rates of return for the B.C. economy. The current replant program expires after 2021. So we need action now.

The third thing Reg mentioned is assisting with the changing labour market. The government’s investment in the quarantine of foreign farmworkers has been very helpful in maintaining a consistent, controlled quarantine.

We are also very concerned about the impact of ongoing COVID-related costs, which are increasing the risk on highly leveraged, financially vulnerable producers facing increasing costs across their operations. These added costs and risks of COVID-19 are causing many of our farms to consider production cuts. The survival of the individual farm business hit randomly by COVID-19 is a concern. Assistance with secondary COVID-19 imposed costs could be supported by government, as they are with the quarantine costs, to ensure maximum crop yield and to have the greatest chance of meeting market demand.

In summary, I will end with some comments that arise from the COVID-19 pandemic and its impact on a secure food supply. Briefly, our food system needs to be realigned for food security. The terms of trade need to be improved for growers, who are the generators of the first dollar in the economic cycle. These growers face significant cost pressures from all sides.

[10:20 a.m.]

In the short term of the 2021 budget, we ask that the government provide support and investment programs that we need to establish food security. For the longer term, let us work on realigning the food system so that it works for all participants and creates enduring food security for B.C.

Thank you for the important work that you do to build a B.C. budget which reflects the many needs of B.C. citizens and the health of the economy.

B. D’Eith (Chair): Thank you very much, Glen.

For those listeners, it’s nice to see Ronna-Rae is enjoying an apple. It’s very appropriate, given the presentation right now.

Next up we have Kevin Boon from the B.C. Cattlemen’s Association.

B.C. CATTLEMEN’S ASSOCIATION

K. Boon: I’m expecting someone to have a steak in front of them before we’re done here.

I’d, first of all, really like to thank you for the opportunity of being able to present to the standing committee on the needs of agriculture and the cattle industry. I fully support and deeply support all of the comments that have been introduced by Glen and by Reg in their submissions and would like to add more of an Interior perspective to our comments, I think, in what it is, fully supporting what has been said.

The BCCA, B.C. Cattlemen’s Association, has been the official voice of cattle ranchers throughout British Columbia since 1929. We represent approximately 1,100 ranchers across the province. These are family-run ranches that are among many of the British Columbian small businesses that are the backbone of the rural economy.

British Columbia has demonstrated leadership and a commonsense approach to managing the coronavirus outbreak. While we are facing uncertain times, we have learned the importance of our health, our food supply, our sense of community and our impact on the environment.

As the province emerges from the global pandemic, farmers and ranchers are an essential part of B.C.’s economic recovery. B.C. Cattlemen’s Association has given careful thought to our request in these uncertain times to ensure that we are investing in the future and not just reacting to COVID-19 but fully aware of what we have learned from this crisis.

As British Columbia builds a road map to recovery, the B.C. Cattlemen’s Association has discovered how we can be part of this recovery. The road to recovery needs to make smart investments into areas that will reap benefits now and into the future. We’d like to highlight a couple of areas where we feel that it is very important — that is, enhancing Crown resources and B.C. beef processing and marketing opportunity.

Water storage has been identified as one of the most important factors for climate change and adaptation. While we know that agriculture is a major benefactor of water storage and is often the reason for constructing them, this is supported by a recent cost-benefit analysis titled Study of the Costs and Benefits Associated with Dams and Reservoirs on B.C. Cattle Ranches. The analysis identified that there are many others that benefit, including recreation, wildlife habitat, fish migration, wildfire suppression and flood mitigation.

We can see the effects the past wildfires have on snow melt, freshet flows and flooding. This year, with a record snowpack, we would have been able to capture and manage some of that water. There are 1,500 dams within the province; about 62 percent are maintained by agriculture. They’re essential to help B.C. adapt to an ever-changing climate and respond to severe weather events. Managing water will be a critical asset in B.C.’s future.

The cost borne by agriculture due to regulatory burden and maintenance is making it extremely uneconomical for agriculture to continue to invest in this infrastructure. It is our recommendation that the province invest in protecting, maintaining and building water storage infrastructure for the future.

We also want to bring your attention to Crown ALR lands. With over 50 percent of the ALR being on Crown land, government has a stake in the food production chain. This carries the responsibility to consider food production in the management of Crown land, especially the Crown ALR lands.

[10:25 a.m.]

With the lack of an ALR objective in the FRPA regulations, there is a need for the Crown to invest in a forage development plan. Currently there is no requirement for professionals and planners to consider ALR rules. Landscape-level planning needs to consider all major tenure holders.

Finally, we want to bring to your attention the need to invest in processing and marketing. One of the hitch points we definitely saw was the centralization, as Reg pointed out, of the processing in Alberta. B.C. lacks post-processing, especially for beef. We’ve been working on a plan for a cooperative of producer-owned and gate-to-plate for the past several years and would like to ask that we continue to invest in this as we move forward to try and solve our problems.

I would like to thank you for this opportunity to present to you and look forward to working with you in the near future to try and overcome some of these hurdles created. Thank you.

B. D’Eith (Chair): Thank you, panellists, and thank you very much for staying on time. We really appreciate that.

Questions from members?

R. Leonard: Thank you very much for the presentation. As I said to Bob, it’s too early for steak.

B. D’Eith (Chair): Never too early for steak.

K. Boon: Never too early for steak.

R. Leonard: My husband would probably agree. It must be a guy thing.

Anyway, I wanted to ask particularly around the processing issue, Kevin. I understand there is a facility — you can tell me where it’s at — in Prince George. It was under development — at least, I believe so — last year. The reference to the cooperative processing that you were talking about — is that different from that one? What does it look like?

K. Boon: In the interest of time, I won’t go into the greater detail, because it is pretty complex. But yes, it started with the need to build a federal facility in British Columbia. However, it has to be kept in mind that a facility is a tool. Until we need the tool and have the cattle available in that finished stage to go through it, there’s no sense having it.

Most plants will fail because of lack of supply. We’ve been building a cooperative of producers, because the way to ensure that is to have producers involved in that plant so that the longevity of that supply is secured. We have that in process.

Right now there are two things happening, in a shortened version. We’re looking at a current facility that may become available to us that we feel that we can do and turn into a federal plant that we can process through, in another part of British Columbia. We also have a consortium of investors looking at building a facility to lease back to this cooperative. There’s a lot of work being done. The key to this, as I say, is having those producers involved and invested in it so that we can ensure that that B.C. supply is B.C. product that is going into the market.

One further point to this is that in this, we’ve done a lot of research into our marketing and understand very well the value of a B.C. product, especially here in B.C. It is huge and is a real opportunity to build that capacity here in our own province. I hope I answered your questions.

B. D’Eith (Chair): Thank you. I have a quick question for Glen, just in regard to the B.C. tree fruit replant program. Could you just maybe tell us a little bit more about the success of that program? You’d mentioned the need to continue that program. If you could, just elaborate on a bit more on that please.

