[ Page 10531 ]

The House met at 10:08 a.m.

Prayers.

Introduction of Bills

AN ACT TO AMEND THE HOSPITAL DISTRICT ACT

G. Abbott: My bill would repeal the provision in section 49.1 of the Hospital District Act which empowers the Minister of Health to dismiss a regional hospital district board and replace it with an appointed administrator. Regional hospital districts were first created over 30 years ago. Their primary purpose is to provide a vehicle for the raising and expending of local taxes, where appropriate, for capital projects or purchases that are cost-shared with the province.

Most importantly, regional hospital district boards are comprised of the same locally elected officials who comprise regional districts and municipal councils. As such, they are responsible to their electors, not to the Minister of Health or the provincial government. Boards are obliged to make difficult decisions in consultation with provincial officials about the priority, cost and timing of proposed projects.

Section 9 of last year's Bill 42 represents an ill-advised, unnecessary and unwarranted incursion into the realm of local autonomy. Local governments, through the Union of B.C. Municipalities, have sought repeal of this section. I urge all members of this assembly to embrace the principle of local autonomy by supporting this bill.

Bill M212 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

The Speaker: I call the committee Chair, with some sympathy.

STRATA PROPERTY ACT

On section 1.

R. Coleman: Just before I start, I might mention to the House that the member for Prince George-Omineca had a son last night -- 8 pounds 10 ounces. I understand that he's named Thorin Harold, and mother and child and father are all fine.

We start out with section 1, just quickly, on the definitions and interpretation. I don't have to spend a lot of time on it. My only question is with regards to "majority vote." When you're dealing with a majority vote, it's basically people, by presence or by proxy at the time the vote is taken, who have not abstained from voting and this is a 50 percent vote. Where does the minister see that being applied? Most of the time it seems that we're applying a 75 percent vote versus a 50 percent vote.

Hon. J. MacPhail: Ordinary business will require the majority vote, but special circumstances such as bylaw changes and appropriation from contingencies is when the exceptional three-quarter vote will occur. In some cases and very special circumstances, I think a unanimous vote is also required.

[10:15]

On section 6.

R. Coleman: On the owner-developer's standard of care, I just want to comment on the standard of care, because there's a new subsection (2), which outlines that "the owner developer must make reasonable efforts to pursue any remedies under warranties in existence with respect to the construction of the common property and common assets." I think this is a very good section. I'm not sure that it's strong enough, because it deals with reasonable care. The people who do these. . . . If you've ever been on a job site, dealing with the as-builts and the information relative to them. . . . Those warranties should be available as backup to the developer, and they should be provided to the strata corporation.

That's just a point that I think is important. It's unfortunate that we actually have to include in a piece of legislation that somebody should do this, because it should be by standard of practice that they do it. Maybe it's not strong enough. Hopefully it will be, and it will find its application as the act goes into play.

Hon. J. MacPhail: I actually appreciate those comments and perhaps would even agree with them. What we will have to do is a careful monitoring of the success of this section, to see whether any strengthening is needed in the future.

Section 6 approved.

On section 7.

R. Coleman: On this particular section, this is where the owner-developer must pay the actual expenses of the strata corporation that occur after the conveyance of the first strata lot.

This has always actually caused a bit of confusion in the industry. On the conveyance of the first strata lot, there have been two schools of thought. One is that all other lots, because the first lot is paying strata fees, should also pay the same strata fees into the operating budget and that it should flow through from there. Vice versa is where the expenses are being paid, but sometimes you have five or six owners in a 40-unit project who are actually subsidizing the operation, and that's where the concern comes from the strata owner. The actual expenses during that period of time are oftentimes not as high. Some of the contracts for maintenance and what have you are not in place, so the strata owners are actually paying more than they should be. I'm just wondering whether you took that into consideration when this section was developed.

[ Page 10532 ]

Sections 7 to 9 inclusive approved.

On section 10.

R. Coleman: This is the restriction on contracting powers. As I understood what we were doing in the previous section -- what we were discussing. . . . I wanted it clarified because of the first conveyance and the confusion that's out in the industry. There's no confusion in my mind.

This one says: "In the period after the first conveyance of a strata lot to a purchaser but before the first annual general meeting, no contract or transaction may be entered into by or on behalf of the strata corporation with either the owner developer. . . " etc., unless it's "approved by a resolution passed by a unanimous vote at a special general meeting." This is one of those unanimous-vote situations. It's not such a critical situation as the fact that. . . . I know what we're trying to accomplish here. We're trying to keep that arm's-length relationship in here, so we don't have developers passing off management to their own management companies and therefore having control of the strata corporation in more than one manner.

The difficulty I see with this is that I guess it depends on who you convey the first one or two units to and how you're going to deal with that unanimous vote, because the balance of the votes are still in the hands of the developers. I'm wondering how you interpret that use of the vote. I'll use a 20-unit strata as an example. If two units are conveyed, and they're friendly to the developer and there are 18 units left, does it constitute a unanimous vote when the developer casts his 18 votes and the two purchasers' votes and then enters into the contracts, prior to any other sales?

Hon. J. MacPhail: Actually, yes. That is the way it would operate. This section, though, does protect the interests of the purchasers, in that they would virtually have a veto under those circumstances by. . . . It's not as if the developer's 18 could override their two votes. This section also is to make sure that the interests of the owners are protected through disclosure of. . . . They're protected. But it also provides the flexibility for allowing them non-arm's-length contracts in restricted circumstances.

R. Coleman: I don't want to belabour the point, but my comment was that when you have a couple of friendly sales and you have a developer with the balance, you could do the unanimous contracts prior to any other sales. Then you just have the disclosure of who the contract is with, which you've entered into, to the new purchaser. But if you were in a friendly position, you could actually. . . . My concern is that I see a flaw here, where there's a loophole to walk through. If you move your first two sales in the right place, you can enter into your contracts, then bring on your other sales afterwards and only with disclosure. I see that as a flaw in this section.

Hon. J. MacPhail: Your point is well taken. It was a judgment call to permit arm's-length contracts. For instance, the Barrett commission recommended against that. But we're trying not to restrict the developer in any undue way. Your point is well taken.

