2009 Legislative Session: Fifth 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 19, 2009

Morning Sitting

Volume 38, Number 5

[ Page 13817 ]

THURSDAY, FEBRUARY 19, 2009

The House met at 10:04 a.m.

[Mr. Speaker in the chair.]

Prayers.

[1005]

Orders of the Day

Motions Without Notice

APPOINTMENT OF
ACTING merit commissioner

Hon. M. de Jong: By leave I move that:

[The Legislative Assembly recommend to the Lieutenant Governor in Council the appointment of Ms. Joy Illington as the Acting Merit Commissioner for the Province of British Columbia pursuant to section 5.01(6) of the Public Service Act, effective from May 26, 2009 until the date upon which a Merit Commissioner is appointed pursuant to the Public Service Act (RSBC 1996, c. 385).]

Leave granted.

Motion approved.

Supplementary Estimates

Hon. C. Hansen presented a message from His Honour the Lieutenant-Governor: supplementary estimates for the fiscal year ending March 31, 2009.

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

Motion approved.

Hon. M. de Jong: Mr. Speaker, I wonder if this House might recess until 10:45 or 10:50 and reconvene at that point, to give members an opportunity to review the message.

Mr. Speaker: This House stands in recess until 10:45.

The House recessed from 10:06 a.m. to 10:46 a.m.

[Mr. Speaker in the chair.]

Hon. B. Penner: At this point, I'd like to call Committee of Supply to debate supplementary estimates.

Committee of Supply

The House in Committee of Supply; K. Whittred in the chair.

The committee met at 10:47 a.m.

Hon. C. Hansen: I'll make just a few very brief introductory comments and then turn it over to my colleague the Minister of Community Development, who will move the first vote.

These supplemental estimates are to provide funding from the consolidated revenue fund in the amount of $622 million. For the benefit of those that are trying to follow the debate, perhaps through video Hansard, the sequence in which we will deal with these is Community Development; Advanced Education and Labour Market Development; Finance; Housing and Social Development; Health Services; Labour and Citizens' Services; Tourism, Culture and the Arts; and Transportation and Infrastructure. And for the contingencies vote itself, it would be myself as Minister of Finance.

For the operating estimates, as set out in the schedule of estimates, consolidated revenue funds for each of these will be put forward and voted. As well, the supplemental estimates provide funding from the consolidated revenue fund in the amount of $180 million for capital expenditures, loans, investments and other requirements, as set out in the schedule of estimates, "Consolidated Revenue Fund Financing Transactions."

With that, I will turn it over to my colleague the Minister of Community Development.

B. Ralston: Again, some introductory remarks from our perspective.

Last week we heard the Minister of Finance bring before the House a bill in which he put before the House the proposition that supplementary estimates would no longer take place in this House — that beginning in the fiscal year to come, supplementary estimates would be no longer possible. Yet we now see, a week after that very solemn declaration here in the House, that we're here before the House with a bill containing those supplementary estimates. It reminds me somewhat of the saying of St. Augustine: "Give me chastity and continence, but not just yet."

What we're about to hear through various ministers is the same process that's been gone through since 2001 — coming back before the House through the supplementary estimates process to patch up mistakes that the ministers have made, overspending in various ministries, in the same manner in which it's always been done. Despite the declaration of a new direction just a week ago, we seem to be back here before the House in the very same old process.

Of course, this is also linked to the way in which ministers are compensated under the act that governs members' compensation. There's a holdback of 20 percent of ministerial salaries.

[1050]
[ Page 13818 ]

The Chair: Order, please, Member. Your comments at this point are not appropriate. We do not yet have a vote on the floor to be debating.

B. Ralston: Well, the minister simply deferred to the Minister of Community Development and made some introductory comments.

The Chair: Order, please, Member. Take your place.

B. Ralston: Very well, Madam Speaker.

SUPPLEMENTARY ESTIMATES:
Ministry of COMMUNITY DEVELOPMENT

On Vote 22(S): ministry operations, $186,000,000.

Hon. K. Krueger: This portion of the supplementary estimates supports $186 million in payments to local governments. These funds will deliver on our budget commitment to provide greater financial certainty to local governments by restructuring key transfer programs. The amount includes infrastructure investments in communities and $3 million to fulfil our commitment to offset the carbon tax paid by local governments.

B. Ralston: I gather this is now the moment in which I might continue my remarks, and that would be in order?

The Chair: Yes, and I simply caution you about relevance. Continue, Member.

B. Ralston: Well, I am speaking about the supplementary estimates and the supplementary estimates process. We're here, with the minister just having made some brief opening comments about supplementary estimates.

