Hansard — Tuesday, February 26, 2008 a.m.

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY


CONTENTS

	Routine Proceedings
		Page


Tabling Documents		9967
	Office of the Representative for Children and Youth, report, Monitoring Brief: System of Services for Children and Youth

Committee of Supply		9967
	Supplementary Estimates
	Hon. C. Taylor
	B. Ralston
	G. Robertson
	J. Brar
	S. Simpson
	N. Macdonald
	Supplementary Estimates: Ministry of Environment and Minister Responsible for Water Stewardship and Sustainable Communities
	Hon. B. Penner
	S. Simpson

Mr. Speaker: Hon. Members, I have the honour to present a report of the Representative for Children and Youth, Monitoring Brief: System of Services for Children and Youth.

Hon. C. Taylor presented a message from His Honour the Lieutenant-Governor: supplementary estimates for the fiscal year ending March 31, 2008.

Hon. C. Taylor moved that the said message and the estimates accompanying the same be referred to the Committee of Supply.

Hon. M. de Jong: Mr. Speaker, I wonder if the House might recess for ten minutes to allow for distribution of the bill and review of same.

Mr. Speaker: Hon. Members, this House will stand in recess until quarter after the hour.

Hon. C. Taylor: This supplementary estimate provides funding from the consolidated revenue fund in the amount of $1.045 billion to the Ministry of Finance; Ministry of Advanced Education; Ministry of Environment; Ministry of Health; Ministry of Tourism, Sport and the Arts for operating expenses as set out in the schedule of consolidated revenue fund expenses to be voted for the following.

B. Ralston: Can the Minister of Finance just explain this a little bit more? This $450 million refers to the amount that's being set aside for the so-called climate action dividend, which will be paid to people on July 1 of this year. Is that correct?

Hon. C. Taylor: This request for a supplementary estimate is indeed for the climate action dividend, and the intent of the climate action dividend is to give to every British Columbian — every adult, every child — $100.

If this passes the House, we anticipate that we will have the cheques out in June. The idea is that the people of British Columbia will have the dividend in hand before the carbon tax starts, which is in July.

B. Ralston: Why is this supplementary estimate being required rather than simply booking the expenditure of $450 million to this fiscal year that's due to start 2008-2009? Why is it being added to the fiscal year 2007-2008?

Hon. C. Taylor: We have been very fortunate in British Columbia for the last few years to have had a very strong economy. I think most people in B.C. are aware of this. We have been enjoying a growth of about 3 percent. Our surpluses have been larger than anticipated for the last few years, and that is true again of this year that we are just closing.

The surplus is in the area of about $2 billion. We believe it would be appropriate to take some of that surplus and return it to the people of B.C. in anticipation that we were headed down a new path once we start the carbon tax.

Our notion is that it is better for the people of B.C. to experience the benefits first, before they start paying the carbon tax. Since our surplus was so strong and greater than budgeted, we believe that was the appropriate place to take the $440 million and the extra $10 million for administration.

B. Ralston: Both the minister and the Deputy Minister of Finance — at least the previous Deputy Minister of Finance — have spoken at some length about how British Columbia is GAAP-compliant. Part of being GAAP-compliant — generally accepted principles of accounting — is that budget transparency becomes paramount.

Isn't this rather contrary to the spirit of budget transparency where an initiative that is announced in the budget for the year to come, which is going to be paid in the year to come, is being funded from the previous year?

Hon. C. Taylor: I believe this is the ultimate transparency — to come to the House and stand before the Legislature and express our desire to give to every British Columbian — every adult, every child — $100. This is the ultimate in transparency, where the opposition has a chance to disagree, if they wish, or to support, if they wish. It is our chance to talk about why we are doing it.

This is not part of the carbon tax neutrality. This is a separate issue. This is a dividend which we wish to

take from the surplus of the current year and give back, at the rate of $100 per person and child, to the people of B.C.

B. Ralston: Just to be clear. If the government so chose, it would be possible to pay it out of the 2008-2009 budget. Is that not correct?

Hon. C. Taylor: In fact, this is consistent with GAAP policy. When you create a liability, which we are creating — we did so in the budget speech — then the liability should be paid and covered this year.

B. Ralston: The minister didn't answer my question. I'm suggesting to the minister that it would be possible to pay it out of the 2008-2009 budget — would it not?

Hon. C. Taylor: We could have constructed it that way, had we chosen. We chose to make the liability clear in the budget for this year, and we will honour that commitment with this supplementary estimate.

B. Ralston: The response is a little opaque, if I may say with respect. Would the minister not agree that it would be possible, if the government so chose, to pay this $450 million from this year's budget as opposed to last year's budget?

Hon. C. Taylor: What we have done and what we have said are consistent with public sector accounting rules.

B. Ralston: Once again, not a direct answer — with respect. I'm taking it, then, that's an option that the government could have chosen and has chosen not to.

Back in 2001 the government announced income tax reductions on July 1, 2001, made retroactive to January 1, 2001. I understand that at that time, the Auditor General was not prepared to sanction that decision and was not prepared to allow those income tax cuts to be booked to the previous year.

Can the minister explain how this decision to book the payment of this dividend to the 2007-2008 fiscal year, as opposed to the year for which it's included in the budget, differs from that decision back in 2001?

Hon. C. Taylor: In that particular situation, the books had already been closed for the year.

B. Ralston: So is the minister then saying that because the supplementary estimates have come before the Legislature before March 31 of this year, the Auditor General would be prepared to sanction this position?

Hon. C. Taylor: I will not speak for the Auditor General, of course, but we are following public sector accounting rules.

G. Robertson: A question regarding the climate action dividend and the $440 million expenditure. In the supplementary estimates it refers to this dividend as being "to help them reduce their fossil fuel use and greenhouse gas emissions." Is there anything that requires the citizens to do so with their climate action dividend?

Hon. C. Taylor: We are headed down a new road for British Columbia. We think that taking on climate action and really being serious about it is an important initiative for this province and for all of our community. Part of it will be a community that decides for themselves that it is also important. Of course, when we give tax cuts, we cannot tell people how to use those tax cuts.

When we give them a climate action dividend, we can't dictate how that is to be used. We do believe there is a spirit within this province that wants to help our environment. We are simply trying to provide a dividend which will put dollars in the hands of every adult, a hundred dollars, every child a hundred dollars, in June before the carbon tax begins so that they will — ahead of having to pay the tax — have the benefits in hand.