G. Lucas: Certainly. The cost of replanting an acre of apples is about $30,000 an acre. The replant program provides a grant of $3.50 per apple tree. We’re high density. So we plant thousands of these per acre — usually around 2,200 trees per acre, about $7,500 in grants.

I have to back up to say that farmers, if you give them a little incentive, take a giant leap. By paying roughly a fifth of the cost, growers really leap to that and have renewed our industry — new varieties, high density, very much more efficient, more water-efficient. So there are lots of good things about replanting. It’s been in place for 25 years.

[10:30 a.m.]

We changed over our orchards much more quickly than in Washington state. Up till recently, Red Delicious was still their largest variety, and really, Red Delicious stopped being our largest variety about 15 years ago. We’ve got this lead on the U.S., and that’s very important in today’s competitive world.

The committee, going back a couple of years, recommended that the replant program be renewed. We’re just at the tail end of our replant program. It would’ve been nice to renew it two years ago. It would’ve given growers more confidence and more planning time. However, next year is the very last year of replant in the current program. It was a seven-year program. Before that, we had it going back 25 years.

What we’re looking for is that renewal, and seeking that. The cost is not high, relative to government. About $1 million a year is what’s invested, and it generates quite an excellent return for government, as stated.

B. D’Eith (Chair): Great. Thank you very much. I feel obliged, because Dan Ashton is no longer on the committee, to make sure somebody is stepping up for fruit trees. I’m getting the thumbs-up from Ronna-Rae on that.

Okay. Other questions from members? Seeing none.

Thank you so much for the presentations and everything that you do for the agriculture industry. We certainly appreciate the challenges that you’re facing with the pandemic, and we will obviously be taking all of that into account in the recommendations. So thanks again.

If we could please recess. We will be back at 10:40. Thanks, Members.

The committee recessed from 10:31 a.m. to 10:41 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Welcome back, everyone. Next up we have a panel…. We continue with agriculture and natural resources.

We would ask that if you could please keep your comments to five minutes, then that gives us time at the end to ask questions. Also, all presenters will be presenting before we go to questions.

First up we have Arzeena Hamir from Mid Island Farmers Institute.

Hello. How are you?

A. Hamir: Hi. Very well.

B. D’Eith (Chair): Good. Please go ahead.

Budget Consultation Presentations
Panel 4 – Natural Resources (Agriculture)

MID ISLAND FARMERS INSTITUTE

A. Hamir: Thank you for inviting me and having me present to the select standing committee. I’ll keep my comments short and brief.

I would like to advocate for funds to farmers institutes in the range of approximately $5,000. The reason for this is that many farmers in and around B.C. have been unable to take advantage of both provincial and federal dollars that have been set aside for agriculture. Federally, many of these programs that our federal government instituted require farmers to be incorporated. Many small-scale farms around B.C. are either sole proprietorships or partnerships. However, they do generally belong to a farmers institute, and we have approximately 50 of these across British Columbia.

At the same time, the provincial government did put aside some dollars through a digital fund that Buy B.C. enabled that allowed farmers to access dollars, but that fund was oversubscribed in less than a week, and the dollars just flew out. The impact, I think…. There’s a need, obviously. The amount of funding, in the range of $300,000, went very quickly. But not many farmers were able to take advantage of this.

By providing farmers institutes with some dollars, it will allow those institutes to, first of all, pivot to the digital community that we now have. Many farmers institutes have been very good at bringing farmers together in person. We often use community halls to do that and to bring in speakers, but not all are adept to now pivoting to meeting on line. This will require some training and some dollars to get platforms like Zoom, like this one, available to farmers institutes.

At the same time, the issues that farmers are now facing will require outside…. What I’m trying to say is there’s not a lot of expertise within the farming community. We’ll probably require outside expertise to be brought in, which does cost dollars, to provide advice to farms and farmers on how to pivot to a new digital economy.

[10:45 a.m.]

By providing funds to the institutes, I think the impact will be much greater. Our own farmers institute, the Mid Island Farmers Institute, has over 60 members. So the dollars that we are able to receive do create an impact far greater than if that $5,000 went to an individual farm. I will stop there.

The overall ask is $250,000 to support farmers institutes and support farmers in recovery now, post-COVID. Thank you.

B. D’Eith (Chair): Thanks, Arzeena. I appreciate that.

Next up we have Heather O’Hara from the B.C. Association of Farmers Markets.

Hi, Heather.

B.C. ASSOCIATION OF FARMERS MARKETS

H. O’Hara: Hi, everybody. I recognize a few faces from past presentations, Bob included.

Thanks for having me today, especially during this time, during the COVID-19 pandemic — that you’ve made this arrangement to do this virtually. So thank you very much.

To begin, on behalf of our 145-plus BCAFM member farmers markets and more than 4,200 farm, food and artisan vendors who sell at the markets across the province, I’d like to extend a sincere thank you to the province of B.C. and the provincial health officer, Dr. Bonnie Henry, who have recognized farmers markets as essential services.

The pandemic reminds us all of the critical and vitally important need to sustain our local food system, farmers, growers, food processors and local artisan businesses. It’s also a catalyst to prioritize investment in a decentralized, localized and community-based food system, including farm-to-plate sales and supply channels, such as farmers markets. It’s our experience that consumers across B.C., especially during this pandemic, are seeking more, not less, local food options as a result of COVID.

Over the past two months, BCAFM member farmers markets have demonstrated their will, resiliency and ability to adapt, pivot and be flexible to meet the needs of their local community and regions — exactly what we need at a time of crisis. In-person markets have been modified by organizers to ensure health and safety, while navigating a sea of new restrictions and regulations.

In addition, farmers markets have risen to the challenge and taken a big technological leap into the world of e-commerce, creating new online market stores literally overnight. We expect the majority of our markets, approximately 60 of them, to launch an online market store in addition to their in-person markets during the summer, which is an amazing achievement.

At the same time, unfortunately, farmers markets are doing way more but with a lot less resources. Operating revenues at markets, which rely primarily on vendor booth fees, have decreased and been negatively impacted due to vendor selling restrictions, market layout restrictions, municipal delays, burnout and the extra work to modify and manage markets in response to COVID.

With all of this in mind, we kindly request the province of B.C. to consider the following 2021-22 budget considerations outlined below. The first being B.C. farmers markets’ COVID response and recovery. The pandemic is unquestionably a catalyst to relocalize our B.C. food system. We need strong, sufficiently resourced and sustainable farmers markets to provide growing consumer demand for the food grown and processed locally through these direct farm-to-plate sales channels.

Operating capacity. BCAFM requests a $2 million investment for BCAFM member markets to strengthen their operating capacity, dedicated equipment investments and infrastructure and leverage this for further investment locally and federally.

