2008 Legislative Session: Fourth Session, 38th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Thursday, February 12, 2009

Afternoon Sitting

Volume 37, Number 6

[ Page 13689 ]

THURSDAY, FEBRUARY 12, 2009

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Introductions by Members

N. Macdonald: It gives me great pleasure to introduce some representatives from rural agency stores. These are the small stores that serve our communities. We have Annette and Tim Brause from Scotch Creek in the Shuswap. We have Gerry Myers, again from the Shuswap, and we have Brad Davies from Sorrento in the Shuswap. I ask the House to join me in making them feel welcome here.

Hon. J. McIntyre: Today in the members' gallery we have a very special visitor from Bangladesh. His Excellency A.M. Yakub Ali, the High Commissioner of Bangladesh to Canada, is making his first official visit to British Columbia. He's accompanied by Vancouver resident Dr. Matiul Alam, who is a professor, a master of educational technology, at UBC. I'll have the pleasure of meeting with His Excellency later this afternoon for what I'm sure will be a very productive meeting. So please join me in giving our visitors a very, very warm welcome.

S. Fraser: Visiting us today in the gallery are representatives from the Sechelt First Nation. Today we have Chief Garry Feschuk. We have Coun. Tom Paul; and we have Coun. Wesley Jeffries, Coun. Jordan Louie, Coun. Robert Joe and their administrator Jasmine Paul. Would you all please help me make them feel very welcome.

[1335]

R. Lee: In the gallery today we have four visitors: from Shenzhen, Guangdong, Xin Fan; from Vancouver, Tina Quan; from Richmond, Hanna Peng; and from Burnaby, Andrew Wang. Mr. Fan is an entrepreneur in the environmental industry, especially in sewage treatment. Would the House please join me to make them welcome.

C. Wyse: It is indeed my pleasure today to welcome Ted Hlokoff from Anahim Lake. He has come to join us here in the Legislature. It will take Ted a total of three days to be here to watch the business done here in the Legislature. Ted is a rural agency store owner.

Likewise, I'd like to introduce Ian Kangas of Adams Lake, who has also joined us here today. I'd ask the House to make both of these gentlemen most welcome.

Hon. I. Black: I would like the House to help me welcome 26 of our finest public servants in the House today. We've got representatives from the workplace technology services division of my ministry who have come to see exactly what we do in this great building. Please make them feel welcome.

J. Horgan: I join with the Minister of Labour in welcoming two constituents of mine from his ministry. Sandy Carmichael is here from Langford — downtown Langford, that is — and Andrea Gibbs from Sooke. Would the House please make both of them welcome and thank them for their service to British Columbia.

D. Hayer: It gives me great pleasure to introduce 66 grade 5 students visiting here from Surrey Christian School, which is in my riding of Surrey-Tynehead. They're here with their teachers — Miss Allison Penner, Miss Janice MacDonald and Miss Jackie Hofstede — as well as 14 volunteers. I met them outside. They have three classes here. Would the House please make them very welcome. And thank you to the parents for coming over and joining the students.

B. Simpson: I would like to recognize Mr. Trent Leggett who is in the House. Mr. Leggett is from Williams Lake and owns the Mountain View store. Now, I understand that the member for Cariboo South taught Mr. Leggett. Notwithstanding that, he turned out to be a fine citizen and entrepreneur in the Williams Lake area. Mr. Leggett is part of the rural agency store delegation here to seek fairness from the government. I'd like the House to make them feel welcome.

Mr. Speaker: Does the member for Cariboo South wish him to withdraw that mark? [Laughter.]

Hon. M. de Jong: In the gallery today the chief councillor of the Sechelt First Nation, Mr. Garry Feschuk, is here. I hope all members will make him feel welcome.

R. Austin: On behalf of my colleague the member for North Coast, I would like to introduce Craig and Elaine Widsten. They're with the Shearwater Marine group who provide services through rural agency stores in Denny Island and Bella Bella. Would the House join me in making them most welcome.

R. Hawes: In the gallery today is Mr. Rob Thiessen of the Hope for Freedom Society. They provide just absolutely first-class drug and alcohol addiction recovery services in the Tri-Cities area. Could the House please make Rob welcome.

C. Trevena: I, too, would like to ask the House to make welcome some people who are here to discuss the issue of rural agency stores. John Guy from Saturna Island and Daniel Kim from Galiano Island are in the gallery to watch proceedings and to discuss the issue later on.
[ Page 13690 ]

G. Gentner: In the gallery today are some of Delta's finest school students. In particular, I'd like to introduce to the gallery, from the Delview Secondary School, Principal Don Younger, Sylvia Showler and Maureen and 31 grade 11 students. And now that I have the ear of the minister, this school certainly needs some new gym equipment.

[1340]

Statements
(Standing Order 25b)

port alice

C. Trevena: When you drive down the road approaching Port Alice, your breath is literally taken away by the beauty and majesty of its location. On the shores of Neroutsos Inlet the small community stretches along the base of the hillside. Turning right before you get to the village, you come to Jeune Landing, a Western Forest Products site, and if you go through the village, you end up at the mill, which was built more than 90 years ago.

Four years ago the mill was closed, the previous owners taking equipment and, along with it, the pensions of the workers. It has now reopened, largely thanks to the hard work, commitment and belief of the community, led by former mayor Larry Pepper and the CEP local. Unfortunately, it is struggling, like all of the forest sector, and Western around Port Alice is likely down until April.

Port Alice is a community that has taken its knocks and continues to do so. The hospital was downgraded to a health centre but is still vital since the village is home to heavy industry. The community continues a longstanding fight with VIHA to get a permanent doctor. At present the locum comes in every two weeks, and as one person said to me: "You just have to time your heart attack."

There's always a question of whether the arena will remain open, and the village is using all avenues to get funding to replace the roof on the community centre, a building vital for maintaining the sense of belonging, ownership and community. It's the school gym, the library, the meeting room, the evacuation centre — the true community centre.

The latest pitch is to Towns for Tomorrow. Luckily, Sea View School is very active, and it received a fabulous classroom makeover last year in a national competition. I invite anybody to go and see it. It's remarkable. The village is diversifying. It's working on building a marina. A resort is going to be built, and retirees and second homeowners continue to drive across Highway 30 over to the west coast.

Port Alice is a community with strength and with resilience, a community determined to survive. Like other small communities across the north Island, the people who live there are rooted and committed to the community and want to ensure their communities live beyond this recession.

education funding in surrey

D. Hayer: Education is the key to our future, and Surrey residents are benefiting from the emphasis our government has placed on British Columbia being the best educated in Canada, if not the world. The facts speak for themselves in Surrey. Since 2001 we have completed over 31 school capital projects in Surrey, worth $171 million — including the new schools, renovations and seismic upgrades — with even more to come.

We now have ten StrongStart B.C. early learning centres in Surrey to support the youngest learners. For all those Surrey students who want to go for higher learning, we have the world-class trades and technology centre in Cloverdale and a magnificent new university campus at Simon Fraser University. Just a few months ago we also announced the upgrading of Kwantlen University College to the full degree-granting Kwantlen Polytechnic University.

Surrey residents, Surrey parents, students and PACs of Fraser Heights are very excited about it, and they look forward to more services as we keep protecting education funding. They can access early learning opportunities from kindergarten to K-to-12 and post-secondary programs such as trades training and university degrees without having to leave home.

Even with the downturn in the economy, our government is continuing to protect and make sure education is a priority, and today education funding from K-to-12 is at an all-time high at $5.67 billion, a 23 percent increase since 2001 despite being approximately 50,000 fewer students in the system.

My constituents also are happy to see that we have the highest funding for post-secondary education we have ever received, and they're looking forward to government providing good education and good funding to education so their kids can be successful, stay at home and continue providing good jobs and good education opportunities and good citizens for the future.

community social services workers

J. McGinn: I rise today to recognize the important contributions that community social service workers make to this province. Since 2008 more than 20 municipal councils across B.C. joined with community social service workers to ask that March be made community social service awareness month.

[1345]

Often we don't recognize the important work done by our community social service workers. This work includes providing employment and housing supports for people with developmental disabilities, support for women and children who are victims of violence, specialized services for immigrants and first nations families, and child care, to name a few.
[ Page 13691 ]

The people working in these areas are the backbone of our community. These are the people who look after our most vulnerable populations and work to ensure that we have a caring, compassionate and just society. People like Cherie Dobbie, an infant development consultant with Sunrise Resources for Early Childhood Development. She works with families to ensure that children who are at risk of developmental delays have the services and care they deserve.

People like Angela McDougall and the staff and volunteers at battered women's support services. As they enter their 30th year this year, they are proud to know that they serve over 8,000 women a year who are survivors of domestic violence.

Individuals like Bunny LeBlanc, team leader on intake and investigation at the Vancouver Aboriginal Child and Family Services, one of the largest urban aboriginal child services organizations in Canada. They work to protect some of British Columbia's most vulnerable children and ensure they get care that's integrated into aboriginal communities.

In my experience working in the community social service sector, I've met some of the most passionate and dedicated individuals who have made an immeasurable impact in people's lives. We should be proud that the province of British Columbia contains such phenomenal, dedicated social service workers.

I just hope that all the members here today will join me to designate March as Community Social Services Month.

RICHMOND OLYMPIC OVAL

O. Ilich: Today marks exactly one year to the start of the Olympic Games, and tonight my municipality of Richmond is celebrating at the Olympic Oval. The oval was opened to the public on December 12 last year, exactly 14 months before the opening of the games. Already 70,000 people have visited the oval, or they've skated on the Olympic ice, or they've used the fitness facilities.

The oval is one of the most impressive indoor competition venues for the games, and I was delighted to see the CBC broadcasting nationally from the oval last night. It looked great on television.

A wide range of green building innovations have been incorporated into the oval. The massive roof structure has over one million board feet of pine beetle wood incorporated into it. The stormwater management system also captures rainwater from the enormous roof, and it's used for toilet flushing and irrigation. There are other green innovations as well.

For my community of Richmond, this extraordinary facility is anticipated to be a keystone of sport and wellness going into the future. Richmond already takes pride in having the longest life expectancy and the lowest obesity rates in Canada, thanks in part to active lifestyles and excellent parks and recreation programs.

Given the community vitality, the oval was primarily designed for legacy use while delivering on all of the Olympic venue specifications. Following the games, the oval will transform into a multi-sport and wellness complex to service sport organizations and provide the greater Vancouver area with a facility for sport medicine, sport science, healthy living promotion and injury rehabilitation.

Other Olympic legacies in Richmond include a 2010 arts and cultural program designed to create ongoing legacies for local arts and culture groups. This has led to the first annual Richmond Winter Festival of the Arts, which began February 1 and runs until March 15. It's going to become an annual event, giving increased profile to the arts. All in all, we're very proud in Richmond of the oval.

Mr. Speaker: Just to remind you, Members. They are two-minute statements.

LITERACY INITIATIVES IN
MALAHAT–JUAN DE FUCA AREA

J. Horgan: It's two minutes for me, hon. Speaker.

I want to bring to the attention of members two positive literacy initiatives in my community, the first involving students at Hans Helgesen Elementary in Metchosin. On January 23, World Literacy Day, students at the school joined with students across Canada in hopes of being entered in the Guinness Book of World Records. Their goal was to be part of the record for the most children reading with an adult in multiple locations. Interesting category.

[1350]

Teachers in classrooms across the country began the simultaneous read at 11 a.m. Pacific Standard Time. Hans Helgesen had 136 students participate. I want to congratulate the principal, Julia Sahota, and all the staff, students and parents that are participating in this possible world record. Our local numbers will be sent to the literacy foundation, along with the numbers from more than 1,000 other locations across Canada.

The second literacy success story involves an old friend and mentor from my youth. Since 2005 the Sooke Lionesses have been supporting literacy at Port Renfrew Elementary. It all started when my friend, retired district principal George Gurney, drove Lionesses and former teachers Jean Whiffan and Jean Conway, retired district primary supervisor Bev Lenahan and author Julie Lawson to Port Renfrew to deliver 26 children's books written by Ms. Lawson, herself a former teacher at John Muir Elementary in my district.

The donation was gratefully received by Principal Ruman McArthur, the staff at the school and the very excited students. In return, Julie was presented with drawings from the students, and George got to make a
[ Page 13692 ]
rare trip to Port Renfrew that did not include returning with a couple of salmon or two.

From that beginning, the Lionesses have continued the tradition of delivering new books every December. Weather and — listen up, Minister of Transportation — road washouts permitting, students, teachers and Lionesses enjoy the opportunity to share in the joy of reading. Two great examples, hon. Speaker and members of this House, of literacy in action in Malahat–Juan de Fuca.

OLYMPIC GAMES COUNTDOWN EVENTS

J. Rustad: Today is an exciting day for the people of B.C. Communities big and small, right across this province, are celebrating. Today we mark the one-year countdown of the 2010 Winter Games, one year until we take the world stage and show them what it means to be British Columbians.

Northern communities are also celebrating this historic milestone and showing off their B.C. spirit, from Prince Rupert through to Dawson Creek. For example, in my constituency, Vanderhoof residents are enjoying a fun week of festivities at this year's Nechako Valley Winterfest. With family activities, including a curling bonspiel, hockey tournaments, sleigh rides, movie night and many more events than I have time to mention, our community is showcasing its own Olympic spirit.

As part of the winterfest, our very own Olympian, Tuppy Collard, who competed in the biathlon at the 1998 Winter Olympics in Nagano, Japan, is visiting three elementary schools in Vanderhoof and will talk about her Olympic experience. Tuppy has not only proudly represented our province and our country, but she has been instrumental in giving back to her community and fostering our local Olympic spirit. She is a fantastic example of the north's contribution to the Olympic spirit.

B.C.'s rural communities are home to a rich diversity of culture, heritage and traditions. This is exactly what our games will be representing to the world next year. Winterfest and all of the one-year-countdown events are a great way to kick off the 2010 games celebrations that demonstrate not only the spirit of B.C. but the spirit of our rural communities. I encourage all British Columbians to enjoy their local countdown festivities as the excitement for the 2010 games builds.

Oral Questions

impact of olympIC SECURITY
COSTS on utility and transit rates

C. James: Can the Energy Minister tell this House how much extra B.C. Hydro is paying or will pay to cover Olympic security costs? And will those costs be passed on to ratepayers?

Hon. C. Hansen: Today is an exciting day in British Columbia.

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: Today is one of those days when we have the eyes of the world on British Columbia. The Today show is broadcasting out of New York. Actually, they're broadcasting from Whistler through New York to their North American audience. CBC is broadcasting nationally all across Canada.

[1355]

What they're seeing is the excitement in British Columbia. They're seeing the excitement of the countdown to the 2010 Olympic and Paralympic Games.

I find it so sad that the Leader of the Opposition and her opposition colleagues cannot for just one day join in the celebration. Instead, they continue to bash the Olympics. It's very regrettable.

Interjections.

Mr. Speaker: Members.

Interjections.

Mr. Speaker: Members.

Leader of the Opposition has a supplemental.

C. James: Unlike this government, I believe you can actually stand up for taxpayers and support the Olympics. Both of those are possible.

As we know….

Interjections.

Mr. Speaker: Members.

Just take your seat for a second.

Interjections.

Mr. Speaker: Members.

Proceed.

C. James: This government has shown over and over and over again that they can't be trusted to come clean on Olympic costs. We hear it again from the minister. Last year Hydro said security costs will add at least $7 million. They applied for a rate increase of up to 7.5 percent, in part to cover those security costs.

Again, my question is to the Energy Minister. How much more will British Columbians pay to turn on their lights to cover security costs that this minister still won't come clean on?
[ Page 13693 ]

Interjections.

Mr. Speaker: Members.

Continue, minister.

Hon. C. Hansen: I'm sure that the NDP are the type of people that go to a two-year-old's birthday party and douse the candles.

We saw the excitement with the unveiling of the torch today. We saw the excitement in the eyes of the public in Whistler this morning when they couldn't wait to be photographed with it, to touch it, just to be near the Olympic torch or anything that's associated with the games.

This is a time for us to celebrate. This is a time for us all to stand up and celebrate the huge success of the Olympic Games that is in the making. It's time for the opposition to get on board and join with British Columbians in celebrating this tremendous day in the eyes of the world.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

C. James: I'll tell this minister and every member on that side what it's time for. It's time for this government to come clean on the real cost of the Olympics for British Columbians.

In its submission to BCUC, Hydro said they're not alone in having to look at additional costs. TransLink, Telus, Terasen, B.C. Transmission Corporation — all in the same boat, all of them saying their customers are going to have to pay millions for security costs that VANOC and the government won't cover. I remind the minister that it was his Premier who was famous for saying: "There's only one taxpayer."

Will the minister end this charade and tell us how many different ways this government is going to dip into taxpayers' pockets to pay for security costs?

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: In 365 days from today we will have 250,000 visitors from around the world. We'll see about 8,000 athletes and officials, and we'll see about 10,000 journalists coming to British Columbia.

[1400]

I can assure the member that the RCMP and the federal government are doing a first-class job in developing a security plan that will make sure that those hundreds of thousands of visitors who come to British Columbia are going to be able to enjoy the best Winter Olympics ever, knowing that they're safe and secure in British Columbia and knowing that they can celebrate along with the other 4.4 million British Columbians who will be celebrating one of the greatest events that will ever happen in the history of British Columbia.

J. Horgan: Terasen Gas has been given the green light to ding ratepayers to pay for security costs.

Interjection.

Mr. Speaker: Member.

J. Horgan: B.C. Hydro has been given the green light to ding their ratepayers for security costs. We're told that the B.C. Transmission Corporation, Telus, TransLink, and other utilities in British Columbia are all looking at increased costs to pay for the Olympic Games security challenges.

This is a very simple question to the minister. When everybody goes home, when the venues' lights go out, how much will British Columbians have to pay to turn on their lights, to make a phone call or to take a bus, to pay for your security costs? How much is it going to be?

Interjections.

Mr. Speaker: Members. Members.

Minister.

Hon. C. Hansen: It's obvious. We know that the Leader of the Opposition did not support the games from day one. She claims today that she supports it, and yet what we hear from the NDP and the Leader of the Opposition is "Bash the Olympics" one day, "Bash the Olympics" the next day.

I can tell the opposition members that this side of the House supports the Olympic Games. We support the athletes. We support the communities that are celebrating throughout British Columbia today, and we're going to join with the world as we celebrate 365 days from today when we enjoy the opening ceremonies of what will be the world's best winter Olympic Games ever in the history of….

Mr. Speaker: The member has a supplemental.

J. Horgan: As much as we are always delighted to see the Minister of Finance and his gold-plated pompoms, standing up being supportive of the Olympics and being concerned about cost to taxpayers are not mutually exclusive. We on this side of the House are trying to get an answer from that minister about what the true costs are going to be.

So 365 days to go until the world comes to British Columbia. When are you going to tell British Columbians what it's going to cost to hold the big party? When are you going to come clean, be honest with taxpayers? How much is it going to cost to turn on the lights? How
[ Page 13694 ]
much for a bus ride? How much for a phone call? You're responsible. Answer the question.

Hon. C. Hansen: I will tell you who will feel like partying in British Columbia, and it's the thousands of workers who are going to be employed because of the fact that we're holding the Olympic Games. It will be all British Columbians that will be able to party and celebrate the fact that we have economic stimulus as a direct result of the games to the tune of about $10 billion.

I can tell you that every one of us on this side of the House are going to be celebrating and feel like partying because this is going to be the best Olympics ever, and I'll tell you that I personally will be partying when the Canadian men's and women's hockey teams bring home gold.