This is the very process on which we heard some very solemn declarations only a week ago from the minister about how, in the present economic environment, it was important, as part of a posture of fiscal rectitude, not to engage in the supplementary estimate process. It would be put aside. It would no longer be legislatively possible, and the focus would be on managing ministerial budgets through processes other than the use of supplementary estimates.

In the past, supplementary estimates have been the mechanism through which the ministerial overspending, whether deliberate or unforeseen, has been dealt with. It's also related, as we know and have heard on many occasions, to the manner in which ministers are compensated. In the act there's a 20 percent holdback. Ten percent, or half of that, relates to whether or not the expenditure of a given ministry has exceeded the voted estimate.

By engaging in this process and coming before the committee, if the supplementary estimate is passed, that sets a new baseline for the calculation of the ministerial holdback. Ordinarily, that is sufficient to let the minister off the hook. Indeed, the research that has been done in the past suggests that no minister has ever suffered that holdback of 10 percent, because they've always been let off the hook by the supplementary estimates process.

So we are here to deal with that process, which even the minister last week felt was discredited in the present fiscal environment and should no longer be used. Yet here we are at it again.

I look forward to the debate, and I can certainly affirm on this side of the House that the kind of spending that's being put forward here will be scrutinized closely. We expect full debate.

I want to ask the Minister of Finance whether he is satisfied with the process that's being engaged in here, given his statements of last week.

[1055]

Hon. K. Krueger: I'd like to take a moment to introduce two senior staff members from the Ministry of Community Development who are assisting me today in this Legislature. Seated to my left is Assistant Deputy Minister Shauna Brouwer and to my right, Deputy Minister Dale Wall. I'd like everyone to welcome them to the House. We're very thankful, as always, to have our civil service — long-term, qualified senior people — and we're here to answer the opposition's questions.

C. Wyse: I'm here to pick up — at least from my perspective — a very hastily cobbled together supplementary estimates that have been brought here in front of the House. The minister's explanation on why, on such short notice, this is being put in front of the House…. Did he not anticipate something much earlier than bringing it forward in such a hastily cobbled together manner?

Hon. K. Krueger: There's nothing particularly hasty and certainly not cobbled together. If the member will refer to his budget document, pages 109, 110. The last full paragraph toward the bottom of page 109, before the bullet points, outlines the government's intention with regard to providing increased financial certainty in uncertain economic times to our local government partners.

We're grateful for the federal government being so upfront with its intentions with what it rolled out in its budget, and we're grateful for our relationship with the municipalities and the UBCM. We're working with them. A memorandum of understanding is being created between the UBCM and the ministry.

The budget document, in the paragraph I described, talks about $151 million being provided to local governments. On the other side of the same page, page 110, there's a table. It lists that $151 million; $30 million for Towns for Tomorrow; $3 million, carbon tax rebates for local governments; $2 million, Trees for Tomorrow.
[ Page 13819 ]

These programs have all been announced, and they've been in the public domain. Certainly, the UBCM and its members have been actively working with us. We're doing everything we can to get infrastructure projects underway in the member's own riding and everywhere else in the province, every region. We want to see people employed. We want to see them able to bring their paycheques home to their families, not have to move away from the community to get work elsewhere. These are important projects.

Over the years infrastructure programs have been oversubscribed, generally up to 5 to 1 — $5 of applications for every dollar in the program. This is our way of trying to bolster local governments and communities and make sure that they can carry on with those important projects and keep their citizens working and at home.

H. Bloy: I seek leave to make an introduction.

The Chair: Proceed, Member.

Introductions by Members

H. Bloy: It's my privilege today to introduce the future for British Columbia and Canada. We have a school class here from Lyndhurst Elementary School. Would the House please make them welcome.

Debate Continued

C. Wyse: The minister is talking about the '09-10 budget. Had the government not thought about this during their green budget?

Hon. K. Krueger: I don't think I can really add to the comments I just made. I think it's clear what our intentions are.

C. Wyse: With all due respect, I'm attempting to find out how much previous thought had gone into this announcement that is in front of us. The minister has walked right by the significance of that particular item.

[1100]

When you look at next year, these funds are not there. They disappear. I wouldn't want to think that this is just electioneering. The minister had indicated to me that this was part of a well-thought-out, well-orchestrated…. It had been looked at from all sorts of different angles. My question once more is: where was this item in the green budget?

Hon. K. Krueger: Frankly, we have more money available this year than we expect to have in the next two years.

Local governments need certainty. People are worried. I'm receiving calls daily from local governments, from industry. I met with the council from Powell River recently — very concerned about the future of Catalyst pulp mill. Three other communities here on the Island are talking to me about the same thing. I met with another pulp mill group today from Harmac.