Two, B.C. farmers market online initiative. BCAFM requests an additional $200K to build on and strengthen the B.C. farmers market online e-commerce initiative that we just launched in the last couple of months for the future, to better attract and retain convenience and tech-savvy market customers — millennials and gen consumers, which are a growing market base.

Three, technology and broadband. Provincial support for rural and remote regions especially, to address bandwidth and Wi-Fi gaps to strengthen farmers markets’ and vendors’ ability to sell more directly at markets and at home and through online market stores. That’s kind of the big bucket of B.C. farmers market COVID response and recovery.

The second area is the B.C. farmers market incubator initiative. I’m really happy that in 2021, BCAFM is excited to pilot a farmers market incubator initiative in the Kootenays and Columbia Basin region. We were awarded a $100,000 grant, year end of this year, by the rural policy and programs branch, Ministry of Forests, Lands, Natural Resource Operations and Rural Development. Like us, the ministry recognizes this rural community project as one that will create jobs and assist with post–COVID-19 economic recovery. We’ve long recognized the vital role of farmers markets as small business incubators, attested by the 4,200 entrepreneurs who sell at our member markets.

We would love the province to consider an additional $900K investment for BCAFM to expand and scale this work in nine other regions across the province as part of its provincial COVID economic recovery strategy.

[10:50 a.m.]

Thirdly, zero waste and sustainable farmers markets. BCAFM and its members share a growing vision to be the most sustainable farmers markets anywhere and continue our path towards zero-waste farmers markets as we move into the future. We would like to request a $50,000 grant to develop a comprehensive sustainability plan to support markets in operationalizing and implementing our sustainable farmers markets vision.

Finally, of course, a big thank-you for the ongoing provincial support for the B.C. farmers market nutrition coupon program. For the 2021-22 budget year, we’re requesting a $2.3 million contribution for the continuation of that program in the 2022 program season. In closing, thank you so much for your time and for supporting B.C. farmers markets. I look forward to any questions.

B. D’Eith (Chair): Thank you so much, Heather.

Next up we have Jeremy Dunn from the B.C. Dairy Association.

Please go ahead, Jeremy.

B.C. DAIRY ASSOCIATION

J. Dunn: Thank you for having us here today and for conducting this meeting virtually. It’s important to all British Columbians to have the opportunity to connect. This is a critically important budget for British Columbia. Our province deals with challenges caused by the COVID-19 pandemic but also, as we pivot, to set the future on the right course for B.C. for a post-pandemic world.

The B.C. Dairy Association is a not-for-profit farmer-driven organization guided by a board of directors and delegates who are all dairy farmers. We are solely funded by B.C.’s dairy farms, most of which are family-owned and -operated here. We support dairy farmers in their work to produce safe, nutritious food in an economically, socially and environmentally sustainable way.

There are about 500 dairy farms in B.C. The majority of them are family-owned and -operated businesses. On average, we have modest dairy farms; they’re about 135 milking cows each. The B.C. dairy industry, which operates under a supply-managed system, is large enough to supply our province with fluid milk while contributing to keep B.C. stocked with cheese, yogurt and other milk products.

Milk and dairy products are healthy and nutritious. It’s also good business for B.C., generating close to $700 million toward the GDP and over 7,000 jobs. That’s just on the farm side. Processing dairy adds another $830 million to the GDP and another 7,500 jobs. In terms of jobs and total economic impact, dairy is the most valuable agricultural commodity in B.C.

Now, while milk production in B.C. is largely centred in the Fraser Valley, there are seven other milk-producing regions in the province, making dairy one of B.C.’s most regionally diverse sectors of the entire economy. We have dairies in clusters throughout north and south Vancouver Island, Kamloops, Okanagan area, Peace River, Kootenays, Bulkley Valley and the Cariboo region.

You know, it’s the supply-managed system that makes this work. With processing largely concentrated in the Lower Mainland, farmers share the cost of transportation through the supply-managed system. This makes it possible to run a dairy in the Bulkley Valley.

You see the image behind me here. This is from one of our beautiful dairies in Smithers, B.C. It’s one of the most beautiful places I’ve visited this year, where we have a very viable dairy region in the Bulkley Valley because of the supply-managed sector. Supply management ensures that farmers receive a fair return — derived completely from the marketplace — on their capital and labour costs, providing dairy processors with a stable supply of milk so that they can properly plan to help feed British Columbians and Canadians.

During COVID-19, this system has been tested, as has our entire food supply chain. I can tell you that the system bent but did not break. In fact, dairy farmers, who are incredibly community-minded, stepped up to feed people in need. We’ve donated $175,000 to food banks in B.C. to buy dairy products and other nutritious staples and provided 40,000 litres of milk — it took processors and, really, everyone in the supply chain to make that happen — over 5,000 kilograms of cheese and over 3,000 kilograms of butter, and there is more to do. This has been distributed to over 80 food banks across British Columbia.

Today we face the challenges of COVID-19. Tomorrow we continue to face the challenges presented by climate change. Simultaneously in B.C. today, we’re preparing for flooding that threatens over 50 dairies, and, in another part of the province, we’re preparing for drought that threatens the crops of nine other dairies. One of the recommendations of the B.C. food security task force report released in January is to adopt and implement the UN sustainable develop goals.

[10:55 a.m.]

I know you heard this earlier from the B.C. Agriculture Council, but partnering with farmers and ranchers to improve water and nutrient management systems would accelerate environmental sustainability. This would create jobs through the province and strengthen our food supply.

Specifically, the B.C. Dairy Association asks this committee to support dairy farmers, and really all of B.C. agriculture, with funding aimed at mitigating and adapting to the effects of climate change, particularly challenges with water management, including funding provided for infrastructure such as water storage and water retention. Simply, as farmers, we need water for crops, and our land must be protected from floods.

Farmers are tough people. Historically, they’ve lived through floods, fires, pests — you name it. Farmers are helping us get through this pandemic. We believe that farming and the food supply system can be an effective way to help restart B.C.’s economy. Government and farmers have a common objective of wanting to ensure that consumers have safe and secure access to food.

Thank you again for having me here today. I look forward to your questions.

B. D’Eith (Chair): Thank you, Jeremy, and thank you to the presenters.

Before we start with questions, I did want to thank all the presenters and their associations and their members for the work that they’ve done during the pandemic in feeding us. It’s been such an important part of getting through this pandemic. Locally sourced food is just so important. It shows how important food security is. So thank you for all the work you’re doing.

With that, Ronna-Rae, please go ahead.

R. Leonard: Yes, thank you everyone for your presentations.

Two of the presenters have referenced getting supports to move into the digital world with their sector. I was wondering if they have had access to the Small Business B.C. supports that have been rolled out to help small business. A big piece of it is helping with those resources around going digital. And if so, are there gaps?

A. Hamir: I can speak for Farmers Institutes. As institutes, we’re in a bit of a strange position. We’re not formally a non-profit under the Societies Act. We are, actually, institutes of the Ministry of Agriculture. It’s very difficult for us to access funding for companies or even non-profits because we lie in this little weird grey area. So I’m not aware of any institutes that were able to take advantage of that funding for small business.