We hope that with all of this discussion, including the discussion that we will have in the Legislature, more and more people will decide that there may be one additional thing they could do this year to help with the environment. We are certainly hoping that with this $100 for each person — so a family with two kids, $400 — they may be able to make some choices immediately rather than wait until the income tax cuts also help them do the same.

G. Robertson: With regards to the distribution of the $100 cheques, will there be any educational materials, anything that helps — as is laid out in the supplementary estimates — each British Columbian to reduce their fossil fuel use, anything that comes along with that cheque to actually achieve the end that this government has in mind for that dividend?

Hon. C. Taylor: I think that communication and new ideas that we can all participate in have to be a big part of this year going forward. One piece of it is that there will be an information brochure that goes with the cheques. But much broader than that, I know it is the intention of the climate action secretariat to be very actively involved with outreach programs in the community so that people do see some of the ways that, in fact, we can make a difference.

For instance — as we included a lot of information, as you would know, in the budget — if we decide to reduce the temperature of our house at night by 5 degrees, that covers any increase in carbon tax that a family will pay in 2009. So we think there are ideas there. Some of them will appeal to different individuals, but it will be part of our learning as a province going forward.

G. Robertson: Given that this is a very significant expense for the treasury, $440 million, what is the specific emission reduction that is forecasted to result from a

$440 million dividend that enables British Columbians to reduce their emissions?

Hon. C. Taylor: Since I have just said that we are not requiring anyone to use that $100 per person specifically to reduce their carbon footprint, it would be impossible to put a number on it. I wonder from the tone, though, whether the member opposite is actually suggesting that we shouldn't give $100 to each adult and each child in the province to give them the option, give them the choice, let them decide if they want to start participating.

B. Ralston: Last year in debate the minister spoke very strongly about using surplus funds to pay down debt, and indeed, reviewing the Hansard records, that was a strong commitment made by the minister. Can the minister explain why this choice has been made to spend last year's surplus in this manner rather than the commitment that she gave last year about using surpluses to pay down debt?

Hon. C. Taylor: It has been clear for the past year, since the throne speech one year ago, that this government is committed to taking action on climate change. We have made it a priority, and therefore, I believe, for the people of B.C. it makes sense that we will support that priority with action and with dollars.

This is only part of the surplus that we anticipate by the time we close the books, and indeed, some of that will go to reduce our borrowing requirements, and indeed, some of that will go towards building new infrastructure in the province as well. But we believe that the idea of saying a climate action dividend is the first step down this road, that everyone has the choice, that they can start to participate — because government won't be able to do it all and industry won't be able to do it all…. It will be everyone in the community taking on a piece of this, and we hope that this dividend is one step forward for all of B.C.

B. Ralston: Well, to give people a sense of the choices that the government has made, can the minister explain, then, how much of the surplus that's anticipated when this year's fiscal closes will be used to pay down debt?

Hon. C. Taylor: We won't know the specific numbers, of course, until we close the books and public accounts will lay it all out, but we anticipate it will be in the order of about $1.5 billion that we will be able to reduce our borrowing requirements by.

B. Ralston: Can the minister then explain how much total debt, not debt-to-GDP but total debt, is anticipated to increase in the budget that's coming for which we've just had the budget speech, the 2008-2009 budget?

Hon. C. Taylor: I know that this, today, is about the dividend, not the budget. We'll have lots of time to discuss the budget. But if you're asking for total debt, including self-supported debt, the numbers as printed are $38 billion, $40 billion and $42 billion over the three-year track.

We're very pleased that we are able to do this budget to include a billion dollars' worth of spending on climate change initiatives, to include the tax incentives of reducing personal income tax, reducing business tax, and still be able to say that it is a balanced budget and our debt remains affordable. The three-year rolling average that everyone watches in our credit rating institutions continues to decline — 14.1 percent down to 14 percent, down to 13.9 percent on our taxpayer-supported debt. So we're doing this in a way that keeps our debt affordable, and I think that that is a commitment we've made to the people of B.C., and we will honour that.

B. Ralston: Notwithstanding the discussion about the ratio, is it fair to summarize, then, that total debt is anticipated to increase by $3 billion in next year's budget, and the choice that the government has made here is not to apply this $440 million to reducing that borrowing requirement?

Hon. C. Taylor: It is absolutely correct to say that we have made a decision to take $450 million out of the surplus and give it immediately back to the people of British Columbia, as I will continue to repeat –– $100 for every adult, $100 for every child –– and to pay that out in June before our carbon tax initiatives, which will result in an increase for gasoline of 2.4 cents –– before that begins in July. It absolutely was a wilful decision. We believe it is the right one, but of course, the opposition has the option of voting against it.

J. Brar: Based on the criteria I have here, the climate action dividend of $100 will be paid to each British Columbian who was a resident in the province on December 31, 2007. My question is: how are you going to verify, Minister, that one particular person is a resident of the province of British Columbia?

Hon. C. Taylor: We will use the income tax forms for last year where everyone has to list which province they were resident in as of December 2007. It might surprise people, but that also applies to many people who are on income assistance, because they fill out income tax forms so that they can get the assistance from the federal government that is available.

We also have a plan in place to work with the Ministry of Income Assistance as well as the Ministry of Children and Family Development to have outreach programs for those who are not captured by that method. But the notion is to say to anyone who was resident in British Columbia by December 31, 2007: "You're part of why our economy is strong, and we wish to return $440 million back to your family's pockets."

J. Brar: According to one very recent report, there are about 15,000 homeless people in the province, and they have severe addiction problems, severe mental

health problems. So my question is: how and by what method is the minister going to apply to ensure that those 15,000 people get this $100 climate action dividend?

Hon. C. Taylor: As I said before, many already have filled out the forms because it's the way that they get the extra assistance out of the federal government. But our outreach workers are seeing this as an opportunity where we can help those who haven't, up till now, been able to access some of the other assistance that is available to help fill out the forms — and not only make sure that they get the $100 but make sure that they get any kind of assistance that's available, either provincially or also federally. So we will do it through our outreach workers.

J. Brar: I understand the concept of the outreach program, but my understanding is that the outreach program is very limited when we look at the provincial scene. For example, in Surrey we have only one and a half positions when there are over 500 people who are homeless.