B.C. HYDRO AND ICBC PURCHASE
of olympic games tickets

H. Bains: It seems that there is a hidden Olympic cost in every corner of this government, and they don't end with security costs alone. Here are a couple of other examples. B.C. Hydro and ICBC are also using ratepayers' money to buy their own pool of prime tickets: men's hockey final, best skating events, all top-notch.

Between these two Crown corporations, they have all ordered almost 4,000 of these tickets for their executives and high-end customers, but they refuse to tell us how many of those tickets are being issued to them and how much it would be costing those ratepayers.

[1405]

To the minister: will the minister tell us today how many of these tickets have been bought by B.C. Hydro and ICBC and at what cost to the ratepayers?

Hon. C. Hansen: I must say that the opposition critic is showing a considerable amount of hypocrisy today. While he stands up…. While he's outside in the foyer this morning trying to get his picture taken with children who are celebrating the Olympics, he comes in this House on the day of the 365-day countdown and bashes the Olympics. This is an opposition party that doesn't appreciate the fact that the world is watching us.

Interjections.

Mr. Speaker: Minister, just take your seat.

Members. Members.

Continue, Minister.

Hon. C. Hansen: The world is excited about the Olympics. We are excited about the Olympics. It's about time that the NDP got on board and got excited about the Olympics as well.

Mr. Speaker: The member has a supplemental.

accountability for
olympic games costs

H. Bains: This is a pathetic display of non-accountability and irresponsibility by this minister. The performance of this minister for the last few days clearly shows that everyone is pointing fingers at everyone else. No one is being held accountable to the taxpayers.

B.C. Liberals point to the federal Tories. Yesterday the federal minister said: "Don't look at me. I never endorsed $175 million." VANOC tells the utilities that they're on their own. In all of this there's one person who counts: the taxpayer. The taxpayer is getting the runaround from the Liberal government right here.

Again to the minister. He can't stall any longer. Will he promise the taxpayers that when the final security budget is made public every cost borne by the taxpayers will be included in that budget?

Hon. C. Hansen: As I indicated yesterday, it is the federal government, through the RCMP, that has responsibility for the security plan and the security budget overall. So I refer the member back to the answers from previous days where this was canvassed.

But I can tell you what will be part of that accountability: the benefits that flow from the Olympics, where we talk about billions of dollars of economic activity. We talk about the dollars that visitors will be spending in our restaurants and on our taxis and in our hotels and travelling around the province to see what a wonderful province that British Columbia is.

The benefits that are going to flow from the TV exposure that we're getting today on NBC, being broadcast across the United States, CBC, CTV, Global Television…. All of the networks are broadcasting what a fabulous place British Columbia is, and that will be part of the huge and considerable legacy that we will have for British Columbia once the games are over.

ACCESSIBILITY OF
OLYMPIC GAMES TICKETS

M. Farnworth: Well, the minister couldn't answer the question, but I can answer it for him. ICBC has purchased 2,261 tickets to the Olympics, including events such as the gold-medal hockey finals, curling finals — all the primo events.

My question is to the minister responsible for ICBC. Given the statements that have come from the Minister of Finance and others that…. You know, when every British Columbian should be able to enjoy the games, doesn't he believe it's appropriate that any tickets bought by ICBC, particularly to gold-medal events such as the men's hockey final, should go to British Columbians
[ Page 13695 ]
who otherwise wouldn't be able to attend the games and not to corporate executives?

[1410]

Hon. C. Hansen: This is going to be the first Olympic Games in history where accessibility for tickets for people who are low-income is actually being put forward as a matter of right by VANOC. We know that if you look at the operating budget of VANOC, they had budgeted for a certain amount for ticket revenues, which was actually a huge chunk of the operating budget that VANOC has put in place.

I think each of us, certainly, on this side of the House knows, because we went on line trying to get tickets with very, very limited success. I know I was certainly disappointed I didn't get the ones that I would have liked to have. But there's been a huge demand for tickets from around the world, and we know that they've been a huge sellout.

Actually, VANOC is now projecting that they're going to receive more revenue than they otherwise would have from ticket sales. That's part of the success of the games and part of what will make this the best games ever.

RURAL AGENCY STORES and
government liquor retail policies

C. Wyse: Rural agency stores provide access to food, toiletries and liquor to residents in our province's smallest communities and the tourists that visit them, but these stores are not being treated fairly by this government. Since 2003 the Campbell government has progressively reduced the price that private liquor stores pay for liquor. They now get a 16 percent discount as well as assistance with their operating costs. Rural agency stores have had their discount frozen at 10 percent for 24 years and get little assistance with their operating costs.

What these operators want to know is: when will this government provide rural agency stores with the same discount rate and assistance with operating costs paid for the private liquor stores?

Hon. R. Coleman: Government has recently made changes to reduce the costs to improve the services to rural agency stores across B.C. by providing free freight, increasing product availability and improving reporting. Government has also recently completed a review of these stores in conjunction with their association, which is under review by the Liquor Distribution Branch.

On the second part of the question, rural agency stores have liquor and grocery stores and confectionery stores and sell dry goods as well. They are not liquor stores. This is an add-on to their business, and at this time, there is no review of the discount to rural agency stores taking place.

Mr. Speaker: The member has a supplemental.

C. Wyse: The agency stores are looking to be treated with the same treatment that this government gives to the private liquor stores. Private liquor stores have donated almost $250,000 to the B.C. Liberal Party. The group representing private liquor stores, called ABLE, not only donates to the B.C. Liberals but is presently sponsoring advertisements supporting the Liberals. Is this why private liquor stores receive such a sweetheart deal from the Liberals?

Hon. R. Coleman: I guess the first piece of history was that those guys on the other side of the House actually opposed rural agency stores when they came into place in the first place. So they don't actually support the whole concept.

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: These are not liquor stores. These are rural stores that are general stores that sell groceries and what have you. I'd like know if the member is advocating against the wishes of the BCGEU and other people in society that we should be putting liquor in grocery stores around the province of British Columbia.

This is an add-on that's given to rural communities to their business. It is not them being exclusive as liquor stores, and that's why they're treated differently, hon. Member.

C. Trevena: I think that if the minister spoke to people who ran the rural agency stores, he'd understand that yes, they know they're not liquor stores, but they are effectively carrying out government business on behalf of the government but at a cost to themselves. They often lose money by running these liquor agencies.

[1415]

Private liquor stores receive a 16 percent discount and get help with operating costs. The rural agency stores, which are government licensed, get fixed prices and get a 10 percent discount. That hurts wherever they are, whether it's the Sointula co-op or the Heriot Bay store or the store in Sayward — wherever they're trying to run these stores.

Maybe the minister can answer for me the question which was posed to me by the manager of the co-op on Hornby Island, who asked quite directly: "Who lobbied the government on behalf of the private stores to get them such a good deal?"

Hon. R. Coleman: I'll repeat for the member that these are not liquor stores. These are general stores that have an add-on to their business, and they can have it
[ Page 13696 ]
voluntarily. They don't have to take the licence if they don't want it. By reducing and giving free freight and doing some efficiencies, we have actually saved about a million dollars to rural agency stores in the last year.

With regards to some changes we have, we have a report in front of us that we're looking at. But they are treated differently because they are not full-line liquor stores, as liquor stores are. Private or government liquor stores cannot sell groceries, cannot sell confectionery and cannot sell dry goods. That's why the difference.

So in rural B.C. they have an add-on to their business by rural agency stores. They get a 10 percent discount, and we work on efficiencies to get their freight to them as efficiently as possible.

R. Austin: In essence, they are an extension of government liquor stores. What the minister here is saying is that if they are too small a business and they don't have the big connections and they don't have the money to donate to the B.C. Liberals, then they don't get a fair shake in this province.

It's because of this government's policies that rural agency stores sometimes take a loss on the liquor that they offer. This means they have to charge more for the necessities like food and toiletries that people in these tiny communities rely on. Why is this government against these hard-working small business owners getting the same deal that their friends and donors get?

Hon. R. Coleman: That's absolute nonsense. Absolute nonsense. To make that type of parallel and try and drive that party line when you as an opposition and as a government opposed rural agency stores to begin with in the province of British Columbia and, in addition to that, made no changes in efficiencies whatsoever in the ten years you were government with regards to them….

We've improved the efficiencies. We're giving them free freight. We're working with them on the report that we have before government, and we'll find other solutions for them as we go forward. But the fact of the matter is that they are not going to be treated like a liquor store when they are not a liquor store.

GOVERNMENT SUPPORT
FOR FOREST WORKERS

N. Macdonald: Almost every one of the province's sawmills and pulp mills are either completely shut down or operating on reduced shifts. At the truck loggers convention this January, the Premier claimed he was going to get the federal government to extend EI benefits for a full year. We got a mere five-week extension, and that's it.

What is the government going to do to help the thousands of forest workers who are now running out of EI benefits?

Hon. P. Bell: This government has been working hard through a series of initiatives to support the industry not just in the short term but over the long term. The member opposite should recognize that in his community, a lot of the work that has gone on has yielded direct benefit to the Cedar operation. In fact, if the softwood lumber hadn't been dealt with in the way it was with the high-value cap, there's a very good chance that Downie Cedar would not be operating today in that member's community.

Mr. Speaker: The member has a supplemental.

N. Macdonald: The question was on the immediate support for 20,000 workers who have lost their jobs and are losing their EI.

Look, there is a rally of laid-off forest workers tomorrow in Prince George, so the minister can attend and give that sort of an answer to workers there and see the reception he gets. We know for sure he won't go near it.

Not only did the Premier fail to get extensions to EI; he still has not put one penny of provincial money towards supporting B.C. forest workers and forest-dependent communities — not one penny. The community development trust is entirely federal money.

[1420]

My question is this. Will the government commit today to match all federal contributions to the community development trust so that more forest workers and their families can be helped through this very difficult time?

Hon. P. Bell: In fact, the province has been doing a great job delivering the resources the federal government…. And listen to this: 1,700 forest workers have been bridged to early retirement; 500 workers have been offered retraining packages. There's been $17.25 million set aside for tuition assistance for forest workers.

In fact, we've delivered over and over and over again, and for that member to stand up opposite is absolutely hypocritical. He knows how challenging this industry is.

In 1998 B.C. had just 47 percent of the total Canadian lumber shipments into the United States. Today it's 58 percent. Our industry is leading the world in very difficult times.

Interjections.

Mr. Speaker: Members.

B. Simpson: Every penny that the minister just mentioned is federal money. That's the point. We're asking for the province to match that money. This minister has no credibility on this file whatsoever.

Last September this Minister of Forests made the following prediction about the forest industry: "I think the worst is over. It's unlikely that you're going to see any
[ Page 13697 ]
more significant mill closures at this point." Oops. We've seen nothing but mill closures since. Last October he stood in Quesnel, and he told the chamber of commerce that there will be no mill closures in Quesnel. In fact, he was so sure of himself, he said that the sky would not fall "because I'm going to hold up the sky" — a direct quote from this minister.

Ever since then we've had nothing but mill closure announcements in the Cariboo, most of which are indefinite closures, leaving those workers facing uncertainty. My question to the minister is this. There is a forest worker meeting for all the laid-off forest workers in Quesnel next week. Will the minister clear his calendar, come to that meeting, tell them why he let the sky fall and why this government will not support those workers in their time of need?

Hon. P. Bell: I think it's always noteworthy to look at some of the comments that the opposition critic has made over a period of time. It's useful to have the insight into what forest policy under that regime must look like.

As reported in….

Interjections.

Mr. Speaker: Members.

Minister, just take your seat.

Members.

Continue, Minister.

Hon. P. Bell: I encourage the opposition to sit back because this may take a little while.

I can tell you that it's reported in Opinion 250. Recently the opposition critic is quoted as saying: "The pulp industry is dead." Is that the member opposite's vision? In Hansard in this very House he said: "In everything I read on the pulp industry, it's not viable in British Columbia."

I'll tell you what we've done. We've worked with each and every pulp operation in this province to make sure they're viable. In fact we just gave a detailed tax reduction for school taxes across the pulp industry that translates into $25 million a year. This government cares about the forest industry. It's reacting; it's delivering — whether it's China, whether it's Mongolia, whether it's the United States. We're going to support this industry.

[End of question period.]

Interjections.

Mr. Speaker: Members.

We're just going to wait a second while they….

Members.

[1425]

Reports from Committees

R. Hawes: I have the honour to present the report of the Select Standing Committee on Finance and Government Services for the fourth session of the 38th parliament. This report summarizes our annual review of the budgets of the independent officers of the Legislative Assembly.

I move that the report be taken as read and received.

Motion approved.

Orders of the Day

Hon. M. de Jong: I call continued second reading debate on Bill 48.

Second Reading of Bills

Finance Statutes (Deficit
Authorization and Debt Elimination)
Amendment Act, 2009

(continued)

R. Fleming: I'm pleased to rise to respond to Bill 48, the Deficit Authorization Act, today. I was looking forward to hearing more from my colleague from North Thompson — but I guess he concluded his statements before we adjourned earlier today — because I wanted to direct his attention….

He had said a number of things to the member for Cowichan-Ladysmith about his government's so-called prudent financial management record, and I wanted to direct the member for North Thompson's attention to his own government's copies of their consolidated revenue statements, because we've heard the Premier. We've heard other members of the government talk about how personally painful it is to return to deficits, having produced the largest deficits in B.C.'s history in 2002 and 2003, to be returning to that today, in this year.

I want to direct that member's attention to a note in the consolidated revenue statements of his government just issued last summer — last July, as a matter of fact. There's a note in that set of statements that shows that under this government, in one year, the long-term contractual obligations — debt, in other words — that this government has entered into….

This is where the public-private partnerships and other agreements would be situated — in a tiny little note with no graphs, no explanations of what obligations are what and what the value of them are, because that's openness and transparency under this government.

[K. Whittred in the chair.]
[ Page 13698 ]

In that note it does disclose that the long-term contractual obligations of this government increased by $30 billion year over year, that there are $52 billion of long-term contractual obligations that this government has signed our grandchildren on to repay, because many of these agreements, when it comes to public-private partnerships, as that member will know, are 30 to 40 years in duration. That's debt and obligation that those generations will have to pay.

So I want that on the record. I want the member to have an opportunity to go and read that note, because apparently it has escaped him in the past. And when he claims that the B.C. Liberals are in favour of borrowing instead of direct debt, I want him to know that what his government has done is, in fact, oblige us mainly to private capital markets that are now evidently unstable in many parts of the world. The Olympic village fiasco comes to mind in this regard. His government has bound us in 40-year contracts in many instances to these hedge funds and to these private financial market organizations that are now having so much difficulty surviving.

On Bill 48. I recognize that the bill's title runs a little longer. It contains parentheses in there, words like "statutes" and "amendments." But I think when it comes to the vernacular, as the public understands this bill, it should really be truthfully called the "deficits when we need them" act, because contrary to all the posturing done by the Premier and this government, that's what this means. That's what it stands for.

When you come into the Legislature, reconvene it, move the throne speech back, extend the session as this government has done this week, it's their escape clause from their own law. And there are lots of laws that this government has broken. This is one of them. There are other laws — I'll get to them later in my remarks — that they've continued to break.

[1430]

I see that the member who I would wish to remind won't be able to hear it, but the education act that guarantees class composition and class-size limits…. We just had confirmation that for the third year in a row — and it's only a three-year-old bill — that law was broken. As far as children in 10,000 classrooms across British Columbia, that law means nothing. And this law, only four years after it was passed — one business cycle after it was passed — means nothing, because the province is returning to deficit. That's why we're here.

I think what I lament is that this bill is not about fixing that legislation. It's actually a mini-bailout, in its own right, of the bill's flaws. It's a bill that seeks to prop up the fiction that beneath the government's unlimited economic hubris, the belief that the B.C. Liberals actually have divine counter-cyclical powers, because that's what underlines the original legislation….

Interjection.

R. Fleming: The Minister of Health says it's true, so I don't know why we're here this week. I guess the cycle returned. Maybe we're not really here at all.

The Liberal law, as it was originally drafted, commands deficits to go away, and it expects the economy to listen to the law. But the real world doesn't work that way, and that's why we're here.

I've given the very concept of this bill a little bit of thought over the last week. We didn't see the bill until Monday, but we have had an opportunity — all of us in British Columbia — for many, many months to contemplate that the government would have to go in exactly the direction it is going this week. We've looked at the context of the legislation in terms of every other industrialized country which started a mature discussion with its population and with opinion leaders many, many months ago, in as many as five fiscal quarters ago.

We have the International Monetary Fund; we have business analysts. Everyone was predicting the inevitability. Some people were trumpeting the desirability — even the Prime Minister of Canada, an unlikely convert — of this many months ago. But this government, almost alone in the world, denied that this jurisdiction was at any risk of running a deficit.

The Minister of Finance, in B.C. Business Magazine, the issue of January 7, 2009 — like a month ago — was quoted saying: "With responsible fiscal management, there's no reason this province should ever go back into deficit." The Premier made the same arguments repeatedly. They argued a position of B.C. exceptionalism — that global winds touching other areas of the world would not touch our shores. They sounded exactly like John McCain did in the U.S. presidential election, who throughout — right through to November — said that the fundamentals of the economy are strong. He was in absolute denial, just as this government has been.

They didn't respond. They saw no need to. The attitude was that there's nothing in need of rescuing here in British Columbia. Keep shopping. Go about your business. But meanwhile the signs were all around. The entire world, specifically the private sector economy, lost some $57 trillion in the latter half of 2008. Now, that must have been a pretty good clue that the fundamentals weren't strong in our new global economy. That should have sparked some action from this government, but it didn't. The Minister of Finance and the Premier maintained their line.

Maybe there were other clues that the Premier and the Minister of Finance should have seen. I specifically reference the headlines in our British Columbia papers of record. I want to cite a few headlines and the dates of these headlines.

[1435]

Let me just read a few. "Canada's Housing Bubble to Burst," September 2008. "Commodity Index Drops; Global Sell-off Continues," September 2008. "Global
[ Page 13699 ]
Crisis Ends Plan for B.C. Pulp Mill," October 2008. "Stocks Plunge Despite Government Efforts," October 2008. "Ontario and B.C. See Surge in EI Recipients," November 2008. "Provincial Economies to Shrink in 2009," December 2008. Those are the headlines of the newspapers that presumably the Minister of Finance and the Premier have access to and read.

All the while, while the discussion in the mainstream of society and in our newspapers and the media was about the reality that was upon us, the Finance Minister and the Premier were telling British Columbians something different, and something that was incorrect. They know it's incorrect now; they've admitted it.

For all of 2008 the B.C. Liberals actually ordered their bureaucracy to be only optimistic and to prepare to do what it takes to not have a deficit under any circumstances, even as growth levels were predicted to reach zero. Maybe that's why there was no fight for jobs from the Premier or for resource communities. Maybe that's why there's been no action at all coming from British Columbia to unlock the credit crunch that's gripping small and medium-sized businesses.

While all this turmoil was going on, the Premier actually cancelled the fall session of the Legislature. This is while the world was talking about the meltdown of the global financial sector. Nothing to do here in this Legislature under those circumstances.

Then he realized he actually had to do something. More importantly, he had to be seen to do something. So we did, in the end — after it was cancelled — come back to this place for five days in November. And to do what? We were here to debate a vague package, and members will remember that it was centred around a fake property tax freeze that played on people's common misunderstandings of how assessments and municipal taxes actually work.