R. Coleman: Just so I understand that, this section doesn't deal with the true spirit of what the Barrett commission was recommending. We do have this flaw -- just so that we're all aware of it. So if we run into it, we may have to deal with it at a later date.

Sections 10 and 11 approved.

On section 12.

R. Coleman: There's just one concern on this section, hon. Chair, and that is that throughout the rest of this act we've recognized that the contingency should be raised to 10 percent or a calculation relative to what's in reserves in the budget. In this particular section, we've allowed a 5 percent contingency in the first year relative to the interim budget. I'm wondering why we didn't move it all to 10 percent once and for all.

Hon. J. MacPhail: The reason for the different rates is that this is seed money only. Further increases to the owner-developer's contributions would not effectively respond to the problems raised by the leaky-condo crisis, for instance. Even a reasonably healthy contingency reserve fund would make very little difference to a strata corporation facing a leaky-condo problem.

Also, requiring across-the-board contributions really would have the effect of penalizing developers -- and perhaps subsequently purchasers, as well -- of sound, well-constructed buildings. The sum, 10 percent, could be substantial, because it's a percentage of the total budget, unlike the owner's contribution, which is apportioned according to their ownership, etc.

I'm talking about the 5 percent now. That's why we made it the lower number -- because it's on the whole budget. The developer isn't off the hook upon payment of the seed money; it will have to continue to contribute a proportionate share towards the 10 percent owner's contribution with respect to any unsold lots after the first AGM. The act does provide for increases to seed money of 5 percent per year, up to a total of 25 percent, if the developer holds on to the lots and does not sell immediately.

Section 12 approved.

On section 13.

R. Coleman: I'm looking at section 13(2). It's just basically a concern about the interim budget and what it includes. I guess my concern is: what's the commitment to the budget? The minister may have answered that in her previous comments, with the 5 percent increase relative to unsold units. But I found that when I was in the industry, one of the things that was done was that the operating budgets were always sent in with the disclosure statement and added to the sales documents, saying that this is what you're going to be paying the strata fees for on X-numbered lot under the unit entitlement. Those budgets were always run as tightly as possible. That's why I was concerned about the 5 percent earlier.

[ Page 10533 ]

Hon. J. MacPhail: Your point is well taken. That's addressed in section 14(5). That clause contains a disincentive from underestimating the budget, as you suggest.

Sections 13 to 19 inclusive approved.

On section 20.

R. Coleman: Again, this is one I just want to touch on, because I think it's important to the ownership of the strata. It's important that it's put in this type of language and laid out for people, because frankly, this is where we're dealing to some degree with the disclosures in having to make your purchase. I'll get into the strata management a little further on in our discussions this morning. It also refers back to what I always referred to as the "as-builts." As-builts are the final drawings, with all amendments and changes that have been made on site, whenever those are turned over to the strata corporation at the end of the building process. It's very important to have that, because sometimes in construction, a wall or a piece of pipe can't be moved relative to changes on site. If you don't have those and you go to fix something, you have a very difficult time. It was always the practice in the organizations that I dealt with that those as-builts were delivered to the owners as soon as possible. I'm glad we've articulated it more clearly in this particular section, because I think the as-builts and that information has to be there for the owners of the condos so they know what they're dealing with.

Hon. J. MacPhail: Yes, and that is the intent of section 20(2)(ii). That's the one where it says that if the documents are there for as-builts, they have to table them.

Sections 20 to 34 inclusive approved.

On section 35.

R. Coleman: This is a section that deals with records and information and what has been maintained by the strata corporation. I just bring it to the minister's attention, because it's important; it's been one of the major complaints in the industry that this information isn't available to the owners of strata units in the way they like it. I just think that the way it's laid out here in plain language is much better for them to understand how they're supposed to operate. I just wanted to pass comment on that.

[10:30]

On section 36.

R. Coleman: Just another comment. Section 36 is on the receiving of the requests: what the strata corporation has to do with those documents for inspection -- providing copies of them to the owners and how they have to do that. If the recordkeeping wasn't a frustration, the bigger frustration was in not being able to access the information for the people who were actually paying the strata fees and then the strata corporations. Although the previous act did deal with this, it just didn't deal with it as clearly as this. I just wanted to touch on that so people will know that you actually dealt with that issue.

Sections 36 to 50 inclusive approved.

On section 51.

R. Coleman: Basically, if we move from section 50, which deals with voting in special meetings and then the reconsideration of resolutions passed by a three-quarters vote, this whole section. . . . I've just chosen this to stop at to comment and ask the question. One of the things that I've always been concerned about is when strata corporations are put together. After they've all bought units and they've had their first annual general meeting, it's the rules of procedure and how to run the strata corporation properly that seems to have been lacking. If they haven't hired a professional, particularly a licensed professional that would be their strata manager, and they're going to self-manage, there's no strata council training. I'm wondering if the ministry has thought of any standard package of training or information for strata council training so that they could learn how to run an effective meeting, handle their agendas and follow through with a checklist to make sure that they are actually running their strata properly and in a clear, concise manner that everybody can understand.

Hon. J. MacPhail: It's a good point. Right now we work in a voluntary capacity with organizations such as the Condominium Homeowners Association, in terms of us working with them so that they can provide their training package. It's an interesting concept, because, of course, even though you're dealing with substantial ownership, people sit on the strata council on a voluntary basis, and it's a tough recruiting act. At this stage, we are working with the organizations to provide the best possible sources for them to provide their own training on a voluntary basis.

R. Coleman: My only suggestion is that you step up working on that resource. If nothing else, if we had a package. . . . You see it with any service organization that knows how to run an effective meeting and deal with their bylaws and requirements: they usually have a manual -- a president's manual, or whatever the case may be -- that can be handed to somebody and that tells them how to operate and what the positions of responsibility are. One of the real weaknesses in strata management, particularly with self-managed stratas, is just that lack of understanding. That lack of understanding then becomes a hearsay discussion on what their powers are as a president, secretary or treasurer, and the whole act and the whole direction that we're trying to give people on how to run a strata goes out the window. What happens is that they don't pick up on that. I think standards of practice, in some format that would be useful to them, would be very valuable.