People are concerned, and communities want to have as much reassurance as they can. I can tell the member that his home community and every other are, as I understand it, very pleased and actively working with the UBCM on these plans. It's good for them to have their money and be able to proceed as quickly as possible with these key infrastructure programs and the other needs that they have.

C. Wyse: There is no question that there are uncertain times this year, and when we look at the budget, there are also uncertain times next year and the year after. But there is no continuation for those years of those things of uncertainty.

This is the government that has consistently walked around the issue of the operating expenditures and costs that local governments have to deal with. This is the government that has consistently ignored pleas on an ongoing basis from the UBCM about addressing their issues of how they fund their projects. The budget, in the broader picture, has a reduction in the operating grants that go to local government.

The government now runs out a supplementary. It does not seem to fit into any continuum. They've walked past any type of planning. There are uncertain times.

This is the same government that in the throne speech and other statements that have been made in the House has given veiled threats about freezing assessments, dealing with the property taxes for local government, their major source of revenue — threatening how their basic services are funded and provided.

The continuum of consistently saying with the Community Charter that there will be discussion, there will be debate, there will be respect, and no changes will be made…. That is not what has been occurring. That is not the record here of this government in dealing with local government.

To roll out an item that we will need to get more information on, whether it is simply dealing with capital costs, where the funds will come from, whether they're the federal funds that have now been moved into account lines so that in this, being an election year, it looks like the government has stepped forward….

There is nothing in this document that suggests that this is no more than a one-year write-off. It does not continue. It is outside of what the government's intention was less than a week ago — that this type of manoeuvring within budgets would cease and desist, would not occur.

[1105]

We're here, and we have a minister that still has not outlined where this fits into any type of plan.
[ Page 13820 ]

So once more, will he explain to British Columbians how he has arrived at this program at this point in time, in isolation of any other years that would have suggested that if it was a continuum, those figures and plans would have been in place?

Hon. K. Krueger: Well, if the member opposite would like to go back in time, that's what we'll do.

The last time that transfers to communities were reduced by the government of British Columbia was in the 1990s, where it happened repeatedly. In fact, local government transfers were reduced by almost 75 percent by the NDP government. Two of the ministers responsible for those cuts in transfers at that time now sit to the left and to the right of the Leader of the Opposition.

It was very tough on municipalities, and I was at the UBCM convention in Penticton where local governments booed the NDP Premier of the day about that.

We haven't cut transfers to local governments. We have no intention of doing so. The member should know that these have all been publicly announced — I think he attends the UBCM conventions, as do we, where many of the announcements happen — and that in terms of existing programs, for example, the province has doubled the amount of small community and regional district grants.

The province has created new programs to assist communities to upgrade their infrastructure, including Towns for Tomorrow, LocalMotion, Spirit Squares, the B.C. water improvement program. The province has partnered with the federal government and the UBCM in the Canada-B.C. infrastructure program, the federal gas tax transfer program, the municipal rural infrastructure program and Building Canada.

The province has created an innovative revenue-sharing program — the provincial hotel room tax transfer, which provides resort-based communities with $11 million a year to develop the amenities they need to grow their tourism economies.

We see local governments as being responsible. They are going to report to the public as to how these funds are spent. Once again, I don't know if the member thinks that he's speaking for the mayors of Williams Lake and Quesnel and their councils. We're not hearing anything but satisfaction from the UBCM and its member communities.

C. Wyse: The question is: is the minister explaining where he is? That's what we are talking about. Where is any assistance for local government with the increased gas tax that is coming up? Where was the consultation with local government when the gas tax was put into play?

Hon. K. Krueger: I mentioned earlier — perhaps the member didn't hear me reference page 110 — $3 million in carbon tax rebates for local governments. Again, that's something they're fairly familiar with.

C. Wyse: This is all after the fact. We're attempting to determine what consultation took place with local government when they implemented the gas tax.

Hon. K. Krueger: The carbon tax is a tax on pollution. We send out an all-party committee in advance of the budget. Members opposite serve on that committee. The Finance and Government Services Committee listens to the public and receives all sorts of input.

[1110]

People agree with the carbon tax. As the member opposite full well knows, every penny that was anticipated as far as revenues from carbon tax was provided in tax cuts to British Columbians, which we subsequently accelerated ahead of schedule.

In fact, as it turns out in the current economy, we cut taxes in larger amounts than we're receiving in revenues.

C. Wyse: Again, I don't find the answer at all pertinent to the question. So I'm left making an interpretation that there wasn't consultation with local government when the gas tax was implemented, because during these discussions it's local government that has raised the issue of the effect upon their ability to provide services. It contains in here only relief for the immediacy. It doesn't provide assistance for the increases that are upcoming.