I've read the papers as of last week, and locally, municipalities are talking about 4, 6 or 8 percent tax increases. Vancouver is staring at a 10 percent tax increase for its ratepayers from the failure of the Olympic village fiasco. Those are the kinds of pressures that are in our municipal level of government, and it exposes that the centrepiece of that package that we were here for five days in November to debate isn't working. It was designed to show that there was a tax freeze when in fact there's no such thing.

The Premier's plan, up until recently, and the orders within government were the old Herbert Hoover line. When you've got a contracting economy and when there are signs of danger all around, cut public spending. Hold the line. That was the temptation and the direction that came from this government, because that's what they know how to do best. That's what they did for their entire first term, and that's what they've continued in many ministries in the second mandate.

There must be a fascinating paper trail of bureaucratic hoop-jumping of draconian austerity plans that were drafted up for ministries and agencies of the Crown and other fruitless exercises that they probably had their deputy ministers performing, and their senior managers. It must have resembled some kind of Charlie Chaplin film, seeing them run around with that right up until February.

The diktat was: "Obey the orders from up on high. Avoid deficits at any cost." This is ideology at work. But then that all changed, and that's why we're here again. It changed on Groundhog Day, as we remember last week. That's when everything suddenly changed. That was the day this government poked its head out of the hole, looked around and said, "Things are bad," and, to its bureaucracy, said: "We can't do these cuts."

Maybe the Premier had an epiphany. Many he joined the pragmatic global consensus that we're seeing from the U.S. administration and other world leaders. Maybe he joined that consensus that exists, which advised that cuts under these circumstances would be the worst thing possible — would make a recession deeper, longer, worse and more painful.

Maybe he joined that consensus, or maybe he realized that that plan, if pursued to the fullest extent, would cost him the election, because undoubtedly it would have. British Columbians would have been irate. I think that is the more likely motivator for this 180-degree U-turn. It's not every day, after all…. It's only every six months or so that B.C. Liberals renounce what amount to articles of political faith, and in this case an article of political faith that for this Premier he has held dear for 15 years.

[1440]

But what is underpinning this bill is still a sham. It's a component of a broader hoax the B.C. Liberals are playing British Columbians for. The bill, in effect, says: "I mean what I say on deficits. I mean what I say on deficits until I stop meaning what I say." That's what the bill says. In other words, this is not really the deficit authorization act. It's the "I was kidding; I was just kidding" act.

Interjection.

R. Fleming: Here's the problem I face, because the Minister of Health is asking me my voting intentions. He's asking my voting intentions.

Here's the problem I face on this bill. At a practical level, I will probably have to vote in favour of it, because the government screwed up. It's operating under flawed legislation that gives it no room to manoeuvre under the situation that we're encountering in the world economy. This legislation doesn't fit reality, so all of us are going to have to take a hard look at this and look at the amendments as proposed, flawed as they are.

In other words, what we have to decide…. This is the difficult part for me. If this doesn't pass, then this government will end up punishing British Columbians brutally again.
[ Page 13700 ]

Can you imagine the scenario if they tried to hold the line on deficits — the scenario that they held until February? I know the scenarios exist. I know they were produced by ministries and deputy ministers, so they did look at it. The Treasury Board obviously got pretty spooked about what that would look like.

But pass or fail, this bill isn't really part of the solution. It's a part of the problem, and let me explain what I mean.

In 2000 the then NDP government passed Bill 28, which was the Balanced Budget Act. In short, that bill said that government should not run deficits unless there are significant and unforeseen revenue declines or in the case of an emergency — kind of like today. That was the original legislation.

Back then the B.C. Liberals opposed that bill, not perhaps because they thought the bill was actually flawed in and of itself, but because they said that you couldn't trust the government. They said that when you trust the government, all the legislation in the world won't make them more accountable.

Indeed, the Premier was in full rhetorical flight back then. Indeed, he bizarrely and somewhat badly, maybe even offensively, drew a historical analogy to that government bill. The Premier, then opposition leader, said: "We've seen these pieces of paper before. It kind of reminds me of Neville Chamberlain. 'I have in my hand a piece of paper. It will guarantee peace in our time.' We didn't have peace. Having a piece of paper in your hand does not guarantee balanced budgets." Oh, those are stirring words, stirring words indeed.

We know what's happened in the interim. The B.C. Liberals were then elected. They promised a brave new era of budgeting to be ushered in. They promised that the deficit dragon can be slain by law forever, and they put it in that law. Deficits would never again rear their ugly head. "B.C. will never slip back into the red," is in effect what that law that we're amending today said. And the fact that we're amending it…. Go back and contrast the fanfare that that government introduced it with. None of it means anything.

Except for 2002 and 2003…

Interjection.

R. Fleming: That's what I meant.

…which were the record years for the biggest deficits ever in British Columbia history, this bill came after a billion-dollar surplus. Here we are. We're debating the "just kidding" act, the law that cannot be obeyed because it does not fit the reality of how economies and societies work in today's global market system.

We're listening to the Finance Minister — he'll close remarks, I assume, shortly in this debate — say with a straight face: "We were serious when we outlawed deficits. Really, we were. We're sad that we have to break our own law. It really hurts us that we're rewriting a law that we refuse to obey, and that's a respectful way to treat British Columbians."

Finally, I think what the Finance Minister will say, maybe in a couple hours, is: "Trust me when I tell you that I'll outlaw deficits again in 2011. Just give me an out, and I'll make them illegal again." That's what he's going to say.

[1445]

That's the real problem with this bill. It insults the intelligence of British Columbians, and it lowers the honesty of political debate in this province. It's part of a political culture that this government has fostered. It seeks to avoid meaningful discussion and debate. It instead relies on pretty empty rhetoric. I pointed to the Premier's — then opposition leader — remarks, and I think that says it all.

I could spend hours, actually, repeating pious, self-righteous quotes from the Premier and the Finance Minister on this legislation and the antecedent before it, but what's the point? I would, though, with some indulgence, like to refer to one, I think, very, very prescient comment from the Premier when he was opposition leader and opposing Bill 28 so many years ago. He said: "It's amazing how rewriting laws can work for a government that doesn't really care about the law."

You couldn't put the shoe on the other foot any better than that. It pretty much sums up how this Premier and this Finance Minister approach governance in B.C. They make empty promises. They discard them when they become too inconvenient or too tired.

Let me give you a few examples of how that dynamic has worked in B.C. In 2001 the B.C. Liberals committed to making B.C. the most open and accountable government in Canada. Openness was the watchword of this government. They would make decisions in plain sight. They'd even hold public cabinet meetings because they had nothing to hide.

The reality? Well, let's look at an independent report that was issued not long ago, which said that this government had all but destroyed the spirit and intent of freedom-of-information legislation, so much so that British Columbia is considered one of the least open governments in Canada. Of course, open cabinet meetings are long gone. Perhaps they only existed in the first place so that the Liberal government could award production contracts to their friends.

But let's take something even simpler. How about government advertising? This one is real simple, especially in the context of an economy that is scarce of money and tax resources. How about telling the public the truth about spending on ads? They said they'd do it in opposition. They haven't done it in government. They've made that function a mockery.

They won't disclose any details, and they hope the public won't notice. They won't tell them how massive
[ Page 13701 ]
this year's taxpayer-funded advertising campaign is. They could, but they know full well that audited statements of spending on government feel-good puffery advertising is not going to be available to the taxpayer to scrutinize until July — two months after the election is over.

They could disclose it now. They could actually tell us how much they're spending. In fact, the opposition asked for just that in November, and the Finance Minister said: "No way. No how."

Here's another example of government saying one thing and doing another. Remember in 2001 we had the commitment to a fixed calendar for the House? That's a great idea. It meant we would have predictable sessions. We'd have orderly business. We'd try and run this place with some common sense and order that worked for both sides of the House.

Fast-forward a few years, and that promise has been tossed to the curb as well. Why? I think it's pretty simple. Having a session is sometimes really inconvenient for the government. It forces government to answer questions. This government doesn't like to answer questions, as we saw just a half hour ago.

Here's another example of saying one thing and doing another. You'll recall in 2001 that the Liberals committed themselves to repealing gag laws and allowing everyone to participate fully in elections. That's a nice idea. People were all in favour of it.

Let's jump ahead to 2008. The Liberals face a competitive election, so what do they do? They impose an even more restrictive gag law on third-party advertising that they committed to get rid of in the first place.

It's so cynical. They waited until the eve of the 2009 election to drop this legislation in this House, knowing full well that it can't successfully be challenged in court in time for the election. The Attorney General can use his subsequent time in his career to explain how comfortable he is carrying the can for the Premier on that law. I'll leave it to him.

[1450]

I want to talk again about the context of this bill. We came back to this House on Monday, and what was the first instinct of this government? The Finance Minister was asked quite properly by the opposition to table the third quarter fiscal report for the province. We know it's available. We have speculation about what it might say, but we don't have it on the public record. Quite rightly, the opposition critic for the Ministry of Finance asked for it. Let the opposition and the public know the full extent of the revenue crisis in British Columbia while we're debating this legislation.

You've asked the public to bear with you and accept that B.C. isn't going to keep to its own laws and that we're going to return to deficits. You have information showing how bad the scale of the crisis is, and you wouldn't table it in the House. That was the very first thing that was done on Monday — a refusal to do that. There's no acceptable reason why that was denied to the opposition or to the public.

Then we had the Government House Leader on Monday. He couldn't help himself. He brought in an incredibly important bill, potentially worth billions of dollars. We'll see when the budget is tabled next week — worth billions, though, I'm sure. He came to the House in the very afternoon and said: "I'd like to proceed immediately to second reading. I don't want to give the opposition any time to read the bill. Let's start immediately. Let's just get out of here and get it done." I can't even believe he asked.

Remember, it was a great Premier who I think said: "Not a dime without debate." What's the watchword of this government? In this debate and the one we had in November — the one that we had on the Olympic village….

An Hon. Member: It was Bill Bennett, by the way, that said that.

R. Fleming: A great Premier, as I said. He's got a bridge named after him, thanks to this government.

What's the watchword of this government, though? It's billions without debate. We saw that with the Olympic village. It was a blank-cheque bill that they wanted to push through in one day, on a Saturday —and the same with this bill. They wanted to skip stages and proper notice for debate and get out of here and go home.

Think about it. This is a bill that actually renounces the B.C. Liberals' very reason for political existence. The Government House Leader wanted to hustle it through the House as quick as he could. That's embarrassing.

The Premier was right when he said, all of those years ago: "It's amazing how rewriting laws can work for a government that doesn't really care about the law." That's what this debate these past few days has been about right here, under his term as Premier. He didn't tell us back then that he was talking about his own views on how he would govern, but here we are. We're rewriting a law for a government that doesn't really care about the law. That's what's on display.

This isn't the only law government has passed that it ignores. I mentioned it previously. We've seen for three years this government break a law that it boasted about when it introduced it — a law to protect the K-to-12 education system, to put limits on class size and composition. We found out the other week that for the three years of existence of that law, every single year the law has been broken.

So when the Premier says that it's amazing how rewriting laws can work for a government that doesn't really care about the law, he was talking about the B.C. Liberals and how they would govern this province — tens of thousands of classrooms not in compliance with the government's own law.
[ Page 13702 ]

This government didn't honour the three-year budget commitment they made to our colleges and universities. That was passed. They said they'd provide stable, secure funding for post-secondary education, and then what happened? We were here last March, and at the last minute 2.6 percent of the core budget was cut from all 26 of our public post-secondary institutions that fiscal year.

I don't expect we're going to get the truth on what this government knows and when this government knew. We've talked about how the world crisis was upon us, how every other world leader seemed to know, how even Stephen Harper admitted and worked with others to introduce a very different kind of fiscal package in his government. But in British Columbia we waited until Groundhog Day to let B.C. in on a secret they already knew, which was that this jurisdiction was inevitably sliding toward deficits. The revenue collapse was too great to avoid that.

[1455]

What we should have is an honest piece of deficit control legislation, one that actually fits the ebbs and flows of the economy — a law that's actually informed by the lessons of history and the realities of recessions past in the 1970s, in the 1980s and in the 1990s. No other province in Canada has the total ban on deficits that B.C. has, and that's for a reason. They don't work. The proof that they don't work is the fact that we're here today debating Bill 48.

The concern is that dishonest legislation will lead to dishonest budgets. That's the real concern. I sincerely hope that British Columbians, because of what this government has done, don't become so cynical and disenchanted with government because they don't follow their own laws. I think that will reflect badly on all of us. I thank you, Madam Speaker, for the chance to speak to Bill 48 this afternoon, and I take my place.

R. Sultan: After listening to the accounting of my friend from Victoria-Hillside about the economic situation and the headlines he read — from crashing stock markets to layoffs to shrivelling investment to ruin and decay in all corners of the economy — prefaced by a quotation from that famous statesman Neville Chamberlain, I believe it was, who said "peace in our time," I couldn't help but think once again that members of the party opposite and leaders in the party opposite are demonstrating their specialty for always looking at the dark side and putting a negative light on what is admittedly a difficult situation.

I couldn't help but think of another quotation from the 1930s in rebuttal. President Roosevelt, looking at the inactivity and fear and frozen condition of the economy they inherited in 1933, went on the radio and said that the biggest thing we have to fear is fear itself. I would suggest that if we overplay the hand here in your anxiety to display how bad things are, indeed you help create the conditions that we are attempting to overcome.

It's not unlike this party's tendency to run down what I personally believe is one of the best health systems in the world, its tendency to point to huge fundamental defects in what I think is one of the greatest public education systems in the world. Now they're turning their tendency to tear down what has been, in fact, and remains one of the most successful economies we've seen in North America in recent times.

While criticism is indeed their role, I wish from time to time they offered some constructive alternatives. About the only thing I've heard from the party opposite this week, as an alternative to the plans this government is bringing forward, is a proposal, as I understand it, to go out and convince people to lend $10 billion to the government. I'd say be careful of that one. We've seen it before.

Well, to turn to the bill at hand, which is why we're here…. Our Premier has called this early convening of the Legislature to deal with a crisis. We are in a crisis, and I don't want to minimize that. We're debating the government's first step in responding to the crisis — Bill 48, the Deficit Authorization and Debt Elimination Act. The bill proposes to give the government elbow room to apply remedies by granting them the latitude to run an operating deficit.

What crisis are we talking about? Well, as everybody should know by now, our friend and trading partner and that great engine of economy and democracy and creativity, our largest customer, the United States of America, is today deeply troubled. On Monday of this week President Barack Obama, holding his first press conference since being elected, told the American people: "If there's anybody out there who still doesn't believe this recession constitutes a full-blown crisis, I suggest speaking to…the millions of Americans whose lives have been turned upside down because they don't know where their next paycheque is coming from."

[1500]

Obama spoke of a deficit of jobs, a deficit of incomes and a deficit of confidence, and said that this could turn a crisis into a catastrophe. He said: "I refuse to let that happen."

Well, as has happened often in our history, we Canadians have basked in the temporary warmth of crisis postponed, partly through our own superior economic management in this country and in this province, partly through the delayed response to the supply chain. It takes a while to trickle through. But let no one in this House believe that we're immune.

The bad headlines, as the member for Victoria-Hillside so elegantly relayed to us just now, are appearing on the front pages. I'll add one of my own, the Globe and Mail on Tuesday, headlining: "Western Canada Hit Hardest by Decline." The story went on to say: "B.C. and Alberta see swifter and sharper downturns than other provinces as housing slumps and bankruptcies soar."
[ Page 13703 ]

The Premier himself, not mincing words at the economic summit he called in Vancouver last week, reported that government revenues had been dropping like a stone — his phrase. Again, as he described it, for home heating in this province, dimension lumber is now cheaper to buy than firewood. Such is the state of our largest industry — forestry.

What is the government doing about it? We shall see the outlines of the government's response next week in the Speech from the Throne and the budget tabled before this House. But the shape of the probable response is quite clear: a focus on jobs, jobs and more jobs; stimulate the economy through infrastructure spending and public works; maintain incomes; cut taxes further; continue to invest strongly in health care and education; grant citizens greater flexibility in managing their own financial affairs; encourage long-run productivity improvement; and finally, maintain the financial reporting transparency which — despite denigration from the opposite side — is an award-winner in the accounting profession in Canada and makes this government an accounting and accountability model for the world. I truly believe that.

The purpose of Bill 48 is to suspend the law adopted about six years ago prohibiting our provincial government from running an operating deficit. It suspends the law for two years. It also forbids the government from spending any surprise surpluses that might occur in individual ministries along the way through supplementary estimates. All such surprise surpluses will be allocated by law to continued debt reduction.

The law itself will dissolve in two years when, hopefully, life is restored to something more closely resembling normal. I stress the word "hopefully." None of us should be under any illusion as to what a government may be compelled to do when faced with the fiscal equivalent of an asteroid impact or a magnitude 10 earthquake.

Put another way, as an old James Bond movie once advised, we're once again learning to never say never. As a completely irrelevant aside and listening to the debate over this week here in this Legislature, I must say it's been quite an education in accounting and the philosophies of financial intermediation. Some disparage the existence of banks, it seems to me, as if we could somehow get along without financial intermediation in the economy.

I have to, as again an outrageous aside, declare my disagreement with Laertes, who 400 years ago told his son: "Neither a borrower nor a lender be, for loan oft loses both itself and friend." Only a barter society could live up to those words. Indeed, sometimes I think that's exactly the sort of society our friends on the benches opposite are advocating.

[1505]

I also hear a certain amount of confusion, if not deliberate intent to mislead, as people seem to switch interchangeably between debt and deficit — two rather different things — and as we hear people declaiming about borrowing to cover operating deficits as opposed to purchase assets. Indeed, my dear friend from Victoria-Hillside talks about the $13 billion number he pulled out of the air. It doesn't really surprise me, given the airport expansions, given the hospital construction, considering the seismic upgrades this government's been involved in, considering all of the infrastructure activity that has characterized the economy since this government came to power.

To suggest, as they seem to, that this should be financed on a pay-as-you-go basis from current taxes is just wishful thinking. It may have been way back in the early days of Wacky Bennett that such things were possible. Perhaps my friend the former Speaker of the House could enlighten me, but I would think that even then Mr. Bennett realized that to finance some of these huge, huge capital projects, you had to go out and borrow money, and that is hardly irresponsible.

Well, in borrowing and lending, however, if they are inevitable, there are some reasonable limits, and I think this is partly what the debate's all about: what are the reasonable limits? What is our borrowing and lending situation? Well, one important indicator for governments is the ratio of debt to gross domestic product or GDP.

Looking at the Canadian federal government for starters, their debt-to-GDP ratio peaked at around 40 percent in 1995. I believe Jean Chrétien was in power, if I'm not mistaken. Under Stephen Harper it's declined to 28 percent. The feds are now projecting it to go back up to 32 percent over the next couple years as they provide a little help on the operating side until better days arrive.

With a stimulus package federally of about 1 percent of GDP in each of two years, the feds have temporarily forsaken their goal of driving the debt ratio down to 25 percent. Nevertheless, I repeat, as a country we've managed our affairs more prudently than the Americans, and as a province we have managed our affairs more prudently than other provinces of Canada — and I would say that across the board — and, for that matter, more prudently than any other G7 country.

This is a golden moment in the fiscal history of Canada, when we can look at those ratios on the last page of the London Economist, as I did last night just to remind myself, and see: "Wow, we have a great report card on the ratios."

Now, look at the United States by contrast. The Barack Obama stimulus package is closer to 6 percent of their GDP, compared to our 1 or 2 percent — a startling contrast. It makes the U.S. plunge into further deficit spending, far greater than our own. As one American expert, David Smick, put it recently: "Too much debt is never a good thing, and in many respects, Americans may be living on borrowed time." Continuing with Smick's quotation: "It's important to keep things in
[ Page 13704 ]
perspective." He says America's gross national federal government debt, at 65 percent of GDP, is less than Germany, which is all of 67 percent.