My question is…. Again, we have 15,000 people. I understand the outreach part. Is the minister confident that for the people who are now available to do the outreach, we have enough resources there to make sure they have the capacity to outreach to 15,000 people who are homeless?

Hon. C. Taylor: As I indicated before, our outreach workers already do this for many who are homeless. They see this as an opportunity to expand even further the people that they are able to help. We are trying to do this in a way that simplifies the process so we will also have a method of people just phoning in and giving us the information so that we can move forward.

Mostly, the idea is that we will do everything we can to ensure that the people of B.C. all receive this. We have said that we are working with the two ministries that are most directly involved, and through them, we will ensure that those who should receive this benefit will receive this benefit.

J. Brar: Are there any estimations as to how much it's going to cost to reach out to those 15,000 people?

Hon. C. Taylor: Yes. We have included $10 million in this request. Some of that cost will just be the actual practical printing of the cheques and matching up with income tax forms. A great part of that also will be for outreach to make sure that we do our very best to make sure that everyone who is eligible receives this dividend.

J. Brar: So my understanding is that there's $10 million available and that a major part of that $10 million is basically dedicated to outreach and to support the people who may not be able to access it themselves, to ensure that this $100 reaches everyone.

My next question is…. The minister touched upon it very briefly. This money will be available to the people on income assistance. I just want to make sure. Is there any plan to claw back the $100 climate action dividend from the people on income assistance?

Hon. C. Taylor: Yes, anyone on income assistance will receive this, and it will not affect their income assistance in any way.

J. Brar: My last question is…. We understand that there is a time line, which is December 31, '07. But for people who were here before that date, can the minister explain — we know who is eligible — if there's anyone who will not be eligible who was actually a resident of British Columbia before that date? Is there any list of people as to who those people will be?

Hon. C. Taylor: We are using the income tax forms for the past year and where individuals say they were resident.

S. Simpson: I believe in the main budget there's about $15 million or so allocated for outreach, for advertising or whatever, related to the main budget and the carbon tax initiative. Is it the intention to use any of those advertising dollars to be promoting or talking about this?

Hon. C. Taylor: I haven't seen the plan at this point for how those dollars will be spent because the budget, of course, hasn't yet been passed. It is my belief that those dollars will be broadly talking about everything we are doing as a government, which would include, of course, the climate action initiatives. It would include information about the carbon tax, but I haven't seen their promotional or communications program. Therefore, I would be cautious in how I characterize it.

With this $10 million that we have built into this request, we believe that will help us do the specific job around making sure that people in British Columbia who are eligible to receive $100 do receive it. We've built that into our $10 million. I'm quite sure that as we go forward, any outreach programs will probably talk about this piece as well.

S. Simpson: The reason I raise the question is that it is my sense — and I believe the minister said earlier — that there is a separation between this particular dividend, which of course, is coming out of the '07-08 year versus the new budget. So I'm trying to make that separation that the minister has chosen to make by not including this in this year's budget but trying to take it out of last year's.

So the question, I guess, I would have is: does the minister think it would be appropriate to use marketing dollars for this year's budget to talk about last year's programs?

Hon. C. Taylor: I'm sure that the member opposite realizes that another section of this supplementary estimate is for some other climate change initiatives that in fact we are able to use last year's dollars for.

We really believe that it's important to start to move quickly on this. We think that, as a government, we have set out a very aggressive agenda, saying we're going to reduce our carbon emissions by a third by 2020. To do that, we can't just sit and not take action.

This was a very aggressive budget. Part of it you are seeing today, and we'll discuss today, as we move forward very quickly. It doesn't make any sense to me to talk about only one piece at a time. You know, we have a program that will involve the carbon tax, the revenue neutrality, where we cut income tax, where we cut business taxes and another billion dollars in climate change initiatives as well.

The climate action dividend is one piece where we just believe it's important that the people of B.C. have dollars in their pockets that are extra before the carbon tax starts and before, in fact, they start to see their income tax reductions.

S. Simpson: I don't disagree with the minister that we'll have lots of time to talk about this. A little bit later this morning we'll talk about the $252 million in supplementary estimates in the Environment Ministry that covers a lot of those things that I believe the minister was just talking about that come out of the supplementary estimates.

But my sense is that the dividend itself…. I'm always happy to give money back to British Columbians, if we can do that. As the minister said, there's no reason to believe this will necessarily be used for climate change — to deal with behaviour or climate change. I believe the minister, in her own comment, said she's buying running shoes. Maybe that's a climate change initiative. I don't know.

So I do see it as quite different than the whole array of potential initiatives that will be in Vote 29 or Vote 29(S). What I'm trying to do is determine whether it is the government's intention to use amounts of the $15 million that have been set aside to promote the carbon initiatives, to go out and promote the fact that the government is giving a hundred bucks back to people.

Hon. C. Taylor: The climate action secretariat will decide how they are going to do their outreach and how they do their communications programs. From our point of view, we see this as a very important step and as a piece in part of our climate action. It is enabling people to start to make choices sooner than waiting until they fill out their income tax forms and see how much money they've saved. We think this is an important initiative.

It's funny to think that the government has more faith in the people of British Columbia than the opposition. We think that people will look at this and consider some possibilities for their own family, but we're not a government that wags our finger at people and tells them what they have to do with these dollars.

S. Simpson: I don't think this side is talking about wagging its finger. People will do whatever they choose to do with the hundred dollars, because it clearly was presented as a way to garner some political support. But this side also isn't going to tell people that this is a climate change initiative when it's the giving back of a hundred dollars. That's what it is.

Frankly, it's a political manoeuvre to do that. It has very little or nothing to do with the issue of climate change, quite frankly. It has to do with giving back a hundred dollars.

There are lots of other things in here that do have to do with climate change, and we'll get to talking about those in due course. But I think it's a misrepresentation to suggest for a minute that giving back that money is anything more than a political move on the part of the government to garner some favour.

I think the last question I would have in regard to the hundred dollar dividend…. How does the government…? What's the best way for us…? This is a more practical question. I know there's the potential that we will get people coming into my office. I'm in a community where people won't necessarily…. If they're going to fall through the cracks…. I have a constituency where that potentially happens to some of the people who I represent. What exactly will be available to people if they come into my office — or for me to be able to tell people — about their hundred dollars so that they can get it, if they haven't got it, or if maybe the communication hasn't worked? How do we go about being able to do that, as MLAs, to make sure all our constituents get that money, if they're not picked up by the system?