Hon. J. MacPhail: Thanks very much. I'm making note of your suggestions; they're quite helpful. We are updating all of our pamphlets and information as of this fall. So we'll take that suggestion; it's a good one.

Sections 51 to 55 inclusive approved.

On section 56.

R. Coleman: This is just a comment back to my previous comment. If you're going to look at that this fall, you might

[ Page 10534 ]

Hon. J. MacPhail: Yes, we are going to do that, from the forms point of view. It would be helpful, actually, if I could run it by the member for his advice as we develop that.

Sections 56 to 58 inclusive approved.

On section 59.

R. Coleman: This is the one that requires an information certificate: "Within one week of a request by an owner, a purchaser or a person authorized by an owner or purchaser, the strata corporation must give to the person making the request an Information Certificate in the prescribed form." There is a substantial amount of information required on that form. There are a couple of concerns I have. One is that you have "within one week," and you're dealing with volunteers running a strata corporation. You have a situation where the people making the request -- the purchaser, owner or person authorized by the owner or purchaser. . . . That's a real estate agent and, more than likely, somebody that's going to sell the real estate property either as a listing or a sales agent. The certificate includes a great deal of information that is going to have to be provided by the strata corporation. If there's not a prescribed form that's going to have the copies in place that are going to be necessary for the particular owners to handle this section, we're going to create some real confusion in the real estate industry.

Now, the real estate industry presently uses what we call a property condition disclosure statement that has to be attached as part of the sales document whenever they do a sale. I'm just wondering: have you developed this information certificate so that it's a simple fill-in-the-blanks form for the strata corporation to fill out and get out within the week? The people would be able to do their transactions in a format that's going to be acceptable, so that after the sale, nobody's going to be coming back on this volunteer strata corporation. Although I do see later on, on your insurance side, that you do have. . . . You're putting directors' and officers' liability insurance in their insurance plans. I still think there's a real touchy area here for them to make sure that they're in a format that's going to be acceptable to make that sale work and come through so we don't end up with frustrated sales in the industry. I mean, we should get together with the real estate industry to make sure that this document is in place in a prescribed and accepted format before the act actually comes into place so the sales aren't going to run into some difficulty.

Hon. J. MacPhail: That is exactly what we're working on. If for some reason, as the act comes into effect, we find that one-week period too restrictive, there is an opportunity before we return, without amending the legislation, to allow -- under section 292, which is the power to make regulations -- the ability to vary the provision under the act for a different time period or monetary amount, if it's too onerous under the act. But yes, your advice on the form is exactly as we're proceeding as well.

R. Coleman: Just to the minister, I caution you on not amending the time frame so much as making sure that the process is simplistic enough that they can get it done. Nothing would be worse than if you're trying to sell your most valuable asset, and you can't sell it -- and you've got a purchaser -- because somebody hasn't filled out a document. That would actually frustrate the sale, and you could end up losing the sale, and all of a sudden you're going to have to wait for another purchaser. That's where I see the biggest fear.

Sections 59 to 69 inclusive approved.

On section 70.

R. Coleman: This I just found to be an interesting section; that's why I want to bring it to the attention of the minister today. It allows for an owner, with the prior written approval of the strata corporation, to remove all or part of a wall as a common boundary between adjoining strata lots, which means you can actually make two units into one. Frankly, if you're able to take that adjoining wall out. . . . Now, obviously they can remove it under the Building Code and applicable municipal or regional district bylaws. But I just had some concerns about how we were going to do the definition of the new lot at land titles, relative to the fact that usually the intervening walls are a line halfway through -- half of it's one and half of it's the other. I'm just wondering how we anticipate defining a new lot. Are we just leaving it as the old lot with a wall removed? Is that how we're going to define it?

Hon. J. MacPhail: It could be that you remove the wall, and you go back to the. . . . It's the one lot or the wall separating two lots; it could be that way. Or they could go to section 259 first, amend the strata plan and then remove the wall; that's in section 259.

Sections 70 to 94 inclusive approved.

On section 95.

R. Coleman: Again, I just picked one section to stop at, and this particular section of the act is "Management of contingency reserve fund." I think we've managed to actually define this -- the operation of contingency reserves and the average yearly expenditure, its definition and what have you -- in language that these people actually understand, and that's a pleasant change. I just want to bring to the attention of the minister that although there are some increased accounting costs here relative to the management of the contingency reserve funds, it's necessary for the reporting back to the owner of the strata. They would know better what their funding is and how their money is being managed, as far as the owner is concerned. So although there may be a bit more expense to the strata corporation given the fact that they may have to hire some level of professionalism for their accounting procedures, perhaps, it's a long-term benefit to the resident -- the owner -- of the condo, because they'll now know exactly where they stand with their operation.

Sections 95 to 138 inclusive approved.

On section 139.

[10:45]

[ Page 10535 ]

I don't want to canvass every section here; I just wonder what the thinking of the ministry was on this particular section.

Hon. J. MacPhail: This was an area where there was a great deal of discussion and consultation. We've tried to achieve a balance between interests here. The member is right that there are changes -- first of all, that the act maintains the rights of strata corporations to pass bylaws restricting rental of strata lots. So that's still there, but there are these changes that are to provide for a balance. It is a tough balance to find, but rental to family members has to be allowed.

Secondly, the grandparenting is there, as the member points out. It is for a year from the date that the bylaw is passed. The intent is to increase the options for individual owners and tenants and at the same time not to jeopardize the strata corporation community's concerns. We'll monitor it carefully and, hopefully, through organizations like CHOA, receive feedback on it as well.

R. Coleman: I understand that. My only concern is that the person who has made the investment in the rental property all of a sudden finds that their revenue stream is going to disappear in a year and is forced, in a marketplace, to sell a unit that may be on the downside of a market rather than the upside. I know that there is an appeal mechanism to the strata corporation in here in that particular case. Hopefully, that won't be unreasonably withheld when that's in force. We'll have to see how it works and whether it works to the benefit of all.