I wouldn't say a 2 percent margin is much to brag about. Again, I interject my own comments, admittedly. Japan's debt is roughly three times larger at 176 percent of their economy. Smick went on to say that the critical point is this: "Whether the U.S. financial system avoids catastrophe depends on more than merely correcting financial imbalances as measured by these ratios. As important as that goal remains, most likely it depends on the dual fears of a lack of financial transparency caused by the U.S. sub-prime mess and the effect of the housing crisis on consumer demand."

Hmm. Lack of financial transparency and the housing crisis. Well, we've had some experience with that in this province. The NDP government of a decade ago provided a vivid object lesson on the first point — how to erode the credibility of public financial statements, a core root of the global financial problem today. Nobody knows what to believe anymore, and it's a problem which motivated this government's well-intentioned corrective laws when it took over from the NDP, as we're all aware.

[1510]

As for the second point — the housing crisis — we must thank the good judgment of our banking system for steering Canada around the worst of those sub-prime mortgage misjudgments, which plague the United States today and which, through obscure securitization, became embedded in financial institutions all around the world like a hidden, toxic waste. We still haven't figured out exactly where they are, and even when we identify them, we're not quite sure what to do with them.

Financial transparency and housing — two key variables. What does the NDP have to say about all of this? Well, not much, it appears, but it doesn't stop persons opposite from talking about it for many days.

But let's give credit where credit is due. In reality, it appears they agreed with the government's core fiscal strategy prior to the financial crisis. Let me repeat that. It appears the NDP agreed with the government's core fiscal strategy prior to the financial crisis, and it appears they also agree with steps taken by the government since the financial crisis.

Partisan politics aside — and it's always fun to throw the odd spitball at one another across this two and a half sword lengths that separates us — the spirit of unanimity in this House among all members of this Legislature is in fact helpful and, I think, positive, and it diminishes the fear that can freeze us into inactivity and lack of economic transactions.

As, for example, the member for Malahat–Juan de Fuca pointed out — and I salute his balanced commentary — we're all in this together in terms of passing laws which, with the benefit of hindsight, perhaps had an element of hubris in them. I think responsibility for that, I heard him saying, is shared equally on both sides, and I would have to agree with the member for Malahat–Juan de Fuca.

To illustrate, precrisis the Leader of the Opposition said: "Don't agree with deficits. I think a balanced budget is critical," CKNW, October 23, 2008. "The balanced budget act is there. It's going to remain, and I believe we need to balance our budgets" — CKNW, again on October 23.

Now, post-crisis, the Leader of the Opposition quoted again: "I've said all along that I believe in balanced budgets. I believe in fiscal responsibility, but I also believe in common sense" — hmm, the door's opening a crack — CTV News, January 28 of this year.

Echoing this sentiment, the member for Cariboo North is quoted as saying: "We've seen a federal throne speech that's talking about the potential for deficits, and it may not be the time to work within mandatory balanced budgets."

So my ear tells me there's really no huge gap between what the government is saying and what the opposition party has been saying on the subject of balanced budgets and the need to temporarily suspend this law.

Since they appear to my ear to agree with the substance of Bill 48, what new insights are being launched in these days of debate from benches opposite? Well, midst the many peaks of oratory achieved yesterday, my favourite was the member for Delta North who said that we're in a deficit position today because the Premier was sleep-deprived. I didn't quite see the connection, but that's his allegation. On such firm foundations the NDP would build its budgets.

Another familiar refrain was heard from the member from Maple Ridge who blamed the usual suspects, the big banks. Since our need to thaw the world banking system is at the heart of our global recovery effort and since Canadian banks are now celebrated around the world for their wisdom and the fact they're still continuing to actually function, to villainize them now seems a bit strange.

Indeed, this debate is an opportune moment to contrast the NDP versus the B.C. Liberal government track record on red ink, matters fiscal and the indebtedness of governments. On this topic there is a huge gap between the two parties.

I'll recite three of them, but I will quote again my friend from Victoria-Hillside who referred to "the biggest deficit ever" as a condemnation of the fiscal irresponsibility of the B.C. Liberals once they were elected. Well, let's look at the reality — three measures.

[1515]

The debt-to-GDP ratio. As I mentioned earlier, the B.C. taxpayer-supported debt to GDP ratio was a piddling 12 percent when the NDP took office in 1991. It was just a shade under 22 percent when they left office, almost doubled. Since that time, this B.C. Liberal gov-
[ Page 13705 ]
ernment has driven it back down to within 2 percentage points of where it stood when the NDP started out. But it took seven years to erase a decade of what I would call not the greatest fiscal management.

Second measure. Consider the operating debt of the government, and again, let's not get confused between capital and operations. The operating debt of government — that is, government debt other than that invested in infrastructure and physical assets like bridges and power dams and so on — was $6.6 billion when the NDP came to office in the early '90s. When they left office, it was $12 billion, double the operating debt in a decade, and it has since been driven back to $6 billion by this government, to where it was when the NDP first came back to power.

Third measure. Consider the province's credit rating. These are the green eyeshade boys who look at all the fine print of the balance sheets to figure out what's really going on and where all the bad stories are hidden in the footnotes. And here's their report card on B.C. government fiscal performance.

In the 1990s the NDP received two credit-rating downgrades, raising the cost of borrowing to taxpayers, on debt itself, which was mushrooming. Since coming to office, this government has achieved eight credit upgrades, to the point where we now have one of the best credit ratings in the world from Standard and Poor's and Moody's Investors Service. This saves the taxpayer tens of millions of dollars of interest each year.

All things considered, in a crisis atmosphere where the credibility of published figures and the conservatism of balance sheets has become critical to economic recovery, whom would you rather have in charge — the fudge-it budget crowd or the government who gets glowing report cards from the rating agency bean counters? Well, they're maybe not as exciting, but I'd vote for the latter.

Bill 48 is therefore a bill that I support and that every member of this Legislature should and, I forecast, will support. It's not only an essential piece of legislation in troubled times, but it has also conveniently provided British Columbians with an opportunity to contemplate the economic philosophies, the leadership style, and the calibre of thinking which underlies two great parties contending for citizen support in the upcoming election.

British Columbians will have the further opportunity to contrast these two next week when the Speech from the Throne and the budget are brought down. For me, the decision is quite obvious. In troubled economic times, with jobs and households on the line, go with experience and track record. This is not the time for leadership experimentation or discredited ideology.

J. Kwan: I rise to enter into the debate on Bill 48, the bill that is to allow for the government to bring forward deficit financing and a bill that incorporates also a debt elimination aspect to it.

Before I sort of get into the details of the bill, I do actually want to just talk a little bit about the history of debts and deficits financing over the years and to correct the minister for small business, technology and economy. I think that's her title.

[1520]

I just want to say very clearly that in 1991 the incoming NDP administration inherited a huge deficit. Not as big a deficit as the current Liberal Party brought in when they were in government, when Gary Farrell-Collins was the Minister of Finance — not as big as that, because that was the biggest in the history of British Columbia.

In 1991, when the NDP came into office, they inherited a pretty big deficit — yes, from the Socreds, some of whom are sitting around this table here today in this Legislature, in this very chamber. The Social Credit government left the NDP with a $2.5 billion deficit when they left office.

In 1991, under the leadership of Mike Harcourt…. Many would know of him and know him well, for he is still active in our communities today, working hard as ever, driving the issues of sustainability, amongst many issues. Under his leadership and the subsequent NDP government, they actually brought the debt down significantly, to the point that…. By golly gee, when the NDP left office in 2001, guess what happened? The NDP actually left the Liberals a surplus, and not a small surplus, I might add, but a $1.4 billion surplus.

That's the history of what happened here on deficit financing in the province of British Columbia. It was this Liberal government that inherited a surplus budget from the NDP, then went on to create the largest deficit in the history of British Columbia. Yes, the government of the day, the Liberal government, created a $3.076 billion deficit — under the Liberals, on their watch, the largest deficit in the history of British Columbia.

So all the Liberals who claimed that the NDP left them deficits — they're wrong. They're dead wrong. If they want to suggest that I'm wrong, all they need to do is check the Auditor General's books, because it tells all in that document. That document does not lie. It states very clearly that it was the NDP who left this government a $1.4 billion surplus, and it was this government that created the largest deficit in the history of British Columbia, a $3.1 billion deficit.

I just want to set that record straight because I've heard over this past week…. "Inaccuracies" is a minor way of describing this. It's an understatement, but I would want to stay parliamentary in this House. I heard stuff that came out of the mouths of cabinet ministers, who've been around, who sat through this period of time, who ought to know the information and know the truth and should be speaking the truth in this very Legislature and didn't. Shame on them.

I just want to also say that the Liberals created the largest deficit in the history of British Columbia. Let us just be clear. That deficit was manufactured by the
[ Page 13706 ]
Liberal government, because they created a tax cut for the wealthy and they took from the poor. They took from the poor by eliminating some of the most critical programs that the poorest of the poor relied on.

In the midst of all of that, they called it a structural deficit. The structural deficit, it turns out, was a result of the tax cuts to the wealthiest British Columbians. That's what happened.

[1525]

I also want to say that the government says about this situation we're in: "Oh, but we didn't know. We didn't know about the world economy collapsing all around us. We didn't anticipate this at all." Really?

Let me just go back and review some of the warning signs that the Liberals might have picked up. I don't know, maybe it's just me, but dating as far back as 2008, here are some of the headlines from last year. January 2008 — a year ago: "Are Politicians Ready for a Recession? Probably Not," Vancouver Sun. January 22, 2008, Vancouver Sun: "B.C. Companies Lose Billions in Crash." February 16, 2008, Vancouver Sun: "Canadian Factory Output Plunges." March 26, 2008: "Ready for a Slump? As B.C.'s Economy Cools, How Well Are We Prepared?" March 27, 2008: "Drop in B.C.'s Business Optimism Cited as Omen for Economy." March 29, 2008, Vancouver Sun: "B.C. Economy Expected to Cool in 2008."

Let's turn to a different paper — the Province. April 24, 2008: "Retail Sales Loss Hammers Loonie." June 12, 2008: "Canada's Industrial Capacity Utilization Slumps." June 24, 2008 — back to the Sun: "Denying Income Inequality Won't Make It Go Away."

Then a litany of articles between July and August in 2008. "Pesky Statistics Are Raining on Liberals' Economic Parade." Another one: "Consumer Confidence at Lowest Level in Five Years." Another one: "Leaders Must Focus on the Economic and Financial Crisis Unfolding Before Us." Another one: "Economic Growth Slowing in B.C." Another one: "Canada's Housing Bubble Could Soon Burst, Merrill Lynch Warns." "Commodity Index Drops; Global Sell-off Continues." That's now in September 2008. "Global Crisis Ends Plans for B.C. Pulp Mill," 2008.

This goes on. There are pages and pages of headlines in each and every month in the papers, talking about the economic meltdown that's happening and, yes, touching British Columbia too. Yes, right up to January, all through the year. And I can go on with many of these headlines.

But what did we hear? What did we hear from the Minister of Finance as this was happening all around him? He is the guy who should be in the know, who actually gets the briefings, the support from the staff — the excellent staff, I might add — who would provide him with the information. What does he say? Well, he says on November 21, 2008: "There is nothing on the horizon that would suggest the province is at risk of going into recession."

Well, I've got to ask this question. Where the heck has the Minister of Finance been? It's sort of just like him on the Olympic file. He refuses to tell British Columbians the truth on the cost overruns of the Olympics. Turns out that on his main file he has no idea what's going on. As recently as November he says, "Everything is just fine in British Columbia," yet every headline you pick up in the newspapers as far back as at least a year ago gives you the warning signals.

You've got to ask: where is the Minister of Finance? Is this really a surprise to them, or did they just not want to come clean to tell British Columbians what the story is with British Columbia's financial situation?

[1530]

[H. Bloy in the chair.]

As if that's not enough by way of warning signs, let's just go to Stats Canada to get some information, shall we? Those are stats. Kind of gives you a sense of what's going on around us.

Let's just look at the stats around debt and bankruptcy rates. Yep, personal bankruptcy filings in Canada rose more than 50 percent in December of 2008 from the same month of 2007. You'd think that might be a bit of a signal that something is starting to go wrong, that British Columbians are having a bit of a tough time managing, that businesses are at a little bit of a risk, that the economy is softening just a tad.

But more than that, it's not just bankruptcy rates. Canadians now carry more personal debt as a percentage of their personal incomes than do Americans, challenging Canada's reputation for financial prudence. Yeah, the economic crisis started in America, but yet Canadians are now carrying more personal debt as a percentage of their personal incomes than do our American counterparts.

You'd think that might be a wake-up call for the Minister of Finance. Not so. Not for the Premier either, but then get this. B.C. lost 35,000 — not 35, not 3,500, but 35,000 — jobs in January, with gains in part-time employment more than offset by an astronomical loss of 68,000 full-time positions — 68,000 full-time positions. That ought to ring alarm bells from here all the way to Fort St. John.

The Premier and the Minister of Finance — in fact, the entire Treasury Board, I would expect — will be sitting around the table going: "Uh-oh. Something's gone awry here, and we should have known; we should have seen it coming more than a year ago." Well, the Premier, just prior to us coming back with his legislation, says: "Oh, but I only found out a couple of weeks ago, and I lost sleep over that."

Really? I find that, frankly, hard to believe. I find it hard to believe. Not with all the very excellent staff in the Ministry of Finance that would have actually alerted
[ Page 13707 ]
the government to the dire situation. The government either chose to have a blind eye to the matter, or the government chose not to tell British Columbians when they knew what. That's what I think.

Just on this question of unemployment, some people might say: "Well, the unemployment might just be one region of the province but is not across the board, and the opposition are just being naysayers because that's what they do all the time." Well, let's just look at the statistics and see what they say. Between December and January, 68,000 full-time jobs were lost, and let's just break it down. Let's just break it down region by region.

Vancouver Island coast. Between November and December of 2008, unemployment increased by 37.8 percent.

Lower Mainland. Some will say that the Lower Mainland is immune from an economic downturn. Not so. Unemployment increased by 24.3 percent between November and December of 2008.

Hon. K. Krueger: More than 400,000 new jobs.

J. Kwan: Kamloops–North Thompson, where the minister is heckling, where he's from…. Guess what happened there.

[1535]

Well, that region experienced, yes, a 56.9 percent increase in unemployment between November 2007 and November 2008. Where's that minister at? Did he not notice this statistic is happening right in his own community? Did he just choose to close his eyes and say: "I don't see it, and I don't hear it, and everything will just be rosy"? Sort of like what the Minister of Finance continues to say.

Here's what he said. He said in December of 2008. "We are not in British Columbia anticipating that we're going to see significant layoffs. We still have an unemployment rate that is one of the lowest we've seen in many, many decades," he says. "Massive Layoffs Not Likely in B.C., says the Minister of Finance." Well, tell it to the families who lost their jobs.

What's happened in the Kootenays? Unemployment has increased by 15 percent. In the Cariboo region 7,800 jobs were lost between December 2007 and December 2008.

Those are the very warning signs that the minister and the government chose to ignore, and those are the facts. It wasn't as if this economic crisis just sort of popped up on them. The warning signs had been there all along. The government chose to ignore them, or they chose not to tell British Columbians the truth.

Meanwhile, what did that mean for the government's behaviour in terms of them managing taxpayers' money? Well, it didn't change one iota of their behaviour. What happened? Well, I recall that the Premier, when he was in the opposition, railed against the government on government advertising campaigns. And what do they do? Well, they only increased the government advertising campaign by 150 percent. That's all….

An Hon. Member: Are you okay?

J. Kwan: I'm okay. But I'll tell you that B.C.'s finances are not okay under your watch.

So advertising campaigns increased under this government's watch by 150 percent since 2001. That's what happened there.

Did that change the government's behaviour? No. They're carrying on business as usual. This year, how much has the government put in advertising? Almost $30 million. You might think that's a drop in the bucket. But for many British Columbians that's a significant sum that could actually support community events, community programs and many more.

I see that my colleague wants to make an introduction, so I'm going to yield the floor to him for a minute.

M. Farnworth: I seek leave to make an introduction.

Leave granted.

Introductions by Members

M. Farnworth: I'm glad I got this opportunity to make an introduction because it will give my colleague a chance to have a drink of water.

Anyway, I know in the gallery today there are a number of students from schools in my riding. I know that they're looking and watching our deliberations here in this chamber, they're touring the gallery, they're seeing the wonderful architecture and they're learning about the importance of this magnificent building.

I hope that those students who are visiting here truly appreciate what a terrific place this is and how this is the heart and seat of our democracy in this province and is an important part for when they are eligible to vote. Some day some of them will be sitting in this place. I would ask the members of this House to make those students who are visiting here today most welcome.

[1540]

Debate Continued

J. Kwan: Thank you to my colleague.

So the behaviour of the government continues. Advertising continues to be spent by the government — unnecessary spending, I might add. Perhaps the government, if they were prudent with taxpayers' money, would have cut the advertising budget, if they were prudent with taxpayers' money, but they didn't do that. In fact, they rush out the door to spend as much money as they can to promote the gas tax that the government brought forward.
[ Page 13708 ]

As if that's not enough, the government went in the dead of summer — hopefully when nobody was paying attention, I guess — and actually increased the wages for the top bureaucrats to the tune of some 43 percent, to a whopping $348,000. That's not a small sum, but the government saw fit to do that and thought that was appropriate. This was, of course, after a promise that they wouldn't increase the top bureaucrats' wages, when they already made such an increase a few years ago.

But on the eve of doing that, what did the Premier do? He sent out a press release — I believe it was a Friday just before a long weekend — and then hopped on a private jet and went to Beijing for the Beijing Olympics opening. How about that for accountability and transparency? That's how the government is managing your tax dollars.

We talked about Olympic cost overruns. The government continues to insist that somehow the Olympic cost is only $600 million when auditors and others are looking at the figures, and they're saying: "Huh. It's kind of more like $6 billion — several zeros missing on that $600 million." Then the government says: "Oh well. No, no, no. That's not the case."

So while the budget for Olympic cost overruns continues to rise…. To this day the Minister of Finance, the Minister Responsible for the Olympics, still won't come clean to tell British Columbians how much we're going to be on the hook for the security cost overruns. The feds say that they never committed to the $175 million that the government claims are the Olympic security costs. It's likely more like a billion dollars and counting.

In the meantime, what's the Premier doing? He goes and announces the retractable roof. Well, that's an important project, isn't it? If my memory serves me correctly, $364 million of taxpayers' money on a retractable roof. Well, that's an important project, eh? It's just unbelievable on the management of taxpayers' money.

In the meantime, what are we faced with? We're faced with — yeah — legal aid cuts, as if the cuts made by this government are not deep enough in legal aid, as if when they cut close to some 40 percent of legal aid services in British Columbia by way of funding, that wasn't enough.

We're now anticipating yet another cut. The recent cuts to legal aid will mean, frankly, more delays in the court process, in child protection cases. Ultimately it will take longer for families to be reunited, leaving children to linger in foster care instead.

The announcement that the Family Law Clinic at the Legal Services Society will close as of March 31, 2009…. That's this year. That's going to happen. It's going to happen in about two months' time. This is a horrible, horrible blow to low-income women who need these services.

Staff lawyers at the Family Law Clinic work on complex cases, and they take on cases that the private bar would oftentimes not touch. In particular, working with people that have mental health issues or learning disabilities is also another challenge that legal aid services provides. With this loss, it is going to be even more devastating than it already is with the loss in people accessing representation in the judicial system.