Hon. C. Taylor: Very quickly, once the House has dealt with this supplementary estimate, the Minister of Small Business and Revenue will have on his website — available to the members opposite, to all of our constituents and to the people of B.C. — information on how to go about it. We are going to do it in a way that is not complicated so that anyone who is eligible will be able to receive these dollars.

N. Macdonald: My experience here has been that each year when the budget is presented, the surplus is understated and the actual surplus that we end up with is wildly different than the projection that we were given. Now, what that is characterized as by the government is one thing, but it also points to the fact that the projections are wildly inaccurate. Though you characterize it as conservative, it is still wildly inaccurate.

What's happening here is that we are creating a fund from the surplus of last year. There were needs all over rural British Columbia. There were needs that went unmet. The impression that was given is that any additional funds that would end up as surplus would go towards putting down the debt.

Then the minister is presented with a problem where the Premier has indicated that certain things need to happen around climate change. It is clear that some of those measures are going to be politically unpopular. Then you have the gas tax, and then you have the decision to soften that blow by giving everybody a hundred dollars. You don't have enough money to do that with

this year, so you go back to last year's surplus, and then you give each person $100.

The minister has said clearly that this is not going to have any environmental impact. It's possible, but possibly not. There are no studies, no looking at when money was handed back by different jurisdictions at different times as to how that money was spent. There's no pretence here that this is in any way an environmental action. It is something to soften the blow of a program that's going to be unpopular. I mean, let's face it: a gas tax is going to be unpopular. This is intended to soften that blow.

It has to come from last year because if you do it this year, there's a political cost to that because perhaps you can't stand up and say it's Balanced Budget 2008. Now it's going to cost $10 million to do it. We run into times again and again where $10 million would solve some really substantive problems. To do this is going to cost taxpayers $10 million. It is being done purely for political reasons.

Now, I just came in today. We just had it laid out for us how this is going to work. I'm sure you have a number of issues that you would take with the way I've characterized it, and so I'll give you the opportunity to do it, but when I see it, that is the way I would portray it. That's the way that I think an awful lot of people out in the public and the areas I represent would see it — as an inefficient way of giving money back to people for purely political reasons.

I'll give you the opportunity to characterize it very likely in a completely different way, but I'd be interested in hearing it.

Hon. C. Taylor: There were so many openings there that it's really tempting to get into the budget debate right now, but we'll put that for another day. I have noticed a few times that members opposite…. The words that I believe I just heard were that the gas tax will be very unpopular. I've heard similar sentiments.

That leads me to think that perhaps the opposition is going to vote against a carbon tax, which will be quite an interesting situation if that happens.

I will say once again how we're approaching this. We have said that we will bring in a carbon tax of 2.4 cents a litre in July. We recognize that it's a low amount, but it will transition up. It will give people time to understand that we're actually pricing carbon, and it will escalate. But it gives people time to adjust.

The revenue neutrality part — and we will bring forward legislation that ensures this is the law — requires that the dollars that come in from the carbon tax go out in tax cuts. So people will receive more back when they have their personal income tax cuts, their business tax cuts going forward and a special credit for low-income individuals.

Having said that, the sequence is that the tax starts in July. You don't fill out your form until later, and you don't see those benefits until later. We believed, since our surplus allowed us to do it, it would be important to put the benefits first before you start to pay. That was the only idea behind this.

We think that if people do receive, for a family of four, $400 in June before the carbon tax, which is anticipated in the first year to really cost just $46, it will give the people of B.C., first of all, dollars to make their own decisions — rather than say they must use it for issues that will help the climate — and give them the choice and the chance to participate along with us when we start to take action on climate change. It was simply a sequencing.

We could have said that carbon tax comes first. We know you will receive more in dollars later, but it will be later. We felt that it was important to have the dollars first before the tax starts so that the people of B.C. will not find themselves in difficult circumstances in any way. It was our decision, and of course, the opposition has the right to vote against giving $100 to everybody.

N. Macdonald: The objection that I have is…. We come into situations constantly where small amounts of money would make a huge difference to people's lives. Yet there is a tendency for government, and perhaps for every government, to spend money for political reasons.

The moving of this money from last year's budget to essentially be used this year…. The general public is not going to follow that. That is done for political reasons.

Then you are going to spend $10 million to hand a hundred dollars out to every person. The minister has said it's not going to have an environmental impact. It is done for purely political reasons. It will cost $10 million, and it is money that could be spent far, far better in helping individuals.

Why we are doing this I really think needs to be looked at. It's a pre-election year. It is something that is essentially done to soften the blow and to deflect criticism from the direction that the government is going. For that reason, I think that there are a lot of people that will take issue with it.

Again, that's how I would characterize it. I know that the minister has characterized it fundamentally differently.

B. Ralston: Vote 44(S) is characterized as a contingency that is attached to all ministries. I'm interested in an explanation as to why this expenditure wouldn't fall squarely within the Ministry of Finance budget and therefore be subject to the ministerial accountability process that was established in much-vaunted style some years ago.

Could the minister explain why this is classified as a contingency? Clearly, I would think it's a program that falls squarely within the Ministry of Finance, and it would require the legislation that seems to be routinely passed in this House each spring when ministers overshoot their budget targets and are subject to personal financial penalties by operation of the legislation.

Hon. C. Taylor: The reason for this is because the vote description under contingencies is broad enough to allow for this use of the funds.

B. Ralston: Well, it may be broad enough to allow for it, but wouldn't it be more accurate to refer to this

as a program of the Ministry of Finance? In the way that the minister has described it here in this brief debate, it falls as money that's being taken from last year's surplus and being dispensed as part of the budget process to citizens of British Columbia.

Why is it not classified as a Ministry of Finance program? Therefore, it would be subject to the ministerial accountability requirements of the legislation.

Hon. C. Taylor: Perhaps the member opposite doesn't understand that I am responsible for contingencies. It will be part of BBMA accountability, and we will come to the House, as we have in previous years, for a BBMA exemption.