My only other question is: in some strata corporations now you're finding. . . . I'm familiar with one in particular where a manager's suite was purchased by the strata corporation. The manager later decided to buy a suite in the building, and then the strata corporation rented out the manager's suite in a non-rental building, where everybody else was restricted. How does the ministry see the interpretation of that move by a strata corporation on the overall effect of the building? Does that now open it up, and the rest of the building should be entitled to rent their suites? Or is it because the. . . ? There was no three-quarters vote or anything in this particular case; the decision was made by the strata council to rent out a unit. Once you have one rental unit in a building, have you not set the standard where other people should be entitled to do the same thing?

Hon. J. MacPhail: I'm actually going to restrict my comments, because I'm not a lawyer, and these are legal technicalities. It does raise some interesting questions of lack of fairness if the strata corporation is the only one that's allowed to rent and the bylaw doesn't specifically say that one rental is allowed. Certainly the strata corporation has the opportunity to change the bylaw to accommodate that situation or to actually enforce the no-rental bylaw against itself. I guess that would perhaps involve some work for lawyers.

Sections 139 to 198 inclusive approved.

On section 199.

R. Coleman: I guess the minister has figured out that I'm not too contentious about this piece of legislation. I just want to see if it will work in the marketplace before we have to worry about it too much.

As we get to leasehold strata plans, I just want to make a couple of comments. The comments are more directed to municipalities and government, relative to the opportunities they have on Crown and municipal-owned lands, to tell them not to be afraid of a leasehold -- not be afraid of a 99-year lease in private-public partnerships and what have you. As I go through this section, having dealt with long-term leases, ground leases and strata leases in private-public partnerships in the past, I think this section goes a long way to clarify it even for them, so that they understand it. Agencies that are thinking that they could make better use of their land within their community -- provide affordable housing and opportunities in their communities, because of the land base they have -- should be looking at this section. It allows them to produce the product but still retain the ownership of the land for the long term for the taxpayer. I just wanted to make that comment on this particular section, because I think this is the section they should be applying their thoughts to if they're looking at what they want to do with municipal and government lands. The same holds for government.

Sections 199 to 322 inclusive approved.

On the schedule.

R. Coleman: Before we conclude on the "Schedule of Standard Bylaws," I want to comment that that should be included in some of the training for the strata corporations. I think we have to make sure this industry is taking the next step to make sure that property managers are licensed under the Real Estate Act and are operating in a manner that we want them to, and that we're going to tighten that up. I didn't want to pick a particular section to go into in that detail but just to comment and to ask for the minister's comment on that.

It's been felt that the licensing should be there; it is there. It may not be managed the way it should be, but the training and the licensing of property managers relative to this, the encouragement of strata corporations to make sure they're getting the right licensed professionals to operate their strata, and the training itself -- to make sure they know what to look for and what licensing requirements to look for when they're selecting their property manager -- are going to be very important to the operation of a successful strata corporation. I just want to bring that point up.

Hon. J. MacPhail: I agree with the hon. member. I would just bring to his attention that while this act doesn't otherwise regulate the provision of strata management services, the Homeowner Protection Act, Bill 46, actually does consequentially amend the Real Estate Act to require the licensing of strata managers. That licensing will involve education and standardized business practices, such as trust fund requirements and oversight by the Real Estate Council, to ensure that strata managers are subject to the same regulatory control as other property managers.

R. Coleman: I'm familiar with that. But what I think is important is the education of the strata councils and strata

[ Page 10536 ]

Schedule approved.

Title approved.

Hon. J. MacPhail: Hon. Chair, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 47, Strata Property Act, reported complete without amendment, read a third time and passed.

Hon. J. MacPhail: I call Committee of the Whole to debate Bill 35.

EDUCATION STATUTES AMENDMENT ACT, 1998

Hon. P. Ramsey: I think we'll be able to deal with some of the technical issues that arose from the debate of this bill last night, as we consider it in committee. To assist us, I have in the chamber Dawn Leroy, who is senior legislative analyst; John Woycheshin, who is a school district operations analyst; and Peter Owen, who is the director of governance and legislation. There are a couple of tabled amendments that are in the hands of the Clerk and, I hope, in the hands of the opposition now. They are, I think, pretty minor.

With that, let's get underway.

Section 1 approved.

Section 2, section 937.2 approved.

On section 2, section 937.3.

A. Sanders: I have a question for the minister on section 937.3(1). This is regarding school site acquisition charges payable. It reads: "Every person who obtains subdivision approval or a building permit in respect of an eligible development in an eligible school district must pay to the local government, for each eligible development unit that is authorized or will be created, the school site acquisition charge applicable to that category of eligible development." What are the categories of eligible development?

[11:00]

A. Sanders: So the density factor will be built into the formula. Of the variables in the formula, which of those is the density factor that would alter the formula?

Hon. P. Ramsey: It is D. It specifies that, and we'll be getting to it: Section 937.5(1) says D is "a factor set by regulation for the prescribed categories of eligible development."

A. Sanders: My next question in section 937.3 is about subsection (3). It says: "A school site acquisition charge is not payable under subsection (1) if any of the following applies. . . ." I have a couple of questions regarding the subsections there. In subsection (3)(a), the first section where these acquisition charges are not payable, it says that there is a list of exemptions from the school site acquisition charge under the regulations. Could the minister give us the list of those exemptions that will not be required to pay the school site acquisition charge based on the regulations outlined?

Hon. P. Ramsey: I want to go back to the purposes of the act and then speak to the member's question on this section. The purposes of the act are, of course, to enable a site development charge on developments that actually will generate increased school-age population. The proposed exemption under section 937.3(3)(a) would be to exempt categories that don't actually generate school-age children -- summer and seasonal dwellings, for example, or hotels and motels, seniors housing, community care facilities and similar developments.

A. Sanders: Let's look at the seniors housing category as an example. There are many potential seniors-housing-category developments in the area where I live. Many of the individuals who now perhaps choose to live there are not seniors. How will the minister differentiate in the integration of seniors housing, for example, with non-senior individuals who perhaps have families?