My next question to the minister is.…

Interjections.

The Chair: Member, will you take your seat for a moment, please.

Members, this is Committee of Supply. Under even the normal conditions in this House, we have decorum during committee debate.

Continue, Member.

C. Wyse: So there was no relief coming up for these even larger increases that are occurring.

Madam Speaker, would I be out of line in recognizing a colleague returning to the House who has been away a long period of time? I need your help.

I would like to yield the floor to my colleague the MLA for New Westminster. I am so pleased to have him back here in the House.

Statements

MESSAGE OF APPRECIATION

C. Puchmayr: Thank you to the colleagues on both sides of the House. A little unexpected. I wasn't planning on coming in here to speak, but thank you for the opportunity.

I just want to say that it's still a long road to recovery. I'm feeling good. I'm here for the day. I look forward to
[ Page 13821 ]
coming back next week and debating the budget, probably for another day.

I just want to say to all the people in British Columbia who have donated organs that recipients of those organs are very indebted to you all. You're all heroes, and you deserve to be recognized as that.

So I will sit down on those words. Thank you very much. [Applause.]

Debate Continued

C. Wyse: My memory is that I was making the point that there hadn't been consultation. That was the interpretation that I was forming. The government hadn't thought about the effect of the gas tax on local government. Is that the truth?

[1115]

Hon. K. Krueger: The member said in his initial comments that he didn't think the answers were pertinent to the questions, but the questions should be pertinent to the supplemental estimates. I have pointed out to the member where he can find his answer with regard to carbon tax rebates for local governments.

C. Wyse: Relevance, I guess, is always up to interpretation.

You bring forward a supplementary budget that has a huge figure in it — $186 million — in trying times and then run it out as though this is the godsend to the support of local government.

There are so many unanswered questions that we have about what type of lifebuoy has been thrown to local government, a lifebuoy for a level of government that has been ignored, has had costs consistently downloaded on it, has had the challenge thrown to it as recently as a few months ago by the Premier about freezing assessments — projecting that by freezing assessments, in actual fact he was defending the property owner and the tax bill they would receive for the local government services that would be coming in their fashion.

The minister consistently likes to refer to a statement about an announcement made dealing with some capital funds that at this moment in time are not defined yet. Don't know where they're going. Don't know who's receiving them. But we will try and get to those items as the discussion continues.

The point the minister is making — that in his opinion determining a continuum of thought is irrelevant — is very dismissive in my judgment. It's very, very dismissive in these trying times.

If we were able to establish that there was a continuum of thought, then there would be more confidence amongst the general public that this is not simply electioneering. The numbers only apply to one year, and it concurrently happens to be in the election year.

People here in British Columbia have the right to know whether it isn't just rolling out their tax money to be ascribed and assigned to where the government believes it will do the most good for them politically. These are the parts of the relevance of a question that consistently is dismissed here in this House — that is, the openness and transparency of how government is provided.

So in my judgment this is very relevant. It is germane. It is of significance, because it shows where there's a plan that looks after the interests of all British Columbians regardless of where they're found. It looks after all British Columbians, regardless of their economic capabilities. It looks after all British Columbians, whether it be in an incorporated area or an unincorporated area. Once more, in my judgment this is really quite relevant.

[1120]

Once more, is there a cross-ministerial committee that reviews the effect of such items as the gas tax and the effect that that gas tax projected over a number of years would have upon local government, and whether that projection of the effect upon the various local governments by this cross-ministerial committee would have also examined the difference of the effect of such a tax on the different geographies of the province?

When you are from rural British Columbia, you understand the significance of weather, the significance of climate, upon these types of items. You also recognize the significance of government services that have been centralized, and therefore you have the additional transportation items of getting to those areas of centralization. They also understand that public transportation is not always available in order to get there.

So once more my question to the minister is: is there a cross-ministerial committee that has looked at the effect of an item such as the gas tax and the effect upon the different local governments and the effect it would have had upon the different geographical regions here in British Columbia?

Hon. K. Krueger: The allocation makes whole, or will make whole when they receive their portion of it, local governments for their expenditures on carbon tax. Most of the local governments of British Columbia have already signed the climate action charter. This fulfils government's commitment and will continue to do that.

With regard to the member's other comments, this is all about assisting local governments with certainty, giving them and the people they represent confidence. It's also all about transparency. I mentioned that an MOU is being worked out with the UBCM. It's almost complete. It'll be a public document when it's done.