B. Ralston: That was the point that I was seeking to make. Just so we're clear, then, the minister will be required — as will, I think, all the other ministers who are here today in the supplementary estimate process — to come before the House with legislation that seeks to exempt them from the ministerial accountability legislation, because by adding these dollars into their budgets for last year's fiscal year, they will have overshot the targets that were voted on last spring. Is that correct?

Hon. C. Taylor: This is very similar to when I came before the House requesting the dollars for the bonuses for the negotiating framework and also asked for a BBMA exemption at that time for those payments. This is very similar. BBMA exemptions are allowed for new programs, and these are new initiatives.

B. Ralston: But if the expenditure were made in the 2008-2009 year and budgeted for, then no such exemption from the ministerial accountability legislation would be required. Is that correct?

Hon. C. Taylor: We have committed to this liability in this year, and we will honour our GAAP accounting process. Assuming that the House approves this, we will use $450 million from last year's surplus, and we will use it to give everyone in British Columbia a cheque for $100.

B. Ralston: I guess my question is to the minister since, obviously, by virtue of her position, she's principally responsible for the budget and for the budgeting process. Doesn't this really make a bit of a sham of the ministerial accountability legislation — when ministers routinely come before the House for exemptions from the accountability legislation?

While there are certainly sometimes genuinely unexpected contingencies…. I didn't object last year, for example, when the Minister of Forests' budget for firefighting went unanticipatedly over the estimate. That's a contingency that has fluctuated wildly over the last ten years, depending on the fire season.

But this is a matter of deliberate government policy, a choice that's being made in a number of ministries. Would the minister not agree that the financial accountability that's set out in the ministerial accountability legislation has really become a bit of a joke?

Hon. C. Taylor: In fact, you couldn't imagine a process that's more transparent than having to come before the House and have everyone have a chance to discuss the initiatives that we are suggesting. In fact, this process would have to be followed for any expenditure out of last year's surplus other than paying down the debt.

This is what we have done before. We are being very clear in why we're doing it, and you will have a chance to look at the other initiatives involved in the supplementary estimate. But the one thing you can't do is say that this process isn't transparent for everyone.

B. Ralston: Well, the minister may choose to describe it as transparent. What I'm seeking to draw and elicit from the minister is some reflection upon the ministerial accountability legislation that was placed into legislation by the government. It was much ballyhooed and vaunted as personal accountability, yet it seems to be now routinely circumvented.

This year I think will probably be no exception. These are not genuine contingencies. These are programs that are initiated after long deliberation in the budget process and that come before the House. It just happens to be more convenient to draw the money from last year than this year, so legislation is required to exempt the minister from that accountability.

Legislation. I suppose it's surprising — or maybe it's not — but it does seem to be completely at variance with what the Premier talked about when he talked about ministerial accountability legislation. It seems to be simply a speed bump in the budget process and easily circumvented.

Would the minister agree that the ministerial accountability legislation really doesn't have much impact upon the budget process this year?

B. Ralston: Can the minister, then, just for the record, say which ministers she proposes will require enabling legislation to enable them to circumvent the ministerial accountability legislation?

Hon. C. Taylor: The member opposite and all of the members of the opposition will have lots of opportunity, when they see the legislation and the ministers involved, to speak to them and present any questions.

It is a little bit ironic that I spent last year with almost the entire opposition saying that I should be spending the surplus from the previous year on a number of different issues. So you were asking me to do it last year. This year we are doing it for some specific initiatives. I would have thought you would have heartily supported it.

B. Ralston: I think the point that members of the opposition were attempting to make — apparently not

successfully when ears are closed to the argument — was that the budget debate is the proper arena to debate spending. A genuine estimate of the likely surplus, whether it's going to be low or high…. Have that budget debate and that discussion about programs up front rather than at the end of the year in this truncated fashion.

This avoids the government's own ministerial accountability legislation, in a very convenient way, perhaps, for the government, but it avoids the broader public debate. Many spending requests that are legitimate are rebuffed because the projected revenue and expenditure don't appear to allow for that kind of expenditure.

I suppose it's about transparency in the budgeting process and enabling the public to have an accurate and honest look at what the finances are anticipated to be and what programs the government can afford.

Vote 44(S): contingencies (all ministries) and new programs, $450,000,000 — approved.

SUPPLEMENTARY ESTIMATES: MINISTRY OF
ENVIRONMENT AND MINISTER RESPONSIBLE
FOR WATER STEWARDSHIP
AND SUSTAINABLE COMMUNITIES

Hon. B. Penner: I'll just preface the discussion with some opening remarks that are brief. It is a pleasure for me to have an opportunity to present to the committee and to the House and to seek approval for additional funding for climate action initiatives throughout the province.

These supplementary estimates will help create a greener future and a healthier planet and establish B.C. as a climate action leader in North America as well as the world.

We're seeking approval for expenditures of $252 million in the following areas. There's $95 million for the Pacific institute for climate solutions and the Pacific Climate Impacts Consortium. This new multi-university collaboration will provide government with scientific research expertise on climate change issues. This research will foster better understanding of the future impacts of climate change on B.C.'s water and other natural resources, weather events and the economy.

There's $52 million being sought for the provincial transit plan. A grant will be provided to the South Coast British Columbia transportation authority for RapidBus development and other assets.

There's $25 million for a bioenergy network. The funding will be used to establish a network responsible for encouraging research and initiating projects that promote the development and use of fuel from organic resources, including research and investments in wood waste cogeneration, biofuels from wood, agricultural or waste biomass, and wood pellet production.

There's $15 million for an expanded Scrap-It program. Currently operating in the lower mainland, Scrap-It is designed to get older, higher-polluting vehicles off our roads by offering drivers a range of incentives, including cash, to help people switch to cleaner alternatives.

In conclusion, the responsible protection of B.C.'s environment is critical to our quality of life, to addressing the global challenge of climate change and to preserving the natural beauty of our province, which we are known for worldwide. Protecting and improving our environment will require many different actions and strategies over the coming years.

All British Columbians will have a role to play, but government must lead by example. We need to take the actions and innovations needed to help ensure we address climate change and protect our natural legacy for generations to come.

S. Simpson: Just one question for clarification. The minister was listing. The first item was the Pacific institute, and then I missed the second item on his list. I know the third one was bioenergy strategy. But the second item…. I wonder if he could just clarify what that was.

Hon. B. Penner: Yes. That was $52 million for the provincial transit plan. A grant will be provided to the South Coast British Columbia transportation authority for RapidBus development and other assets.