Hon. P. Ramsey: Most of these categories are relatively straightforward -- hotels and motels, for example, or a community care facility. Seniors housing does have some potential for greyness in it, but clearly any development would have to be evaluated on whether it's going to generate additional school-age children for which schools and therefore sites for schools will be required. There are some that clearly have covenants on them that restrict them to seniors housing; there are others that clearly do not and are really open to anybody. There is some grey there, but in the process of looking at the regulation, we would attempt to capture the principle of saying that if the development does generate school-age children, then it should be subject to the site acquisition charge, and if it doesn't, it should be exempt.

A. Sanders: Will there be a list of the exemptions for people to look at in order to ascertain whether they would be exempt or not?

[ Page 10537 ]

A. Sanders: Section 937.3(3)(b) talks about school site acquisition charges that have been previously paid or provided for an eligible development. If further subdivision or building permits are acquired, that developer may be exempt from the school site acquisition charges, having paid previously. Could the minister outline what kind of retroactivity that incurs and exactly how that section will be administered?

Hon. P. Ramsey: The import of this section is to prevent retroactivity for subdivisions that have already gone through the approval process and to require and capture school site acquisition fees if that subdivision is further subdivided. So if the number of units for which the subdivision has been approved remains unchanged, there's no retroactivity. If there's a revision to that subdivision, it would obviously have to go through municipal approval. If there's a revision to it that generates increased units, then those increased units would be captured and subject to the school site acquisition fee.

A. Sanders: There's just one question to the minister on sub-subsection (5)(b), on page 3 of the bill: ". . .prescribe conditions under which the instalments may be paid." Could the minister please explain that statement?

Hon. P. Ramsey: I want to talk a little bit about one of the principles on which consultation around this revision to Bill 43 moved forward and then applied to this section. One of our goals here was to harmonize how school site acquisition charges would be imposed with development charges for other purposes. One of the areas in which we will be harmonizing would be in the ability to pay school site acquisition fees by instalments. Currently, there is regulation 166/84, which provides that where a development charge exceeds $50,000 or where a local government has by law provided that all development cost charges may be paid by instalment, the charge may be paid in three instalments over a two-year period. It has some other provisions in it. It would be our intent that that regulation would also apply to instalment payment of school site acquisition fees.

Section 2, section 937.3 approved.

On section 2, section 937.4.

A. Sanders: In section 937.4 there are a number of things set out. First of all, in this section it's set out that once a year school boards will have to go through a process of evaluation with respect to the needs for school site acquisition based on enrolment, etc., and they will have to go through the need for new school sites and levy costs, working with municipal government or several municipal governments, depending on which school district it is. They may involve more than one municipality. In section 2, section 937.4, it says that the final decision with respect to any dispute that occurs between local government and school boards failing to agree on the requirements for school expansion or for five-year plans will go to the Minister of Education, as part of the School Act capital plan approval process. Could the minister please explain how that will work?

Hon. P. Ramsey: Difficulties with the current provisions around school site acquisition that developers, municipalities and school boards have noted have been, at times, around reaching agreement and concerns about the transparency of the process. The provisions of section 2, section 937.4, seek to provide a totally transparent process, where everybody in the community can examine what is being projected for the school-age population, what is required around new schools and new school sites, and seek public discussion and agreement on them. Therefore you have provisions for work between school districts and municipalities; therefore you have a provision for inexpensive attempts at dispute resolution through the appointment of facilitators -- which I believe will lead to agreement, in the great majority of cases, on the number of school sites that are going to be required and the number of development units that will be levied a charge to help offset the costs of those school sites. At the end of the day, however, there has to be some decision process. The decision process is ministry approval and my approval of a capital plan proposed by a school district.

[11:15]

Hon. P. Ramsey: I will attempt to reply to the actual technical question rather than to the political assumption here.

This will apply to future needs and to future developments -- subdivisions or building permit developments that result in increased units that will generate increased numbers of children. It will apply to those areas where that clear need is demonstrated, which will largely be in high-growth areas. It will apply, I suspect, to relatively few additional districts around the province other than the 15 or so that are clearly high-growth. As the member knows, there are currently seven of those districts that now have agreements in place with local municipalities. So it will apply there and elsewhere in high-growth areas, where there is a clear need for additional schools as a result of additional subdivisions.

A. Sanders: Just for the record, "future" needs means September 1998; the future is a month away. Does the minister imply by that answer that, for example, in an area like Richmond, which needs an additional classroom for every existing school, because of the decrease in enrolment or in the numbers of children in the K-to-3 area, where we will in September have generated a significant need. . . ? Does the minister mean that because the population itself has not grown, this bill will not trigger the necessity of capital planning, with additional dollars for all of those schools that would require an additional elementary schoolroom come September 1998?

Hon. P. Ramsey: The trigger for school site acquisition fees is actual subdivision -- in other words, the actual development of new subdivisions and therefore of new demand. It does not apply to the government decision to lower class size and build more classrooms to accommodate smaller classes.

[ Page 10538 ]

In the past, the ministry has used the 1530 form in order to ascertain the number of children expected in districts come September of every year. We discovered in the estimates the very significant unreliability of the 1530 form. For example, the ministry projected that there would be 8,000 new children in the school districts come September 1998, and the 1530 forms told us that there would 4,000 new children. That's quite a difference in range. This brought forward very significant concerns as to whether the form 1530 that the ministry used and the districts sent back in to the ministry had, in fact, any validity.

With Bill 35 being activated, what kind of format will the ministry be using to ascertain the number of children needed, in order for future school site and capital plans to be developed by school boards? Will it be the 1530 form? Will there be a new form? What is planned there in terms of trying to gather the data, so that we are in fact charging new homeowners correctly when they go to pay the bills for building and acquiring a home in the future?

Hon. P. Ramsey: Form 1530 is the report on current enrolment and staffing. It is not going to be used in the work that is contemplated under section 937.4. Municipalities and school districts currently have in place, as they develop their capital plans, models for projecting future enrolment or growth of school-age population as a result of subdivisions.

I would again say to the member that this is looking out into the future. It does not contemplate retroactively capturing demand for school sites that currently exist. It looks at increasing demand as a result of increasing school-age population as a result of subdivisions. It is a ten-year look out into the future. This is indeed an attempt to get some midterm planning into school sites and schools required, so that developers of subdivisions which result in increased demand for schools are paying a portion of the cost of providing that valuable service.