Individual local governments working from that MOU will prepare their plan for what they're going to do with the funds that we're allocating here — the $186 million. They'll be publicly reporting to their constituents.
[ Page 13822 ]

Our government never loses sight of the fact that although there's a federal government, a provincial government and local governments, there's really only one taxpayer, and transparency is what we want.

C. Wyse: I'm going to simplify this. I'm only going to ask the question now. Isn't there a cross-ministry committee to evaluate the impacts of government policies?

Hon. K. Krueger: I'm speaking to the supplemental estimates before us.

C. Wyse: I accept that that's what we're discussing. I would encourage the minister to join me in the discussion. I would encourage him to join me in attempting to determine how we've arrived at this crossroad. I would encourage the minister to enlighten me that this bill is not just simply political electioneering. I'm quite willing to be convinced. I agree with the minister that we're talking about $186 million.

So my question once more is to the minister. Is there not a cross-ministry committee to evaluate the impacts of government policies as they are represented in the supplementary note that we're debating?

Hon. K. Krueger: Obviously, cabinet discusses and debates budgets, policies and legislation. Cabinet has made a decision that we want to ensure that local governments have confidence. Our Premier made a commitment at the UBCM that we would handle grant applications more quickly than we had been under our programs such as Towns for Tomorrow. He made a commitment that we would enhance the budget.

[1125]

The communities have poured their applications in to government. We're handling those. I think the mayors in the member's constituency would be shocked to hear him questioning whether government should be doing this or not. They are very pleased to have the funds being allocated, and I think they'll find this line of questioning incomprehensible.

Of course, if the member wants to think of cabinet as a committee, by all means, but this government has a very businesslike, steady way of doing the work of British Columbians and just follows that path.

C. Wyse: I have attempted to ignore the detractions that the minister has thrown out, but he should be aware that the former mayor of Williams Lake was one of the ones that were most vocal about the gas tax and the effect upon his community. The list went on and on.

That having been said, the minister here is dealing with a program that applies to the entire province of British Columbia, the 186 communities and regional districts — all of them. So at this moment I find that I'm still left forming the conclusion — it hasn't mattered how I've gone at it — that the minister is resistant to explaining to this House, and therefore all of British Columbians, how he has arrived at the sum of $186 million.

He's expecting that we're to take on face value that this is good for you. It's good for every British Columbian. That simply is not good enough. That falls way, way short of openness and transparency.

This debate of the supplementary estimate is about the spending of $186 million, which includes sums that offset the gas tax — a gas tax that has had an effect upon local government. Apparently, the government had not thought about its policies, the effect that it would have.

Once more, I'm going to allow the minister an opportunity to explain how the support to local government, with the increased cost of the gas tax that they are going to experience, will be expended beyond the supplementary numbers that we have in front of us.

Hon. K. Krueger: It was at the 2008 UBCM convention where the Premier announced the new climate action revenue incentive program grant, which offsets the direct carbon taxes paid by local governments and is paid after they commit to the goal of becoming carbon neutral by 2012 under the B.C. climate action charter.

Under the CARIP, each eligible local government receives a grant equal to 100 percent of the carbon tax paid as a direct expenditure. It's intended to offset the carbon tax completely when it's been paid directly by B.C. local governments for fossil fuels purchased and combusted for their own use in delivering local government services.

[1130]

C. Wyse: Does that also apply to next year and the year after?

Hon. K. Krueger: The answer is yes.

N. Macdonald: Let's be clear for people that are watching what's taking place here.

There was an original budget that was put forward by the government. It was debated properly last spring, and it was passed. One would expect that, with that budget, this government would have thought through the moneys that it needed to spend. They would have thought through the gas tax. They would have thought through a series of capital expenditures so that it would be accurately reflected in a budget.

What we're doing here today is we are coming back and dealing with an additional $186 million that the government did not think through properly enough to include in the previous debate. This money could also be put in this year's budget, but it's not going there. Instead we are going through this process.

I would put to the minister and to the government that in Alberta you had 42 percent of people that bothered to
[ Page 13823 ]
come out and vote. You see voter turnout going down municipally. You see it going down federally. You see it consistently going down provincially. There's a tremendous amount of cynicism, and everybody in this House should realize that, and everybody in this House should be concerned about that, because it's a problem.

Part of the reason for cynicism is when we have an exercise like this. There is a political advantage to doing it this way. These are not emergencies that we're talking about. This is not like a huge forest fire season. This is a choice by government to spend this money. It's pre-election, and it is a deliberate choice by this minister and by this government to do it in this way so that you could stand up and talk about the deficit in a certain way.