S. Simpson: Could the minister tell us a little bit about what the expectations are about the objectives? I believe the Premier had a press conference back a while ago announcing the Pacific institute, but could the minister tell us a little bit about where that $95 million is going to be spent and what the expectations are?

Hon. B. Penner: Of the amount sought, $4.5 million is targeted for operating funds, and $90 million would be set aside for an endowment. The endowment will be managed by the University of Victoria, but the model that we're pursuing is a collaborative one and involves Simon Fraser University, the University of British Columbia and the University of Northern British Columbia.

The institute or this new entity will also be governed by a scientific steering committee with advice from a blue-ribbon advisory board comprised of public and private sector stakeholders. It's intended that the $90 million endowment will provide funding for this research in perpetuity.

S. Simpson: Could the minister tell us whether the framework has been completely put in place yet for the Pacific institute and where it rests in terms of the creation of the legal entity of the institute?

Hon. B. Penner: As indicated, this work is being led by the University of Victoria. It's my understanding that there is some additional work that they are required to complete. My expectation would be that they would have that work completed by the end of the current fiscal year.

The intention — to elaborate further on my earlier answer — is to allow for long-term planning and continuity of climate research, providing a level of funding certainty

that is necessary in the research field. Unlike an annual budget that could be reallocated to other areas, the endowment fund will always be there to ensure that future generations will continue to benefit from new knowledge about our changing climate and the research that's undertaken here in British Columbia.

S. Simpson: The endowment that the minister talks about…. Maybe the minister could tell us what the rationale is for this endowment, which is presumably forward-thinking and looks to the future and certainly not to the past. Why is this being booked back into '07-08 instead of into '08-09, the current year, the budget year we're talking about now? Instead of being essentially booked back into the current year, why isn't it being booked into next year's budget?

Hon. B. Penner: The reason for funding it as soon as possible is that we believe the sooner we get started, the sooner we'll see the benefits from the research that's being undertaken in British Columbia.

As for the purpose of the endowment and the reason why we want to provide that money up front, as I said earlier, it's to provide funding certainty. We've been informed, and the University of Victoria has told us, that in order to attract the best and brightest minds from around the world to participate in the research, they need to have some level of certainty that the funding will be there on an ongoing basis.

The best way to demonstrate that the funding will be there and to provide that certainty is to allot an endowment to provide for that ongoing cost of operation for the research centre in future years.

S. Simpson: I don't question the use of the tool of an endowment as the way to get at this source of money. I think that's a reasonable tool to provide the certainty that the minister talks about. I guess the question I have is the decisions about where this money is and why it's in '07-08 instead of '08-09.

It seems to me that there might have been an argument made to say that there's a small portion — I believe the minister said of somewhere up to about $4 million — that was allocated for startup purposes under the institute, and some argument made to load the startup dollars into '07-08. There might well be an argument for that, but I'm suspecting, and the minister can certainly correct me…. I don't expect that any of the universities will be drawing on the $90 million endowment or the interest off the endowment before the end of the fiscal year. In fact, that will all come in '08-09 and in future years.

The question I have is: what is the rationale for booking the whole endowment into '07-08's budget year, for which the minister presumably will be looking for an exemption on his accountability, rather than into '08-09 when that endowment actually will start to be put to work, presumably?

Hon. B. Penner: As I indicated already, the sooner we get started, the sooner we'll start seeing the benefits from the research in British Columbia. I've been advised by an official with Advanced Education that there are graduate students looking to apply for courses this fall. They need to know with certainty that there'll be programs in place.

The sooner we can demonstrate that we have the endowment secured and that it's fully funded, the sooner those students can make long-term decisions about whether they want to choose the University of Victoria for a graduate program that could carry them on for many years in terms of completing their master's or doctorate degrees.

S. Simpson: Well, I assume, had the Minister of Finance got up on February 19 and announced the $90 million endowment in the '08-09 budget, that would have been about as much certainty as we have today. I think that argument's a bit of a stretch.

The question here is…. I appreciate that some of the startup dollars — the $4 million — are being expended now, presumably as the universities involved in this and government begin to frame what this institute will look like and begin to think about how they will make endowment dollars, which will be available in the future, available to graduate students or to other projects.

I understand that some of that $4 million will certainly be spent in this fiscal year we're in today. Is there any expectation that any of the money of the endowment will be spent in this fiscal year, or will all of that spending start in the next fiscal year?

Hon. B. Penner: As the Finance Minister noted in her remarks a few moments ago, the fact that we have a strong surplus this year does allow us to do a number of additional things. The opposition has been critical in the past of the province running a surplus and not spending that money.

We have identified a number of key initiatives that we think are important to helping achieve our climate change objectives. That is certainly one of the reasons we're here today. We have that strong surplus, thanks in large measure to prudent financial management and a strong economy. We also believe it's important that we get this endowment topped up and funded fully as soon as possible to attract the best and brightest minds and to create a world-leading research institution here in British Columbia on the topic of climate change.

There's also another technical reason that supports doing it now and in this fashion, and that is this. Under legislation, the academic institutions in British Columbia are not allowed to run a deficit. In order to spend the money that will be generated from the interest earned on the endowment, they have to get the money into that endowment on a full-year basis before they can spend it. In other words, the money has to be in the endowment fund earning interest for a period of time until they actually have the money to spend.

That's why it's important that we move this money as soon as we can, pending the approval of the Legislature, into the endowment fund: so it can start earning

interest, which they can then start to spend on an operating basis. They cannot spend that money, even if they know it's coming, until they have it.

S. Simpson: If that's the case, when does the minister anticipate that the universities will start spending that money?

Hon. B. Penner: I don't have the detailed financial plan for the research centre here with me. My understanding is that for the startup period they're going to need $4.5 million in operating, and then they'll need additional dollars to carry on that facility or that research centre and to provide the instruction and the programs that they're planning to undertake.

That's what the endowment fund is for, and that's what the interest earned from that fund will be deployed for. It's our expectation that the $90 million endowment fund will help generate approximately $4 million annually to defray the expenses of the operation of the new research facility.

S. Simpson: I don't disagree with the minister that the $4 million or $4½ million of startup dollars out of the $95 million, appropriately, are presumably being spent now or planned for and that some of the initial amounts are being spent as they put this whole thing together.