A. Sanders: Just for clarification, the projection of the number of school-age children will come from the models of projection used at the local school district. It will not come from the ministry; it will come from the community to the minister. Is that correct?

Hon. P. Ramsey: Yes, the projections will come from the work of school districts and their local municipalities.

The Chair: Shall section 2, section 937.4 pass? Do you have one more on 937.4, member?

A. Sanders: In section 937.4(8), which is on page 4, we're talking here about facilitators. If local governments and school districts are having some problems deciding what the proposed eligible school site requirements are, the minister will appoint a facilitator. The facilitator's responsibilities will be to help resolve the differences between the two parties. Could the minister tell me what budget that will be coming out of, if we're looking at the cost projected by hiring facilitators in school districts? What part of the district budget will those costs be coming from? Who will pay them? How will they be derived?

Hon. P. Ramsey: First, again let me say that it is the goal of this rewrite of Bill 43 that disputes will be as few as possible and that the planning for new school sites will be as public as possible. I would hope that the appointment of facilitators under subsection (8) will be a rarity. The cost of such facilitation will be borne by the Ministry of Education, not by local school districts.

A. Sanders: Under what vote in the ministry will that come? Will it be in operating budgets? Will it be through the minister's office? Where will we take that money from when it comes time that the facilitators need to be paid?

Hon. P. Ramsey: It will be in the field services budget, under ministry operations.

Section 2, section 937.4 approved.

On section 2, section 937.5.

A. Sanders: This is an especially noxious section, 937.5. There's a couple more of those, but we'll start here.

This is the part of section 2 where the minister is developing a formula to get money from those folks who are building new homes. That formula has a number of variables; there are four of them. My understanding of the formula is that school site acquisition charges will be derived from the formula by plugging in a number of different variables. Two of the variables are set by regulation, which basically means that all that has to happen is that the Lieutenant-Governor can change these through order-in-council, and we would have a differential. My understanding of the formula is that if we plug in the numbers for school districts right now, the charge or fee for the development of the cost to the new homeowner could be as high as $3,000.

However, there is a cap on that amount. That cap, which can be removed or changed at any time through order-in-council, sets the charges for local government to levy for the services that are to be derived from this amount of money accrued. Now, this cap presently. . . .

Again, the first question to the minister would be. . . . I've heard, mostly through media presentations by the minister, that he has estimated that the cost for school site acquisition to the new homeowner is around $1,000. My question is: is that information correct? Is the charge around $1,000? Could the minister respond to that?

Hon. P. Ramsey: As a result of the consultation work and further analysis done by the ministry, we do have some estimated charges. Currently, we're looking at some charge, it appears. I need to say "it appears," because we're working in the absence of next year's capital plan and then any school site acquisition charges that would flow from it -- okay? But it appears that estimated charges for 12 of the high-growth districts would range from less than $100 a unit to $400 a unit. We've been able to roughly identify only two districts for which the charges would be over $1,000 if a cap were not in place.

A. Sanders: When we had a briefing from the ministry staff, the figure of up to $3,000 was used. Could the ministry staff, through the minister, explain where that figure came from? One hundred dollars is quite significantly different from $3,000.

Hon. P. Ramsey: Staff have advised me that the highest projection they could come up with without a cap in place

[ Page 10539 ]

[11:30]

Last night the minister said in his speech that there were certain school districts that would have their fees decreased as a result of this legislation. He had mentioned Richmond at that time. Could the minister give a list of other school districts whose present fees will decrease as a result of the legislation?

Hon. P. Ramsey: The current legislation provides for a developer, where an agreement is in place between a school district and a municipality, to provide up to 5 percent of the site cost in land for school site acquisition. So if you took a lot that was worth -- oh, I don't know -- $70,000, the 5 percent could be $3,500 in land. Clearly, where the lot costs are a lot lower -- for example, in a rural region. . . . I understand there's a desire, a potential need, for a new school in Telkwa. I doubt that land costs are going to be anywhere near that amount.

We are, in a way, comparing apples and oranges. The current thing provides for this 5 percent regime and focuses on land. This new scheme focuses on a site charge, crunched out by the formula to which the member refers, and looks at the value in cash, though there is the ability to substitute land that's agreeable to all parties. I can identify in at least a couple of districts, Richmond and Langley, that preliminary work of the ministry suggests that there will be lower costs under the provisions of Bill 35 than currently exist for developers.

A. Sanders: Does that pertain to raw land or to serviced land?

Hon. P. Ramsey: I believe the member is asking about the current act and the current provisions. The current act and current provisions do specify the 5 percent of the cost of undeveloped land.

A. Sanders: In subsection (2) of this section, it again talks about the prescribed categories of eligible development. Just for clarification, are these the same categories that were referred to in section 937.3, where we talked about categories of eligible development and I asked the minister about what those categories are? Is that same nomenclature being used to classify the same group of categories?

Hon. P. Ramsey: Yes, the member's understanding is correct.

Section 2, section 937.5 approved on division.

Section 2, sections 937.6 and 937.7 approved.

On section 2, section 937.8.

A. Sanders: Section 2, section 937.8 addresses a situation where a developer in the past, without a legal obligation to do so, has provided land for schools or funds for a school site within a school district. It has now come under Bill 35. Section 2, section 937.8 (1) says: ". . .the local government may, with the agreement of the school board, deduct the value of that land or the amount paid or a portion of either from the school site acquisition charge that is payable in respect of an eligible development." How far back does this go? If someone provided that land in 1985, can they use that now to defer the costs they may incur by expanding the same subdivision they are now expanding on in a community in B.C.?

Hon. P. Ramsey: There is no backstop date there, so whatever the parties agreed to. . . . If the school district and the municipality that the contribution of that school site should be used as an offset, it would be agreeable as part of determining whether school site acquisition charges should be charged. I would point out that staff advise me that this is a pretty rare occurrence. There are a couple of examples in Richmond and in Port Moody, where large subdivisions have provided school sites as part of the development or have made a voluntary contribution. We think that should be given credit for and recognized.