R. Leonard: Just to clarify, I don’t know that it’s extra funding. It’s actual supports to business.

A. Hamir: Right. On Vancouver Island, there is Innovation Island. There is some support and advice for any kind of organization. The staff there have gotten some funding through ICET, so a little bit of that advice is available. But to actually, for example, implement Zoom, pay for the Zoom, pay for speakers to come to the institute, that’s what the dollars for our ask are.

I think each institute across B.C. would have a different ask. That’s why I’ve left that open — what each institute needs. Some may be more digitally inclined already, whereas some may require totally different training.

B. D’Eith (Chair): Great. Thanks.

Heather, Bob D’Eith here. I just have a question for you in regards to farmers markets and the food coupon program. As you know, many people have become sort of reliant on the program to get fresh produce and food. With COVID, with the summer coming up, I’m just wondering if you could speak briefly about what strategies the farmers markets have in terms of continuing service and, also, what support you might need in terms of that — other than, obviously, renewal of the food coupon funding.

H. O’Hara: As part of the overall foray into the e-commerce market store strategy…. When we chose Local Line as our platform, we also have been working behind the scenes with them to actually build in some coding and accommodation for coupon redemption as well. So we’ve baked that into the model and have mechanisms to track and monitor that.

[11:00 a.m.]

Coupon participants will be able to do two things, just like any other customer. They’ll be able to redeem coupons on line vis-à-vis the market and through vendors and/or at the in-person markets as well. It’s a bit of a wait-and-see how many participants use the online capability or the in-person market stores. So that’s TBD.

Certainly, I would say that the community partners generally are more stretched through COVID, as are the markets, as I’ve indicated. Anything we can do to have more human resources capacity to manage some of these activities with these new sorts of ways of doing things this year would be helpful, certainly from a community partners standpoint and from a market standpoint.

They get a small honorarium relative to the amount of work they put into this. They are always very committed. They come to the orientations — always. They’re just there to manage the program well. But it’s certainly not as much to cover, really, what they have to do to manage on the ground some of this programming.

So the short answer is: participants will be able to redeem those coupons on line as well as in person.

B. D’Eith (Chair): Thanks, Heather. I guess part of it is that people who may be seniors or people struggling financially may have less access to the Internet. It’s interesting that yesterday we heard about how important, for example, libraries are in terms of that sort of access.

It’s interesting how so many things are tied together in our communities with these. Thank you so much for that work.

H. O’Hara: You’re welcome.

B. D’Eith (Chair): Other questions from members?

Jeremy, I have a question for you just in regards to CleanBC. It’s interesting to see how you see some of the work around the B.C. dairy industry can be in terms of sort of adding to the remediation and climate change issues. So I wonder if you could just expand a little bit more on that, because I’m quite interested in how you see that interface.

J. Dunn: Well, thank you. The B.C. Dairy Association did take the time to submit a very well researched paper into the CleanBC consultations and very much would like to be a partner of government as we go forward in climate change.

I’ll look at one area on Vancouver Island that we’re currently challenged with, with dealing with drought in the Cowichan region, the Koksilah watershed. Last summer dairies and other agricultural users growing forage crops had their water rights suspended because of fish protection orders. This is an area of the province that has had challenges with water for many years. There are many reports written that have identified funding that could be put in place.

There’s a new report about to be released, which has been done by consultants on Vancouver Island, that shows that just to maintain the agriculture use in that region that we have today — never mind feeding more people — we’re going to need 25 percent more water by 2050. We don’t have enough water today to maintain the agriculture that we have, and we need 25 percent more water to be able to feed people in the future.

With the importance of local food really coming to a high here during the COVID pandemic, it now is time, from a climate adaptation perspective, to really stop with the reports and start looking at real-world solutions to provide water for farmers that are critical to our food supply.

B. D’Eith (Chair): Thank you very much, Jeremy.

Any other questions from members? Seeing none.

Thank you so much, again, for everything that you’re doing for our agriculture industries and for our communities. I know that it’s been a difficult time. We appreciate all of the comments and thoughts, especially around COVID-19 and what you’ve been doing. So thanks again.

If I could go into recess now. We’ll come back again at 11:10. Thanks very much, everybody.

The committee recessed from 11:04 a.m. to 11:12 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): All right. Welcome back, Members and panellists. I wanted to welcome you to the natural resource section. This is a bit different this year. We have groupings, which is great, and we’re in the middle of agriculture, which is wonderful.

If I could ask all the presenters to please look up. I don’t know if it’s there or which side, but there’s a clock that is…. You could put it in gallery view, and if you see that…. What it’ll do is it will start when you speak and run down for five minutes. If you could keep an eye on that. We try to keep the presentations to five minutes, please. And please leave yourself enough time for your recommendations. That’s very important. We’ll go through each presentation first, and then we’ll go for questions for all of the panellists.

First up we have Erika Goldt from Clayoquot Biosphere Trust.

Please go ahead.

Budget Consultation Presentations
Panel 5 – Natural Resources (Agriculture)

CLAYOQUOT BIOSPHERE TRUST

E. Goldt: Hello. Good morning. My name is Erika Goldt, and I lead Eat West Coast, which is a food security initiative of the Clayoquot Biosphere Trust on the west coast of Vancouver Island.

I’m based out of Tofino on traditional Tla-o-qui-aht territory and represent eight communities, two municipalities and five First Nations — a population of about 6,000 people.

Today myself and my fellow panellists are speaking to you about food. It’s important in a time of emergencies but also in building community resilience. Food is not just a commodity but a public and community good with an important role in strengthening local communities, ecosystems and economies.

I was disheartened to see that food did not have a mention in the Budget 2021 consultations. It has a place in practically every B.C. ministry and, today, is a priority for government funding during the COVID-19 pandemic.

My organization is one of eight Island Food Hubs, a collective, working together with the Island Health Authority and hundreds of community partners to address food insecurity. Food security exists when everyone in our community has access to nutritious, safe and culturally appropriate food to be happy and healthy.

[11:15 a.m.]

We think the pandemic has highlighted that food security means much more — inequalities that persist across communities and the lack of priority for food policy at all levels of government. The existence of our food hubs has been essential to meeting the emergency food needs and is a model that works.

But what does the future look like? What happens when emergency funds run out? What we’re really asking is: how can we build a systemic resiliency? There is nowhere that that is more important than rural, remote communities just like mine.

We actually rely very heavily on a tourism economy and, facing potentially not a full summer season, our families will actually stay in great need for a whole year. For example, since April 1, our good-food box has reached over a third of our population. But we are small, and we do not have avenues to sustain any long-term charity.

It is a challenge for us and other similar coastal remote communities to access local food system support. It often comes through organizations that either have no presence in our region or are just not relevant to our local food system. We need acknowledgement that, for many communities in B.C., agriculture is not at the centre of our community resiliency through food.