[1545]

What else is happening? In the Ministry of Children and Family Development, B.C.'s child protection legislation requires that removal of children from their families happens as a last resort. A major finding in the Broken Promises report, a fairly recent report, was that the resources are not available for families who are in need.

It is critical that we create family-based housing that is integrated with counselling, child development services, vocational training, mental health services, medical care and family support and reunification services. This, of course, will reduce the number of children who are moved into foster care and dramatically improve the health and development of children.

Is the government doing that? Instead of doing that, they are initiating retractable roof projects while the wait-lists for people with disabilities grow. Mr. Speaker, you would know this, because we travelled on the Finance Committee together. We heard from parents all across the province, urging the government to reduce the wait-lists for children with disabilities who are in great need so that one could identify what the problems are and provide assistance so that they have the best opportunity for success in life.

That happened not just the last couple of years. It happened year after year after year. I've been on that Finance Committee for so long. I can't even remember how long it was. We heard consistently from people urging the government to act. We even agreed when we were on that committee to actually bring forward that recommendation to government to act. And what happened? It never made it into budget dollars. That's what happened.

I'm not on the Finance Committee anymore, frankly, because I got, well, very sad at the fact that we go and invite people to come and travel to these committee meetings to express their views, to offer their thoughts — all of which, the majority of which, just fall on deaf ears for the government. When it came to budget day, it never made it into the budgets. That was frankly sad.

Other issues in the MCFD files — they continue in terms of housing needs for people, women who are pregnant or with young children and don't have adequate housing, who are at risk of losing their children. If they don't have adequate housing, how are they supposed to ensure that they bring their baby into a world that would not compromise their well-being? Yet the government doesn't see fit to provide them with the housing supports that they need.

I can go on about the homelessness rate that's proliferated under this government's watch — 10,000 to 15,000 people who are homeless today in the streets of British Columbia. In the Lower Mainland alone, homelessness
[ Page 13709 ]
has more than doubled. Yes, the government wants to crow about how great they're doing in this homelessness crisis. They say that they bought some hotels, and they're doing everything they can.

Let us be clear. The homelessness crisis happened right under this government's watch, and they did nothing. In fact, what they did when they first came into government was cancel the permanent housing program in British Columbia and eliminate 1,700 units of affordable housing that were funded and slated and ready to roll.

Now what is the government doing in 2009? They've gone around announcing those very projects that were cancelled back in 2002. Why do I know this? Because I actually happen to have that list of cancelled projects from the government. I can go on about that, but I won't.

I want to say this, though, on the homelessness crisis. It's not just in the Lower Mainland. I recently got a letter from someone from Nanaimo, who raised the issue around homelessness. I got another letter from someone from Burns Lake who's raising the issue around homelessness. They say that the only thing they have to keep warm for the homeless is survival gear. They don't even have a shelter.

That's what's happening across the province of British Columbia. We can go into the education crisis too, about what's happening there, but I see that the debate has to come to an end. I hope the government takes stock as they go and spend the money of British Columbians, that they actually pay attention to what's happening in and around the province.

[1550]

D. Hayer: As I listened to the member for Vancouver–Mount Pleasant, it seemed to be a totally different story than when we listened to our member for West Vancouver–Capilano, who told the truth and was giving a good story of what the reality was in the 1990s and now.

As we sat on the Finance Committee before this…. We have sat through many arguments from the opposition on the Finance Committee and also in this House for the last almost eight years.

It is my privilege today to speak to Bill 48, which is very important especially at this extraordinary time. There are especially extraordinary circumstances outside, when there is so much economic turmoil around the world and when we see an unprecedented amount of financial crisis in the United States and around the world. The world economy is changing every day. It definitely has changed since we sat on the Finance Committee starting in September, October, November, and we have seen huge changes.

I don't want to repeat what my other colleagues have said or what the member for Vancouver–Mount Pleasant has said, saying how wrong she is on the information and how the facts are twisted. Our government has made a difference. Remember in 2001, before we were elected, most British Columbians, when they wanted a job, had to go to Alberta, Ontario or the United States.

Then our government came in. We found a structural deficit, the worst economy left by the NDP, the worst unemployment rate under the NDP, and we had to fix it. With the help of British Columbians, with the help of our business people, with the hard-working British Columbians and our workers and unions, we were able to make a difference. We were able to make sure the worst economy of British Columbia was once again the best economy.

Mr. Speaker, you remember in 1991 when the NDP got elected. They got the best economy, the lowest unemployment rate. By the time they left office, they had destroyed this province to the worst point, to number ten in Canada. The unemployment rate was one of the highest. Our economic growth was the worst in Canada. We were dead last in the private sector job creation programs. Private sector investment was an abysmal 16.8 percent — the tenth in Canada.

B.C. suffered the highest unemployment rate in western Canada every year between 1991 and 2000. Real disposable income dropped every year between '91 and '96. It left B.C. with a $3.8 billion structural deficit in 2001. The unemployment rate was one of the worst. In 1991 taxpayer-supported debt to GDP was 12.4 percent, but in 2000, by the time the NDP left, it was up to 21.8 percent — from 12.4 percent when they came into office to 21.8 percent when they left. The marginal tax rate was the highest in North America.

You know what? People were looking forward to changing the government. This is why they left them with two seats. Then five years went, and people forgot about how bad things were. They elected a few more. On another hand, when you take a look at what they promised, they promised the Port Mann Bridge to Surrey residents. You know what they did, Mr. Speaker? Nothing.

They didn't like the people south of the Fraser, so all the improvement was done north of the Fraser. Nothing much was done in Surrey. You know what our government is doing? We're putting ten lanes on the Port Mann Bridge. You know what the opposition is doing? Their leader says it's the wrong bridge, wrong plan, and she doesn't like it at all. The MLAs from the NDP in Surrey — do you know what they say? Our leader doesn't understand.

Finally, when we had a crisis at the Pattullo Bridge, which the NDP transferred to TransLink in '99 without any money…. It had some problems, but then the people realized that this was really bad. They told all the NDP MLAs from Surrey: "We will not elect any one of you."

[1555]

They talked to the leader. Now she says that since the election is coming, she might support the Port Mann Bridge. After the election, they will probably go back to saying that they're against the twinning of the Port
[ Page 13710 ]
Mann Bridge. You know, our government, for the first time, is…. We're going to put ten lanes on there. We're going to have ten lanes. As a matter of fact, we're going to put the buses there.

Interjections.

Deputy Speaker: Members. Members, please direct all your comments through the Chair. And would all other members please allow the person who has the floor….

D. Hayer: We're going to make sure that we have the buses running. Last time the buses ran on the Port Mann Bridge was back in 1987-1988. Once it gets to ten lanes, it will have buses on it. It was designed for a light rail system. It will have bicycles going on there. It will have two lanes going to Coquitlam, two to Surrey and another three to Vancouver. We're going to expand the lanes to the east of the Port Mann Bridge, and we're going to expand the lanes to the west of Port Mann Bridge.

Also, with our plans, because of the way we have dealt with the economy, with the help of British Columbians, our unions and our business people, we're want to make sure that we actually have expansion of Surrey Memorial emergency. You know, we're putting a tower in there. Many people say that should have been done 20 years ago. When the last government was here, they made some minor changes, not major changes.

We also have a new hospital coming in on Fraser Highway and 140th Street. Actually, it's under construction. They just poured the concrete the other day, and they're really happy about it. When I talk to the doctors and talk to the nurses, the other health care workers, they say: "Thank you very much for doing it." They say there are some MLAs that will always criticize health care workers and hospitals.

I tried to say thank you to the health care workers, and I tried to say thank you to the doctors and nurses who work hard. I tried to say thank you to British Columbians who helped our economy progress and made sure we have funding available that's going to create more than 8,000 jobs by twinning and widening Highway 1 and ten-laning the Port Mann Bridge.

Also, when we took a look at the South Fraser perimeter road…. When I was on the Surrey Board of Trade — I was the president there — the NDP had said they were going to make sure that we have a South Fraser perimeter road. You know what? Nothing was done. We have actually started working on making sure we have a South Fraser perimeter road. The South Fraser perimeter road is going to be really good for the truckers. It's good for my constituents; it's good for the workers.

When you take a look at the new tower that we're putting in the Surrey Memorial Hospital, that is great news. I know that when there's a ribbon cutting, our colleagues from the NDP from Surrey are always in the front and say: "We want to be standing in there for the great news stories."

Even talk about the Olympics, you know. This morning there were many students here who were singing "O Canada" to celebrate the 365-day countdown, and there were many NDP MLAs there. They wanted a picture with them. I know their leader doesn't support it, but I can tell you that British Columbians are saying that this is probably the best time to have the Olympics here, because it's going to help our economy.

When you look at 2010, the only economic growth expected in Canada is in British Columbia. They say it's because the Olympics are going to create billions of dollars' worth of investment in the long term. There are going to be billions of people watching the Olympics from all around the world, and they're making sure they come here later on to visit, to invest and also to move here as immigrants. That is great news for us.

Mr. Speaker, I know we're running out of time, and I know we don't have too much time. I think my colleague from the opposition wants to take his place to say his version of events. I know he's going to disagree with us. I know he's going to say a lot of negative things.

But they also know that at end of the day, every single member sitting on the other side is going to vote for the bill. I mean, it's sad. Why don't they say some positive things too, and then they can vote for it. On the other hand, I think I will have more to say later on.

I support this bill. It is a very important bill. It is to make sure British Columbia's economy stays strong. It is to make sure people have money to make their payments, to buy food. It is to make sure we create more jobs in construction and development. It is to make sure British Columbia stays the best place on earth, and it's to make sure the British Columbia economy stays the best in Canada — not like the 1990s, when it was the worst in Canada.

Mr. Speaker, I support this bill. I will give the floor to our colleague from the opposition.

[1600]

M. Farnworth: It's my pleasure to take my place in debate and follow the member for Surrey-Tynehead. I'm shocked, though. I am shocked that he would think that I would get up and that I'm going to be negative. I'm really disappointed in him. I was going to start off and say something really nice and positive. I enjoyed listening to his comments, and I know that he is one of the Premier's favourite MLAs.

He is one of the Premier's absolute favourite MLAs. Why is that? Because he's the type of MLA that a Premier likes. You give him the message box, he goes out and says it, he doesn't question, he doesn't talk back, he doesn't argue, and he goes and does his job as a loyal backbench government member. It's a really good thing for a Premier to know that he's got someone who will
[ Page 13711 ]
drink the Kool-Aid, no questions asked, and go forward and carry the message.

But I must admit I was puzzled by a couple of comments that he made. They are not negative. They are offered in a spirit of positive and constructive critique. He says he likes to thank the health care workers. He says that we're down on health care workers. He thanks the health care workers and thanks the doctors. I just wondered: did he send them thank-you cards after he voted, along with his colleagues, to tear up their contract? Did he show his concern and thank them at that particular point in time? Just a question. I just raise that as a question.

We're here today debating Bill 48, which will amend the balanced-budget legislation, and we have heard an awful lot from the government benches. It positively gives a new meaning to the definition of revisionist. I mean, I have heard some of the most revisionist statements I have possibly heard in my entire time as an MLA.

An Hon. Member: Have you listened to your colleagues?

M. Farnworth: I have listened to you, hon. Member.

I was astounded to hear the member for Okanagan-Westside saying: "And the opposition doesn't support savings credit unions protecting your saving deposit, increasing it. They don't support…." And I'm going: "Wait a sec. Wait a second here." Where was he? Of course we supported it. Absolutely, we supported it, and we supported all those other measures.

Unfortunately, he got it wrong, as did so many other members on that side. They get caught up in something. It has been a problem for this government that they've been struggling with. I used to think it was just confined to the leader, that arrogance and out of touch. It is an ideological arrogance that that side of the House keeps getting trapped by. They think they know everything, they think they have all the answers, and they think that nobody else has a good answer and that no one on this side of the House has a valid point or idea. It's an intellectual arrogance, which is why we're here today.

Before I get into that intellectual arrogance, I just want to briefly point out to them…. I've done it before, but gosh darn it, I feel I've got to remind them of something, and that is our role here. As opposition, our job is to critique, to prod, to poke, to question.

D. Chudnovsky: They just don't get it.

[1605]

M. Farnworth: And as my colleague from Vancouver-Kensington says, they just don't get it. And they don't. The opposition's job is to vote against the budget. That is because it is a confidence motion. It's a confidence motion, and the opposition does not have confidence in the government.

Hon. G. Abbott: That seems oddly harsh.

M. Farnworth: My colleague from Shuswap says: "That seems oddly harsh." Well, we learned it from him and his colleagues when they were on this side of the House, and they learned it from us, and we learned it from the government previous. It's the basis of our Westminster parliamentary system of governments that oppositions vote against government budgets on a confidence motion. That is a principle of our democracy, and it happens all the time in British Columbia and every other province in this country and every other Commonwealth jurisdiction around the globe.

Yet they peddle this absolute falsehood, load of nonsense. "Oh, you're against funding for health care. You're against increased funding for schools. You're against increased funding for seismic…. You're against this; you're against that." I defy them to find one line item vote on any budget where we have voted against school funding, policing costs — you name it. There isn't one. There isn't one because it doesn't happen.

[Mr. Speaker in the chair.]

Yet the government likes to peddle a line of absolute nonsense, total tripe, that the opposition is against the spending in areas of health care, education, public safety — you name it. They peddle a line. It misleads the public, and unfortunately, it doesn't do them any credit in terms of giving an indication that they really understand what the role of this legislative chamber is all about.

Now, getting back to what I talked about in terms of ideological arrogance. We have balanced-budget legislation. They amended it. It recognized that there would be times like this…

J. Horgan: Mama told me there'd be days like these.

M. Farnworth: …and, as my colleague for Malahat–Juan de Fuca said, days like these. Unfortunately, the days like these are turning into months and — who knows? — potentially years, because no one can tell you where the current economic crisis is going or when it will end, unless you happen to be a government member on that side of the House.

Back before they became government, the Premier and others stood up — no deficits, never deficits. "We will never have a deficit. The days of deficits in British Columbia are over. They will not happen under the Liberals, because it is the Liberals who are responsible for economic good times. It's the work of the government that's responsible for economic good times. Elect us, and all will be well. We will turn things right, we will
[ Page 13712 ]
do everything that you want, and we will make it good." It's all because of their actions.

Interjection.

M. Farnworth: She says it's true. The Minister of Education says it's true. If everything is good because of them, then the real question people are asking is: "Well, if you're so good, then why are things so bad right now? Why are things going down the tube right now?"

Interjections.

M. Farnworth: Curiouser and curiouser, as my learned colleague for Malahat–Juan de Fuca says.

Guess what. It's because this government believes its own bathwater. They believe their own bathwater. They refuse to acknowledge that when the economy is doing well, it's because of a worldwide boom in commodity prices and low interest rates.

That's what has carried British Columbia and every other province in this country, and most of the jurisdictions around the western industrialized world and much of the developing world. It's a worldwide commodities boom. That's what did it. That's what generated the economic development. That's what has contributed to the provincial coffers.

[1610]

Yet somehow they felt that it was just themselves. At least, that's what they tell the public. Then, as we all know, when things do go through a downturn — when commodity prices slump, when forest prices drop, when events south of the border cause the U.S. economy to go into a tailspin — guess what — we're impacted. All of a sudden it's like: "Oh, it's because of events in other jurisdictions that it's now impacting on British Columbia."

They want to take credit. You know what? Governments do this, and so I'm not being critical in the sense of blaming one government or another.

Hon. G. Abbott: I sense a critical tone.

M. Farnworth: That's why you're Minister of Health. Nothing gets by you.

Governments are very good at claiming credit, but as we all know, when things go bad, they're the quickest in the world to blame world economic conditions and economic circumstances beyond their control and that it's not their fault.

Well, had they had the common sense to understand that in the beginning — that there are times like that — we wouldn't be here today. We would not be here today debating whether or not to amend the balanced-budget legislation.

Interjection.

M. Farnworth: The member for Langley says it doesn't make any sense. Well, actually, Member, it does, because if you allowed for this in the beginning — to recognize that the economy goes through ups and downs and cycles and swings — that would have been anticipated in legislation. There would have been a provision for it in the legislation.

Instead, there's ideological arrogance, which says: "There will never be a deficit under the B.C. Liberals, because we know better than anybody else that there will never be a deficit. The days of deficit financing are over in British Columbia." That ideological arrogance is what caused you to bring in the legislation, but made it impossible in the first place — okay? So it is that ideological arrogance.

While for the rest of the world, warning signs were going on. We were getting comments from ministers, and my favourite has got to be from one of my other favourite members in this House, the member for Kamloops–North Thompson.

Interjections.

M. Farnworth: No, no, he is. Because, I might add, the imagery…. The quote. I'll paraphrase it so that he is not offended.

Interjections.

M. Farnworth: Ah, yes, yes. Okay, my colleagues do not want me to paraphrase; therefore, I shall not paraphrase. "We are weathering a tremendous world economic storm in a ship that is riding fairly smoothly on troubled seas." All I could think of when I heard that…. All I can think of….

Interjection.

M. Farnworth: No, no, not quite that, hon. Member.

Interjections.

[1615]

M. Farnworth: No, no, just wait, please.

All I could think of when I heard that quote and read that quote is that he must have said that, sitting in a bathtub and making waves with a little rubber boat bouncing about, because no one who had a true understanding of how B.C.'s economy works, how the Canadian economy works and how the global economy works would have made such a statement.

But it's not just the member for Kamloops–North Thompson. It was the Premier and the Finance Minister who, as late as November and even in December, were going on: "We will table four years of deficit-free budgets in this province — four years of deficit-free budgets." This raises a question.
[ Page 13713 ]

One of the key things in this piece of legislation and, I think, one of the key points I want to make before my colleague the Minister of Finance wraps up debate in this House is that they couldn't…. In November they were saying: "We will table four years of deficit-free budgets." I mean, they were still adamant about this fiscal year — that it will have a surplus. A smaller one, but a surplus. They knew that things were going downhill. They'd been readjusting the surplus down, down, down and still maintaining that it was going to be a surplus budget. Hey, fine.

But then, in the face of all the evidence that's coming into British Columbia through the Ministry of Finance, in the face of all the evidence of everything that's happening south of the border, they are unbelievably arrogantly going on about how there will be, for the next four years, deficit-free budgets.

An Hon. Member: Message box.

M. Farnworth: No, no. Actually, yeah, if it was the message box, it would be "arrogant and out of touch." I didn't do the "out-of-touch" part.

My point is that they didn't see that coming, or if they knew, they didn't tell the public. So when the legislation is tabled, they are definitive that we will only be in a deficit position for two years.

My question: if they were not clairvoyant enough to see what was happening in November…? I understand that things move quickly, and I'm sure the Minister of Finance may in fact point that out. I will accept those words from him. I would even be prepared to accept those words from him.

I am really interested in how this government can be so clairvoyant that they can say with certainty that we will be back in a surplus in two years' time, when nowhere else in the industrialized world are they able to say that — no other province in Canada, not the federal government, not in the United States, nowhere. How can they guarantee? How on earth can they guarantee? They cannot.

That, again, comes back to one of their problems as a government. They refuse to acknowledge that — you know what? — they can't peer that far into the future and give a concrete answer.

In the same way, in December they said: "Four years of deficit-free budgets are what we are going to be doing. That's our plan." They've had to adjust it. They've had to come in and make this change, because it wasn't realistic to do. And now they're standing before us saying that we will have only two years of deficits.