I'm trying to get some clarification on the minister's comments about the need of the institutions to have this money in place so that they can start anticipating spending the interest off of the endowment — the $4 million, I believe the minister said, that's projected to be dollars off the endowment that the universities will be able to spend on the initiatives. My interest here is to get some clarity.

The minister said that we need to do it now, in the past fiscal year, rather than do it in the year when we're actually going to start spending the money, because there needed to be some certainty for the institutions.

I would hope, and I would hope that the minister would agree with me, that the fact that the Premier stood up and announced this initiative with all of the presidents — and the Minister of Finance could certainly have put it in this upcoming year's budget — would have provided all the certainty that the universities would have needed in order to make their plans.

The question I'm trying to determine here is: in the planning of this, is there any expectation as to when dollars will start to be spent by the institute on actual programs, research or analysis that will support the climate change initiatives in British Columbia?

Hon. B. Penner: I am advised that the universities, led by the University of Victoria, cannot spend that money until they have the approval from the Legislature. They are waiting, and they're presumably following this debate with some interest to find out if, in fact, the Legislature will approve the establishment of this foundation and the extra $4.5 million in startup operating costs.

At the time that the Premier made his announcement about our intention to provide this funding and to create this world-leading research institute into climate change right here in British Columbia, he made it very clear that we could only do so if we first had the approval of the Legislature. He made it very clear that we would be coming here and seeking support of the House. The members have a choice. They can vote in favour of this, or they can vote against it. Our side will be voting in favour.

S. Simpson: I appreciate that. If the government side is voting in favour, whatever the opposition chooses to do or not do on this vote, I assume the vote will pass.

But I want to get back to this point. Is the minister telling us that his officials, or the officials from the secretariat, have not had any discussions with the universities at this point about when they plan to start — or when they anticipate they're going to start — actually expending some of those endowment dollars on some of the research, the applied research, the analysis and all of those things that the Premier spoke about at the time of the announcement of the institute?

He laid out a number of areas where it was his expectation, and the government's expectation, that the institute would be doing work that would be a benefit not just to British Columbia but a benefit globally.

I support that, because I certainly do believe that it's a positive initiative to have the universities doing this work, to do this analysis. I'm trying to determine when we might start to see the universities expending some of those dollars.

Do they have a plan as to when they will start allocating dollars to grad students, for example, to start doing that work? What does the schedule look like?

Hon. B. Penner: My expectation is that the institutions would start spending the money as soon as they got it, or at least start that process. They can't start spending the money, as I explained earlier, until they actually have it. That's why they are anxiously awaiting the conclusion of this debate to find out whether or not the Legislature will support the $94.5 million or $95 million in total that we're looking to provide to help establish British Columbia as a world-leading research centre on climate change.

I think we already have a lot of credibility in that regard. We're all familiar with the work of Dr. Andrew Weaver and his counterparts at the University of Victoria, and also professors at the University of British Columbia, who jointly shared in the Nobel peace prize that was awarded last year for their work on the Intergovernmental Panel on Climate Change report — which I think has been instrumental in raising awareness around the world amongst various governments about the important need to take action to help reduce the rate of climate change that we're experiencing worldwide.

We know that they could use additional dollars. That's why they have put together this comprehensive proposal to government to create a leading research

institution at the University of Victoria, but in partnership with other universities.

I think one of the things that's very important to note is that this isn't just about the University of Victoria. It's about other academic institutions as well, such as the University of British Columbia, Simon Fraser University, one of my alma maters, and the University of Northern British Columbia. So it is a collaborative approach. It's something that we support, and the sooner the Legislature approves the funding, the sooner the institutions can get on with actually implementing their plan.

As I noted earlier, there are academic researchers that the universities hope to attract to British Columbia. They can't sign those contracts, I don't think, or at least send any cheques until they actually get the funding. Similarly, there are graduate students, and perhaps undergraduate students, who are right now making decisions about where they're going to be in September. To the extent that the Legislature can provide some certainty about what kind of programs they can expect once they get there, in terms of funding being there to back it up, I think those students will choose British Columbia institutions over institutions elsewhere in the world.

S. Simpson: The minister made reference to this in his answer. I believe his comment was that as soon as the universities get the money, they can implement their plan. The question I have is: what do we know about what their plan is? What's the plan?

Hon. B. Penner: I understand that the institutions have been working with the Ministry of Advanced Education on what they're planning to implement should the Legislature approve the funding that we're here talking about this morning and that I'm seeking approval for. I don't have all the details that the Ministry of Advanced Education has, but they obviously have endorsed this proposal. It's met whatever their requirements are, in terms of receiving a seal of approval, and it's on that basis that we're here seeking funding approval from the Legislature.

S. Simpson: Maybe the Minister of Environment could chat with his colleague the Minister of Advanced Education who, of course, is here with us today as well.

I guess the point I would make on this particular initiative is that what we have here is $95 million being booked into '07-08. At best, a small amount or some portion of the $4 million or $4 million-plus that's for startup might actually get expended in the '07-08 year. Other than that, none of the $90 million in the endowment, or the interest off of that endowment, will be expended in this current year. It will be expended in '08-09 and in subsequent years after that.

The point that I would make is that it seems to me somewhat suspect that the decision would be made to allocate book money into this year's budget when you're not going to spend any of it until sometime in the future.

But I'm going to move to the next item on the list of the five that the minister outlined in his opening comments — $52 million for the provincial transit plan. Could the minister tell us: what's that $52 million for?

The Chair: Members, I would just like to remind you that it is the convention of the House that you don't refer to the absence or presence of members within the chamber.

Hon. B. Penner: This might be the right moment to make a number of introductions. Seated to my left or to the viewers' right is my deputy minister, Joan Hesketh, with the Ministry of Environment. Seated to my right or the viewers' left is Graham Whitmarsh, who heads up the climate action secretariat for the provincial government. Seated behind me we've just been joined by Peter Milburn, associate deputy minister with the Ministry of Transportation.

Now, as I indicated in my opening remarks, the $52 million that we are now discussing is intended to go to the development of the RapidBus initiative and other assets. The member will be aware that in January, I believe it was, the province made a number of significant transit announcements as part of our provincial transportation plan, indicating, among other things, a desire to double transit ridership in British Columbia by 2020.