We have worked hard to advocate for federal fishery policies that allow greater community access to local seafood to raise the profile of marine and agroforest food products; to invest in education on traditional Indigenous food, cultivation and preservation practices; and to actually fight for the use of our foods in our schools and institutions. This is the resiliency we build as a food hub under the context of very fragmented food policies.

We feel that we need a very dedicated, cohesive and collaborative approach to food in this province that is explicitly recognized in our 2021 budget.

First, we need funding for food security to be prioritized at the community and provincial levels in emergency response planning. We realize we have been woefully inadequate at meeting emergency food needs.

Second, we need more dedicated funding for different models of local food systems, not relying just on the traditional farmers and tractors under agriculture but expanding that understanding of what food systems are for our communities.

And finally, to do this, we need direct and stable funding from the province to organizations like our food hub to allow for a coordinated approach to long-term community resiliency. I currently see $7,500 annually to conduct this work.

Experiences in my region during COVID have demonstrated that this is extremely important, and this is what we are here to ask you for today.

B. D’Eith (Chair): Thanks very much, Erika.

Next up we have Judy Stafford from Cowichan Green Community.

Go ahead, Judy.

COWICHAN GREEN COMMUNITY

J. Stafford: Thank you. My name is Judy Stafford, and I am the executive director of Cowichan Green Community. We’re a non-profit focused on improving food security in the Cowichan region.

I’m grateful to be speaking to you from the unceded territories of the Cowichan, Ditidaht, Penelakut, Halalt, Stz’uminus, Lake Cowichan, Lyackson and Malahat First Nations.

Thank you for this opportunity to present today as we feel strongly that food security and the local food discussion should be a pillar of all budgetary considerations. I am also disappointed to see food is omitted in your Budget 2021 consultation document. Without access to healthy food, we cannot even dream of becoming a healthy and prosperous society. But that’s why we’re here: to help educate you on this important issue that CGC has been focused on since 2004.

Due to our years of supporting this community and our connections with local government, the school district, non-profits and the agriculture sector, the city of Duncan asked us to lead the emergency food access task force since the outbreak of COVID-19.

We have successfully engaged with 25 organizations in response to this pandemic, and we’ve raised over $800,000 for emergency food and shelter programming, ensuring everyone has a place to sleep and hot, nutritious meals. The collaboration has been unprecedented, with the local school board opening their school kitchens for cooking and distributing 450 food hampers a week and lending their laid-off bus drivers for food pickup and delivery.

CGC has expanded from our normal role of providing educational programming into emergency food response. We have taken on catering for the homeless shelter when an additional 60 people showed up for dinner. Several food banks closed, and the Island Health food hubs all helped mobilize to help to support the interruptions of those programs. Other organizations stepped up to provide volunteers for Meals on Wheels, which is an essential service.

[11:20 a.m.]

The community response has been heartwarming, with organizations such as the Victoria Foundation raising $6 million in a few months. The Cowichan has been a benefactor of $557,000 of that funding to help reduce the stress of unemployment and a lack of money to buy even basic groceries.

I was asked to come to a breakfast on Monday at the recently launched shelter that was converted from a hotel and met, firsthand, folks who told me this was the first hot breakfast that they’d had in months. Another gentleman literally cried when he opened his hotel room and saw a pillow, something he had not had in years. That is not okay.

However, the conversation around the dinner tables and in Zoom meetings is focused more around the importance of shelter, local food, food resiliency and self-sufficiency. This is something that Island Food Hubs have been bringing to the forefront with local government for decades. On one hand, we have the uncertainty of the fallout from COVID. But on the other hand, we’re encouraged that this awareness is increasing, and the discussions are reaching further than we anticipated.

Our online farmers market, which struggled to do a $2,000-a-week market, has hit $25,000 a week. Since the crisis, opportunity has arisen, and lots of people are buying up seeds, vegetable starts and calling us to say: “How do we start a garden?” We’ve been inspired by the interest in growing food, and the people are grateful for the emergency supports. But this is not going to solve the problem.

We need to create a coordinated approach to building community capacity for food security when we face food shortfalls. Relying on charitable organizations to provide emergency food does not create food security. It fills a gap, but that gap will continue to grow wider if we don’t invest more funding to support our local agriculture production, increase our self-sufficiency and decrease our reliance on imported food.

Our budget requests. The Island Food Hubs need direct and stable funding from the province to continue to provide services and long-term community resiliency, planning and implementation. The eight Island Food Hubs are asking for $100,000 a year each, through a secure three- to five-year contract. Cowichan Green Community, since 2013, has received $15,000 a year to do our programming here.

We also require additional supports for our farmers, processors and harvesters. We’re requesting that the Ministry of Agriculture funding be expanded to support all eight Island Food Hubs communities to set up food innovation and processing hubs.

On behalf of Cowichan, I thank you for your time, and I trust that the food conversation will be brought into your budget considerations. Together we will move beyond the emergency food response and towards food self-sufficiency by supporting local agriculture and the Island Food Hubs, who have been working tirelessly to ensure that this important message be shared.

B. D’Eith (Chair): Thank you very much, Judy.

Next up we have Jen Cody from Nanaimo Foodshare Society.

Please go ahead.

NANAIMO FOODSHARE SOCIETY

J. Cody: Good morning, everyone. My name is Jen Cody, and I’m the executive director for Nanaimo Foodshare.

I’m grateful to be speaking to you from the unceded territories of Snuneymuxw, Stz’uminus and Snaw-Naw-As First Nations.

Nanaimo Foodshare is a non-profit charity with a mandate of supporting food security in the regional district of Nanaimo. At Nanaimo Foodshare, food security is more than food banks and access to food for people in need. Food security includes access, and it includes food skills and supporting sustainable local food production, the local food economy and food policy. In addition to access and food skills, we also bring nutrition security to food security.

Why do we do this? Because the evidence of the impact of nutrition on health, local economy and quality of life is clear. Here’s one example of many. In Nanaimo, 56 percent of older adults admitted to hospital are malnourished. More than half of the older adults are not eating the foods, or enough food, to keep them healthy. This statistic is regardless of income. Yet for a population of over 90,000, there is no community dietitian to support addressing nutrition issues like this in Nanaimo.

Seniors are in the hospital more often and will need extended care earlier because of their lack of nutrition. For the hospital alone, malnourishment means an increased length of stay and associated health care costs, adding $1,500 to $2,000 per patient per stay. Studies show that dietitians can save the health care system $3,800 per patient. This is true for seniors and also true prenatally, early years and for children. The impact that dietitians can have is immense. Dietitians also play a critical role in providing evidence-based nutrition information to the public and supporting organizations like ours in linking community response to food security with evidence-based practices.

[11:25 a.m.]