Let's go back to last week — what we were talking about. We were talking about a bill that changed an existing law where there were no deficits allowed, and the government comes in and just changes it — for two years, arbitrarily. Is it likely to be two years? Nobody here knows, but you changed it. Then we come to the idea of supplementary estimates, which the minister — all the ministers — said that for the next two years we're not going to do…

Interjections.

The Chair: Order, Members.

N. Macdonald: …because, obviously, there is something wrong with it. Obviously, the minister knows that there's a problem with supplementary estimates, that there's something we should be uncomfortable about. So for the next two years you're not going to do it, but this year you'll sneak it through.

You've got $186 million, and you're asking us to believe that it needs to be done this way. You're asking us to believe that you're doing this out of some concern for local government. But you look at the record with local governments. You look at the policing costs, the number of downloads that you've put onto local government, and you also look at the unprecedented way in which this government has removed local control and a whole host of issues. Then to come in and to have us believe that in any way this is out of concern for local government…. It simply isn't.

There is $186 million. You're dealing with political problems before an election. Did the Premier, did this government, anticipate that it was going to compensate local governments for the gas tax? It said again and again, "No, no, no," but as he gets into trouble with it, he goes to the UBCM. On the back of an envelope, just like the announcement on the Coquihalla, he thinks of it. He announces it, and then he expects to come in here and do a fix for him. He won't even put it on the next year's budget. He'll put it into this supplementary budget.

I would ask the minister to break down all of the $186 million. You've talked about the gas tax. Break it down as clearly as possible, as specifically as possible to figures. Where is this $186 million going? I don't anticipate that the minister is going to comment on this process. He knows as well as I that there's a farcical nature. As I say, it leads to cynicism, and in setting this standard, it's an invitation for future governments to just….

You've set a lower bar, as you have again and again in this House. Whether it's changing schedules…. You just set the bar lower and lower, and this is exactly what this process is — just another lowering of the bar.

[1135]

So I ask the minister to do this: specifically lay out the exact costs, the exact areas that this $186 million is going to be spent on.

Hon. K. Krueger: I can tell the member opposite that people who live along the Coquihalla Highway were delighted that the government would cease the tolls when the highway had been paid for. I think he's going to have a difficult time explaining to the mayors and councils of Revelstoke and Golden and Kimberley how he could possibly not think that it was a good idea for us to do what we're doing.

As far as caring about local governments, I had mentioned earlier that the NDP in the '90s rolled back local government unconditional grants by almost 75 percent. We not only have never done that; we've been in the process of doubling small community grants. We've allocated nearly $2 billion in additional funds to local governments beyond the normal granting process. This year we have more money than we will in the next two years.

Apparently, and not at all to our surprise, local governments think that this is a really good idea. The previous government didn't allocate anything from traffic fine revenues to local governments. We committed, before we were elected government, that we would rollover 75 percent of those revenues, and instead we've rolled over 100 percent.

So $70 million of this $186 million allocation comes from traffic fine revenues; $63 million comes from our small community grants program; $50 million comes from our allocations for infrastructure programs; and $3 million, as I told the member's colleague repeatedly, is a carbon tax rebate to local governments.

N. Macdonald: I apologize. I wonder if you could repeat the numbers, please.

Hon. K. Krueger: Certainly. So $70 million from the traffic fine revenue-sharing grants, $63 million from the small community grants, $50 million from the infrastructure programs and $3 million from the carbon tax rebate commitment.
[ Page 13824 ]

N. Macdonald: Could we break down the $70 million for traffic fines — just an explanation from the minister as to why that is unanticipated in the budget, why that is flowing through and why that would have not been anticipated in the budget that was put forward last spring.

Hon. K. Krueger: Of course, none of us are operating in a vacuum. We know about what's been happening in the world economy. We know that these are very uncertain times for pretty much everybody and certainly for local governments. We want to do our part to provide all the certainty we can, so we have changed the nature and the timing of how we deliver funding to local governments. We've decided to do it in this process.

B. Ralston: Given what the minister has just said and in view of the legislation that was passed last week, if this is the way it's going to be done in the future, how could that be so when the minister and this House voted on a bill just last week that would forbid this process for next year?

The minister says: "Well, there's a change in process. We're going to do it this way." That very process is not going to be available next year, so how can that be a credible answer?

[1140]

Hon. K. Krueger: Once again, we have the money. Local governments really value the certainty. We expect to have less money next year and the year after that than we do this year, so we've changed the nature and timing of how we provide these funds, for certainty. Local governments are happy about it, and of course they are, because there's a great advantage to them.

B. Ralston: I'm having real difficulty following the minister. He claims that this process will provide certainty to local government, yet he agrees that next year this process won't be available. How is that certainty?