I hope we don't have two years of deficits. It would be nice if these financial circumstances that we're in — and that the rest of Canada, the States and the rest of the world are in — were to end as quickly as possible, but we can't say that. We can't predict that.

[1620]

I'd love to see a balanced budget next year and the year after and the year after. I'd love that, but when we don't, I think the government really needs to be able to answer that question. How can they be so sure? And can they guarantee British Columbians that in two years' time it'll be a surplus budget and that they are, at the same time, still protecting health care, education and all those other services that the public rely on?

With that, I see that we're almost at the time. I know the Minister of Finance wants a few minutes, and I will be happy to yield the floor to him and to hear what he has to say.

Seriously, the real question is that I don't know how they can promise that there will not be a deficit in two years' time. So with that, I will take my seat.

Mr. Speaker: Seeing no further speakers, the Minister of Finance closes debate.

Hon. C. Hansen: It's been an interesting couple of debates in the chamber, and I think there has been lots of rhetoric that has been thrown around in the course of this debate as we have tried to listen earnestly to some of the contributions by members of the opposition. It was sometimes difficult to cut between the rhetoric and actually find substance, but I guess that is sometimes in the nature of debate in this particular chamber.

There has been a lot of discussion around operating debt and structural deficits. I think one member said that somehow the term "operating debt" was a term that we invented.

Actually, I can tell you who invented most of the operating debt that the province has been faced with over the last number of years, and that's the administration that was in office from 1991 to 2001. During that period of time, we actually saw the operating debt of the province of British Columbia climb by billions of dollars so that, as a result of those ten years of that administration, we saw the operating debt of the province double.

Now, operating debt — just to make sure that everyone is clear on the concept — is the debt that is really incurred by buying your groceries with your credit card. It's basically paying for the day-to-day operations of government on the backs of future generations. It is debt that is driven up by year after year after year of deficits.

There are two ways that you can get into deficit. One is by ramping up spending when you can't afford it, building new programs when you don't have the revenues to cover it. There's another way to get into deficit, and that's when you see the kind of unprecedented world economic environment, which the Opposition House Leader was referring to in his remarks, that saw such a huge and precipitous decline in revenue to the province, unlike anything that had ever been seen in British Columbia in the past.

In fact, from what we had been forecasting as of September 12, on the date that I tabled the first quarterly
[ Page 13714 ]
report and our three-year economic outlook, from that day until where we are at today getting ready to table next week's budget, we saw well over $6 billion of projected revenue evaporate from the three-year spending plan of government. That was what we had to deal with, basically, on a week-to-week basis.

Throughout the fall, as we saw some of these projected revenues disappear, we kept tailoring our plan. We kept tightening our belt, basically saying, "Let's find the savings within government where they can be managed, where we're not going to actually have to go in and cut back on health care, education or vital social programs," but to say, "Let's find the other areas of discretionary spending, ministry by ministry" — things like travel budgets, things like advertising budgets, things like discretionary grants that go out for ministries.

We went through, and we found every penny that we felt that we could not spend in the years to come. So we tightened our belt, and I can remember the briefings that I would have from Finance officials where we kept getting increasingly bad news in terms of what the impact was having on our revenue projections. But I can tell all of the members of this House that, until three weeks ago, I was still confident that we would be able to table a balanced budget.

[1625]

When we continued to see revenues decline, the realization came that we were on the last notch on the belt, that the belt-tightening…. We had done as much as we could possibly do. In order for us to table a balanced budget, it would require that we not just cut the fat, but that we actually cut right into the bone. That would have meant us reducing significantly necessary spending in health care, in education and in those vital social programs that I think we all feel the necessity to protect as we go forward.

But we're going into this time, actually, with a pretty solid financial economic base in British Columbia, a good base to our economy and a good base to the fiscal management of the province's expenditures.

When we formed government in 2001, we inherited the results of year after year of deficit spending. We inherited a structural deficit that was hard-wired into the spending, because you can't just ramp up long-term programs and only pay for them for a year.

We saw some examples of that, actually, in the previous administration when they rolled out a plan for universal child care and then had nothing to fund it. You can't ramp up those programs and then not have them become part of a structural deficit going forward.

What we've actually heard from the opposition over the last number of months is the building of the next structural deficit, if they were ever to have the opportunity to implement those plans.

When I hear the opposition Health critic say that he would like to add $2 billion a year to the Health budget in British Columbia, I ask myself: "How can the province afford those kind of expenditures, given the revenues that we know we can count on, without putting the province back into structural deficit?"

When I hear the Leader of the Opposition say that she's going to eliminate an $880 million a year revenue stream, I ask myself: "How can you possibly do that without putting the province back into structural deficit?" It's that structural deficit that winds up being paid for by our children and grandchildren going forward.

So the approach that we have taken, I believe, is a very responsible one, and one that deals with the very unusual world economic climate that we find ourselves in today. It allows for a deficit, but only for two years, and one that is manageable and also drives to a third year of a balanced budget going forward.

Earlier I made the comment that B.C. has a strong financial base and a strong fiscal management environment in which to do this. It's also true, as I think is recognized by economists and commentators from around the world, that Canada is the country…. There's actually a great article in Newsweek magazine this week that I'd recommend to all members of the House. There's a great article in Newsweek Canada that recognizes that Canada is the strongest country in the world right now when it comes to managing through this financial crisis.

We also recognize, and it is acknowledged by economists and commentators and financial and economic leaders, that British Columbia is probably best positioned than just about any jurisdiction in North America when it comes to weathering through this challenge.

We're going to feel it. We are already feeling it. We are seeing layoffs around the province. But when you consider that we have a triple-A credit rating that we earned for this province, when you look at the almost 380,000 net new jobs that have been created since 2001, when you look at the ability that we've had as a government to get our financial house in order over these last number of years, that is the underpinnings of a strong economy and a strong base from which we can weather through this.

There's one aspect to the debate on second reading that I find quite curious, and that is the argument coming from members of the opposition when they say: "Well, there was balanced-budget legislation in year 2000 that would have allowed for government to run a deficit in certain circumstances."

I find that very curious, because when we came to the realization that we were going to have to amend this legislation to allow for a deficit budget to be tabled, there were those who suggested that we should build in a provision which says that if we were ever in a similar circumstance — which I hope as a province we never are — of just this dramatic economic turmoil from outside our borders, there would be a trigger mechanism that would say that a deficit could be allowed.

[1630]
[ Page 13715 ]

I can tell you I disagreed with that, and I'll tell you why I disagreed with it. If a province winds up in the kind of very unusual economic circumstances that we find ourselves in today, these circumstances that have never been seen before, I believe, as a member of this legislative chamber, that it is incumbent upon a Finance Minister to come into this House, to meet the House, to engage in the debate and to allow for the permission of this House to engage in a temporary deficit.

I can tell you that I categorically reject what has been suggested by the opposition — that somehow the big loopholes that were in the 2000 legislation for a balanced budget were acceptable. They were not acceptable, because I believe that today — and if it were ever to happen in the future that a deficit may be required — it is incumbent upon a Finance Minister to meet this House and to formally ask for the permission of this House to table a deficit budget for the time that is necessary.

One element of this legislation that I am also very proud of is that we as a government are saying to the people of British Columbia…. We're saying to the future generations of British Columbians that we will not build a structural deficit and that we will, by law, have to get back to a balanced budget in three years. And we will have to dedicate any future cash surpluses in the consolidated revenue fund to paying down the operating debt that has been driven up by previous governments.

Bill 48 is a piece of legislation that I never thought we would, as a government, ever have to bring into this chamber. I, as a Finance Minister and as a member of government since 2001, never thought that I would ever have to see this government bring in this legislation. But the world has changed in a very rapid and a very profound way, and Bill 48 speaks to the realities. It speaks to the world economic turmoil from which we are not immune.

But it also, I think, takes a responsible approach to saying we're going to get through this. British Columbia is going to come out stronger at the end of this economic downturn, and Bill 48 ensures that we can do that in the quickest manner and that we will eliminate that operating debt at the earliest possible opportunity.

With that, I move second reading of Bill 48.

[1635]

Second reading of Bill 48 approved unanimously on a division. [See Votes and Proceedings.]

Hon. C. Hansen: By agreement, I move that Bill 48 be referred to Committee of the Whole House to be considered forthwith.

Bill 48, Finance Statutes (Deficit Authorization and Debt Elimination) Amendment Act, 2009, read a second time and referred to a Committee of the Whole House for consideration forthwith.

[1640]

Committee of the Whole House

Finance Statutes (Deficit
Authorization and Debt Elimination)
Amendment Act, 2009

The House in Committee of the Whole (Section B) on Bill 48; H. Bloy in the chair.

The committee met at 4:41 p.m.

On section 1.

B. Ralston: Looking at section 1 that's proposed — the amendment to the Balanced Budget and Ministerial Accountability Act — the prohibition against projecting a deficit would not apply for two fiscal years, 2009-2010 and 2010-2011. Obviously, there was some thought, one would expect, that had gone into choosing two years rather than three, rather than four or rather than one.

Can the minister explain why he has chosen to advance an amendment that prohibits deficits for two years?

Hon. C. Hansen: The revenue projections that the Ministry of Finance develops as part of the budget process are based on a variety of independent sources. We will take, for example, the forecasts provided to us by the 12 members of our Economic Forecast Council, who are 12 of the leading economists from across Canada. We will look at various indicators, including U.S. housing starts and a projected Canada-U.S. exchange rate. We will look at anticipated employment levels. We will look at gross domestic product increases. We'll look at nominal GDP, which is actually even a more important driver.

On things like natural gas pricing, we will look at private sector forecasts. These are numbers that…. Basically natural gas contracts are being traded and written on the basis of these private sector forecasts as to what natural gas will be selling for, not just next year but the year after and the year after that. When we start looking…. When we plug all of these numbers into the model, it will generate what we can anticipate in terms of revenues in the years to come.

So it is based on those projections, which you will see when the budget is tabled on Tuesday, that we are confident that we will have sufficient revenues and be able to sufficiently manage our expenditure side in order to get back to a balanced budget in the third year.

B. Ralston: Well, the minister mentions various projections, and he refers to the quarterly report which the opposition has requested be made public, or at least a summary of it be made public, in order to assist the opposition and the public in this debate. The minister in his response is clearly referring to that document.
[ Page 13716 ]

Does the minister not feel any obligation to disclose, even in a summary fashion, those projections? The minister has made, I think, much, in the media — and perhaps understandably — of the volatility of those numbers and just how much they've changed. A much-referenced change of $300 million in projected government revenue was mentioned by the Premier, by the member for Kamloops, by various Liberal members — clearly part of the Liberal talking point.

So it seems, at the very least, odd or unfair that there's a debate taking place on this important matter when the minister is basing the very premise of the legislation on information that he has on his desk and is not prepared to share publicly. Can the minister explain why he thinks that's justified and how that assists the public in understanding the legislation that the minister is putting forward?

Hon. C. Hansen: Actually, what the member, I think, would be aware of is that that third quarterly report is an integral part of the budget documents that are tabled on budget day. So the requirement that is in the Budget Transparency and Accountability Act actually requires that the budget be tabled on the third Tuesday of February each year.

[1645]

It also makes provision in there that the third quarterly report must be tabled not later than the end of February of each fiscal year, and there is also a section in the Budget Transparency Act that says that the government may — and the word is "may" — table the third quarterly report on the third Tuesday of February in conjunction with the budget documents.

What has been the practice over the last seven or eight years is that that third quarterly report is actually an integral part. It actually forms part 4 of the budget document. So it would be very difficult to extricate that one section and try to make that public at a time other than budget day.

I think it's something that a government in the future may choose to do, but they would have to make that choice much sooner than a week before budget. The whole process of getting it ready for printing and having it tabled on budget day is already well in progress and well ensconced.

What the member will see in terms of the third quarterly report is that many of the numbers that are contained in the report are actually directly linked to members' numbers in the budget. So it would be a very complex process to extricate and have the third quarterly report tabled on a day prior to the budget itself.

B. Ralston: Well, that very well may be so in an ordinary year, but as the minister has stressed in his comments both introducing the bill and closing the bill, these are extraordinary events. This bill is something that's before the House that, according to Liberal Party orthodoxy, was never intended to be here. It's only these very changed economic circumstances that have necessitated this kind of bill being brought before the House.

So even in those very unusual circumstances, the minister is saying that he's not prepared to summarize the changes in government revenue, of the projections, either to the end of fiscal or to provide more detail about what he said took place in January? Because that wouldn't be included in the third quarterly report. That would be included in the summary of public accounts, which won't be published until after the election day. That would be at the end of June.

Surely, as part of the budget transparency and the background to the debate on this particular bill, the minister should be prepared to reconsider his position. I can appreciate, perhaps, not releasing the full report. But at least giving us a summary here.

He has an official here — I'm sure a very well-briefed and competent person — who can give him a sense that he can provide here to the chamber of what the changes have been in the projected deficit to year-end. What is the rapidity with which revenue is declining? What is the composition of that $300 million decline in government revenue? Is that for the current fiscal year, or is that for the fiscal year to come?

These are questions that are very, very basic. I think that in order to understand the circumstances and why the minister has chosen this particular amendment of two years, rather than three or one…. In order to understand that, I think the minister has some obligation to provide that kind of detail.

Hon. C. Hansen: I think I should probably outline for the member what he can expect in the third quarterly report or what every third quarterly report includes. What the third quarterly report does is it is simply a look at the financial position of the province for the period ending December 31 of the fiscal year. So it does not project anything in terms of the coming fiscal years. It is only for the fiscal year that we're in currently.

Yes, the member is right. What the third quarterly report will reflect is that the revenues for the year we are currently in are down from what we were projecting as of the second quarterly report, which was tabled in December, and down further from what we were projecting in the first quarterly report, which was tabled on September 12.

But just to ensure that the member fully understands what will be in the third quarterly report…. When we did the first quarterly report, we also tabled on that same day the economic outlook, which is done on a biannual basis. The economic outlook actually looks forward three years.

[1650]

So it looks at projected revenues not only for the fiscal year that we're currently in but for the further two
[ Page 13717 ]
fiscal years of the three-year fiscal plan. That only happens twice a year. That is at budget day, and it is also on the tabling of the first quarterly report that we actually have that three-year outlook. With the tabling of the second quarterly report and the third quarterly report, those particular reports do not reflect anything other than the fiscal year that we are currently in.

What Bill 48 is about is the need to run a deficit for the coming fiscal year and the year after that. While I think everyone will find the third quarterly report informative, it would not be directly relevant to what is being proposed with deficits in the coming fiscal years.

B. Ralston: Well, I'm sure the minister will confirm this — that the third quarterly report will also project the surplus or deficit to the end of the fiscal year, March 31. If, as I have been led to believe or expect, there may very well be a deficit in this current fiscal year, that would be an important fact to know in terms of being able to assess why the minister is proposing this two-year amendment as opposed to three years or four years or one year.

Once again, is the minister prepared to give an indication, to tell the public and the Legislature, whether the projected deficit for this fiscal year is indeed a deficit? Or is it a balanced budget? Or is it a surplus? Given what the minister has said, given what commentators have said and the rapid decline in projected government revenue, it seems likely that this year, the projected year-end, will lead to a deficit in this fiscal year, never mind what we're talking about in the fiscal year to come.

Is the minister prepared to comment on that, or does budget secrecy forbid him from giving an indication on that? It would be helpful to the debate here, I think.

Hon. C. Hansen: We are not projecting that this fiscal year will end in a deficit.

B. Ralston: The concomitant question is: is the government projecting a surplus of government revenue to March 31?

Hon. C. Hansen: All of this is part of the budget documents that will be tabled on Tuesday, and I think it will be there for everyone to see. But I stand by my earlier comment that we are not projecting a deficit for the fiscal year we are currently in.

B. Ralston: So the minister, other than citing a variety of…. There's a bit of a laundry list that he's given of sources. Can the minister say, for example, why — given that the federal government is projecting a need to run a deficit budget for some much further time than two years — he is projecting the need to run a deficit for only two years?

I heard the minister concluding a news conference just the other day where he said that he wasn't willing to predict that further deficits beyond…. If I heard him correctly, and he may want to correct this, I heard him say that he wasn't predicting that there might not be a necessity to run a further deficit, assuming that the government is re-elected and the financial circumstances of the province continue in this same direction.

So is he ruling out, absolutely, a deficit beyond the two years that are contained in this legislative amendment, or is he leaving open that possibility, with the prospect of, were the government to be re-elected, coming back to the Legislature and asking for yet another amendment, if it were necessary?

Hon. C. Hansen: I think the member knows that we are living in a very turbulent economic time in the world. As we go through some of this changing economic environment and start to realize over the past year that British Columbia was not going to be immune…. Even though we were not part of any of the things that precipitated this economic turmoil internationally, we are certainly feeling the effects of it.

[1655]

But as we develop our plans, we rely…. I see mentioned the list of revenue projections that we rely on. We look to the best expertise that we can identify. I would challenge the member that if he thinks there's someone in the provincial, national or international community that can provide us better economic projections than the ones we're getting, then I would love to consider that, quite frankly.

I think that we are getting the best economic advice from our Economic Forecast Council and from the other sources of input that we get. It is based on that expert advice that we are putting forward our fiscal plan for the next three years.

You know, I don't think anybody has a crystal ball that could…. Nobody, I think, even six months ago could have predicted even remotely close to the kind of economic turmoil that the world has gone through in just six months.

Given the expert advice that we have received from a variety of sources, we are confident that the fiscal plan that I will be tabling on Tuesday is solid. It does project deficits for year 1 and year 2, and it also projects that we will not be in deficit in year 3.

B. Ralston: I thank the minister for that response.

Well, given the variability and the unpredictability that the minister refers to and the ability of the current economic situation to confound people who claim expertise in this area, why wouldn't the minister, then, fashion a legislative amendment that encompasses the possibility that it may be necessary to run a deficit beyond the next two years?

The minister spoke very disparagingly of previous legislation and said that he thought it important for the
[ Page 13718 ]
Minister of Finance to come before the Legislature. But that act, which was debated back in the year 2000, had a provision that the Minister of Finance had to table a report and, if the Legislature wasn't sitting, convene the Legislature within 30 days and defend the report — in effect meeting the very criterion, which the minister spoke of, of the necessity to meet the House and to explain to the public why it might be necessary, why changed economic circumstances require the Minister of Finance to meet the House.

The minister seems willing to acknowledge that expert opinion has been wrong and can be wrong and might likely be wrong again in the future yet has introduced an amendment that imposes a hard-and-fast timetable on the deficit reduction. It seems that the minister's acknowledgment of that doesn't fit with the legislative amendment that's before the House here and seems to be a legislative solution that doesn't really seem too practical.

Hon. C. Hansen: I voted against the balanced-budget legislation that the previous administration proposed in the year 2000, because I was a member of the opposition at that time. Quite frankly, the reason I did was because you could drive a truck through the loopholes that were in that legislation.

You know, just to go back and look at the way that governments could manipulate the budget numbers in those days.... If you go back and look, actually, at the fudge-it budget that was tabled in 1996, which the government of the day purported to be a balanced budget through the election, an election that they very, very narrowly won….

In the context of what was on the table in the year 2000, where government had a proven track record of manipulating revenue numbers artificially — not based on private sector forecasts, not based on independent inputs, which our model is today, but based on the whim and subjectivity of a Minister of Finance of the day and a Premier of the day — to artificially inflate revenue numbers that could not be justified….

[K. Whittred in the chair.]