Embedding community dietitians in community-based planning and food security initiatives will increase our ability to add nutrition security to the food security agenda. A coordinated approach to food security and support from the province for community planning to include food security are essential.

Food is often missed as an issue to plans and support. Emergency response plans are an example of this. The emergency plans include fire, flood, utilities, water and so on. Food is not on this list, yet it is the most basic of needs. COVID has demonstrated the need for inclusion of food in emergency plans beyond the reliance on food banks.

A coordinated food response also includes local food, and if we’re to plan for the possibility of food supply interruptions, then the plan needs to include supports for agriculture and link agriculture to community food needs. Nanaimo Foodshare is doing that on a small scale. We have expanded our food production at urban farms by threefold to supply the Good Food Box with more locally produced food. The farms are training youth and people with challenges and disabilities as agricultural workers, and once trained, these workers will support local farmers through their labour, allowing more food to be harvested and accessed by the community.

Farmers continue to need support to grow and meet community food needs. They’re telling us that they’re struggling to find sufficient labour due to border interruptions and lack of trained local workers. That means the food that they would normally produce, harvest and send to market will not be available. This is also true of farmers in the U.S., who supply 97 percent of our food. This means that some foods may not be available later this season, and other foods will be more expensive.

This brings me to my asks. We recommend that the budget include funding for 30 additional community dietitian positions in British Columbia. Each community dietitian to work with local food security organizations like the Island Food Hubs to support community capacity-building for food security that includes nutrition, a $2 million ask.

We also ask that you fund community food hubs based on the Island Food Hubs model. The ask is $100,000 per food hub each year for a minimum of three years.

We also ask the province to increase the emergency budget by 10 percent to include food as part of the plan in 2021 and further increase the emergency budget in 2022 to implement food as a coordinated emergency responsibility.

The Ministry of Ag had a budget cut of $2.8 million in 2020. We ask that the funding for the Ministry of Agriculture be increased to $105 million to restore levels of funding and increase agriculture extension services to B.C. communities. These services will support farms like ours and other community programs that support local community in producing more of its own food.

Food is a gap in planning at all levels of government. I’m thankful that this government consultation has allowed us to bring forward this important issue in need of support at a time when COVID has brought forward the importance of food to communities and the need for a coordinated food system approach to food and nutrition security.

Thank you.

B. D’Eith (Chair): Thank you very much, Jen.

Next up we have Maurita Prato from LUSH Valley Food Action Society.

Please go ahead.

LUSH VALLEY FOOD ACTION SOCIETY

M. Prato: I acknowledge that I’m standing on the unceded traditional territory of the K’ómoks First Nation.

LUSH Valley is one of eight Island Food Hubs and envisions local food at the heart of community well-being. We’re celebrating 20 years of doing this in 2020. Thank you for the opportunity to speak with you today.

As others have mentioned, it concerns me that the Budget 2021 consultation paper has no explicit mention of funding for food and food systems. Although there’s a strong focus on long-term planning and resilient communities, which is great to see, food systems are, as others have said, central to education, health, poverty reduction and the health of our economy and need to be mentioned and paid attention to explicitly.

COVID-19 has required LUSH Valley and others working in food security to rise to the challenges that we are facing. Due to our network of relationships across the charitable, governmental, funding and food-producing sectors, when our food bank first ran out of food and then shut its doors temporarily in March, we were able to provide healthy food access to a rising number of people in need in our community.

To date, since April 1, our two new emergency programs have served 6,825 hot meals and 2,492 good-food boxes, which is one week’s worth of healthy groceries. We’re doing this while supporting local producers by purchasing 25 percent or more local food. In rolling out these programs, we worked with 25 agencies, including school district 71 and the Comox Valley Food Policy Council, another initiative of LUSH Valley, to bring these services to their clients and student families.

[11:30 a.m.]

We have also started a “Grow food everywhere” campaign, with over 1,000 members, supporting new food growers with supplies, tutorials and mentorship. While this response has been immense, my main concerns are for the longevity and sustainability of the services we provide, as well as our organization’s survival, and other similar organizations, over the next six months to two years.

A recent study released by the Victoria and Vancouver Foundations found that 92 percent of non-profits are seeing an increase in stress. Half fear they will not be able to operate over the next six months, and over half are seeing an increase in demand for their services. We’re certainly seeing that squeeze. Many of us rely, for example, on gaming funds and are uncertain of the future of those funds with casinos and other gaming venues currently shut down.

As others have mentioned, the COVID-19 crisis has put food security at top of mind for many. With increasing reports of food systems disruptions from global to local, my concern is that when this emergency funding bubble bursts this summer and fall and into next year, there may be an increased need for food access on the community level with diminished funding and food supply and a higher cost for food as a result.

In my community, our emergency operating centre did not have food security on their agenda. I soon learned that the provincial Health Emergency Coordination Centre also had food security and other population health issues as a blind spot. As a response, LUSH Valley put out briefing notes each week and formed a subcommittee group to ensure that food got on to the EOC’s agenda, but it took lots of advocacy to start that discussion.

There must be provincial funding put aside to prioritize food security and planning for food supply disruptions and emergency issues. Therefore, my budget requests are first, as others have mentioned, that Island Food Hubs needs direct and stable funding from the province to continue to provide services and long-term community resiliency planning and implementation. Island Food Hubs are asking for $100,000 for each hub each year in a secure three- to five-year contract.

Second, funds for food security must be prioritized at the community and provincial level in terms of the emergency response. As Jen had suggested, we’d like to see a 10 percent increase in that budget — the provincial budget being $519 million — that specifically focuses on food security. That’s $50 million.

The third is funds to purchase local food for social programs, ongoing, similar to the $50 million from the federal government, but focused provincially through the Ministry of Agriculture’s Buy B.C. umbrella. So $20 million to help charities purchase local food for their programs and create longer-term contracts with local growers, helping local growers and people who are food insecure.

The fourth is investments and funding in local food systems infrastructure — this is community kitchens, aggregation sites and other food processing facilities — and policy, as the national local food infrastructure fund, which was supposed to do this, is now on hold.

The fifth is our food literacy programs that provide support for home growers. We’d like to just see that continue to be supported.

One other point is that on May 7, we heard about bumping up wages for front-line workers making minimum wage, with each province deciding who those front-line workers would be. We hope that food producers and food security workers will be included. Thank you.

B. D’Eith (Chair): Thank you very much.

Yeah. There’s no doubt that supply chains and food security have become top of mind on people’s minds during the COVID-19 crisis. I appreciate all of your comments. We know there was a huge amount of pressure put on food banks and other community resources to deal with food security. Thank you for all of your work.

Members, questions at all?

R. Leonard: Thank you, everyone, for your presentations.

I’m a little bit concerned that you think we haven’t been addressing the issue around agriculture and food security. It was addressed. I know that we had some presentations last year, including Maurita from LUSH, where there were opportunities to talk about food security and address things.