That seems to be the very opposite of certainty. He's doing it this way this year. He can't do it this way next year, if he's still around. That seems to me to be the very opposite of certainty. That generates uncertainty as to what might happen in the future.

Hon. K. Krueger: There will be payments to local government in July 2009, July 2010. Local governments will know exactly what those payments are going to be.

B. Ralston: Once again, then how…? The minister claims that this process, the process we're engaged in today, is designed to provide greater certainty. He hasn't answered the question, not that he ever does, but I think I'll pose it again.

Given that this process is not available next year, yet he claims it's being used this year to provide certainty, can he explain how a process that's not available next year is adding to the certainty for those municipalities having to budget based on…? Sometimes at least a portion of their budget comes in the revenue they get from the province.

Hon. K. Krueger: This is assured funding — three instalments — and I've just outlined the payment schedule.

B. Ralston: Let me try to unpack the minister's somewhat fuzzy explanation. Is the minister saying that by passing this supplementary estimate — that's as he's proposing — moneys will be available in three separate payments into next fiscal year to municipalities throughout the province? If that's the case, why wouldn't that be included in the budget for the next fiscal year?

It would seem to me that if the money was going to be expended in the next fiscal year, it would be more transparent and more in keeping with generally accepted accounting principles that the money be available and expended and be in the budget that's before the Legislature now rather than in these supplementary estimates.

Hon. K. Krueger: Under the assured funds arrangement, the province agrees to pay B.C. local governments $232.4 million in assured funds by July 31, 2010. The payments are made in three instalments: this one, an immediate one-time-only grant; a second instalment in July 2009; a third instalment in July 2010.

B. Ralston: The nomenclature that's used is "assured funds," yet it seems, by the use of the supplementary estimate process, that this payment was unforeseen. It wasn't in the budget last spring. It's not in the budget document that's now before the House. This is an unforeseen payment. Yet the minister, by the way in which he's crafting the explanation, is suggesting that these are assured funds.

How can that be? Is this not simply a windfall payment, however you choose to characterize it, rather than any assured stream of funding that's going to continue from one year to the next, upon which municipal treasurers and mayors can rely into the future?

[1145]

Hon. K. Krueger: Well, the last part of that question is particularly germane. We want to deliver certainty. What could be more certain than for local governments to have the money in the bank?

Assured funds represent a two-year funding commitment by the provincial government that will deliver funding to local governments earlier than would be the case under the existing small community, regional district and traffic fine revenue-sharing grants.

The member's government in the '90s didn't share traffic fine revenues. We share 100 percent. As I mentioned
[ Page 13825 ]
earlier, the member's government cut back local government's grants. We not only don't do that, but we're going into the last year of a program to double small community grants.

We want local governments to have certainty, and we want the citizens who live in those municipalities to know that there's certainty.

N. Macdonald: Let's come back to the legitimacy of the process. What's clear here is that this is a one-off. It's pre-election. The timing has everything to do with election. This should be properly within the budget for either last year or in the budget for this upcoming session. It should not be going forward in this way.

There is nothing legitimate. Like I say, it just adds to the cynicism about politics in general. Anybody watching this will understand that this has nothing to do with consistency. This has nothing to do with anything other than putting spins on either the budget before or the budget after and just hoping people won't pay attention to this.

The minister knows this, because the government makes a big deal out of the fact that this is not supposed to happen. My understanding, from the rhetoric that I heard over the years from the Premier, is that this sort of thing would not happen. This sort of thing would not happen, and if ministers did try to pull something like this, there would be a punishment.

What the government hopes is that that's a thought that stays with people, that people actually think what the Premier says is what happens. That is not the case. It's rarely the case. It certainly is not the case here.

Has there ever been a minister who has brought in a budget that is not balanced, that brings in a supplement and does not get their full pay? Is that what you…? Does this minister expect to get his full pay? Or is there going to be a penalty for not properly considering the budget in the first place or properly putting the money where it should go in next year's budget, by using this process, which I contend — and anybody who watches this and listens to it carefully will see — is not a legitimate process?

Does the minister intend to forfeit part of his salary because he's doing this process? Is it that valuable to him to do it, or does he intend to find a way, like is done every year, to still get his salary and still do something that is not legitimate? And those are the Premier's words; they're not mine. The Premier set up this legislation so that you'd be penalized.

Does the minister intend to take his full salary?

Hon. K. Krueger: I think what people will feel cynical about is the cynical political arguments of the opposition against doing what they will think is a perfectly sensible way of proceeding. This is about certainty for communities.

Interjections.

The Chair: Minister. Minister.

Interjections.

The Chair: Order, Members.

Continue, Minister.