When you combine that kind of ability to manipulate with the legislation that the NDP government brought in, in the year 2000, they could artificially inflate revenues and then say: "Oh, woe is me, the revenue numbers are down from what we projected." Then they would actually have the legislative authority to run a deficit budget. That's the kind of loophole that I found was unacceptable then. I find it unacceptable today.

[1700]

As I said in my closing remarks on second reading, we believe, fundamentally, that if a future government was ever to be faced with the same kind of economic circumstances that we have faced over the last six months, it would be incumbent upon that government not to somehow say: "Well, give us the powers now and trust us, when in the future we will only use a deficit when it's absolutely necessary."

What we're saying is if a government of the future ever found itself in circumstances that absolutely necessitated a temporary deficit, then it would be incumbent upon that government to call the House into session, as we have done this week, and pass enabling legislation to ensure that that could be done an a temporary basis.

B. Ralston: I understand the argument. However, it doesn't accord with the facts of the balanced-budget legislation in 2000, because there was just such a provision that the minister would have to table a report explaining the circumstances, bring the Legislature together and debate it. The history that the minister recounts about that act is just not accurate.

I don't see how that's any different from this particular provision, but there are circumstances in which the government of the day might need to run a deficit in the future, and indeed, the Premier alluded to that not too long ago — not a financial one, particularly. But the Premier said, according to a report in the Globe and Mail, October 24, 2008…. The Premier "can think of one, and just one, circumstance that might persuade him to run a budget deficit: an enormous earthquake that ravages British Columbia's infrastructure and economy. 'Obviously, that's going to put us in a different situation.'"

The Minister of Community Development spoke of an economic earthquake — kind of mixing the two metaphors — that's taking place now. What the minister is saying, then, is that even in those circumstances, which the Premier has identified as one where it might be necessary to run a deficit, that couldn't be accommodated in this legislation, and the government of the day would be obliged to come back to the House and seek a further amendment to the legislation.

Is that essentially what the minister is saying?

Hon. C. Hansen: Actually, if there was a major earthquake in British Columbia that caused major damage to infrastructure, there are statutory provisions already in place that would allow government to deal with that until such time as the House were able to convene to take whatever measures may be appropriate.

B. Ralston: Well, the choice of the metaphor or the reality of the natural calamity was not mine but the Premier's. So obviously, the Minister of Finance disagrees with the Premier on that, at least insofar as it would be a circumstance in which it might be necessary to run a budget deficit. I'm not quite sure why he's prepared to disagree on that point, but we'll leave it at that.

In looking at the reasons that have been offered, can the minister then explain, beyond the briefings that he's
[ Page 13719 ]
received and can't really disclose in any detail, why the choice has been two years? Is there a political timetable to that? Because it seems to me that the justification that the minister has offered is relatively arbitrary. There doesn't seem to be any firm reason why two years is chosen as opposed to three years.

Can the minister explain whether this is really dictated by a political timetable or by some political exigency, rather than a realistic appraisal of the economic landscape of the province, of the country and of the globe?

Hon. C. Hansen: I thought I had explained that, but maybe I will rephrase it. Basically, for the coming year, when you add up our revenues and you add up our expenditures, the expenditures exceed the revenues. For the year after, when you add up our revenues and add up our expenditures, our expenditures exceed our revenue. In the third year, when you add up our revenues and add up our expenditures, it does not put us into deficit.

[1705]

The Chair: Member for Coquitlam–Burke Mountain.

M. Farnworth: Actually, that seat will be in the next parliament — Coquitlam–Burke Mountain. I am currently Port Coquitlam–Burke Mountain.

The Chair: My apologies. Member for Port Coquitlam–Burke Mountain.

M. Farnworth: And there is a huge difference between the two.

Anyway, my question to the Minister of Finance is…. I want to go back a moment, because he has made much about the expertise and the economic council when it comes to forecasting — that we have the best and that he relies on their forecasts. Yet where they started out at the beginning of the fiscal year is not where we're ending up as we are coming towards the end of the fiscal year — is it? They were not able to predict the significant drop that has taken place in economic activity, economic growth or in revenues.

Hon. C. Hansen: The member makes a very valid point. At the time of the first quarterly report where we did engage the Economic Forecast Council around the end of July and asked them to update their projections for the three years of the fiscal plan…. At that time, they, on average, were projecting that for 2009 the economic growth in British Columbia would be 1.7 percent. By the time we convened the Economic Forecast Council again in the first week of December, they, on average, were forecasting economic growth in British Columbia for 2009 at 0.6 percent.

We also, at that time, gave them the opportunity, as we do every year, that in January, before we started to lock down the budget numbers, they could update their forecast if they felt that was necessary. I believe that ten of the 12 did take that opportunity to revise their forecasts. Based on those realized numbers, what will be reflected in the budget document next week is that the — and we outlined this last week as well — Economic Forecast Council, on average, is now projecting economic growth in British Columbia for 2009 at zero.

So the member is correct. There has been a steady revising downward of those economic forecasts. But at the same time, what I stand behind is the process that we have to rely on independent, third-party sources of the best available information that we have at this time. As I say, we don't have a magic ball to forecast or to look and anticipate, "Are they right?" when they all say that in 2010 British Columbia is going to lead Canada in economic recovery. They are actually — all 12 of them — projecting some fairly significant economic growth for British Columbia in 2010.

But again, you know, they are the experts. They have the academic and professional training that is required to develop those kinds of forecasts going forward. We've certainly seen over the last six months that it is not perfect, and they are not perfect in their forecasting, but it is the best source of information that we have, and it is what we….

I think the responsible thing is for us to rely on those independent sources, and as I mentioned to the opposition Finance critic, if he has suggestions of other third-party, independent sources of forecasting that we should be looking at and considering for future budgets, I would be quite willing to entertain those suggestions. But the alternative to those independent, objective, third-party sources is that we go back to the kind of subjective budget-making that we saw in the mid-1990s, and that, I believe, is not where this province should go.

M. Farnworth: The minister says forecasting…. And they are independent, and I don't question that. The point I am making is that the forecast changed. The best advice you had at the beginning of the year has changed significantly over towards the end of the year. That can just as easily happen over the next two years — that the advice and the forecasts that we have right now can change significantly.

Therefore, the question I would have is that you cannot guarantee that at the end of two years there will be a balanced budget. You cannot guarantee that we will be in a surplus situation — can you?

Hon. C. Hansen: I can't guarantee that we won't see a significant, sharp rebound on this economy, as we did in 1982. Actually, it's interesting. If you go back and look at the economic growth in 1982 in British Columbia, it went down over six percentage points in one year, and it was a very sharp bounce back in the following year.

[1710]
[ Page 13720 ]

So I think that as we look at economic forecasts that leading economists are generating for us, they are trying to identify, to the best of their knowledge, what that future economic track will look like. There are obviously risks that it could be worse. There are risks that it could be better.

[S. Hammell in the chair.]

But I can tell you that there is one way for sure that you will not come out of two years of deficit, and that's if you don't try. You will not come out of two years of deficit if you don't actually manage the provincial finances on the expenditure side, maximize revenues on the revenue side and ensure that you work diligently to eliminate all of the unnecessary spending in government to devote resources to the delivery of necessary programs across government.

What we are committed to…. It's in this legislation, and it will be reflected in the budget documents on Tuesday. We are committed to working extremely hard across all parts of government, and it's not going to be easy. We know that trimming some of these discretionary expenditures and trimming budgets and travel and administration costs is going to be a difficult process for us.

Going to deficit was not somehow the panacea that sort of says: "Well, we don't have to…." It was looking like it was going to get painful to trim back on unnecessary spending. Suddenly, when we say we're going to deficit, that doesn't say: "Well, okay, let's just go for a free fall on the spending side."

What we're saying is the exact opposite. We're going to deficit because we absolutely have to, and that does not diminish one iota the amount of effort that we are going to put into ensuring that our administrative costs are trimmed in every way possible across government over the next two years. We will be working very diligently to ensure that this province will be back into surplus by the third year.

M. Farnworth: The minister said a lot there, so I'll ask the question again very shortly. Just as you cannot guarantee a surplus, you also cannot guarantee in two years' time that we will not be in a deficit situation, can you?

Hon. C. Hansen: I can tell you how you can guarantee you'll be in a deficit, and that's to ramp up spending. If, as the opposition Health critic proposed, there's an increase in the Health budget of $2 billion a year, I can guarantee you that you're going to be in deficit in the third year.

You know, I think we saw a lot of that spending in the 1990s. We are being very careful with our spending to make sure that we deliver those important programs, that we protect health care, education and vital social services. But we're going to be trimming everywhere else that we can possibly identify to ensure that this deficit is in fact temporary and lasts only two years.

M. Farnworth: I understand what increases spending and what decreases spending. I just asked a very simple question. The minister cannot guarantee that there will not be a deficit in two years — can you?

Hon. C. Hansen: As I said earlier, if at any time in the future a government finds it's in a circumstance where it is absolutely necessary to run a deficit…. And it would have to be circumstances as cataclysmic as we have seen over the last six months in terms of rapidly declining revenues. As I have said earlier, were that ever to happen in the future, it would be incumbent upon a Minister of Finance to come to this House and ask for this House's permission to run a temporary deficit should that circumstance ever occur again.

M. Farnworth: In that, the minister is clearly saying that you cannot guarantee that you will not run a deficit. He may want to say you can also run a surplus or whatever, but you cannot guarantee that there will not be a deficit in two years.

The reason I want to make that point is because I think it's important, given what the minister said earlier about his comments around forecasts and their accuracy and the independence of those forecasts. The question becomes, when detailing or communicating that information, of saying, "Deficits for two years and no deficits after that," you cannot guarantee to the public….

[1715]

He's worried about the political manipulation. Well, it's not entirely accurate to tell the public that there will be deficits for only two years and none after that because you cannot guarantee that, in fact, to be true. I think an important point that people need to understand is that this legislation says deficits for two years and after that the government isn't projecting a deficit. But the bottom line is that they cannot guarantee that.

It comes back to the question that I think my colleague the Finance critic came to before. What is the consideration? Why not one year, why not three years and why only two years?

B. Ralston: I gather from the minister's silence on that that he's not prepared to answer that question.

The minister set out in his recent remarks here today, in talking about the preparations and the adjustments that the government had made, that there had been cuts in spending on advertising. Could the minister detail those, please?

Hon. C. Hansen: My apologies to the member. I'm going to have to ask him if he could repeat the question.
[ Page 13721 ]

B. Ralston: The minister said, as part of his explanation of what the government was doing to prepare and adjust to changed economic circumstances, that a number of adjustments had been made in spending in this fiscal year. One of the things that the minister said was that there were reductions or cuts in spending on advertising. So could the minister provide an explanation of just what those cuts were and what the dollar value of those cuts were?

Hon. C. Hansen: The comments that I made are in the context of the coming budget and the coming fiscal year. That information will all be provided on Tuesday.

B. Ralston: The minister said in his opening comments on the budget, and this applies directly to the Balanced Budget and Ministerial Accountability Act, that these amendments would trigger the provisions in the Balanced Budget and Ministerial Accountability Act that would lead to a non-payment or a reduction in the salary of cabinet ministers.

I'm interested in exploring…. The minister said in his opening comments that assuming that the government tabled a deficit budget next year, government ministers would lose "their salary holdback for their collective responsibilities, in that each minister will likely lose 10 percent of his or her ministerial salary, unless by year-end a deficit can, in fact, be avoided."

The ministerial portion of the salary is 50 percent of the basic compensation as set out in section 2 of the Members' Remuneration and Pensions Act, effective April 7, 2007. The basic compensation for each member is $98,000 a year. There has been one cost-of-living adjustment, one year ago. The ministerial compensation is 50 percent on top of that. Can the minister explain in dollar terms what the 10 percent reduction would amount to?

Hon. C. Hansen: To be honest, I haven't done the arithmetic exactly on what it is, but I think the member is correct that the ministerial salary is slightly less than $50,000 a year, so the holdback would be 20 percent of that. Ministers then get that holdback returned to them — half of it, basically, 10 percent they get back — if they meet their ministry spending targets.

So as long as their ministry ends the fiscal year and has not spent more than has been authorized for that ministry to spend, they get 10 percent back, and then the other 10 percent they get back if the government as a whole achieves or ends the fiscal year and the public accounts show that the provincial financial statements are not in deficit at that time.

[1720]

B. Ralston: Just so that the public has some appreciation of that, because the 10 percent, I think, to many people might seem like a reasonable penalty. But given that it's 10 percent of 50 percent, would the minister agree that a rough calculation of that would be possibly losing 3.3 percent of what would be approximately a $150,000-a-year salary?

Hon. C. Hansen: I think the member is roughly correct. I think the other time that there has been a…. Well, this may or may not, actually. If we can end the year in the province by some change of circumstance that results in new revenues that we are not forecasting at this time, it's still conceivable that at the end of the year ministers could actually get that extra 10 percent back, should the province not be in deficit at year-end. We are tabling a deficit budget, but that doesn't mean that circumstances wouldn't be such at the end of the fiscal that the year ends that way.

The other time when members of the chamber recently have taken rollbacks in remuneration was actually in 2001, when we as a government were determined to eliminate the structural deficit that we inherited, the $4 billion-plus structural deficit at that time. In that circumstance it was all MLAs that took a 3 percent reduction in their remuneration. I think the opposition members declined or decided not to reduce their remuneration, so at the end of the day it was actually only the government members that had to see that 3 percent reduction in remuneration.

M. Farnworth: My question to the Minister of Finance is this: can he guarantee that all members at that time, both backbench and in cabinet, actually took that cut? Can you guarantee this House that all those members that you said took that cut in fact took that pay rollback? Can you guarantee that all members of the government and the government back bench took that pay rollback?

Hon. C. Hansen: To the best of my knowledge.

B. Ralston: This is an aspect of the amendment and its impact upon…. Since the minister has referred to it in his speech at second reading, I think it's appropriate to pursue this slightly further.

The minister has referred to the other part of the holdback as a prohibition against exceeding the ministerial estimates voted upon by the Legislature. If that were the case, then the minister might lose 10 percent of the ministerial salary, the 50 percent surplus beyond the basic salary.

Would the minister agree that the further amendments in this bill would change what was the standard practice of using supplementary estimates to, in effect, let those ministers whose ministerial spending exceeded the voted estimates off the hook for a variety of reasons? And indeed, no single minister that I am personally aware of has ever lost that portion of their salary, notwithstanding the language of the legislation.
[ Page 13722 ]

Hon. C. Hansen: The principle behind the ministerial holdback is for that portion, that 10 percent, that they have to ensure that they do not overspend what is allocated to their ministry. So there are three sources of approval for spending that could apply to any particular ministry. One is the main estimates. It's tabled on budget day. Second is access to contingencies, with the appropriate appropriation by this House for a contingency vote, and the third is through supplemental estimates.

So if this House, through one of those processes, has appropriated money and the minister stays within that spending appropriation, then he or she would be entitled to receive that 10 percent holdback, or half of the holdback. If any minister….

[1725]

The reason it hasn't happened is because there is the kind of fiscal discipline in this government to ensure that spending is properly managed and that ministers are on top of their ministries, ensuring that they don't spend a dollar more than what has been approved through appropriate processes.

B. Ralston: Well, I'm interested in just pursuing, because the minister has, in a further part of this bill…. I'm interested in debating it on this particular section because it applies to this particular act, the Balanced Budget and Ministerial Accountability Act.

The practice has been in the supplementary estimate process to adjust the estimates of each ministry in accordance with, generally, what's happened in the course of the year and thereby legally not trigger the mechanism that leads to the salary holdback.

So given that later in this bill one of the amendments is to end that practice, while the ability to bring supplementary estimates forward other than for the purpose of reducing the operating deficit…. Given that change that's contemplated in later sections of this bill, how will that impact on this particular act and that particular section of the ministerial holdback? I'm interested in what the relationship will be in the future.

Hon. C. Hansen: That is entirely consistent with the principle behind this measure. What it's saying to every minister is that they cannot go out and spend beyond what they have authorization for. So, as I mentioned, there are three routes by which they can get additional appropriation or to cover expenditures related to their ministry. But they have to be properly approved, and that's why, in fact, you will see next week that there will be a supplemental estimate brought into this House for this fiscal year that we're in right now.

There we will ensure that the reason that the minister for those particular ministries will not lose their holdback is because they have sought the appropriate approvals for that additional spending authority, which is entirely consistent with the principle behind this provision in the Budget and Ministerial Accountability Act.

B. Ralston: So for this fiscal year the same process will be engaged in. How does the minister then expect or contemplate that it will work in its application and effect on that provision of this act in, say, the next fiscal year, assuming that, as I think we all expect, this legislation will pass? How will that impact on that part of the ministerial holdback?

Hon. C. Hansen: I think, as I outlined, the three avenues by which ministers can seek approval for appropriation…. There will be, after the passage of this act, only two. That is the main estimates that are tabled in February of each year, and then where it is absolutely necessary to access contingencies, as has been the practice in this government over many, many years. But what will no longer be available as an avenue to seek additional spending authority is supplemental estimates.

So what we are saying for the coming years, once we get through our two years of temporary deficit, is that government will not be able to table supplemental estimates to provide additional spending authority to that government until such time as the operating debt of the province has been completely paid off.

B. Ralston: Well, one of the traditional explanations for supplemental estimates in certain ministries is, for example, in the Ministry of Forests — a bad fire season, where…. It's not contemplated and not wished for, but hundreds of millions of dollars are required to be spent fighting fires.

Is that something that would fall in the area of supplemental estimates? It's my understanding that it would, rather than contingency, and therefore that avenue wouldn't be open to ministers of the Crown in a year in which a deficit was projected — to come before the House and seek a supplemental estimate to pay for those contingencies.

[1730]

Hon. C. Hansen: I seek guidance of the Chair here. I think we may have progressed past sections 1 and 2, and in fact I think the member's question is pertaining to section 3. I'd be happy to answer it, but we may want to dispense with sections 1 and 2 before we get to that section.

B. Ralston: I appreciate that it does draw on the subsequent sections, but my concern is how it impacts on the Balanced Budget and Ministerial Accountability Act. The only amendment to that act is section 1, so that's why I'm asking these questions at this point and seeking responses.

Clearly, the minister said at second reading, in his opening remarks, that this is an aspect of the operation
[ Page 13723 ]
of that act that will change by these amendments. So my sense is that — subject to your direction, Madam Chair — the operation of that act is changed by these amendments, and it's appropriate to ask them at this particular point.

Hon. C. Hansen: As I say, I've got no difficulty with the member's question, but I'm just conscious of the fact that the only amendment we are making to the Balanced Budget Ministerial Act is pertaining to section 2.1, and it is only pertaining to the next two fiscal years and a provision of the ability for government to run a temporary deficit in those two fiscal years.

So I would respectfully suggest to the member that while his question may be out of order with regard to section 1 that we are on, it is not out of order in my view — although I defer to the Chair — when we get to section 3, which pertains to the supplemental estimate changes.

Section 1 approved.

On section 2.

B. Ralston: Dealing with section 2, the commencement provision in section 7 applies on April 1, 2011. In other words — I think it's clear, but I just wanted to confirm that — section 1, then, is repealed at that point, effective April 1, 2011, automatically. Is that correct?

Hon. C. Hansen: Yes, that's correct.

Section 2 approved.

On section 3.

B. Ralston: My first question is: does this section…? Section 3 in the commencement provisions also commences on April 1, 2011. Those are the provisions that trigger the mechanism to begin to repay the operating debt. Clearly, then, is it fair to say that it's contemplated that there will be no repayment of the operating debt in the second of these two fiscal years, 2010-2011, based on the projections that the minister spoke of earlier? Am I understanding that correctly?