Section 2, section 937.8 approved.

On section 2, section 937.9.

A. Sanders: I have just one question on this section, on subsection (3) on page 7. This talks about the administration fees that a municipality can charge to the school board for the collection and disbursement of the moneys obtained through the school site acquisition. When we're looking at this administration fee, how will that be derived? Again, is there a cap on that fee? Does the municipality have the latitude to charge what they feel is appropriate within generous proportions, or are there some guidelines for that fee to be arrived at so that we do not find a large amount of that going to municipalities to fund projects that they may require?

Hon. P. Ramsey: The current work, in consultation with municipalities and school districts around appropriate administration fees, is leading towards a position that says that a local government would be able to charge an administration fee of $2,000 per school year in addition to 0.1 percent of school site acquisition charges collected. This would come from the school site charges actually collected. There would be no draw on current school district budgets.

Section 2, section 937.9 approved.

On section 2, section 937.91.

A. Sanders: In this section the Lieutenant-Governor-in-Council may make regulations to affect a number of circumstances within this act. There are eight or nine different ways that an order-in-council can change the regulations. The first one is: "prescribing categories of eligible development that are

[ Page 10540 ]

Hon. P. Ramsey: This is precisely the point that we discussed under section 937.3(3)(a) -- developments such as summer and seasonal dwellings, hotels, motels, seniors housing, community care facilities and other developments that do not result in an increased demand for schools by housing increased numbers of school-age children.

A. Sanders: With respect to this particular. . . . I understand that the categories the minister mentioned are very similar to what we talked about before. I'm looking at such things as non-market housing -- for example, cooperative housing, non-profit housing, housing for the mentally ill through CMHA and some of the incentives in the mental health plan that this government has on paper, anyway. How about these people? How will they be affected when they're trying to deliver low-cost housing and, in a lot of cases, family housing with children -- not housing for single, independent individuals but family housing? Where will those kinds of individuals and groups fit in? Will they be on the list of exemptions, or will they be considered market housing? Will they have breaks that those people trying to develop housing as their form of living will be differentiated from. . . ? How will that be done? Could the minister elaborate on that?

Hon. P. Ramsey: Current consultations regarding this regulation are leading to a regulation in which a facility that is owned or operated by a non-profit society, incorporated under the Society Act -- that's one, non-profit societies -- or by a unit that's operated by a municipality or a regional district would be exempt from school site acquisition charges.

A. Sanders: Does that mean, for example, when we look at. . . ? I'm just trying to remember the name of who I specifically wanted to ask about. It's B.C. Non-Profit Housing. Is this a group that will be exempt from school site acquisition charges, despite the fact that they have large numbers of children, perhaps, in their projects?

Hon. P. Ramsey: The proposed regulation would exempt them.

A. Sanders: Just a couple more things, so that these are on the record. Section 937.91(d) gives the Lieutenant-Governor-in-Council the ability to change the formula that we were describing. The value of B is now set at 35 percent. Does this mean that in the formula, based on regulation, the value of B could be raised above 35 percent, to anything higher?

Hon. P. Ramsey: It could be raised or lowered by regulation.

[11:45]

Hon. P. Ramsey: I want to clarify. Is the member referring to section 937.91(g)? Okay. The member's understanding is correct that when you have clear cases where a charge for a whole district would result in unfairness to one or more local government jurisdictions, we would have the authority to permit or require a school board to calculate a different school site acquisition charge for one or more local governments. This is obviously of particular importance to districts that are large in geographic area and incorporate a number of discrete municipalities.

Section 2, section 937.91 approved.

Sections 3 and 4 approved.

On section 5.

Hon. P. Ramsey: Before I move the amendment, I just want to acknowledge the work of my staff on the amendments to Bill 43 and on the consultation process and to also acknowledge the work that my colleague the Minister of Municipal Affairs undertook with my ministry to work with developers, school districts and municipalities to provide what I think is a system of school site acquisition charges vastly superior to what we had under Bill 43.

There is an amendment to section 5 in the hands of the Clerk, and I would move that.

[SECTION 5, by deleting the proposed section 75 (8) (b) and substituting the following:

(b) to enroll and receive instruction in an educational program sufficient to meet the general requirements for graduation set out in the orders of the minister.]

On section 5 as amended.

A. Sanders: I have just one question for the minister on section 5. What this section does is change the profile, perhaps, of the high school as we know it. It says in this section: "A board may, in accordance with any terms and conditions specified. . .permit a person who is older than school age (a) to attend an educational program, or (b) to enroll" in an instructional program that is a move toward graduation.

I'm trying to look at this as to what it means in the community environment. Traditionally at this point, we don't have the adult basic education integrated right into the school system. In terms of looking at this at the community level, does this mean that I could go into a school -- into a grade 10 chemistry class, for example -- and there would be a 40-year-old man sitting next to me and a 25-year-old woman over there? What does that mean? I think parents will be very interested and perhaps concerned, and I think that now is the time we should clarify it for them, so they have some expectations.

Hon. P. Ramsey: If the member wandered into a grade 10 chemistry class, I would assume she'd be instructing it, not taking it.

This would be in the hands of the local school board. In my experience, what school boards usually do with students who are "more mature" -- 19, 20 or above -- is set up separate classes and separate streams, rather than attempt to integrate older students with regular-age cohorts in secondary school. That would continue. Frankly, in my experiences as an administrator and runner of adult basic education programs, school districts do not seek integration.

[ Page 10541 ]

On section 6.

Hon. P. Ramsey: First, I am very pleased to see that rather noisy support for free adult basic education in British Columbia. It's good to see that. I think this is an exciting initiative.

I want to move the amendments to section 6 in the hands of the Clerk.

[SECTION 6, by deleting the proposed section 82 (2.1) (a) and substituting the following:

(a) instruction in an educational program sufficient to meet the general requirements for graduation set out in the orders of the minister, and]

[SECTION 6, by deleting the proposed section 82 (2.2) (a) and substituting the following:

(a) already met the general requirements for graduation set out in the orders of the minister, or]

Section 6 as amended approved.

Sections 7 and 8 approved.