I absolutely recognize what you’re saying, though, around emergency management actually pinning it to the table of contents — that this is one of the issues that we need to deal with and not have to fight to have it on the table. So I appreciate those comments.

[11:35 a.m.]

I mean, food security has been an issue for quite some time. During the wildfire season, I think there was a really poignant example that we heard on this committee around a community that was cut off from outside food supplies and how important the local farming produce was going to be in helping them through that isolation. It’s a different kind of isolation.

I think my question…. I’d like to get a sense of scale from you, one of you or all of you, around the COVID-19 pandemic in terms of the increase in need. I think I heard from the first presenter, from the Clayoquot Biosphere, that around a third of your community is now accessing the Good Food Box. How does that compare to before? Do you see a recovery…? During that recovery period, if we’re going to a new normal and it’s not going to be back to the way things were, how will that continue, those kinds of numbers?

E. Goldt: This is a more than fourfold increase in access to this food program.

Our challenge…. I mentioned the challenges of us being a fishing- and tourism-based economy here that has had a significant impact from the COVID situation with extreme unemployment. Without the return of those to full scale, we may be looking at emergency food needs for a year. However, I do believe that there are things that we could have in place in our community to create that resiliency by accessing our food sources that we have on the coast.

We have been facing a lot of barriers to be able to allow our communities to access our local and traditional foods. That could have a huge impact on future emergency situations.

B. D’Eith (Chair): Before I go to other questions, I did want to mention, too, that sometimes, with the presentations that are made, because something is not included in a list doesn’t mean, necessarily, that the list is exhaustive. I’ll give an example of that with those essential services, for example, that were listed. It was never intended to be an exhaustive list.

I can say that food security, at least from what I’ve heard from the government and government caucus and everyone, has been on top of mind. So I do believe that while it may not be on a list, it’s certainly top of mind. Certainly, supply chain during the crisis was a huge issue, and food was a very, very big part of that.

Rest assured that it is an important piece. I think, on a non-partisan basis, it’s obviously incredibly important to everybody. So I appreciate that.

Any other questions or comments?

Seeing none, thank you very, very much for your presentations, everyone. Thank you for everything you’re doing for our communities. We really appreciate it. I know it’s been a very difficult time. So stay well, and stay healthy. We appreciate everything you’re doing.

If I could go to a recess now until 11:45.

The committee recessed from 11:38 a.m. to 11:45 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Welcome to our new presenters. I appreciate you coming on board. What we’re asking the presenters to do, please, is keep your comments to five minutes. Please give yourself enough time to give us your recommendations. It’s very important that we hear those. What we’ll do is hear the two presentations and then have a little bit of time for questions.

First up we have Geoffrey Morrison from the Canadian Association of Petroleum Producers.

I believe you do have a slide show that members have on their iPads. Please go ahead.

Budget Consultation Presentations

CANADIAN ASSOCIATION
OF PETROLEUM PRODUCERS

G. Morrison: Good morning, Chair and committee members. Thanks for having me.

I’m joining from the traditional territories of the Songhees and Esquimalt First Nations.

I’m speaking on behalf of the upstream oil and gas industry. I’ve provided a presentation, as you’ve already indicated, including some graphs, and I’ll refer to some of them as I’m speaking.

In my remarks, I hope to show why we are a cornerstone of the B.C. economy now and in the future, why it is important that we work in partnership with government to attract investment to create well-paying, quality jobs and lower global emissions, and why competitiveness is more important than ever. B.C. is a modern, innovative and diverse economy. However, B.C.’s strength remains in its natural resources. Seventy-five percent of B.C.’s exports are natural resources by value, and oil and gas is a top-three exporter.

The natural gas industry employs directly 12,000 people in B.C. In 2019, we were the third-largest investor in B.C., investing $3.3 billion and producing exports valued at $4 billion. These numbers do not yet include the emerging LNG industry. That is to say that our industry is a cornerstone today of B.C.’s economy.

Making quick reference to slide 3, you will see an illustrative graph that shows that for every hour worked by natural resource workers, Canada generates $304 of real income, and it shows that mining and oil and gas generate almost twice as much real income per hour as any other industry. These are good-paying and community-building jobs, typically outside of the Lower Mainland and often creating opportunities for Indigenous communities and advancing reconciliation.

Quickly moving to slide 4, we can see the jobs impact of the worst economic shock since the 1930s. In a few months, 14 years of job creation has been erased, with an estimated 400,000 jobs lost in B.C. and three million jobs nationally since March. We will need to work together to lift our economy and our society out of this hole. We will need all of our acumen and resources to do this.

Slide 5 shows how the $3.3 billion of oil and gas investment compares to other B.C. industries. To put it into perspective, every two to three years, this industry invests the equivalent of a Site C dam project — of private capital — into the province. However, today’s crisis, combined with an OPEC-Russia price war, has had a devastating impact on capital availability, equity markets and cash flow to this cornerstone industry. In Canada, nearly $9 billion in oil and gas spending cuts have been announced since March. In B.C., the best estimate for capital investment this year is $2.1 billion. That is a 36 percent drop compared to 2019.

B.C. produces some of the lowest greenhouse gas–​intensive commodities in the world. This includes our natural gas. World demand for energy will recover, and that demand will surely be supplied, but it’s not clear that B.C. will be in a position to grow its supply of lower greenhouse gas–intensive energy if we do not attract investment needed to develop our resources.

Drilling is a leading indicator, and the drilling information in slide 6 is moving us from trying to understand what is happening to understanding what is going to be happening. Looking at March numbers, industry activity is down by almost half, year over year — 18 wells this March compared to 34 wells last year — and the trend is worsening. This April it has the lowest well spud rate ever recorded in Canada, and there are fears that we are not yet at the bottom. To spell this out plainly, capital investment translates to wells drilled; wells drilled translates to jobs and government revenues.

[11:50 a.m.]

Early numbers show B.C. oil and gas export volumes and values are trending down since the start of COVID. This is not encouraging news for a government in need of revenues or for companies in need of cash flow to reinvest. However, I’d like to argue that a strong oil and gas sector can help lower the demand on government programs, and these high-paying, quality jobs will help pay for the government services we all rely on through income taxes.

In addition to employee income taxes, government has received hundreds of millions of dollars annually from oil and gas royalties and land sales. Last fiscal year this was estimated to be over half a billion dollars. British Columbia is facing unprecedented headwinds, and I would argue that B.C. needs a strong oil and gas sector to have a full economic recovery. That is why we’re asking this committee to recommend to the government that it work with industry to develop a clear strategy to attract oil and natural gas investment.

I’d like to point out that carbon tax is one of our biggest costs. This is why this strategy must address EITE competitiveness. We ‘re asking B.C. to look at GHG offset policies and to adopt a stringent policy lens to prevent carbon leakage, as any jurisdiction serious about addressing climate change must also take carbon leakage seriously.

That was the end of my remarks. I look forward to your questions.