Hon. C. Hansen: There is not a requirement for it, but it would be possible. I guess there is the possibility that we see significant new revenues in the coming year, and you know, obviously we're not projecting that, otherwise it would be in the budget. But if there were significant new revenues that were not being forecast at this time, there is still the possibility that we can end the year without the deficit.

But the other thing is that there's not a direct relationship between the cash balances in the CRF and the year-end deficit or surplus. So it is still possible that government may be in a position to pay down operating debt even during these two years while it may be running temporary deficits.

B. Ralston: Given what the minister has said, then, I take it that there's no legislative requirement by these amendments to do so. That would be discretionary on the part of the government of the day and the minister of the day.

[K. Whittred in the chair.]

Hon. C. Hansen: That's correct.

[1735]

B. Ralston: The amendment that's proposed adds a new 8.1 to section 8. It's in the section referring to major capital project information to be presented with the estimates. This 8.1, as I read it, comes after the sections that are already there and prior to part 2, "Fiscal Reports: Public Accounts and Other Reports."

In that amendment there's a reference to a section 4. There's a change in language: "changes in cash and cash equivalents." The present wording of subsection 9(2)(a)(iii) is: "changes in cash and temporary investments." The proposed amendment is "cash equivalents." That language appears in the proposed 8.1 amendment.

Can the minister explain, rather than dealing with section 4 at this point, why "cash and cash equivalents" was chosen, was preferred as language, rather than "cash and temporary investments," as the statute now reads?

Hon. C. Hansen: The term "cash equivalents" is one that is used in the accounting world. It is commonly understood by any accountants and financial managers who are practising in a GAAP-compliant environment, which of course the province of British Columbia now is.

B. Ralston: Looking at proposed subsection 8.1(1), it refers to: "…public accounts for a fiscal year indicate that there was Provincial government direct operating debt at the end of the fiscal year…." When would that operating debt become apparent? Would it be tabled with the public accounts at the end of June, along with the rest of the public accounts, or would it be disclosed earlier than that?

Hon. C. Hansen: Any reduction in the direct operating debt of government is reflected in each of the quarterly financial reports that are released, but the primary document, the one that will basically summarize for the entire 12 months, is of course Public Accounts, which comes out in June.

B. Ralston: So in terms of when the payment, if I can put it that way, on the operating debt might take place, does this mandate a payment only after the end of the
[ Page 13724 ]
fiscal year? Or if there were a change in the province's financial fortunes, would that be able to be paid prior to the public accounts being tabled in June?

Hon. C. Hansen: In fact, what triggers the paydown of the direct operating debt are the numbers that are in the public accounts at every year. Then, when it says that it must be applied to reduce or eliminate that debt, it means that it must be done as soon as practicable.

B. Ralston: The minister has spoken of some of the basic elements of the budget that would either lead to an operating debt or not. One would be to increase spending. Another might be to increase revenue.

[1740]

What would be the impact upon the operating debt were the commercial Crown corporations to increase their subvention or their payment to the Crown?

Hon. C. Hansen: If a Crown corporation were to increase their dividend to the Crown, that would result in an increase in the cash or cash equivalents, and that would trigger a paydown of the direct operating debt.

B. Ralston: In reviewing some of the debate in the year 2000, the opposition Finance critic of the day, Mr. Collins — Mr. Farrell-Collins as he then was — viewed that as a major loophole and was very disparaging about it. Does the minister have any concerns that one way of altering the operating debt one way or the other would be to call upon individual Crown corporations, commercial Crown corporations, to increase their subvention to the government, or not?

Hon. C. Hansen: In terms of the revenue from liquor sales, all of those net proceeds flow into government, so it's not something that government can…. It's not based on a dividend — likewise with Lottery Corporation revenues. What is based on a dividend is B.C. Hydro. The amount that B.C. Hydro returns to the shareholder is actually a formula which is built into the budget projections.

B. Ralston: So I take it, then, that the minister doesn't have a concern and that the concern that was expressed by Mr. Collins in similar circumstances, based on a similar debate some years ago, was wrongly framed, and it was misplaced. Is that correct?

Hon. C. Hansen: Well, I think what the member is maybe going back to is that balanced-budget debate in the year 2000. I think that, as I said earlier in this discussion, the problem with the legislation in the year 2000 was that it was subject to…. You could hit the target of triggering a deficit by manipulating revenues.

What we're saying is that we don't believe that there should be that kind of a trigger in it. So I wouldn't want to second-guess the former Finance Minister — what the intent of his comment was. But Hydro, as it is constituted today, provides a dividend to government, and that is reflected in the projected revenues.

B. Ralston: But to further this point, then, the minister is agreeing that one way to reduce the government direct operating debt is to increase the dividend paid by the commercial Crown, B.C. Hydro. If the dividend were increased, that would be one way…. Without any other changes, everything else being held constant, that would be one way to reduce the direct operating debt, would it not?

Hon. C. Hansen: You know, I'll be really clear as to what the objective of this government is. We don't like the direct operating debt. We found it was regrettable that it doubled as a result of the spending in the 1990s and the structural deficit that flowed from that, and we want it paid off as fast as is practical. We would like to see the direct operating debt hit zero at the earliest possible date.

[1745]

I think we also have to make sure we do that in a very responsible way. We are a province that has reduced taxes 103 times. We have made sure that we kept spending under control, and as we go forward, we'll continue to make sure spending is under control and that our efforts to reduce the debt will be done in the most expeditious way but also the most responsible way possible.

B. Ralston: Well, I really hesitate to venture into the structural deficit fiction that was constructed by the government after the fact when they came to power and then proceeded to run a series of deficits in 2002, 2003 and 2004, leading to the biggest deficit in the history of the province in 2003 of close to $3 billion. But the minister chooses to characterize that as a structural deficit, which objective analysis would disclose to be a complete fiction.

Leaving that aside, given that the minister has referred to cash and cash equivalents in this particular subsection, can the minister — and he said that's well known by accountants — give some examples of what cash equivalents, as opposed to cash, would be and how that money would be held by the Treasury Board during that period of time in the consolidated revenue fund?

Hon. C. Hansen: Actually, if the member wanted to refer to page 46 of the Public Accounts for the 2007-2008 fiscal year, in the notes to the consolidated summary financial statements it says that "cash and cash equivalents include cash on hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an
[ Page 13725 ]
insignificant risk of changes in value. These short-term investments generally have a maturity of three months or less and are held for the purpose of meeting short-term cash commitments rather than for investing."

B. Ralston: I take it, parenthetically, that that doesn't include asset-based commercial paper, thankfully.

In subsection (2) the discussion of supplementary estimates arises, and it says: "Supplementary estimates may not be presented to the Legislative Assembly if the most recent quarterly report includes a forecast that there will be Provincial government direct operating debt at the end of the fiscal year to which the quarterly report applies."

Now, the history of supplementary estimates in the life of this government is a relatively long one. Looking at information that's been provided to me, in 2007 and 2008 it was over a billion dollars — $1.045 billion; 2006-2007, $290 million; 2005-2006, a billion; 2004-2005, $1,004,185,000; 2003-2004, $99.592 million; in 2002-2003, zero; and in 2001-2002, $665 million.

So given that history of supplementary estimates, what gives the minister the confidence that this particular proviso set out here and proposed in subsection 8.1(2) can be relied upon and that it won't be necessary to come back to the Legislature and seek a legislative revision to get permission to present a supplementary estimate?

It would seem that this was an essential part of government financial operations over the last eight years. Given that history, perhaps the minister can explain why he's confident that this amendment is going to be something the government will be able to keep.

[1750]

Hon. C. Hansen: Actually, if you wanted to take the history back even further, what you'll find in the 1990s was extensive use of special warrants where government, basically by cabinet decree, gave itself the authority to spend over and above what had been allocated in the estimates process.

We as a government severely restricted the ability to use special warrants — only in the most severe of circumstances and emergency situations — but we did what was the right thing, I believe. It certainly reflects my democratic principles that you come to the House, and you actually ask the Legislature for the spending authority, which is what we have done with the supplemental estimates over the last eight years.

We are also saying that given that we're going through difficult economic times and given that we are incurring a deficit in the coming years, we want to make sure that government does everything it can to ensure that that deficit does not become structural and that it does not get passed on to future generations — that, in fact, not only do we pay it off as fast as is possible, but we also ensure that the remaining billions of dollars of operating debt are also paid off as fast as is possible so that it does not get passed on to future generations.

What we are saying in this section is that we believe that once we come through this economic downturn and start to see those revenues materialize again and we're back into non-deficit situations, government cannot then say that there's a whole bunch of new spending things that they would like to do until such time as the operating debt has been paid off.

So government still gets to present its spending plan in estimates in February of each year, and that spending plan should reflect what is forecast at that time as available revenues and should leave the province not in deficit at the time the budget is tabled in that third, fourth and fifth year and beyond. But every additional dollar that is identified during the year — additional cash — every bit of cash and cash equivalent that is identified should go to paying down the operating debt.

B. Ralston: I appreciate that as an expression of intent on the part of the minister in putting this amendment forward. But given the history here, I don't quite understand the minister's confidence in saying that that will be possible to do, given that, except for one year in the last eight and including years in which there were substantial deficits, there were still supplementary estimates presented.

What's changed, other than perhaps the political positioning of the government? What's changed to make the minister, beyond an expression of intention, have the confidence that it will be possible to carry out this particular provision of this amendment?

Hon. C. Hansen: I think, first of all, there are still the statutory provisions that allow for emergencies — for example, fighting forest fires. Who would have thought in the year 2003 that we would have had the cost of fighting wildfires in British Columbia put the forest fire fighting budget up over $400 million. I think the annual allocation is typically in the $40 million to $50 million range.

Those kinds of things are covered under statutory provisions that allow government to fund emergency situations — likewise with floods and other emergencies. We have, over the last number of years, used supplemental estimates to meet some of the opportunities that are there.

Some of the examples were flowing dollars to the new relationship fund. There were also dollars that flowed for the regional development trust. Those were all good initiatives, but those were done at a time when government could afford it.

I could point out to the member that in those years that we brought down supplemental estimates we also ended those years with significant surpluses. As a result of having those significant surpluses, we were able to put money into capital programs, and we were able to put money into
[ Page 13726 ]
paying down the direct operating debt of the province — in fact, paid it down over half from where it was at its peak, at about $15 billion.

[1755]

I will also put on the table now that as I mentioned earlier, I will be tabling supplemental estimates for this year. As I have said consistently over the last number of months, this is not a year for government to end a year with a large surplus.

We know there is a need for dollars to be put into the economy in British Columbia now, and this is important. Whatever available revenues government has in this fiscal year, over and above what had been projected at the time of budget last February, should in fact be put back into the economy. Madam Chair, you will see that reflected when we table the supplemental estimates.

What we're saying in this section is that as we come through this economic downturn and start to see the world economy start to come back up again — and certainly that is exactly what the economists are forecasting for British Columbia — we'll lead that economic recovery compared to the rest of Canada. That is a time when we're saying no to using supplemental estimates. We're saying that it should be first and foremost a priority of government that any additional available cash reserves be used to pay down operating debt.

B. Ralston: Subsection (2) talks about the time at which the prohibition against supplementary estimates is triggered. It says: "…if the most recent quarterly report includes a forecast that there will be…government direct operating debt at the end of the fiscal year to which the quarterly report applies." Traditionally, supplementary estimates have been put before the Legislature prior to the end of the fiscal year, but after the budget for the subsequent year has been tabled.

It doesn't specify…. I suppose it would be open to present supplementary estimates in the event that there were a fall session and there was a willingness on the part of the government to do that. It doesn't appear to limit the prohibition against supplementary estimates to any particular time of the year. I just want to clarify in my own mind that that prohibition applies to supplementary estimates that might be presented at any time of the year, regardless of what the quarterly report says.

The reason I ask that is that we've seen…. This year, for example, if supplementary estimates had been presented after and hypothetically the Legislature had convened after the presentation of the first quarterly report, there might have been an ability to do so. Obviously, in rapidly changing circumstances, quarterly reports can fluctuate very drastically in their projection of year-end fiscal balance.

Does the minister have any concern about that? Is he confident that this amendment addresses that or not?

Hon. C. Hansen: I have every confidence. First of all, this is a provision that applies 12 months a year until such time as the direct operating debt of the province is paid off.

Hypothetically, in some future year the province may get to a point where the direct operating debt — not hypothetically; it will happen — has been fully paid off. That would be reflected in the following quarterly report. This particular prohibition on supplemental estimates would then be eclipsed, and governments would have the power to introduce a supplementary estimate at that time.

Sections 3 and 4 approved.

On section 5.

B. Ralston: This is a proposed amendment to section 9(2) of the Budget Transparency and Accountability Act. It deletes paragraph (b), which reads, "for the government reporting entity, a supplementary schedule that includes amounts held and administered in trust," and it adds a more expanded schedule.

Can the minister explain just how that summary of debt will be reported? Is it expected that it will simply be a single figure? Will there be any accounting detail or explanatory notes to go with that, or will it simply be a single figure?

There's a strength in having a single figure, and there's also sometimes a bit of confusion that results from a single figure. So can the minister explain how he expects that reporting schedule to work?

[1800]

Hon. C. Hansen: What the member will see in these subsequent reports is not actually a change in practice, because we have actually been disclosing it in the back of Public Accounts. Under the debt summary report we have been reporting on what government's direct operating debt is, but that is not a statutory requirement. What we are doing now is basically saying that upon passage of this bill, that will become a statutory requirement. In practice what it will mean is that we will continue to do in practice what we have done voluntarily but in the future will have to do because of a statutory obligation.

B. Ralston: Aside from disclosing the amount of debt, will there be any explanation of the composition of that debt? In other words, what are the sources that lead to its accumulation? Or will that be just something that the readers will have to discern for themselves in the usual way, in terms of downturns and different sources of revenue?

Hon. C. Hansen: The direct operating debt of government is reported with methodology that has been
[ Page 13727 ]
established by the Auditor General of the province of British Columbia, and the way it has been presented is in keeping with that. The statements, the public accounts, are in fact both signed off by the comptroller general and commented on by the Auditor General.

B. Ralston: In paragraph 5(b) there's a change to subparagraph (d), adding to that schedule. Can the minister explain the purpose of that subamendment?

Hon. C. Hansen: This requirement is a new requirement that the public accounts include the consolidated revenue fund operating statement, balance sheet and cash flow statement so that the amount to be paid against the operating debt each year can be verified and is publicly disclosed.

B. Ralston: I'm looking at paragraph 9(2). I'm not sure that explains all of the subparagraphs that are added. My understanding of that and my reading of the financial statements is that those are already disclosed. I'm not sure how this is a change when I look at section 9, because that really deals with the requirements of reporting in public accounts. I'm not clear how that is an improvement, an enhancement or a change to what's already reported.

Hon. C. Hansen: The first provision under sub (vi) is already part of our practice. The revenue and expenditures and the resulting surplus or deficit for the fiscal year and the preceding fiscal year is information that we already disclose voluntarily. What this will do, like the previous section, is make that a statutory obligation.

The new provisions which are not part of our reporting practices to date are "the balance sheet as at the end of the fiscal year and the preceding fiscal year, and changes in cash and cash equivalents between the fiscal year and the preceding fiscal year." Those will now become new information that will be made available, and it will be provided as a result of this statutory obligation.

[1805]

B. Ralston: Has the comptroller general's opinion been sought on these legislative changes and/or the opinion of the Auditor General on the presentation of the public accounts and whether that's helpful or not, or whether that's sufficient detail to achieve the effect the minister says that he wishes to achieve?

Hon. C. Hansen: The comptroller general has been consulted in the wording of these sections and the changes in how the financial reports will be presented and is in accordance with those and is also in agreement that what is being proposed is in keeping with generally accepted accounting principles.

B. Ralston: I appreciate it wouldn't be necessary, but I'm wondering if, given that the Auditor General regularly comments on financial disclosure and offers suggestions to government from an independent perspective on the presentation of the public accounts…. And indeed, it's an annual task. I'm wondering if the Auditor General, in addition to the comptroller general, has been asked for any comments on these amendments or not.

Hon. C. Hansen: The Auditor General was not directly consulted with regard to these changes. But given the increased transparency that it is providing and the additional information that is being provided to the public, not just as a matter of practice but as a matter of statutory obligation…. I wouldn't want to second-guess the opinions of the Auditor General, but I think this would certainly be in keeping with the direction that Auditors General in British Columbia have encouraged.

B. Ralston: Looking at 5(b) just a little bit further, then. In subparagraph (viii) what would be the purpose of the change and the contrast between subparagraph (vii) and subparagraph (viii) — the "changes in cash and cash equivalents" between the two fiscal years? What would be revealed by that to the reader?

Hon. C. Hansen: The balance sheet provisions as presented in sub (vii) really give the snapshot of the financial circumstance of the province on that day in the fiscal year, so this gives the ability to compare that snapshot picture from one year to the next. Section 7 actually reflects the cash flow and would actually, from year to year, reconcile how cash flow and cash equivalents have changed over the 12 months.

M. Farnworth: I just want to ask the minister a quick question. He made a comment that the changes were generally in keeping with what Auditors General do. My question is, then: if that's the case, then why wouldn't you consult with the Auditor General? Was it a deliberate decision not to consult with him or an oversight?

Hon. C. Hansen: I think it is the comptroller general that has to take responsibility for how financial reporting of the province is done and how it is structured.

[1810]

The Auditor General has a role in terms of commenting on the way financial reports are presented, and he certainly has the opportunity to do that in this case. It would not…. Well, I guess the bottom line is that we had not consulted with the Auditor General on this particular piece of legislation and did not feel it was a requirement. We got great advice from the comptroller general, I guess, in terms of how to present this.

Section 5 approved.
[ Page 13728 ]

On section 6.

B. Ralston: The revision that's proposed here is a revision to section (2)(b). It reads presently: "the forecast of the debt as at the end of that fiscal year." Added to that is the proposed amendment: "…including a forecast of the Provincial government direct operating debt at the end of that fiscal year…."

The debt that's referred to in the present sub (b) — is that the long-term debt as opposed to the direct operating debt? I'm not clear whether the debt that is referred to in the first phrase is the equivalent of the second one or what the distinction is. It seems to me, given that the direct operating debt is being specified in the second part…. What is the contrast, or what is the legislative intention here?

Hon. C. Hansen: What is referred to by "debt" is all of the debt of the government reporting entity. What this says is that we must present with that forecast of total debt of the province…. We must single out the forecast for the direct operating debt. That is a practice that we currently do, but it is not required as a statutory obligation. So this simply makes it a statutory obligation.

B. Ralston: I notice that in the definition section of the Budget Transparency and Accountability Act there is no definition of "debt." So these are terms of art that are understood, and this distinction is clear to the reader and to the comptroller general and to the Auditor General. Is that correct?

Hon. C. Hansen: The answer is yes.

Sections 6 and 7 approved.

Title approved.

Hon. C. Hansen: Hon. Chair, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6:13 p.m.

The House resumed; Mr. Speaker in the chair.

Report and Third Reading of Bills

Finance Statutes (Deficit
Authorization and Debt Elimination)
Amendment Act, 2009

Bill 48, Finance Statutes (Deficit Authorization and Debt Elimination) Amendment Act, 2009, reported complete without amendment, read a third time and passed.

Hon. C. Hansen moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. Monday morning.

The House adjourned at 6:15 p.m.

[ Return to: Legislative Assembly Home Page ]

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

TV channel guide • Broadcast schedule

Copyright © 2008: British Columbia Hansard Services, Victoria, British Columbia, Canada

ISSN 1499-2175