On section 9.

A. Sanders: I think there are some things in section 9 that we have to look at. Basically, what we've seen is that we have general support for adult basic education. But this is where the government is going to do some tinkering, so I think it's important and appropriate to look at the downside of that particular tinkering and of providing education and then not paying for it.

The first one that I would like to question is section 108(2.1). This is where it says that "the minister may, by order, establish a maximum number of students" that would be included in a program -- for example, in ABE. Basically what that means to me is that we could say we provide adult basic education free of charge and then limit it to three people in a district and not give it to anybody. Can the minister give me his interpretation of what this subsection means, in order to clear up any confusion or concern that we may actually not provide a service that we've said we will?

Hon. P. Ramsey: Very briefly, first, I think the member recognizes that there are over 55,000 British Columbians enrolled in college or school district adult basic education courses this year. There is no intent here to reduce access to adult basic education. The intent here is to ensure planning of the number of spaces and where they are offered. Over the past seven years we've frankly had what has not been a good situation, in which college and school district systems have been in competition with one another for adult education students. It has resulted, at times -- in my view and in the view of many educators -- in inappropriate offerings for particular groups of students at particular sites. The authority contained in this section will enable better planning of adult basic education offerings and coordination of school district and college offerings. There is no intent to reduce access to adult basic education.

[12:00]

So now we have a levelling of the playing field, so to speak, where colleges and school districts will no longer be charging for adult basic education. I project that what will happen is that we will see more people dropping out of college level adult basic education, because the screening mechanism of the $770 tuition will no longer be there. Is that good or bad? I don't think it's necessary to comment; it's just a fact. I think that will come to light when we look back at why school districts have traditionally had high dropout rates and why colleges have not had high dropout rates in adult basic education.

What the minister's tried to do in Bill 35 to cope with that circumstance is he looked at the school districts, said they're not doing as well at keeping their enrolment as the colleges are and therefore decided to hold back 10 percent of the portion allocated to them for adult basic education. If he looks at the end of the year and finds that all those folks aren't still enrolled, he won't give them that 10 percent. The problem I have with that is, number one, you can't lay off a teacher after three months of teaching just because the students have dropped out. Therefore the school district will have to pay that individual. If they are paying for a service that is not being paid for by the ministry, what will happen is that they are going to have to take that money out of the other K-to-12 programs in order to compensate. My concern is for the K-to-12 system in general and the 10 percent holdback that the minister is going to legislate within this agreement.

I have two questions for the minister. Number one, is there going to be a parallel circumstance for colleges, where they have a holdback on their funding based on enrolment in ABE? And number two, does the minister not have concerns for the K-to-12 program and what we might lose in that program at a time that we can't afford to lose education dollars? Teachers will be hired for ABE, and the students may disappear, but the school districts will not be paid because the minister is holding back that 10 percent.

Hon. P. Ramsey: First, just a couple of corrections of fact. The member is right: there were fees imposed on students who were pursuing ABE at colleges, but not on all students. Of the 21,000 students in college ABE courses, about 12,000 were paying fees; the other 9,000 were not. So even within the college system there was a very diverse mix, and through the initiatives that the members have supported, we are levelling the system.

The proposal for a maximum 10 percent holdback on conditions which will be discussed and worked out with the school districts is simply to make sure that all school districts are working toward good completion rates. It is not an even view across the piece. The average completion rate in school district ABE programs is only 23 percent. I find that unacceptably low. Clearly there are school districts that are doing an excellent job and have completion rates in the 70 to 80 percent range. What we need to do is to put mechanisms in place in

[ Page 10542 ]

A. Sanders: If that's the case, why does the minister not aim this at the school districts with 5 and 10 percent completion rates and have some kind of transitional or gradated holdback, as opposed to everyone getting walloped with the same amount even if they're doing a good job?

Hon. P. Ramsey: The section says: up to a maximum of 10 percent. We are currently working with the districts as to what the measurements of success will be and what the holdbacks should be.

A. Sanders: One final question. Does that mean that there is going to be some kind of gradated scope? So it might not be 10 percent; it could be less if school districts are doing well.

Hon. P. Ramsey: Obviously if the school district has a good record and a good completion rate, there'll be no holdback at all. The questions of what variables should be considered for success and what the holdback should be is now under discussion with school districts. This section sets a maximum of 10 percent.

Section 9 approved.

On section 10.

Hon. P. Ramsey: I move the amendment in the hands of the table Clerks.

[SECTION 10, by deleting the proposed section 166.25(7)(b) and substituting the following:

(b) to enroll and receive instruction in a francophone educational program sufficient to meet the general requirements for graduation set out in the orders of the minister.]

Section 10 as amended approved.

Section 11 approved.

On section 12.

Hon. P. Ramsey: I move the amendment in the hands of the table Clerks.

[SECTION 12, by deleting the proposed subsection (2) and substituting the following:

(2) Despite the repeal of section 942 of the Municipal Act by this Act, an owner of an eligible development to which section 937.5(4) of the Municipal Act applies who has an obligation to pay money or provide land under an agreement entered into under section 942 must, for the period referred to in section 937.5(4), pay that money or provide that land in accordance with the agreement.

(3) Despite subsection (2), the money that must be paid or the value of the land that must be provided under subsection (2) must not exceed the amount calculated by multiplying the number of self-contained dwelling units that will be added to the parcel by the development and that would not be exempt under section 937.3(3) by the amount prescribed under section 937.91(f) for the applicable category of development.]

Section 12 as amended approved.

Sections 13 and 14 approved.

Title approved.

Hon. P. Ramsey: I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 35, Education Statutes Amendment Act, 1998, reported complete with amendments.

The Speaker: When shall the bill be read a third time?

Hon. P. Ramsey: With leave of the House now, hon. Speaker.

Leave granted.

Bill 35, Education Statutes Amendment Act, 1998, read a third time and passed.

Hon. P. Ramsey moved adjournment of the House.

Motion approved.

The House adjourned at 12:08 p.m.

[ Return to: Legislative Assembly Home Page ]

Copyright © 1998: Queen's Printer, Victoria, British Columbia, Canada