Hon. K. Krueger: This is about certainty for British Columbians, about certainty for the governments of the communities they live in, about a really solid partnership between three levels of government determined to do everything we can to protect British Columbian families, workers and communities in the face of an economic earthquake that's been felt all around the world — less so here than most other places, and we want to keep it that way. It's all about certainty.

N. Macdonald: As the critic for Finance has very aptly pointed out, this is not about certainty at all. This is a one-off. This has everything to do…. The question comes down to legitimacy. By the Premier's own standards, this is an illegitimate process that we're going through now, and by the Premier's own standards, there would be punishments applied to ministers who tried to go through this process.

[1150]

What this government is doing is trying to find an easy way to dole out money and hide the real cost by not putting it in last year's budget, by not putting it in this year's budget. Instead, they go through this process, which they realize even people watching will not understand. They won't fully understand, and that's the point of this exercise.

What was supposed to prevent that was that there was punishment for a minister who tried it, but what we have seen is that each and every year the minister gets absolved. They come in, they do the sin, and then we're back here with absolution. There has never been a minister that's been punished.

So if the minister thinks this is the proper way to go and that it's the right thing to do, then there is a cost to be paid. I ask the minister: will he be the first B.C. Liberal minister that lives up to the standards that the Premier is supposed to have set? Is this minister going to accept the cost for doing this in a way that is clearly not a legitimate process?

Are you willing to pay that price? That's a very straightforward question. Are you going to be the first B.C. Liberal minister that is going to pay the price for participating in what is clearly an illegitimate process?

Interjection.

The Chair: Order.

Hon. K. Krueger: This year is no different than other years with regard to the balanced budget management
[ Page 13826 ]
act. Next year…. We're not debating next year's budget, but we all already know that that budget is going to provide for a deficit, and there will be consequences to ministerial salaries. We went into that with our eyes wide open, because once again, we're being transparent and clear.

We're not doing what the NDP did in the '90s — pretending to have a balanced budget before the 1996 election and then the Premier himself saying, "I need wriggle room," and the Finance Minister saying: "I don't expect you to believe me." That's what happened.

Next year's budget — the year after that we have to project deficits, and we know that there is going to be a consequence to each cabinet minister personally. The NDP never did that. I think that government had nine deficits, doubled British Columbia's debt.

We are seeking — and I'm actually shocked that the members opposite aren't seeking the same thing — to make sure that we give British Columbians and their local governments certainty in very uncertain times economically worldwide.

N. Macdonald: Clearly, it's not certain. We're talking about the $70 million. There's no certainty to that. This is a one-off.

What we are talking about is the legitimacy of the process. Whether the money is given is not what we're debating here. It could be easily given in the budget as stands. It could have been in last year's budget, as it properly should have been if you had thought things through, or it should be in this year's budget. Both of those options are available.

Instead, what this Premier chose and what this minister chose is to come in with a process that lacks legitimacy, and that's by the Premier's standard. The Premier said that if a minister tried to do this, there would be a punishment attached to this. So the question is: is the minister going to accept that punishment? Is he going to receive less money, or is he going to go along with this process?

Hon. C. Hansen: I felt it appropriate to interject, because I think that the member probably has a misconception of how the balanced budget measures accountability act works and the principles behind it.

What the provisions in that act provide is that ministers must stay within the appropriations that are approved by this Legislature. So as has happened in previous years, when supplemental estimates are tabled, that is in fact an addition to the appropriation that has been authorized by this Legislature, and we come to the Legislature to seek approval for that.

[1155]

The purpose behind the ministerial holdback and the consequence that if a minister exceeds what has been authorized by this Legislature in their appropriation…. Then they will lose a portion of their ministerial salary. I think what the minister is bringing forward as part of this supplemental estimate is entirely in keeping with that, and the member can be assured that the standard amendments to the budget measures accountability act that come every year when we bring in supplemental estimates will again be tabled this year.

N. Macdonald: I certainly very much appreciate the interjection, and that's useful. But what I would say again is that the option which should properly have been taken — and the Minister of Finance can answer this if he likes — is to have these funds, if they're not able to be put in the previous budget, be put in the budget that we would now debate. By doing the supplementary estimates the way we're doing….

This is not an emergent situation. These are predictable situations. We are not getting predictable money for local government. All of this should have been done in a process that is legitimate. Certainly, the spirit and what most people who are watching would understand the intent of the legislation would be…. It's that the government would use a proper process.

I see that we're getting close to time. The time has run out. So I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 11:57 a.m.

The House resumed; Mr. Speaker in the chair.

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

Hon. C. Hansen moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 this afternoon.

The House adjourned at 11:58 a.m.

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