Consistent with that plan, the $52 million will be provided to TransLink as a provincial contribution to the cost of RapidBus development and other transit assets that are planned for Metro Vancouver. Those additional assets include things such as signal coordination — I can't quite read someone's handwriting — and something about pre-empting, queue jumping, bus lane facilities, rolling stock, stationing and interchange systems, I think.

S. Simpson: When I look at the climate change initiative expenditures in the budget and fiscal plan, I see the number for '07-08, smaller numbers for the next couple of years — $20 million in '08-09 and $23 million in '09-10 — then $56 million in '10-11. It's a four-year total of about $151 million, which is not a very large number after four years, considering it's supposed to be a $14 billion plan.

However, the question that I have in regard to the $52 million is: how much of that money has been expended by the government to date in the '07-08 year to start moving RapidBus along?

Hon. B. Penner: The $52 million, if approved by the Legislature, would be granted to TransLink to do some additional work on a number of the initiatives that we've talked about — or that I attempted to translate from the handwritten note that I was given. That will be work that they'll start this year.

They'll spend some money this year, but they'll be able to carry the $52 million into future years, if we're able to give it to them. They'll be able to then deploy those resources for facilitating and expediting RapidBus

development. In particular, I'm told that they'll be focused on the RapidBus lines that would go to Simon Fraser University as well as to the University of British Columbia.

Those are a couple of the primary objectives in terms of advancing these funds. There'll be some other bits of work that TransLink would be able to ramp up with this funding as well.

S. Simpson: Well, maybe we'll go with something a little rougher. Is it going to be 50 percent, 25 percent, 10 percent, 2 percent? What does the minister think?

Hon. B. Penner: As I said, I don't know the exact amount that they're planning to be able to spend this year. But if we are able to give them the $52 million now, the unspent portion will be money they can carry over into future years to expedite development of things such as the two RapidBus lines to Simon Fraser University as well as to the University of British Columbia that I mentioned earlier. In addition, I'm told that this money would go to assist with the SeaBus replacement as well as improvements to West Coast Express.

Those are initiatives that, frankly, I thought the opposition would support. If they choose to vote against this funding, it's their right to do so. But I should caution members of the House that denying this funding would, I would suspect, delay some of the progress and some of the work that TransLink is hoping to accomplish in terms of advancing those transportation initiatives.

S. Simpson: I think the people at TransLink should breathe easy. I think they'll get their money.

In the budget and fiscal plan $20 million is allocated under the provincial transit plan for '08-09. Can the minister tell us why the $52 million is in '07-08 when at this point he can't identify that any of it is being spent in '07-08? Why isn't the '08-09 number $72 million, and why isn't it all allocated in the year in which you're actually going to spend it?

Hon. B. Penner: I'm not an accountant, but my understanding…. There is a member in the House who is an accountant, but I'm not. The minister of small revenue….

Hon. B. Penner: Pardon me, Revenue and Small Business. Big revenue, small business.

But my understanding is that for bookkeeping purposes, when the money leaves the hands of central government is when it has to be booked. That's why the $52 million appears the way it does on page 27 of the budget reports. Assuming that the Legislature approves it in this fiscal year, that money will leave the central entity of government, and that would show up as a bookkeeping entry of $52 million leaving this year.

The member is correct that there's an additional $20 million, which shows up on page 27 of the budget documents for next fiscal year, to continue work on the development of the provincial transit plan.

Again, my answer is somewhat similar here as it was to the previous line of questioning around why we are funding research this way through the University of Victoria to develop a climate change research centre of excellence in British Columbia. Frankly, it's because we can.

We've had a strong economy. We've had prudent fiscal management. We've been able to come to this point in the fiscal year with a surplus that allows us to fund a number of priorities.

In the past the opposition said: "You should be spending those surpluses." So here we are seeking to spend a portion of that surplus on advancing transportation initiatives that I think will benefit students. It will benefit individuals who rely on transit or want to choose transit by accelerating the development of RapidBus lines to Simon Fraser University and the University of British Columbia, facilitate and expedite the improvements and renewal of the SeaBus fleet as well as help undertake improvements to West Coast Express.

Those are all transportation projects that I think are worth supporting, and that's why we're here at the Legislature today. I'm confident that when members have a chance to consider this, they will vote in favour.

S. Simpson: My sense of the supplementary estimates is that there was a certain requirement of them as a contingency tool, among other things, to deal with new programs or expenditures that weren't anticipated at the beginning of the year, then arose by the end of the year, and the government chose to move forward. I accept that.

Clearly, the government announced a transit plan back a little while ago. What I don't see here is any sense of where any of the $52 million is actually being spent in this year of '07-08. Unless the minister wants to correct me and has some figures, those dollars will be spent in '08-09 and in subsequent years. Presumably, the $52 million will be spent in '08-09, hopefully, and we'll see some improvements in transit in the next year.

If I'm wrong, maybe the minister could tell me. The minister listed a number of programs: SeaBus, RapidBus to the two primary universities in the lower mainland. Maybe the minister could tell us: when does he anticipate those programs will come on line and this money will be expended for those programs?

Hon. B. Penner: I take it from the member's questions and the tone that somehow he thinks that what's being proposed here is not in accordance with accounting principles or the guidance we get from the Auditor General. If the member is of that understanding, then of course, he's free to vote against this proposal. Alternatively,

Again, I am not an accountant. I'm a lawyer. But we have advice from people who are accountants, and they tell me that when funding leaves the central entity of government, it's expensed — booked, if you want to use that terminology — in the year in which the money leaves the central government to go to TransLink. In terms of when TransLink could be in a position to start offering a rapid bus service and those other enhancements that I talked about earlier, our expectation is sometime in the next two to three years.

S. Simpson: I'll ask one more question on this area of transit, and then we'll be done until we come back this afternoon.

Just to repeat the question a little bit: can the minister confirm that none of the $52 million…? What percentage of the $52 million dollars will actually be expended on the list of initiatives that the minister identified in the '07-08 year? Will any of it be spent — one penny?

Hon. B. Penner: If the Legislature were to approve this funding request for $52 million to accelerate transit improvements in the lower mainland, that money would be expensed in the fiscal '07-08 year.

S. Simpson: I think we're breaking now. Noting the hour, we will rise, report progress and ask to sit again.

The Committee of Supply, having reported progress, was granted leave to sit again.

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