B. D’Eith (Chair): Great. Thank you very much, Geoff.

Next up we have Bryan Cox from B.C. LNG Alliance.

Please go ahead, Bryan.

B.C. LNG ALLIANCE

B. Cox: Mr. Chair, hello to you and the committee.

I’m happy to be with you today from the Semiahmoo, Katzie and Kwantlen First Nations, where I’m speaking from today.

It’s a pleasure to be with you to talk a little bit about the LNG opportunity that we have here in British Columbia and in Canada.

As we know, we are in an unprecedented time right now, just as evidenced by this committee meeting today and by the fact that we’re all meeting virtually. I don’t think we ever contemplated what’s occurring right now, from a pandemic point of view and, really importantly, from an economic point of view — where we find ourselves as a province and as a country. We really need to look forward towards economic recovery.

When you look at what an opportunity like the LNG industry provides for British Columbia and for Canada, it’s very important that this committee and the government look very closely at what we can collectively do to continue to build this industry. If you look right now at the LNG Canada project, Coastal GasLink project…. Prior to the COVID pandemic beginning, we were seeing over 7,500 people working for the LNG Canada project and 2,500 people on Coastal GasLink, with over $1 billion in contracts let locally, many of those opportunities with Indigenous communities.

We are seeing this benefit translate out not only in the local communities but across the province and, importantly, across the country. This is truly an opportunity with a $40 billion project that we’ve only just begun to see the benefits for. You’ve also seen that project do everything responsibly during this time to ensure that it’s maintaining the essential levels of services that it could. Now it’s in a position, as we move through this next phase of the pandemic, to begin to provide more economic opportunity to the province.

We’ve really seen that through one project, and we have the opportunity to see that through more projects. We have projects like the Woodfibre LNG project, like the Cedar LNG project, like the Fortis Tilbury expansion, as well as other opportunities like the Kitimat LNG project that we have here in British Columbia.

I think it’s really important to put it in context that not only are these billions and billions of dollars of economic activity an opportunity for British Columbia and Canada, but we are producing the lowest-emission LNG in the world through these projects. The LNG Canada project, when constructed, will be the lowest-emitting LNG facility in the world. Kitimat LNG, Woodfibre and the Tilbury facility will be even lower than the LNG Canada project. So we’re demonstrating in British Columbia and in Canada this leadership when it comes to economic development and also climate leadership when it comes to what we can show the world through this industry.

The power of this industry is through our clean, green hydroelectricity grid. When you think about what our opportunity is through natural resource investment in British Columbia…. You’ve heard it in the prior presentation — what the natural resource industry provides in economic activity to the province, over and above other industries. We do it to the highest standards, with a clean, green electricity grid.

As we move forward as a province through this time, it’s incumbent on us to really look at how we develop our economy and our natural resource economy, which we should all be incredibly proud of, and do that in partnership. In order to do that, especially when it comes to LNG, which are, as we know, massive capital projects that require private sector investment, we have a real opportunity now to look at how we invest collectively to unlock those private sector dollars.

[11:55 a.m.]

I think I would venture to say there are not many other opportunities in the country of Canada right now with higher abilities for private sector capital deployment than the LNG opportunity through British Columbia. This truly is British Columbia’s opportunity to provide much-needed economic help to our country right now, by getting this opportunity correct, by ensuring that we build the LNG Canada project, as we’re doing now, but really importantly, empower the growth of this industry.

In order to do that, we need to ensure that we have a regulatory system that can accept this capital investment. Every other jurisdiction in the world right now will be looking to get as much capital investment as they can, because they’re going through the same economic troubles as we are. We have to be ready, as a jurisdiction, to accept this capital investment. When you put it together from a regulatory point of view and from an infrastructure point of view, we need to make the investments now that are going to unlock those multiplier effects of private sector dollars that will benefit locally, provincially, nationally and our Indigenous communities.

We would really recommend to the committee that government put a focus and a lens on natural resource development that involves all of the partners that we have — Indigenous communities, local communities, all levels of government and industry — in order to ensure that we turn the corner on this COVID pandemic and get back to prosperity for our province and for our country.

B. D’Eith (Chair): Thank you very much, Geoff and Bryan. We appreciate the presentations.

I have a quick question for you, Geoff, and it’s only because of not having a background in the oil and gas sector. Could you explain to me what a spud count is, what the spud rate is and the importance of those statistics on that slide that you presented?

G. Morrison: Sorry for the jargon. “Spud” is just a fancy way to say starts of a well. It’s just the number of starts in a particular month. It’s a little bit of oil and gas jargon. Apologies.

B. D’Eith (Chair): Okay, great. Thank you. It’s just one of these things. Every industry has its acronyms and its jargon. So I appreciate that.

If I could open the floor to questions from members. Any questions from members? Okay.

Just a question from me in regard to COVID-19 to both of you, I guess. Obviously, construction and industry were considered essential services during the pandemic. However, I’m just curious, in terms of production and construction, as to LNG B.C. and others. Could you just talk to the impact, maybe percentages, the amount that things have been able to continue or how curtailed the production has been? If you could just comment on that and how you feel things will move forward over the coming months.

G. Morrison: Bryan probably has some stats on what LNG Canada did. I believe they cut their camps down to about 50 percent in that space.

Again, we want to say thanks to the government for identifying this industry as essential. We’ve kept our camps open in northeastern B.C., under strict protocols. As far as I know, those are working out well. It hasn’t impacted construction in the upstream. But I believe — I’ll let Bryan answer this part — it may have impacted construction of the LNG facility and the pipelines adjacent to them.

B. D’Eith (Chair): Thanks, Geoff.

Go ahead, Bryan.

B. Cox: Again, thank you to the government for the work that was done during the pandemic time. Obviously, there was a lot of work done on essential services and allowing industries like LNG construction and upstream natural gas to continue to do what they do to provide those essential services to British Columbians.

You did see, along the Coastal GasLink pipeline…. That time of year, actually, is a slower time of year for construction. So it allowed them to have a reduced workforce at this time.

LNG Canada did reduce their workforce and followed all the protocols and guidance. They still are very confident that they’ll be able to meet their construction timeline. I think they have a very solid plan in place to be able to do that, but they obviously took every precaution and guidance from the province to ensure that they were doing all the things that needed to be done around social distancing and other protocols.

We remain confident that that project, pipeline and facility will be built on time. They’ll be looking to those plans over the coming months.

B. D’Eith (Chair): Thank you very much, Bryan, and thanks, Geoff.

Any other questions?

Seeing none, just for members, when we adjourn, if you could stay on for maybe one minute or two afterwards, I’d appreciate that.

That is it for this morning’s presentations. Seeing nothing else and no other comments, if I could ask for a motion to adjourn.

N. Simons: Thank you very much, everyone. Motion to adjourn.

Motion approved.

B. D’Eith (Chair): We are adjourned. Thank you very much.

The committee adjourned at 12 noon.